Footnotes:

(1) HGEA ad: fifth in a series. Honolulu Advertiser, circa 11/2/99.

(2) Rehfuss, John. Designing an Effective Bidding and Monitoring System. Reason Public Policy Institute. 1993.

(3) Volokh, Alexander (Reason Public Policy Institute), Private Schools' Flexibility In Dealing With Violence. Wall Street Journal. April 29, 1999.

“Private-school administrators have a built-in incentive to maintain their schools' reputations for safety if they are to continue attracting students …”

(4) Honolulu Advertiser. September 7, 1995. p. A2. “Gov. Ben Cayetano last week said he believes the top three problems with Hawaii’s prison system are abuse of overtime pay, drug use by inmates and guards, and contraband flowing into prison facilities.”

Honolulu Advertiser. September 10, 1995. p. A2. “… there have been at least four state court cases here since 1992 of prison guards continuing to work not only while felony charges were pending against them, but also after they were convicted.”

(5) Hawaii State Auditor. Audit of the Child Protective Services System. Report No. 99-5. January 1999. (Not available anywhere online.)

(6) Senate confirms Chandler. Honolulu Star-Bulletin. April 27, 1999.

HGEA wrong on privatization

HGEA ads have pervaded newspaper pages recently querying, “Privatization: A ‘solution’ that causes more problems?” (1)

HGEA reminds us of the failure of privatized services, such as the state library book-buying absurdity, the incompetence of the Youngstown, Ohio, private prison operation, a failed privatized child support system in California, and broken down buses in a privatized school bus operation in Virginia.

Of course, some private businesses will fail at the job. However, most should never have been hired in the first place; if you hire a lousy plumber you do not fault the economic system. As the staff of Reason Foundation (they coined the word, ‘privatization’) continually emphasize, the contractual process of qualifying contractors, determining the bonding and bid requirements and monitoring the awardees are critical to privatization success. (2)

But, in any case, the comparative failure in rate or quality in privatized services still does not begin to compare with the failure of services provided by government. For example,

Even ignoring the elite private schools, the remaining private schools still outperform public schools in quality of education, control of violence and cost of operation. Why? Private schools have to perform. Parents are not dumb. Either private schools provide a superior education in a violence-free atmosphere at a reasonable cost, or parents pull their children out and place them in ‘free’ public schools. (3)

No single private prison is operating under a consent decree for failure to provide adequate conditions, but 75% of prisons under public jurisdictions are. How come? Private prison contracts always have a cancellation clause for failure to perform and so before it reaches the point where the courts step in, we are able to fire the private operator. Government prison managers face no such threat. That is why in Hawaii, our convicted prison guards are even allowed to serve their prison terms on weekends while still holding down their weekday prison guard jobs! Imagine us tolerating such nonsense from a private prison operator.(4)

Hawaii State Auditor Marion Higa reported to the Legislature that our Department of Human Services, the agency responsible monitoring child abuse, has ignored the law, failed to follow procedures established to protect abused children, allowed such children to remain in foster custody without legal authority, and neglected to file reported cases of child abuse.(5) It is difficult to imagine that a private contractor damned by such scathing criticism would be not be summarily fired. Yet, the Hawaii Senate confirmed the head of the government agency (6) by vote of 19-6. One of the supporting Senators literally cried on the floor of the Senate pleading that the agency head meant well. Aaaaaagh!

The last is a perfect example of mismanagement by non-managers. An example of our elected officials identifying with a single incompetent employee instead of the job—that of preventing the abuse of Hawaii's children. They did not see that the bedrock issue was not whether the agency head should have been given another chance, but whether Hawaii's abused children should be given another chance.

This brings us to a major, but overlooked, advantage of privatization. Our anti-business elected officials can look upon a private contractor as just another crass greedy businessperson overcharging for services and underpaying their workers. Therefore, our officials will have no compunction about firing incompetent contractors.

As sure as God is in Heaven, no Hawaii Senator will ever cry on the Senate floor for an incompetent businessperson.

Cliff Slater’s footnoted columns are at www.lava.net/cslater