Promote the General Welfare for Fun and Profit
President Ronald Reagan once said, “The government isn’t the solution to our problems; government is the problem.” He said that in the firm belief that privately owned enterprises, for-profit companies and non-profit organizations could provide goods and services better than the government could (presumably at any level). This ignores the fact that the primary goal of a privately owned business is to make profit. The secondary goal is to serve the public good. If a business provides a product or a service that the public values, they will satisfy its primary goal while fulfilling the secondary goal. Some organizations that serve the public good, the government (in principle) and non-profit organizations like charities for example, do the same thing as for-profit entities for much less cost since their primary goal is to serve the public good.
In our economy where private enterprise supplies all of the products (material goods) while public entities provides us with basic services that make things run as smoothly as possible, I find a balance between which group does what is essential. For example, I do not want the government to manufacture goods like they do (or did) in Communist countries. Along those lines, I do not want private entities to have sole control over services that government agencies can run more efficiently. I have no problem with companies like UPS and FedEx providing courier services since the U.S. Postal Service does the same thing. What bothers me is the government outsourcing their responsibilities to private, for-profit enterprises for reasons known only to those public leaders who craft these arrangements.
Recently in Chicago Mayor Richard J. Daley and the City Council approved a deal that leased the control of the city’s parking meters to Chicago Parking Meters LLC, a subsidiary of Morgan Stanley. Chicago Parking Meters in turn outsourced the routine maintenance of the parking meters to LAZ Parking. The deal between Morgan Stanley and the City of Chicago infused about $1.2 billion into the city’s starved financial coffers.
While this influx of cash on the surface seems beneficial to Chicago’s bottom line, it benefits Morgan Stanley and its contractors even more. Since the first priority of a private company is profit, the $1.2 billion dollar 75-year lease seems to have certainly done so from the time the ink dried on the agreement in December 2008. If the revenue generated by parking meters in 2007 is a guide (and if that number remained static for the life of the lease agreement), the lease agreement created a $274.5 million profit for Morgan Stanley (operating as Chicago Parking Meters LLC). Since Morgan Stanley contracted the daily operation of maintenance to another for-profit company, Chicago Parking Meters LLC predictably raised parking rates so LAZ Parking could profit from providing its services. Consequently, all of the private entities involved with the parking meters will profit from the service it provides the City of Chicago.
The most troubling aspect of private entities managing services the government should provide is not the amount of money they glean from their work but their accountability to the public. If something goes wrong or if the services they provide don’t do what they should, public redress is potentially impossible. If the government doesn’t do the job it is supposed to do, there are inquiries, oversight hearings, and elections to remedy the solution. This is a difficult and tedious process, but it does work. If you apply the same methods to a private entity, the people raising issues about the quality of service can (in theory) face charges of harassment or trespassing if the public outcry does not hinder the company’s profitability.
The deal Chicago’s government made with Morgan Stanley, Chicago Parking Meters LLC, and LAZ Parking is not the only privately run service Chicago’s government outsourced. Several parking garages owned by the Chicago Park District are presently leased to Morgan Stanley. A company headquartered in Spain and Australia manages the Chicago Skyway, a section of Interstate 90 running southeast through and out of Chicago to Indiana. The Skyway and parking garage lease agreements did not raise the public outcry of grievances the most recent deal handing control of the city’s thousands of parking meters to three companies. The level of indignation from disgruntled motorists in the last few days revealed a silver lining in the gray cloud of privatized government services. The silver lining comes in the form of Illinois Attorney General Lisa Madigan. I am at least happy to see that while some feel it beneficial to abdicate their responsibility to the public, others make it their priority to serve the public good.
In our economy where private enterprise supplies all of the products (material goods) while public entities provides us with basic services that make things run as smoothly as possible, I find a balance between which group does what is essential. For example, I do not want the government to manufacture goods like they do (or did) in Communist countries. Along those lines, I do not want private entities to have sole control over services that government agencies can run more efficiently. I have no problem with companies like UPS and FedEx providing courier services since the U.S. Postal Service does the same thing. What bothers me is the government outsourcing their responsibilities to private, for-profit enterprises for reasons known only to those public leaders who craft these arrangements.
Recently in Chicago Mayor Richard J. Daley and the City Council approved a deal that leased the control of the city’s parking meters to Chicago Parking Meters LLC, a subsidiary of Morgan Stanley. Chicago Parking Meters in turn outsourced the routine maintenance of the parking meters to LAZ Parking. The deal between Morgan Stanley and the City of Chicago infused about $1.2 billion into the city’s starved financial coffers.
While this influx of cash on the surface seems beneficial to Chicago’s bottom line, it benefits Morgan Stanley and its contractors even more. Since the first priority of a private company is profit, the $1.2 billion dollar 75-year lease seems to have certainly done so from the time the ink dried on the agreement in December 2008. If the revenue generated by parking meters in 2007 is a guide (and if that number remained static for the life of the lease agreement), the lease agreement created a $274.5 million profit for Morgan Stanley (operating as Chicago Parking Meters LLC). Since Morgan Stanley contracted the daily operation of maintenance to another for-profit company, Chicago Parking Meters LLC predictably raised parking rates so LAZ Parking could profit from providing its services. Consequently, all of the private entities involved with the parking meters will profit from the service it provides the City of Chicago.
The most troubling aspect of private entities managing services the government should provide is not the amount of money they glean from their work but their accountability to the public. If something goes wrong or if the services they provide don’t do what they should, public redress is potentially impossible. If the government doesn’t do the job it is supposed to do, there are inquiries, oversight hearings, and elections to remedy the solution. This is a difficult and tedious process, but it does work. If you apply the same methods to a private entity, the people raising issues about the quality of service can (in theory) face charges of harassment or trespassing if the public outcry does not hinder the company’s profitability.
The deal Chicago’s government made with Morgan Stanley, Chicago Parking Meters LLC, and LAZ Parking is not the only privately run service Chicago’s government outsourced. Several parking garages owned by the Chicago Park District are presently leased to Morgan Stanley. A company headquartered in Spain and Australia manages the Chicago Skyway, a section of Interstate 90 running southeast through and out of Chicago to Indiana. The Skyway and parking garage lease agreements did not raise the public outcry of grievances the most recent deal handing control of the city’s thousands of parking meters to three companies. The level of indignation from disgruntled motorists in the last few days revealed a silver lining in the gray cloud of privatized government services. The silver lining comes in the form of Illinois Attorney General Lisa Madigan. I am at least happy to see that while some feel it beneficial to abdicate their responsibility to the public, others make it their priority to serve the public good.
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