Skip to content
Ralph Nader > In the Public Interest > Sobering Lessons on ‘Privatization’ Seem to Elude Reagan

This year Reagan’s “privatization” dogmas will be in the news. For a long time Reagan has wanted to sell off much of the federal lands out west; he would like to see prisons owned and run by private corporations. Last month the Reaganites proposed to sell the Federal Housing Administration (FHA) to private business. None of these ideologies got very far. In fact the FHA sell-off urge was quickly dropped by Reagan after a torrent of protest from the housing and banking industries themselves.
Undaunted, a few days later the Reagan Budget Office let it be known that four public power authorities in the West, including the Bonneville Power Administration, were heading for the sales block. Millions of people and thousand of businesses receive hydro-electric power from these agencies. The Naval oil reserve in California — established decades ago for national emergencies — is also to be put up for sale.

Since Congress must approve these moves, the public may be given an opportunity to remember or learn the history behind these operations. As the country became electrified earlier in this century, rural areas were riot deemed attractive investments by private electric companies. So for many rural residents it was either lanterns in the dark or electricity from public agencies. One of these was the Tennessee Valley Authority (TVA) which generates electricity for several southern states.

Unless Reagan wants to lose those states for the Republicans in 1988, TVA will be left alone. His advisers must believe, however, that in the western states, there will be less opposition. Maybe less, but watch it build up.

Reagan believes that private enterprise con do the job better, more efficiently and without taxpayer subsidy. Has he riot read of the wasteful boondoggles and practices of private utilities? Are there no sobering lessons from the Defense Departments long-time “privatization” of military contracting for weapons, ships, vehicles and planes? What are the efficiencies of huge cost over-runs, weapons that are defective, $450 for a simple claw hammer or $650 for toilet seat covers?

Ideology brooks no countering evidence in Reagan’s government. Were it not for Congressional resistance, Reagan by now would have sold Conrail to a private railroad company whose tax breaks on this deal were ready to drain more money away from the government then the reported purchase payment — in essence, a giveaway of a major rail service network.

Older veterans remember being flown on MATS (military air transport command) aircraft for Christmas leave. Billions of tax dollars have gone into these air transport facilities. Why did the Pentagon go to private chartered planes — one of which crashed last month killing 248 soldiers — the worst military air disaster ever? The Pentagon said it had no responsibility for the private airline’s performance. If it were a MATS plane, the Pentagon would have been more accountable for the way its men are transported.

Reagan even is letting profit-making corporations operate the satellites, built by the taxpayer, that record and map the world including where minerals and underground water may he located. How accessible and how promptly public are all of these data to the people?

Anybody who believes that private business will save taxpayers’ money in doing the public’s business should read a new book on corporate waste entitled Hidden Profits by Mark Green and John Berry. Its pages go well beyond the legendary profligacy of corporate defense contractors.

The Reagan regime is pushing for privatization of public services and public investments without holding public hearings and consulting with the directly affected persons. Mr. President, there are many consumers, farmers, ranchers and other businesses who just might have some ideas and opinions for you before you propose to sell the Bonneville Power Administration and other public power darns producing electricity.