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Sunday, May 15, 2011, 8:30 am

Disaster Capitalism Erupts in Wisconsin

By Miles Kampf-Lassin

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First, Scott Walker went after the unions. Now he is setting his sights on the very heart of the public good – entitlements and education. In the meantime, the Wisconsin Governor has confessed his political project in a much publicized prank call with a fake Koch: Stop at nothing to institute a deeply conservative, market-centric agenda in order to "change the course of history."

Sound like a lofty goal? Well like many power-hungry, maladroit politicians, Walker is attempting to hold the media's attention as well as the respect of the far-right flank of his party by taking a number of extreme steps to hand over public functions to private entities. Take exhibit A: As part of Walker's proposed budget, Wisconsin's food stamp program, FoodShare, as well as the state's Medicaid program would be consolidated, centralized, and to a great extent privatized.

This process would be made possible through the creation of a new "income maintenance administrative unit" which would allow private bodies to take over the administration and allocation of benefits offered through the programs. The rationale for this structural transformation is to cut down on waste and fraud in the system and save the state some much-needed cash.

There are a myriad of problems with this proposal but three stand out as the most significant.

First of all, public utilities, such as providing food assistance and medical care to the poor, exist outside of the marketplace, i.e. competition cannot create a better outcome. Entitlement programs are just that, entitlements. They exist for those who do not have the resources to purchase goods or services in the private market, so putting profit-driven corporations at the helm of these programs is fundamentally flawed.

It also doesn't work. Similar programs have previously been instituted in Texas and Indiana, both resulting in far more problematic systems. After signing a contract with a private company to screen food and medical assistance applicants in 2005, Texas saw their delinquent application rate rise dramatically. Indiana actually had to cancel its ten-year contract with IBM after just two years because the company provided inadequate service.

And, as has recently been revealed, it is illegal. On April 14, the USDA sent a letter to Wisconsin state officials informing them that the administering of the FoodShare and Medicaid programs must be done by civil servants and not private companies or else the state would lose federal funding for the programs, potentially to the tune of $20 million. Moreover, on April 28, U.S. Agriculture Secretary Tom Vilsack released a statement that drove home the fact that this is a misguided venture:

"Recent state agency privatization initiatives in Texas and Indiana have been complete failures, marked by technical difficulties, staffing shortages, and inadequate training of private call-center staff and resulting in adverse impacts on the state and its people. USDA will continue to work with Wisconsin to improve its program delivery and integrity so that the most vulnerable people in the state receive the nutrition benefits they need."

So, for now, a wrench has been thrown the gears of this privatization process. But in the equally important area of education, Gov. Walker's ambitious corporatist agenda is just heating up.

His budget proposal also strips funding from local schools and boards while investing heavily in "initiatives designed to clear the way for and encourage private-school choice schemes," as reported in The Nation. This is on top of Walker's previous legislation designed to take away public educators' collective bargaining rights. And, as recently outlined in Working In These Times, Walker has a personal pet project of turning UW Madison, a university established on the principle of the public good, into a "quasi-private institution."

Unlike the privatization of food and health assistance programs, private education is more openly supported by the Obama Administration and state governments across the nation, making Walker's aggressive tactics toward this end all the more threatening: If Wisconsin's burgeoning model of private-first education gains steam, it could potentially become more mainstream and be adopted by a growing number of states, further throwing the future of public education into question.

So, the Republican Governor is using a debt emergency, created in large part by his own massive tax cuts for the wealthy, as a basis for selling off the public functions of the state to the highest bidder. Sound familiar? The same trend is happening in states across the country, from Michigan to Texas, only not to as sweeping of an extent as in Wisconsin. This is Disaster Capitalism at its finest. Manipulated crises met with the immediate response of brazen privatization, all in the name of mitigating catastrophe.

It is not a surprise that Walker, a Republican, would be interested in moving public policy in a more market-oriented direction. After all, one of the planks of the Wisconsin Republican Party platform reads: "We believe government needs to reform the way it operates by bringing in ideas and systems currently employed in the private sector to increase productivity and effectiveness."

However, the lengths to which Gov. Walker intends to go in replacing public institutions and utilities with private contractors, all in the face of evidence illustrating the failure of these schemes in the past, make clear that to him and his Republican cohorts, the push to privatize has simply become an ideological construct, grounded in principle yet divorced from reality.

Miles Kampf-Lassin, a graduate of New York University's Gallatin School in Deliberative Democracy and Globalization, is a Web Editor at In These Times. He is a Chicago based writer. @MilesKLassin

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