Wednesday, March 13, 2013

#Privatization: an Important Ingredient Missing from the Budget Discussions

Paul Ryan recently released his latest budget, and it envisions some rather large cuts to the Federal workforce. I'd be the last to defend government bloat, but... Ryan's politics on this point is disappointingly amateur.

With their poor messaging, the national Republicans are missing a large opportunity to present with a theme that worked quite well for them in the past: privatization. This is a theme well familiar to the Reagan-era Republicans, and it does provide many opportunities to connect with a brighter vision of the future, as we see many green shoots in the private sector. Some recent, visible successes like SpaceX suggest that the private sector could snatch several batons from the public sector... and run with them, creating more jobs as they go.

The theme of privatization also connects well with the recent optimism throughout the financial markets, which do appear to be taking sequestration well in stride. What could quickly halt that momentum and produce a sharp downturn is any indication of further job loss. I suppose that some politicians might actually welcome a return to 8% unemployment and higher underemployment, as a short-term, political opportunity before the midterms, but surely there are enough reasonable centrists to overcome those few on the fringe.

Rather than letting job cuts and layoffs and furloughs remain the headline theme, Republicans could and should be emphasizing ways to transition public-sector work to the private sector. Privatization is a long-term political strategy with real opportunities. And, if properly implemented, privatization could produce much of what the Republicans want.... while installing a mechanism to ensure sure that public-sector jobs don't simply vanish.

The public sector has already shed many hundreds of thousands of jobs in the past few years. The perception that Republicans are willing to let many more public-sector jobs go really exposes their longstanding political Achille's heel, namely that they seem to care less about people than they do about abstract numbers.

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