Privatizing America


English: Table 3 from the August 4, 2010 GAO r...

By the time the full extent of it is known, who can say how late it will be. There are always people who know what is happening along the way, but then there are also people who know things that are happening that are not happening, so it can be hard to tell the difference. Life, as I think someone said, somewhere, some place, is hard.

It is only in the past few years, since the 2008 financial implosion, that the graphs have risen up and spun at us, one after another, like an old Hollywood movie montage of newspaper headlines, tracking the decline of organized labor and the thirty-year stagnation of middle class incomes with the loosening of the post Depression regulatory regime and the rise of corporate power and wealth. Some saw it while it was happening, but now everyone knows who isn’t hoodwinked by the American Dream sold like a late night infomericial product or who hasn’t an interested in hawking it.

Well, there’s more. We’ve spent over a decade now selling our national defense and security to private, profit-driven companies – the mission everyone is supposed to agree is truly best and most honorably given, for the commonweal, to the government. We have also been selling our future prospects, in education. From today’s Los Angeles Times:

Backlash builds as for-profit schools rake in GI Bill funds

Congress, the White House and veterans groups — spurred by complaints from thousands of veterans like Maddox — are cracking down on for-profit schools that have raked in hundreds of millions of dollars in GI Bill benefits. They say the schools prey on veterans with misleading ads while selling expensive and woefully inadequate educations.

Since the Post-9/11GI Bill took effect in 2009, eight of the 10 colleges collecting the most money from the program have been for-profit schools. The companies earned 86% of their revenue from taxpayer dollars in 2009, mostly GI Bill payments, according to Congress, with the top 20 for-profit education companies receiving $521 million in veterans’ education funds in 2010.

Yet taxpayers spend more than twice as much to educate a veteran at a for-profit school than at a public university. Congressional investigators say for-profit schools have far higher drop-out rates and loan interest and default rates than public universities, and credits earned at many for-profit schools don’t always transfer to public schools.

Key finddings of Brown University’s Eisenhower Study Group on military privatization include:

  1. Pentagon contracting has been highly concentrated over the post 9/11 period, with just five contractors accounting for over one-third of all Pentagon contracts.
  2. Halliburton’s first Iraq-related contract was a no-bid, open-ended, 7-year contract, awarded before the war even began.
  3. Halliburton’s Pentagon contracts jumped from $483 million in 2002 to over $6 billion in 2006.
  4. Lockheed Martin alone received $29 billion in Pentagon contracts in 2008.
  5. Total Pentagon prime contract awards increased from approximately $145 billion in 2001 to $391billion in 2008—a 170 percent increase.
  6. Outsourcing of intelligence is so pervasive that there are now more contract employees working in the intelligence community than are government employees. [Emphasis added]

Anyone who works in education knows that for over two generations we have been graduating from substandard high schools ever increasing numbers of grossly ill-educated, poor and ethnic minority students, many of whom go on to flounder in community and other colleges at some personal and significant national cost. Since 9/11, many of these student have joined the military before returning home and attempting higher education. Though the Times report focuses on veterans and the GI Bill, a similar picture can be drawn of undereducated non-vets seeking, in lieu of the traditional academic program at public colleges, the career-oriented technical and pre-professional training that for-profit colleges market so heavily, leaving students swamped by debt.

— For-profit schools account for 13% of all college students but receive 38% of GI Bill payments and account for 47% of all student loan defaults.

— Taxpayers paid $4,642 to educate a typical veteran at a public college between 2009 and 2011, versus $10,441 at a for-profit school.

— The two for-profit schools receiving the highest GI Bill payments — American Public Education and Bridgepoint Education — earned $133 million and $113 million last year in Pentagon tuition assistance, versus $31 million and $25 million for the top two public schools, the University of Maryland and the University of Texas systems, respectively.

— Bachelor’s degrees at for-profit schools cost far more than at public colleges: $88,000 at for-profit ITT Tech in Indiana versus $39,000 at Indiana University, for instance.

— For-profit schools spend far more on sales, marketing and advertising than on educational support staff.

Imagine if the government funded community and state four-year colleges at only half the cost – $44,000 per student, with none of that cost assigned to marketing and profit?

“These are not the good guys,” Sen. Richard J. Durbin (D-Ill.) said of for-profit schools …. “What the for-profit schools are doing to students and their families across America is shameful. What they’re doing to veterans is disgraceful.”

What the privatizing of national defense and education are doing to the country’s human and social infrastructure is even more than a a shame and disgrace. It may well be an inescapable decline. Some dream.


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