July 18, 2013
The capital of Pennsylvania
doesn’t pop up during most discussions about the history of the American West.
But Harrisburg’s former mayor never
let a discouraging word prompt him to rethink his dopey scheme
to build a Western-themed museum in the city. Stephen Reed devoted a decade
and a half to gathering memorabilia, including Annie Oakley’s Louis Vuitton
suitcase, a poker table once owned by Wyatt Earp, “Doc” Holiday’s dental chair,
artifacts from the Battle of Little Bighorn, one of Chief Big Foot’s moccasins,
and vintage guns manufactured by Colt, Winchester,
How much generosity
were taxpayers compelled to provide for Reed’s project? In a 2006 loan
application, the collection was valued at $8.3 million. But according
to Harrisburg’s newspaper, “Record-keeping failures mean the true total
spent might never be known.”
You get where
this is headed. The museum wasn’t built. But all those antiques would prove
useful in another capacity -- raising cash to cover Harrisburg’s near-insolvency.
The Keystone State’s
capital went “entrepreneurial” in 1969, and borrowed millions of dollars to
built an electricity-generating trash incinerator. A bungled upgrade launched a
decade ago -- the feds had shut the plant down, due to air-pollution violations
-- drove the facility’s debt past $300 million.
As The New York Times put it, municipal
officials once hoped that the revamped incinerator would be a “moneymaker.”
Instead, it torched tax revenue, and combined with the Great Recession, pushed Harrisburg to the point
of bankruptcy. The city succumbed to state receivership at the close of 2011,
and as part of its desperate grab for cash, it has now conducted what one
expert called “the largest auction of Wild West items ever.”
One ill-advised mission creep helped to cover the failure of an earlier
ill-advised mission creep.
unbuilt museum is an extreme example. But it’s common for government to possess
assets that do not contribute to the protection of lives and liberties -- i.e.,
the commission that was once sacred to the “public” sector.
centers, ports (air, sea, and space), landfills, golf
courses, liquor stores, parking garages, and power stations are the top
prospects for relinquishment. (After the easy stuff, it’s on to schools,
hospitals, highways, and rail/bus lines.) It’s called “privatization.” Contrary
to the crazed bleatings of government unions, the term has nothing to do with
outsourcing tasks such as prison, IT, and groundskeeping services to
contractors, a process accurately called “competitive sourcing” or “contestability.”
means getting land, buildings, and other marketable assets away from pols and
bureaucrats -- permanently. No more tax perks. No more exemptions from
regulations. No more bailouts when the bottom line looks grim. Full
transference to the scary world of competition and accountability.
It’s not easy
to do. Margaret Thatcher’s privatization reforms were despised by her nation’s political
establishment. Ronald Reagan had big plans to get Washington out of the business business. (Heck,
a White House working group was
established.) Upon leaving office, the Gipper hadn’t much to show for his
efforts. Few experienced observers were surprised. When the “p” word is tossed
around, the unlimited-government crowd leaps into hyperdrive. In a 1985 Newsweek article, an energy bureaucrat
in the Pacific Northwest squealed that privatizing the Bonneville
Power Administration would be “mindless,” likening it to “selling the Mississippi River.”
nothing had changed. At the height of the Bush-Obama economic
calamity, Jon Shure, deputy director of the far-left Center on Budget and
Policy Priorities, sniffed that privatization was “a short-term, one-time fix that avoids
the difficult decisions of having to find revenue.”
pooh-pooh it as wishful thinking, but despite privatization’s innumerable
enemies, it has a future. At $16.7 trillion, the national debt is dwarfed by D.C.’s unfunded liabilities, which are driven by
Medicare, Medicaid, and Social Security expenditures for Baby Boomers. A June
analysis by Moody’s Investors Service found that 10 states have unfunded
pension obligations that surpass annual
revenues. In some states -- e.g., Illinois,
Connecticut, and New Jersey -- economic growth is so tepid,
bureaucrat compensation so high, and Medicaid “demand” so strong, full-bore
fiscal implosions are likely. Many towns, cities, and counties face employee-compensation
nightmares and stagnant revenues.
realities could flip the privatization debate’s advantage to the forces of the free
market. Their policy prescription is a fiscal-responsibility twofer. Privatization
cuts costs and shifts control of assets to owners who, if successful, will
generate tax revenue.
Perhaps, in a
decade or two, The Great Harrisburg Wild West Auction will be remembered not as
a curiosity, but as a trailblazer.
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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