[sethhochberg]

Regrettably the only source I can find hosting this video is a reddit post, but you might find the remarks by the MTA chair interesting: https://www.reddit.com/r/nycrail/comments/1iyve4d/mta_buildi...

In short: for decades they’ve been allergic to doing any design or project management in house, which meant brand new teams of consultants and contractors spun up for every single project. Lucrative for the consultants, not an efficient way to use funds for a big organization that is constantly doing design and construction.

Seems like the MTA is finally starting to invest in building internal expertise again so they can stop farming everything out

[const_cast]

This is the story of the American public sector. Voters push them to outsource X Y Z to the private sector because clearly public organization X sucks. The private sector is greedy and a black box, so they're basically going to bleed the tax payers dry because they have no accountability to anyone. And the added complexity of hops between communication just burns money. And now the military is paying 150 dollars for a shovel.

The American public is allergic to just considering public actors as job programs. If the MTA would just keep everything in-house that can be a real boon to the local economy. But no, we have to give those jobs to some fuck ass companies made up primarily of salespeople who are going to make big claims and then proceed to run every project overtime and over budget.

[AnthonyMouse]

The real problem is public corruption. People got tired of public officials getting paid off by a public sector union to create a bunch of makework jobs at taxpayer expense. The theory of privatization is that you put the contract up for bids and then every private company has the incentive to get the contract until the profit margins are low enough, and "low profit margins" are to the public's advantage.

But then the contracting process gets corrupted to prevent most companies from bidding and direct the contracts to specific cronies.

What you actually need is better ways to stop public officials from screwing the public for personal advantage.

[const_cast]

I disagree fundamentally - as more things got privatized in the US, you can clearly see the degradation of our services. For example, the NYC subway.

The reality is we are now paying a lot of money for some of the worse public services we've ever had. In the 50s, 60s, and 70s, our public services were considerably higher quality - AND this is with increased labor. We've managed to significantly lower labor cost through technology, and yet the quality has degraded.

We've tried the theory of privatization. In fact we keep trying it over and over. Look around you. Is it working? Yes or no? No, right? Then we should be on the same page.

[AnthonyMouse]

> as more things got privatized in the US, you can clearly see the degradation of our services. For example, the NYC subway.

The question is whether this is caused by privatization or by corruption. Obviously if you constrain who can bid on the contract so that it can only go to some well-connected paymasters who overcharge and underdeliver, things are going to go poorly.

> We've tried the theory of privatization. In fact we keep trying it over and over. Look around you. Is it working?

In which place are we incarcerating the politicians who deliver the contracts to their cronies?

[sensanaty]

> The real problem is public corruption.

So the solution is private corruption where nameless corporations and CEOs get to take public money with 0 oversight instead?

I'm not a yank myself, but in the Netherlands the national railway (NS) is "jointly" owned but run as a private business and is a complete clusterfuck, exactly because we for some insane reason believe that running public transport should be profitable. Prices get raised every year (and we already have some of the most expensive train costs in the world), there's less trains, conductors get paid like shit and treated like garbage (hence them striking often), the trains are late more and more often, they're filthy etc. I don't want to drive, but if me and my partner decide we want to go to a different city by train, it costs us easily double what the equivalent car journey would cost. Of course, if we didn't subsidize cars as heavily as we do that'd probably be a different story, but that's venturing off-topic.

Similarly in the UK, privatization led to nothing but chaos there, and now they're left with ludicrous prices compared to all other modes of transport, because again, things are being run as a private business and they're expecting profits to be made.

Public transport should be a public good, and we should not expect it to be profitable. If it's possible, that's great, but we should aim for quality of service above anything else. How about we instead divert the gigantic chunk of money that goes to maintaining roads and making sure drivers have few inconveniences and instead start investing that in actual public transport instead?

[AnthonyMouse]

> So the solution is private corruption where nameless corporations and CEOs get to take public money with 0 oversight instead?

Presumably the solution looks something like rounding up all of the public officials who officiated over anything that even hints a whiff of personal advantage and sticking their heads in a guillotine.

> Public transport should be a public good, and we should not expect it to be profitable.

Whether something is profitable or not and whether it's provided by direct government employees or not are two independent things. You could very easily pay a private company to operate a transit system while subsidizing fares with tax dollars.

Meanwhile at some point the government is going to be buying something from the market. If they operate the trains, are they also going to design and manufacture the trains? Are they going to manufacture the steel that goes into the trains? What about the energy used to make the steel, or the trucks used to transport it?

But as soon as you have the government buying something from anyone, you need to start lopping off the heads of the public officials whenever there is anything fishy going on with the bidding process or you get what we've got.

[CPLX]

There wasn’t really a “theory” behind all the privatization.

The theory was “if we do this we can get more of the government money in our pocket” and the arguments were backwards construction from there.

[potato3732842]

There wasn't a "theory" because this wasn't some garbage that aloof academics cooked up.

At the time thins were privatized (50s through 80s) the misalignment of incentives was plain as day obvious fact. People looked at <shuffles cards> New York City, and said "do not want" and they attempted to break the feedback loop between public agencies and the parties they were making work for and tried to resolve it by putting more of the decisions of what work needed to be done under the umbrella of the agencies doing it. With proper competition, this can work. But people like you have spent the last 70yr erecting barriers to competition and so in an environment where things are only ever getting bid on by the same few players the costs rise and the values go down.

[chownie]

Transport is often a natural monopoly, rails almost always. There's no way to run that as a private market because no one can meaningfully compete.

[AnthonyMouse]

The sane way to privatize a transit system isn't to give the private company ownership over the system, it's to have the government own all of the plant and equipment and pay various private companies to supply or operate pieces of it. Then they're not deciding what fares are (the thing with no competition), they're deciding how much they bid to provide rolling stock or train conductors and then the government chooses the company with the most attractive bid for each thing it needs to buy in any given year.

The government in turn sets the fares by amortizing the total cost of the system over the number of riders modulo any taxpayer subsidies it intends to provide.

[bsder]

> The real problem is public corruption

The outsourcing push was a Republican party propaganda anti-tax shibboleth combined with pique at government departments that had the temerity to point out that "Reality Has A Well-Known Liberal Bias(tm)".

The problem is that you switch from the government doing something possibly inefficiently to private industry who WILL take their cut no matter what which leads to even less efficiency. The contracting companies are the same but they love privatization because the government has far less recourse when they don't deliver properly.

If you want real competition, you have to keep at least some amount of capability in house in the government or the contractors will simply wring you out knowing full well that you have no recourse.

For the modern strain: see DOGE. And how much money got saved? Yeah, exactly like that.

[AnthonyMouse]

> The outsourcing push was a Republican party propaganda anti-tax shibboleth

For that to be true it would have to be actually saving money in order to allow lower taxes at a given level of deficit spending.

> Reality Has A Well-Known Liberal Bias(tm)

Quoting a satirist isn't a real argument.

> If you want real competition, you have to keep at least some amount of capability in house in the government or the contractors will simply wring you out knowing full well that you have no recourse.

If you want real competition then you need real competition, i.e. multiple companies that can each supply the thing. And then they lose the contract to the other bidders if they mess up.

But when the corruption is the outcome desired by the politicians, preventing competing bidders is the name of the game.

[bsder]

> Quoting a satirist isn't a real argument.

Quoting Republican propaganda isn't a real argument, but you did it anyway.

The Republican point of outsourcing has always been "My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub." (quoting Grover Norquist).

> And then they lose the contract to the other bidders if they mess up.

This only works if the government has enough competent personnel to be able to oversee and evaluate "mess up". When you outsource everything, you no longer have that. So, contractors only have to worry about being sued after the fact, if that. In reality, the failures only manifest 10 years down the road and the companies have all rolled up and disappeared with the profits.

[AnthonyMouse]

> Quoting Republican propaganda isn't a real argument, but you did it anyway.

I think you're missing the dichotomy:

> The Republican point of outsourcing has always been "My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub." (quoting Grover Norquist).

One of two things has to be true. Either their purpose in doing privatization is to cut government spending in order to cut taxes, which would imply that it actually does save money. Or, their purpose is something else, like diverting the same number of tax dollars to their cronies, in which case "in order to cut taxes" is an erroneous attribution of their purpose.

And by the evidence it's the second one, because they don't actually cut spending and yet they still want to do privatization for some reason. Meanwhile if it was the first one as you claim then we should actually want to do it because then it's more efficient and would provide more government services per tax dollar regardless of whether or not you want to cut taxes.

> This only works if the government has enough competent personnel to be able to oversee and evaluate "mess up". When you outsource everything, you no longer have that.

This doesn't require a large number of personnel and in particular it doesn't require the likes of bus drivers or construction workers to be direct government employees, because they're not going to be tasked with making managerial decisions either way.

The real problem is that the people who are tasked with those decisions get paid off (revolving door etc.) to make sure the government gets locked in to some specific contractor or otherwise takes no effective recourse when they come in late and over budget.

[dhosek]

The other thing is that privatization is old-school patronage on steroids: if you structure it right, you get to channel government money to the recipients in a way that continues even after you lose power.

[xnx]

Public or private, this is what happens without competition. Even with a fixed set of tunnels and tracks, there are ways to benefit from competitive market forces.

[JumpCrisscross]

> Voters push them to outsource X Y Z to the private sector

Do voters really push for this? I would have suspected it is the consultants and the unions.

[supertrope]

Giving displaced workers some money or offering a free public service is frowned upon so we have to launder it through dummy jobs.

[krferriter]

Americans have a weird thing with government agencies (or government-owned companies, e.g. Amtrak) simply hiring people to do a thing the government is tasked with doing, or buying things the government needs in order to do that thing. So instead our governments at all levels rely heavily on contracting it out to private companies to do the exact same thing but with higher cost and turnover and no long term expertise built in-house in the government agency which is now tasked with managing and overseeing all this contracting.

The MBTA in Boston also suffered from this and is now undergoing an effort under the new management to hire more in-house staff to do routine maintenance and other work that had previously been contracted out to a variety of private firms.

[pfannkuchen]

I suspect the theory is that private companies with many clients besides the government are less susceptible to bloat and waste than a government agency is because they are not a singleton entity and will be outcompeted if they are sufficiently inefficient.

A problem with this theory is that, I imagine, a lot of such companies basically only have contracts with the government. So it ends up with the same singleton problems, just outsourced.