Bush's corporate raid


June 30, 1992|By Louis Menand

WHY CAN'T the government be run like a business? Some people think the idea is pernicious, that a government operated with an eye on the bottom line would be oblivious to the needs of the people it is supposed to serve. But many think the idea is admirable, and their conviction accounts for much of the support for Ross Perot. It accounts, too, for the interest in Christopher Whittle's plan to create a system of low-tuition, profit-making schools as an alternative to public schools.

The debate is surely beside the point. The problem isn't that the government is not businesslike enough but that it's entirely too businesslike. During the Reagan and Bush administrations, the government has done, on a scale only dreamed of by the most ambitious corporate raider, what nearly every other big business in America has tried to do.

It has borrowed vast sums, made its future income hostage to interest payments on its debt, tried to sell off many assets, rewarded its captains with perks and insulation from the ordinary world, ignored long-term planning in favor of short-term advantage, devoted great energy to polishing its image and let its customers pay higher prices for the services it no longer finds it worthwhile to offer.

This has all been accomplished under the banner of "government can't work" -- a piece of cant now accepted by Republican and Democratic politicians alike. It does not seem to have occurred to anyone that the executive branch has not had the slightest interest in trying to make it work.

Instead of attempting reform of, say, welfare, education, public works and natural-resource management programs that had become wasteful or ineffective, the Republicans have tried to privatize them, to turn public responsibilities into profit-making opportunities for private business.

What the Republicans couldn't privatize, they let rot. Nothing was more emblematic of this nongoverning philosophy than the administration's response to the Los Angeles riots. Here, its spokesman said, were the consequences of the War on Poverty -- policies blighted by the foolish idea that government can help people become better off. Forget that the War on Poverty lasted for all of three years, before the Vietnam War and election of Richard Nixon sapped its funding and commitment to create innovative programs.

Now public education is being offered as the latest wretched proof of the inability of government to work -- as if the most important thing about public education were cost-efficiency.

It is hard to think of a single serious government effort during the last 11 years, apart from lectures about values by William Bennett, the former education secretary, to get rid of (or to induce the states to get rid of) the inequities and bureaucratic paralysis that afflict the educational system -- let alone to create a public school system of a better kind. Instead, we have the magical concept of vouchers: a plan to extend tax credits to families that can afford to opt out of the public system altogether.

Mr. Whittle says that in planning his new private system, "We're assuming no vouchers to start." Secretary of Education Lamar Alexander, the principal champion of the voucher system, has said he will not comment the Whittle plan. Why? Because he is Mr. Whittle's former business associate. In a second Bush administration, it is in this manner that the public interest would be represented during the most well-funded challenge ever mounted to the school system most Americans rely on. Can anyone doubt that the Mr. Alexander hand will fit into the Whittle glove?

The Whittle schools will be expected, of course, to generate a profit. Who will benefit? Not the taxpayers, whose dollars will subsidize the schools if the voucher plan becomes law, but Mr. Whittle's corporate investors. Of these, the biggest is Time Warner, which holds a 37.5 percent interest in the enterprise.

Its chief executive officer (now on leave) is Steve Ross. In 1990, his compensation was $78 million. That's a big salary for a company with a $11.4 billion debt, but if the Whittle plan succeeds, taxpayers will have a chance to help out. They will have the satisfaction of knowing that a school system is finally being operated like a business: It is making somebody rich.

Louis Menand is a contributing editor of the New Republic.

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