I Finally May Be Understanding Something

This year has been a frustrating year for my business.  As many of you know, I am in the business of privatizing public recreation.  We take over the management of public recreation facilities, and are generally able to run them to the same or better standards as the government for less money.  Whereas before we take over, the government typically loses money on a park, we often can run it at a profit AND pay the government rent for the concession rights.

This year, numerous state parks have been threatened with closure in states all across the country.  In many of these states, I have communicated with everyone I could think of, from the governor to state parks leaders, trying to say that companies like ours could probably keep many of these parks open. I told them I wasn't looking for a sweetheart deal - we weren't afraid to bid against other companies, but it was crazy to close parks that could easily remain open.   We have been told any number of times by numerous state leaders that they would prefer to close the park rather than put it under private concession management.

To some extent, this is due to the pressure of public employees unions, who have every incentive to play brinkmanship and force closure of parks rather than set the precedent of having them managed by a non-union private company.  This is unsurprising.

I also understand that there is a fear of private management of public recreation facilities.  I swear the first think I hear almost every time I present on what we do  is that they fear we would put a billboard or a McDonalds in front of Old Faithful.  I kid you not, this charge is as regular as clockwork.  Fortunately, we manage about 175 public recreation facilities to a pretty high standard, and not one billboard or McDonalds can be found at any of them.  A large part of the bid process for any facility management contract is not just the rate or the rent but also the detailed operating standards to which it will be managed.  So this is a normal, but surmountable hurdle.

But even taking into account these usual sources of resistance, I am always just amazed at how vociferous the opposition is to even experimenting with private management.  States like California are simply hell-bent on closing parks a company like ours could easily keep open for the public (to be fair, Ruth Coleman, head of California State Parks, is very open to new models but she gets absolutely no support either within her organization or in the legislature for such new ideas).

But I think I understand this phenomenon better now after reading Kevin Drum today. This is what Drum wrote in response to the DNC ad, which clearly stretched the truth, claiming that Republicans voted to end Medicare:

Why not just tell the truth: Republicans essentially voted in favor of turning Medicare over to private industry.  With only a few words of explanation, this could easily be more effective than the ad that actually ran.  Like so:

Republicans voted to turn Medicare over to private insurance companies!  You heard right: they want to hand Medicare over to the same companies that [insert two or three insurance company outrages here, maybe a Wall Street reference, something about profits over people, etc.].  Democrats will never do that.  Blah blah blah.

Would that really be any less scary than the ad that actually ran?

So for Drum, and I presume for much of the Left, the suggestion that a government service be managed privately is just as bad as the suggestion that the service be ended. In essence, Drum is saying he would almost rather have no Medicare than Medicare provided privately.

It certainly explains a lot, and puts the phenomenon I see in public recreation into a larger context.

Update: A couple of the comments hpothesize the problem is that many in government and on the left just hate profits and the profit motive in general.  One related story -- I was in a meeting with a large state parks organization where a senior person raised the idea of private park management.  Well, everyone hated the idea, but when it looked as if the leadership might still seriously consider the private option, one person in the room said "well could we at least mandate that they can't make a profit."  There was a lot of head nodding at this.

I didn't go off on this and kept a smile on my face.  But I did lose it in an earlier meeting with the head of some government parks we actually did run.  We were discussing park fee increases for the next year (the state had just raised minimum wages about 30% and we were scrambling to make ends meet).  He said he was uncomfortable with the level of profits we made.  I asked him, "Jim (not his real name) does this state pay you more than $25,000 a year to run this park?"  He nodded.  I said, "then you make more profit in this park than I do, and what is more, you didn't have to invest $100,000 in equipment to get your job, nor do you have to rebid for your job every 5 years, nor does you salary go down if for some reason park visitation decreases."

Sometimes I wish I had stood up in that state meeting and said something similar, as in "Why is the money I make in a park somehow tainted because it is the difference between my revenues and expenses and the result of substantial investments and subject to extraordinary risks, while the virtually guaranteed-for-life salary you make, paid for by the same visitors, is somehow pristine?"


  1. Matt:

    Yeah, but then they'd just put a McDonald's billboard on the side of the hospital buildings...

  2. Ben:

    "Nice public state park you got there. It would be a shame if something were to happen to it during these tough economic times. I'm sure with just a little tax increase, we could protect it from any, um, unforeseen closures...."

  3. silvermine:

    In CA they are threatening this so that we'll agree to more taxes. They do not *want* you to make the parks successful. They want them to require funding so they have a reason to demand more money and more power.

    That's why every budget cut doesn't start with the department of regulating hairdressers. It starts with police, fire, education, etc..

    It's our punishment for voting against them.

  4. artemis:

    You hit dead on a basic theme underlying all of this. Profit itself is evil. Making money at someone else's expense (is there any other way?) is for some reason wrong.

    I can't quite understand the mental contortions that people like Drum go through to advocate modern feudalism under the argument that the government taking everything possible to ensure that everyone gets a "fair" share is somehow "good".

  5. Daniel:

    I think Ben and Silvermine hit the nail on the head. This is the Washington Monument strategy. As long as politicians control parks they will use them as political levers to achieve other goals such as appease key special interest groups.

  6. Stirner:

    In my large coastal city, it is always the libraries and city pools that the are the first sacrificial lamb on the budgetary chopping block. They play a helpful role in upping the ante during budget deadlocks. By having these popular and well-used programs on the front line of the budget battle, it makes it much easier to dramatize the perils of budget cutting, as well as divert attention away from public worker union pay packages, sweetheart no-bid municipal contracts, etc.

    I guess out west, the parks serve the same role.

    Remember the government "shutdown" during the 1990's? The national parks were the ones that were going to be closed in that case. How many states would have been willing to pay the costs to keep the parks open during the FED shutdown, if only to keep those tourism dollars flowing?

    Imagine if these services were basically privatized and had dedicated funding sources from user fees or dedicated taxes and special funds that insulated them from budgetary crises involving state general funds? Far fewer members of the public would give a rip about potential "draconian" cuts in government.

    "You mean I get my useful public services, but the government workers that make more money than me and get a sweetheart retirement after 20 years are going to get some of their benefits cut. What's the problem, cut away!"

    That line of thinking is the "doomsday scenario" the political class is trying to avoid - not cuts in public services.

  7. DrTorch:

    I can’t quite understand the mental contortions that people like Drum go through to advocate modern feudalism under the argument that the government taking everything possible to ensure that everyone gets a “fair” share is somehow “good”.

    It's called "envy". And it used to be recognized as one of the seven deadly sins.

  8. Esox Lucius:

    I ran for office last year and had a conversation with a woman on my own team regarding privatizing parking in town. She said, "Privatizing something that should be run by a government is like admitting that the government is incompetent."

    I was like, "Exactly! So you are on board then?" She says, "NO! If I am (she is) elected the government won't be incompetent anymore."


  9. hanmeng:

    And yet, I think it was Sam Donaldson who complained a few weeks ago on "This Week with George Stephanopoulos" that there was a widespread fear amongst Americans who didn't trust government to run things properly. Not widespread enough, I guess.

  10. Paul Dubuc:

    Silvermine seems to me to be closest to the truth on this by my lights. Parks, fire, police, etc. are cut or closed 1) as a punitive measure for failure to vote on levies, etc, and 2) in lieu of laying off unionized bureaucrats (much less dismantling entire bureaucracies), which sets an unacceptable precedent.

  11. DCW:

    Many many years ago, my grandfather, Clennell C. Wilkinson, as editor of the O.C. Register and vice president of the Izaak Walton League of America, would have firmly supported you and your conservation efforts. Fighting for private control and individual rights has been a long fought battle, and it looks to be a never ending one. Keep up the good work and keep the fight alive!

  12. Burzin:

    As Mankiw suggests here: http://gregmankiw.blogspot.com/2009/07/trust.html, it all boils down to the question "Whom do you trust?" There are many citizens who inherently trust the government more than a private enterprise, hence resulting in your observations.

  13. perlhaqr:

    I was babysitting two 4 year old nephews at the time, so I didn't get a chance to explore the enormous building there, but there might actually be a McDonald's at Old Faithful. There's certainly some restaurant there.

  14. Foxfier:

    ....Why on earth would they hand over a prime bargaining chip?

    These ARE the same park services that are fighting to find ways to harass ranchers out of renting land to run cattle on, even though it has been shown to improve the health of the area and reduce fire danger.

    If they threaten to close parks, they get more money. Same reason they threaten to remove cops, schools and fire fighters instead of assistant secretaries and travel accounts when there's a budget cut.....

  15. epobirs:

    Yosemite was long run by the Curry Company. Some of my siblings were employees in the 70s. Is this historically seen as a good thing or a bad thing?

  16. stan:

    Some years back I exchanged e-mails for over a year with a very liberal, young lawyer. Based on some things he wrote, I'm sure he came from a family of lefties and probably had some folks in the family who were communists in previous generations. The most interesting aspects of the back and forth were not the standard arguments he threw up, but the unthinking assumptions or stock phrases that would come out and reveal so much.

    One of these was his use of the term "corporate interests". Apparently, these were the ultimate boogeyman. He used "corporate interests" the way some people might refer to "Jewish bankers".

    I once tried to explain to him that his clients, friends and neighbors were the people who worked and mangaged America's corporations. In his world view, all these people might be good people with good intentions who did the daily work of the business, but somewhere in the hiearchy were bad people who actually controlled things. I guess all the good people he knew were just too stupid to realize how their daily work taking care of people's needs was being used for nefarious purposes by the corporate interests who really ran things.

  17. tomw:

    Putting words in some mouths:

    Drum: You get no choice. The "Government" will run Medicare. What more could anyone want?

    Coyote: You mean you'd rather have a monopoly than have the possibility that someone can do a better job? Why?

  18. Dan P.:

    Warren, I've been an NPS park ranger in the past and I've thought a lot about this. I propose that people blench at privatization because, for a variety of reasons, many people see parks as 'sacred.' For nature-lovers, wilderness buffs, devout environmentalists, those with compelling faith in government (manifesting in the cult of the Civilian Conservation Corps), and devout patriots (especially on the federal level, where you start including historical sites of national significance), parklands are shrines and temples, every bit as sacred as cathedrals. Park managers, whatever their beliefs and backgrounds, tend to fall in one of these or similar categories.

    So when you come in and offer to streamline the operation, improve service, and cut costs, they see a money changer in the temple and start braiding whips. It's a perspective that defies party lines.

    This perspective helps to explain a lot of the public's relationship with their parks. Exhibit A will be provided by Ken Burns on PBS this fall.

  19. Lark:

    I'd go for tribalism as an explanation. They clearly don't mind when the "good" people are in control and make way too much money doing an awful job, but the idea that the "bad" people might run something (successfully!) is anathema.
    The evil of money (and their opponents), the sacredness of the job, etc. - look at the government/good people's record on anything* and it's clear that these are just clubs.
    (*And the venom you get if you do compare records.)

  20. Cory:

    The Charlotte area has a wonderful private park called the White Water Center with man made rapids and excellent hiking and mountain bike trails.

    I do not know if they have received state funds but they seem to be doing well this year by promoting concerts and various other events to attract visitors.

  21. Noumenon:

    You gotta remember Drum thinks for-profit companies do a terrible job, mainly it seems because they don't have good customer service phone lines. Like me, he hates the cable company for making you stay home all day more than he loves the cable company for giving you cable. He also hates credit card companies for charging fees more than he loves them for letting you buy stuff. So no wonder he doesn't want for-profit taking over. He thinks it's worse service than the DMV.