For the past 7 years, the Bush Administration has been pursuing tax cuts and government outsourcing with dogmatic fervor. We have heard plenty about the benefits of these tax cuts; acting as a stimulus for the economy, giving business large and small extra capital to invest or expand their operations (hopefully) hiring more workers in-country. Giving extra money back to the little guy so he can afford to buy more goods and services, thereby acting as another primer for the economy at large. We hear about wasteful and innefective government services being outsourced to private industry who will do it better. And to be fair, they usually do do it better, although they certainly don't work for cheap! Now when any big changes like these massive tax cuts occur, it generally takes time to work it's way through and affect the big picture. So 7 years later, how is this grand experiment working? Well for some folks it's working great and for others, it's a bit of a different story.

Before we get into the effects of these tax cuts, let's do a quick recap of the reasons WHY this Administration is so fervently committed to them. At it's core, the Bush Administration is playing right out of the Milton Friedman playbook. Now, as much as Milton Friedman's ideologies makes the hair stand up on the back of my socialist neck he was actually a pretty smart fellow. So kudos are deserved, and let's take a look at the core of Friedmanism (consider this a Cole's notes summary, very simple). At it's heart, Friedmanism can be boiled down to 3 things:

1) Taxes should be as low as possible. The lower the better. Best if nonextistent, but of course that's impossible so they should be cut to the bone and applied evenly across the board. This means a reduced flat tax that hits everyone regardless of income. Friedman was quoted many a time saying that he supported "cutting any and all taxes, at any time for any reason, as much as possible"

2) Anything the government can do, private industry can do better. This means that public ownership should be as small as possible and the majority of assets and services should be in private hands. In this day and age, this has equated into the privatization of phone, electrical grids and other utilities. De-nationalizing railways, highways that get sold to private bidders and turned into toll roads. Health, Education, and even government services- Bush tried unsuccesfully to privatize Texas' welfare program when he was governor- all of these are just some of the examples. Of special note (and VERY underreported in the media) Is the privatization of the U.S military and it's supporting services. It's estimated that all of the U.S security contractors combined, many of whom are now heavily involved in Iraq, are capable of fielding at least one or maybe even two full combat divisions of infantry! Considering that a few years ago "security contractors" were called mercenaries, largely relegated to small dirty wars and frowned upon by the international community at large, this is one of the biggest silent victories in the war of public vs. private.

3) The role of the government is to uphold and protect the rights of the property owners. Other than that, it must interfere as little as possible in the economy. Ideally it should not interfere at all as Friedman believed that the market was a force of nature that was best left to work naturally. Any attempts at price controls, tariffs, government regulation or manipulation of the money supply was seen as a distortion that would screw up this natural order of things. This would mean that there would be periods of turbulence and massive unemployment as there would be no protections from foreign competition and especially foreign capital that could enter and leave the economy at breakneck speeds. But it was also believed that these hard times would be naturally sorted out by the market, to end up in a "best case" economic scenario that would be the most prosperous for all mankind.

So, with that out of the way, it's easy to understand WHY the Bush Administration is pursuing certain economic policies. To his credit, he has indeed been faithfully consistent in trying to apply as much Friedmanism as possible to the great U.S of A during his two terms in office. But enough droning on about ideology and economic theory. Bush by personality type is a "driver", he cares primarily about the results, not the means by which those results are attained! So, just what are the results, and what can we expect if we continue to go down this road?

Well, I'm going to give you three examples. You may think that they are unrelated, but please do bear with me and take them into consideration. The first example of the new style of life that the Bush Administration is pursuing is in Baghdad. The second is Audubon, New Orleans. the third, is Sandy Springs Georgia.

Now Baghdad is an extreme example as there are many complicated reasons why the situation there is the way it is, but let's focus on the difference between the Green Zone and the rest of the city. This is important for several reasons, not the least of which is the stark symbolism this will come to represent in the future. The Green Zone is a self contained city, still to this day largely surrounded by "red zone" areas despite the mostly succesful surge. The Green Zone has it's own separate water system, electrical grid, heating and air conditioning, and all amenities, food and entertainment on demand. The rest of Baghdad despite the surge, still only gets a few hours of electricity per day and running water is a problem with the massive dammage to it's leaky pipes. Security in the green zone is provided by a mix of U.S army regulars and security contractors- increasingly more security contractors. All of the services in the green zone, from garbage collection to laundry and cleaning services, are contracted out to big name providers like Halliburton, KBR, various companies based out of Dubai etc. Many of these contractors don't actually do the work, they collect the money and then subcontract out to workers paid far less. In fact, there are SO many contractors doing the job of running the green zone (and across bases all over Iraq) that the government realized they needed to have someone watching over and regulating all the various companies on contract. So, they contracted that out too! CH2M Hill is the contractor responsible for overseeing all of the other contractors in Iraq. An enviable position to be in! Outside the walls of the green zone, it's a different story. Security in many areas is a combination of Iraqi police, sometimes U.S soldies, but mostly is still in the hands of local militias..militias that have thankfully agreed to play nice for the time being. So, there are services and amenities outside of the green zone but it is of markedly lower quality and reliability is a big problem. This is because, under the new system people get what they can pay for, and services once considered universal now exist on a pay-as-you go basis! 

In summarizing the example of Baghdad we have private industry largely running the show. Private industry is running the show because the government (formerly called the coalition provisional authority) has been reduced to a skeletal framework that is only capable of doling out money and issuing civil orders and liasing with the military. This reduced, skeletal government only reinforces the necessary role that contractors will play in running operations. And these contractors do an excellnt job but they charge a VERY pretty penny for their services. Because they charge so much, their only customers are the people who can pay. In this case, the only people who can pay is the richest customer, uncle Sam. Under the new system, WHO the customer is or what their goals, morals or ideals are is unimportant. So long as they can pay, it could very well be the Badr brigades occupying the green zone and there would probably still be contractors looking to offer their services. Think I'm joking? Halliburton just moved their headquarters out of the States to Dubai. Yep, they sure are loyal to the U.S and it's fine folks!

The second example is Audubon, an upscale neighbourhood in New Orleans. This is a particularly affluent part of town and after Katrina passed through it had one of the fastest rebound times- while tens of thousands of residents were languishing in FEMA-villes the residents of Audubon had mostly re-established things within a matter of weeks. They sent their kids to private schools while most public schools were still shut down or in chaos. They hired private security to keep an eye on their neighbourhood while the city did (and does to this day) suffer from a very high crime rate. They bypassed all the red-tape of promised reconstruction and went directly to contractors to pay them to rebuild and repair, pronto! So, how does this compare to Baghdad?

It's a disaster zone in which the customer who can afford to builds their own functioning green zone surrounded by those who can't pay. Those who can't pay are at the mercy of a government that has been cut to the bone as much as possible and is therefore highly innefective. They're only real hope is to actually rebel against the government and take reconstruction into their own hands, but this cannot be allowed because that would infringe on the profit rights of the big contractors who are going to gouge the government! Because that government is cut to the bone, they have to spend large amounts of public money on private contractors to do the necessary work, and those contractors are not in any hurry because they know they're the only game in town. Because that government has to spend so much money on private contractors, they then have to further cut their spending on public programs and the like. Once again, a self-reinforcing policy of the whithering away of the state. For the people of Audubon it was a bit of a different story as they payed top dollar, wanting results NOW and they got them! Aint capitalism grand. The other great benefit of outsourcing public works into private hands is the number of hands in the pie- in New Orleans reconstruction the U.S government was estimated to be paying 175.00 per square meter (or is it foot, I'm not sure) to contractors to place blue tarps over dammaged roofs. The government even provided the tarps, the contractors just had to do the work. While the top contractors, companies like Fluor, Bechtel, etc were getting payed 175 dollars per-foot of tarp layed, the actual people doing the work were getting on the order of 2-3 dollars per foot. This is because the contractor sub-contracted the work, who further sub-contracted the work, to the point where a poorly paid immigrant was getting peanuts to actually do the very thing everyone was making so much money off of! This pyramid scheme of money passing hands down the chain for little or no work is going to be the new way of business in our glorious future!

The third example I would like to bring up is Sandy Springs, Georgia. This is a community that a few years ago decided they didn't want all of their hard earned money to get sapped away in taxes and re-distributed to the greater area of Fulton County. So, they incorporated as their own city! Because Sandy Springs was such a wealthy area, they had the money to do it, and by incorporating into their own city, much of the money that went into taxes to be re-distributed to the county would now stay in Sandy Springs. Of course they couldn't completely get out of all their taxes to the county, but doing this managed to retain a huge chunk of their money. Because this was such a wealthy area, once again, top customer gets top treatment. A company called CH2M Hill (remember them, they oversaw U.S contractors in Iraq) approached the good folks of Sandy Springs and said, "let us build your city for you!". They promptly secured a multimillion dollar contract and went to work. Another thing that's revolutionary about Sandy Springs is the corporation of the city only has a handful of employees- 99 % of all the services normally carried out by public funding are all being taken care of by private contractors. In Sandy Springs, the government is about as downsized as humanly possible- just a few people to liase with the contractors and oversee the distribution of funds.

Now, this sounds like a great thing right? Well, of course there are no problems with Sandy Springs, life there is great. Same with Audubon New Orleans and the Green Zone in Baghdad. The question is, what is life like for the areas surrounding these places. Once again, we have green zones and red zones. People who can pay and are ensconced in a bubble, and those who can't who have to make due with what's left over. While Fulton County is certainly no Sadr city (and nor am I insinuating that it is) they have had to make further cut-backs to public programs and spending due to the revenue that was lost from Sandy Springs effectively keeping their tax money local.

Now, in this article I've really over-simplified quite a bit and I thank you for putting up with such long winded blabbery. Consider though the parralels between the three communities I've talked about and what this means for the future of our world..... This has happened before, and it will happen again, only now it is coming to our backyard. In south and central American countries there are plenty of examples of large barrios surrounding isolated conclaves of "top dollar" customers who can afford to live in luxury. Ultimately, this is the world we will get when governments cut taxes and outsource everything to the private sector. Those who can afford to pay, do, and for them life is good. For the rest of the country, which is most of the country, it's a mixed bag and there are no more rights, everything becomes a priviledge! Please ask yourself, is this the kind of world we want to build? Is this the kind of world you want to live in? If you are among the group of people who can afford to live in the future green zones of the world, or if you provide an essential service, skill or trade that will allow you to work in one of these green zones as an administrator/contractor then you will also have a good life. And then there will the large group of people who will be "non-persons", making up a cheap labor pool of disposable workers who will live on the periphery of these zones. These will be the people who go to work in the green zone, but will live in poorly policed areas outside in which many people will have turned to.... other pursuits to make ends meet. This will mean rampant crime, with the only solution being local neighbourhood gangs or militias offering protection. If you think I'm joking, please go to Mexico!

In closing, this is not a Bush-bashing article or an attempt at spurning hate. I am just asking the question, is this the best system we can come up with? Is unregulated capitalism the best vehicle for our future prosperity, or only for a select handful of winners, while the rest of the species get unnecessarily turned into losers? A world of Green Zones and Red Zones, coming soon to a neighbourhood near you!