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 Its all about greed and power and the Republican fixation on the 16th century.

Crossposted at Texas Kaos.

Two references to our favorite PMC (and to PMC's in general) were in the news this week. Paul Krugman reminds us in the first piece that the model of profiteering the Bushies are using is not new, but quite old, as in the 16th century. The second piece from Corporate Watch demonstrates the new wrinkle the bushies have added. The no bid contractors don't do the dirty stuff themselves, like Georgie, they too farm it out. Why? Deniability. Like Capt. Renault in Casablanca , Bush can claim to be shocked, shocked at the evil deeds done by the subcontractors. So can the parent companies.

LINK   Tax Farmers, Mercenaries and Viceroys, by Paul Krugman, A Monarchy Commentary, NY Times: Yesterday The New York Times reported that the Internal Revenue Service would outsource collection of unpaid back taxes to private debt collectors, who would receive a share of the proceeds.

    It's an awful idea. Privatizing tax collection will cost far more than hiring additional I.R.S. agents, raise less revenue and pose obvious risks of abuse. But what's really amazing is the extent to which this plan is a retreat from modern principles of government. I used to say that conservatives want to take us back to the 1920's, but the Bush administration seemingly wants to go back to the 16th century.

    And privatized tax collection is only part of the great march backward. In the bad old days, ...[t]here was no bureaucracy to collect taxes, so the king subcontracted the job to private "tax farmers," who often engaged in extortion. There was no regular army, so the king hired mercenaries, who tended to wander off and pillage the nearest village. There was no regular system of administration, so the king assigned the task to favored courtiers, who tended to be corrupt, incompetent or both.

    Modern governments solved these problems by creating a professional revenue department to collect taxes, a professional officer corps to enforce military discipline, and a professional civil service. But President Bush apparently doesn't like these innovations, preferring to govern as if he were King Louis XII.

    So the tax farmers are coming back, and the mercenaries already have. There are about 20,000 armed "security contractors" in Iraq, and they have been assigned critical tasks, from guarding top officials to training the Iraqi Army.

    To whom are such contractors accountable? Last week a judge threw out a jury's $10 million verdict against Custer Battles, ... a symbol of the mix of cronyism, corruption and sheer amateurishness that doomed the Iraq adventure -- and the judge didn't challenge the jury's finding that the company engaged in blatant fraud.

    But he ruled that the civil fraud suit ... lacked a legal basis, because ... the Coalition Provisional Authority  ... wasn't "an instrumentality of the U.S. government." It wasn't created by an act of Congress; it wasn't a branch of ... any ... established agency.

    So what was it? Any premodern monarch would have recognized the arrangement: in effect, the authority was a personal fief run by a viceroy answering only to the ruler. And since the fief operated outside all the usual rules of government, the viceroy was free to hire a staff of political loyalists lacking any relevant qualifications for their jobs, and to hand out duffel bags filled with $100 bills to contractors with the right connections.


Let us reflect on Krugman's insights here. At least the Bushies are consistent. Those who have should be allowed the perks of their status. Rich frat boys should be allowed to govern like potenates of old, without being questioned or held accountable. That is what being a rich frat rat means, never having to say you are sorry or even to explain yourself to the peons.

Leo Strauss , the godfather of the Neo-Cons would understand. The elite and enlightended ones who govern us cannot be accountable to the benighted masses or their minions, they are not wise enough to know what is good for them.

Unless these ideologues are stopped, we will end up with innumerable private corporations exercising enormous power over American citizens, especially the most vulnerable, but immune to the reach of our laws and legislators, safe behind a wall of "subcontractors."


Workers already have experienced the gut wrenching impact of this "outsourcing". They fire you as an employee and bring you back as a temp or contract worker at lower wages and no benefits. Sounds like a modern variation of peonage to me.

LINK "What we found is that rampant disaster profiteering abuses are needlessly slowing down the reconstruction of New Orleans and the rest of the stricken Gulf Coast region after Katrina," CorpWatch director Pratap Chatterjee told reporters. Chatterjee, who is author of the book Iraq Inc. about contractor abuses in halfway around the world, compared the situation along the Gulf Coast to that of the Middle East.

According to the report, the clearest instances of waste in Gulf Coast reconstruction are the contracting pyramids schemes - layers of subcontracting that turn an easy profit for the many middlemen. This layering creates distance between corporations such as Halliburton subsidiary Kellogg, Brown & Root (KBR) and the subcontractor that ultimately performs the work. It allows KBR, for example, to plead ignorance when labor abuses are uncovered, as happened when a subcontractor was caught employing undocumented immigrants late last year and accused of mistreating them.

Note the list of  abusers. Blackwater's use of  "subcontracts" is simply their adoption of the ever more popular corporate model. The scheme is of a piece utility privitization. Create a middle man, rip off the government or consumer, hire a cheap subcontractor to actually do the job and do it badly. Blame the subcontractor for all problems, and stick them with legal liability as well.

My brother works for a public utility entity in my home town. He recently told me the story of how it works in his field. His company by law must put out bids for designing a certain kind of public infrastructure ( say a monitoring station for water or such) . The lowest bidder gets the job of creating the design. My brother must then build the infrastructure to these specs.

Here is the kicker, their in house engineers must go over the specs and give their final approval. In some cases, these house engineer literally must redo the specs , and still pay the contractor for their lousy work. My brother's company cannot keep engineers. They are so overworked and so underappreciated they won't stay. My brother knows if something goes wrong he will be blamed , since he must install the project and is "the last line of defense" against faulty plans.  

No reason is given for the inability to go back at the private firm who designed the faulty specs. I think I can guess one. Clearly somebody is making money off of the public and have the pull to NOT be held accountable. Cronyism, American 21st century style!!

Originally posted to lightseeker on Tue Aug 22, 2006 at 07:47 PM PDT.

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Comment Preferences

  •  Tax farming (5+ / 0-)
    Recommended by:
    tryptamine, roses, Elise, naltikriti, epppie

    was one of the worst fiscal policies of the ancien regime. Typical that the regressives now in charge would think it a nifty idea.

    Note to diarist: You picked the wrong Louis--Number 12 was actually pretty good as far as monarchs go...good diary, though!

    Scientia potentia est.

    by slksfca on Tue Aug 22, 2006 at 07:44:50 PM PDT

  •  Nice Job. (4+ / 0-)
    Recommended by:
    roses, Elise, slksfca, epppie

    I didn't think about the tax farming angle.  You could add state-sanctioned piracy, or buccaneering by corsairs.

    As an Iraqi-American academic born and raised in New Orleans, this voter is not pleased.

    by naltikriti on Tue Aug 22, 2006 at 07:49:43 PM PDT

  •  very interesting diary. nt (2+ / 0-)
    Recommended by:
    Elise, slksfca


    I am a winner because I am a loser.

    by epppie on Tue Aug 22, 2006 at 07:54:19 PM PDT

  •  Very good diary.. (4+ / 0-)
    Recommended by:
    roses, Elise, slksfca, epppie
    and so true.

    The neo-cons would like to see nearly every aspect of our government privatized .

    I spent a couple of hours browsing Halliburtons website seeing how much they are involved with governments globally . The dollar amounts are mind boggling.

    I read a couple of days ago how the IRS was planning to outsource the Collections jobs to private companies. Immediately I wondered about the security aspect of that...could be a nightmare.

    Its going on more and more in local governments too..contracting out public works. I would venture a guess that most citizens have no idea it goes on.

    "There comes a time when silence is betrayal" Martin Luther King, Jr.

    by Esjaydee on Tue Aug 22, 2006 at 08:05:37 PM PDT

  •  This is so important. (0+ / 0-)

    But the anti-government idea is so deeply implanted.  What image of government overcomes that?

    I am a winner because I am a loser.

    by epppie on Tue Aug 22, 2006 at 08:15:50 PM PDT

    •  OF, BY, AND FOR THE PEOPLE. (4+ / 0-)
      Recommended by:
      gogol, wenchacha, walkshills, epppie

      Like DUH, right?

      How quaint it sounds.

      But that's really how it is supposed to be here.

      Corporations have no accountability at all- their only purpose is to make as much money for themselves as possible, and our only recourse is to try to sue them- good luck with that, when they can afford the best lawyers AND the best legislators money can buy.

      This is what Libertarians do not understand- or else disingenuously pretend not to understand- when they juxtapose the ideas of personal freedom and corporate freedom.

      A proper government- not a hijacked one- can do things that are not the most profitable, but are in the people's best interest, because their JOB is to REPRESENT the people. The Mystical Sacred Free Market would never come up with things like environmental regulations, product quality standards,  workers' rights, or taxes on imported products to make them competitive with ours held to those higher- if less profitable- standards.
      No, it would be (and lately, is) a race to the bottom. Corporate freedom is not the same as personal freedom, in fact, the two are inversely proportional.  Drown the government, and you are not free, you are now slaving under a tyranny of multinational shareholders that can't even be impeached.

      •  The Constitution is We The People (2+ / 0-)
        Recommended by:
        wenchacha, walkshills

        plus a lot of fine print.  It couldn't be more clear that government is us.  Yet somehow people don't see it.  They see government as the enemy and brand names as friends.

        Gotta admit, a lot of that could come from the experience of dealing with gvt. officials.  It can be a great experience, but sometimes it's almost scary how unresponsive they can be.

        I am a winner because I am a loser.

        by epppie on Tue Aug 22, 2006 at 11:12:54 PM PDT

        [ Parent ]

  •  16th Century? (2+ / 0-)
    Recommended by:
    esquimaux, slksfca

    In the Bible, "Tax Collectors" was the term Jesus used to refer to the most despised people on earth.

    Matthew 5:46 For if you love those who love you, what reward do you have? Don't even the tax collectors do the same?

  •  interesting diary (1+ / 0-)
    Recommended by:

    wouldn't be complete tho without a small plug for The Libertine (i know, 17th cen. still all of an age) starring johnny depp.

    the good part is the end, of course, by which time the 2nd earl of rochester's beautiful mind and lithe extremeties have rotted due to the course of untreated syphillis.

    a pox! a pox on all of us!

    Diversity is the key to economic and political evolution.

    by MarketTrustee on Tue Aug 22, 2006 at 08:29:45 PM PDT

  •  What's Difficult to Understand About the Fact (0+ / 0-)

    that the information age world is largely aristocratic private property?

    Bush is only extending government a little here and there.

    America is being reinvented by America.

    The most we can vote out of office (on parchment) are a few hundred elected reps.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy....--ML King, "Beyond Vietnam"

    by Gooserock on Tue Aug 22, 2006 at 08:42:22 PM PDT

  •  So what's next? (3+ / 0-)
    Recommended by:
    gogol, station wagon, Cottagerose

    Privatized prisons?

    ...Never mind, we already got those.

    (-6.88, -6.36) Nobody asked him about his hair.

    by Tiny Wurlitzer on Tue Aug 22, 2006 at 10:02:00 PM PDT

  •  How does one complain while applauding? (4+ / 0-)
    Recommended by:
    gogol, walkshills, Gegner, slksfca

    The second piece from Corporate Watch demonstrates the new wrinkle the bushies have added. The no bid contractors don't do the dirty stuff themselves, like Georgie, they too farm it out.

    I worked construction for 40+ years. Union and non-union.

    I wrote to 83 different agencies, authorities, etc back in the mid 80s about a general contractor using subcontractors and sub-subcontractors to his advantage. I exposed the taxes lost, the corruption and the general damage to all levels of America especially concerning dollars amounts.

    Response? 0, zip, nada, none, nothing, not even a simple fuck you.

    Any contractor or any businessman that cheats a single employee cheats us all. The old adage of an injustice to one is an injustice to all is absolutely correct.

    A contractor cheating an employee(s) out of wages earned is cheating the city income tax, the State income tax, the Federal income tax, the social security tax, the Medicare tax, the SUTA, the FUTA, the Worker's Compensation Program, etc., etc., etc

    No one cared, no one responded not even enough to tell me fuck off.

    Regardless your or my feelings about this story, a lesson to be learned has been broadcast herein.

    If you desire success, pay attention.

    •  100% America is Built for the Corrupt. (2+ / 0-)
      Recommended by:
      gogol, Halcyon

      Any system as naive as ours wrt corporate controls is naive for a reason.

      That reason is that our culture (nut just our business culture) is set up so that the corrupt are most well adapted for success.

      That may be a basic human flaw, but not every country exhibits it to the degree that ours does in quite so hypocritical a fashion.

      Throw your TV at your TV.

      by Bad Schandau on Tue Aug 22, 2006 at 10:20:07 PM PDT

      [ Parent ]

  •  Every American Should Read This: (7+ / 0-)

    Even if you're the most backwards, selfish, arrogant hater Republican... there is no way to support a NeoCon or a NeoCon sympathizer once you've read this:

    the viceroy [Bush] was free to hire a staff of political loyalists lacking any relevant qualifications for their jobs, and to hand out duffel bags filled with $100 bills to contractors with the right connections.


    Throw your TV at your TV.

    by Bad Schandau on Tue Aug 22, 2006 at 10:17:08 PM PDT

  •  Interesting diary and I love the fact you (3+ / 0-)
    Recommended by:
    gogol, chantedor, walkshills
    mention blackwater, they need to be stopped!

    I love America for the dying dream that hasn't yet died... but they are coming for your fourth amendment, what are YOU going to do to save it?

    by StormingAmerican on Tue Aug 22, 2006 at 11:27:46 PM PDT

  •  Sorry I missed this yesterday (2+ / 0-)
    Recommended by:
    gogol, chantedor

    I would have rec'd. I wish everyone could read and understand just how horrendous Bushco is.

  •  The truly scary thing... (4+ / 0-)
    ...about Blackwater and the likes is, that not only do they amass people able and willing to kill for money, but are are capitalist corporations that need to grow their businesses.

    Growing their business means spreding disorder and chaos on which they thrive. They cannot be interested in creating peace from a business perspective.

    Reality is that which, if you stop believing in it, doesn't go away.

    by RandomGuyFromGermany on Wed Aug 23, 2006 at 08:52:27 PM PDT

  •  It's time we marched on the White House... (3+ / 0-)
    Recommended by:
    gogol, chantedor, anais

    All this talk about W being the new King George, or further back in time, to the 16th century has only served to reinforce a vision I had of the populous marching on the White House. The vision was similar to the Frankenstein movies, where the peasants of the town take up wooden pitchforks and flaming torches and marched up to the castle.

    This is what I envision the March on the White House to be, a peasant revolt, (after-all, that is how this Administration treats us) complete with wooden pitchforks and rakes and torches. It's all symbolic of course, but I like that image and what it says about the "let them eat cake" attitude they have.

    •  Hear, hear VinBacchus. Meteor Blades discussed (3+ / 0-)

      something similar regarding Iran, except with the motiff that the march(es) should be simultaneous across America's leading 250 cities.

      I say this is an excellent idea and add that these demonstrations should be on a continuing basis.

      Bush, it seems was surprised, puzzled and (perhaps) impressed by the giant anti-U.S. demonstration in Baghdad the other day.

      I say WE should join the parade and see if we too can get President Nero's attention.

  •  Sorry, too late to recommend, but you and Krugman (2+ / 0-)
    Recommended by:
    chantedor, Yellow Canary

    are on to something important and major.

    There is a major reworking f the American economic system. The elimination of  legal liability and responsibility for contractors is a major development.

    As you and Krugman point out, the extermination of civil institutions are being wiped out in the name of cronyism and the old robber barons. Even the great private corporate "trusts" that were run  as private feifdoms for corporate monopolis, and subsequently broken up, are reappearing without any accountability.
    It is a grave problem.

    This return to unrestrained plunder and corporate looting is what Bush refers to when he talks about "they(? [N.B.])  don't like our freedoms." He's talking about the freedom of corporate America to pillage, at home and abroad.

    The Republicans are running a firesale of the infrastrucure of the U.S.

    And don't even talk to me about out sourcing.

    Another tax cut for the rich anyone?

  •  Excellent diary (2+ / 0-)
    Recommended by:
    chantedor, Yellow Canary

    Another great set of Bushian loopholes.

    The good news is that the really rich tax evaders can bribe, or buy the tax collecting companies while normal people will get shafted. (Not really good news, that)

    Jim Brandt for Congress (CA-46)

    by mungley on Wed Aug 23, 2006 at 09:29:37 PM PDT

  •  Peasant revolt? (1+ / 0-)
    Recommended by:

    This administration would simply unleash the army or some rent-a-cops on even the most symbolic of protestors.  Don't think it could happen?  Herbeert Hoover's army led by Chief of Staff Douglas MacArthur was pretty ruthless in putting down a march by WWI veterans who only wanted to collect a promised bonus early to tide them through the Depression.

    And yes, Blackwater or their ilk would profit even from the protest.

  •  very important diary (0+ / 0-)

    I missed it last night and am glad it was rescued. Thanks for posting this.

  •  also reminds me (1+ / 0-)
    Recommended by:

    of Warren Buffet's comments on how policies are leading us in the direction of becoming a sharecropper society:

    A country that is now aspiring to an "Ownership Society" will not find happiness in - and I'll use hyperbole here for emphasis - a "Sharecropper's Society." But that's precisely where our trade policies, supported by Republicans and Democrats alike, are taking us.


  •  it is time to attack these crooks directly (1+ / 0-)
    Recommended by:

    It's time for the people to take back their government by engaging in acts of civil disobedience including the occupation of the offices of these crooks. We got to get in and grab their computers and examine the hard drives for evidence of their wrongdoing and then they make it all public. It only takes a few dozen people to successfully occupy a corporate headquarters. It is time to return to some of the tactics of the 1960s and do so. We should also set up a protest camps outside the homes of the executives of these companies and make sure that they start every day with a good bit of harassment. Some people may have to be willing to face fines or brief imprisonment for these actions but unless we get off our asses and do something they will continue forever. These conflicts will draw media coverage, which will bring more attention to the corruption. So let's see some action!

    I'm a linguist, licensed to use words any way I want to!

    by MakeChessNotWar on Wed Aug 23, 2006 at 11:15:17 PM PDT

  •  Healthcare (0+ / 0-)

    is another bastion of middleman money manipulation. Great diary of ultimate importance!

    "I count him braver who overcomes his desires than him who conquers his enemies; for the hardest victory is over self." --Aristotle

    by java4every1 on Thu Aug 24, 2006 at 05:50:31 AM PDT

  •  Caught this on the rescue rebound ... (0+ / 0-)

    ... too late to rec, but this is a rich narrative worth restating again and again.


    W taught Pfc Green everything: One planned and enacted the rape of a girl and the murder of her family. The other raped a country. Eerily parallel crimes

    by Yellow Canary on Thu Aug 24, 2006 at 06:27:36 AM PDT

  •  The must read book (0+ / 0-)

    in my estimation is The Global Class War by Jeff Faux.

    Yes, frat rats are running the country, via the network of banks, corporations and politicians.
    No, there aren't that many of them, but they have a lot of money, money buys influence, press control, and ends with the U.S. Army being used for private gain for these people.

    The other two good books I have read recently, that pertain are A Thousand Barrels a Second by Peter Tertzakian, and China Inc. by Ted C. Fishman. They reinforce that this is where we are, this is where we're going, and most importantly, who got us there and why.

  •  Modern publicans (0+ / 0-)

    publican [Lat.,=state employee], in ancient Rome, man who was employed by the state government under contract. As early as c.200 B.C. there was a class of men in Rome accustomed to undertaking contracts involving public works and tax collecting; the tax collectors made the most profit. The publicans were usually equites equites (ĕk`wĭtēz) [Lat.,=horsemen], the original cavalry of the Roman army, chosen, according to legend, by Romulus from the three ancient Roman tribes; the equites were selected from the senatorial class on the basis of wealth.
    ..... Click the link for more information. , or capitalists. In the Gospels—which showed the general detestation, particularly in Asia Minor, Syria, and Palestine, in which the publicans were held—the publicans mentioned were tax collectors. From the 1st cent. A.D. the abuses of the publicans began to be corrected, and by the end of the 2d cent. the publicans as a group had disappeared.

    Ah- history repeats.
    Only now they are RE publicans-how fitting.

  •  Sorry I missed this one first time around (0+ / 0-)
    great diary.
  •  Could backfire (0+ / 0-)

    Basically when you give a debt to private collection agencies you in effect sell that debt to them no?
    If so those few who are still able to could logically declare bankruptcy on tax debt.
    Am I wrong?

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