“The outsourcing of governmental services is the road to tyranny.”
Trenz Pruca
(A TPJ Update and Critique of My 2022 Review)
By Trenz Pruca
Introduction: Revisiting an Old Warning
Several years ago—back in the summer of 2022—I wrote a post on Trenz Pruca’s Journal reviewing Mark Levinson’s excellent analysis of The Privatization of Everything: How the Plunder of Public Goods Transformed America and How We Can Fight Back, by Donald Cohen and Allen Mikaelian.
(Original TPJ post: July 17, 2022.)
At the time, I described the book as one of the clearest autopsies of the forty-year privatization frenzy that began with Ronald Reagan, metastasized under Bill Clinton, and eventually saturated every corner of American public life. The post laid out how privatization hollowed out democratic accountability, weakened unions, and quietly transferred enormous political power away from citizens and toward corporate boardrooms and private equity firms.
Back then I suspected things were bad. In 2025, I can report—with the grim satisfaction that comes from being right for all the wrong reasons—that things were worse than even I imagined. The book’s warnings were not simply accurate; they were modest.
What follows is my updated assessment—how the argument has aged, what has changed since 2022, where Levinson, Cohen, and Mikaelian were most prescient, and how the privatization project has entered its late, decadent stage.
This is not a neutral academic revisit. It’s a TPJ field report from a country where the “private government” has grown so large that the public one is starting to look like a historical reenactment troupe.
I. What I Wrote Then—And What Still Holds True
In my 2022 post, I emphasized three key points from Levinson’s review that still matter today.
1. Privatization Was Never About Efficiency
Reagan, channelling Milton Friedman, insisted that government was the real problem, that “society” didn’t exist, and that we were all rugged individuals except, perhaps, when corporations needed subsidies. The theory went like this: if government sold, outsourced, or contracted everything, the invisible hand would solve everything from potholes to poverty.
Instead, the invisible hand immediately reached for the ATM.
Everything that could be privatized was: water, prisons, military logistics, school services, transit systems, data operations, nursing homes, bridges, healthcare delivery, and anything not nailed down. Some things that were nailed down were privatized too.
The central goal, I wrote then, was not efficiency or innovation. It was a deliberate lowering of expectations: convincing Americans that government couldn’t tie its own shoes, and therefore might as well not try.
A decade earlier, Murray Weidenbaum, Reagan’s chief economic adviser, had summed it up neatly:
“Don’t just stand there. Undo something.”
And undo they did.
2. Privatization Was Always a Power Shift
Cohen and Mikaelian argued—and I agreed—that privatization was fundamentally a political project. Sell off public goods and you:
-
weaken unions
-
reduce public-sector wages
-
drain institutional memory
-
remove decisions from democratic oversight
-
move power from the ballot to the boardroom
The public still pays (often more), but the public no longer gets a vote.
It’s a brilliant trick: shrink democratic accountability while expanding private profit, all while calling yourself a champion of “limited government.”
3. Democrats Were Not Innocent Bystanders
In 2022 I wrote that Clinton and the “Third Way” crowd embraced privatization with the zeal of converts. They treated it as a technocratic inevitability rather than a political choice. By the late 1990s privatization had become a bipartisan sacrament.
And so the contractor state ballooned. Today, federal contractor spending approaches one trillion dollars annually—more than the budgets of most countries.
By 2022 the trajectory was already clear. By 2025 the outcome is simply undeniable.
II. What I Underestimated in 2022
When I reread my old TPJ post today, I notice three areas where I didn’t go far enough. In fairness, the country still had a few illusions left in 2022. Those have since been pried loose, like old fillings under a dentist with shaky hands.
1. Privatization Was Not “Limited Government”—It Was Parallel Government
I wrote that privatization produced a “private government.” That was correct. What I did not fully spell out was how quickly that private government would become more powerful, better funded, and less accountable than the public one.
By 2025:
-
Private equity funds now own water systems, 911 dispatch companies, emergency rooms, housing developments, nursing homes, prisons, and ambulance fleets.
-
Consulting firms have quietly replaced entire federal offices—policy writing, program creation, data analysis, and even congressional bill drafting.
-
Corporations now do the work once handled by civil servants, only with larger salaries, worse oversight, and more lawyers.
This is not reduced government. It is hidden government.
2. Privatization Thrives on Crisis
I touched on droughts and emergencies in 2022, but I did not fully appreciate how deeply crisis is built into the privatization model.
Privatized systems—electric grids, water utilities, supply chains, hospital networks—break precisely when the public needs them most. And when they break, private operators demand public bailouts.
It is the perfect business model:
-
Underfund maintenance
-
Extract profit
-
Wait for disaster
-
Blame government
-
Demand subsidies
-
Repeat
If privatization were a slot machine, it would be rigged in favor of the house and the house would keep raising your rent.
3. Privatization Is Now a Major Driver of Inequality
I gestured toward this in 2022. I should have screamed it.
Privatization widens inequality every time it touches a public good because it transforms shared necessities into private revenue streams.
Wherever privatization goes, you see:
-
higher fees
-
worse service
-
lower wages
-
less accountability
-
higher executive pay
It is a tidy economic machine that transfers money upward and risk downward. The economic term for this is “rent extraction.” The TPJ term for this is “legalized pickpocketing with a lobbying budget.”
III. The Pandemic and Climate Crises: The Great Reveal
If the 1980s and 1990s built the ideological scaffolding of privatization, the 2020s tore off the façade.
The Pandemic: A Case Study in Privatized Failure
During COVID-19, states that had hollowed out their public health departments were left dependent on:
-
private testing contractors who overcharged
-
logistics companies that couldn’t deliver
-
supply chains optimized for profit rather than resilience
The Strategic National Stockpile—outsourced years earlier—had all the strategic value of a pantry after a teenage sleepover.
Countries with strong public systems recovered quickly. We outsourced, delayed, improvised, and misfired. Then we argued about masks.
Climate Catastrophes: Privatization on Fire
California’s utility, PG&E—a privatized monopoly—managed to ignite entire towns while distributing executive bonuses. Texas’ privatized grid collapsed in a freeze. Other privatized water systems buckled under both drought and flood.
When private utilities fail, you and I pay for their mistakes twice:
-
once through higher rates
-
again through disaster recovery taxes
Privatization is the only economic model in which failure is more profitable than success.
IV. The Biden Intermission: A Brief Reversal
In 2022, Levinson ended his review by noting signs of hope in the Biden administration’s embrace of industrial policy and public investment. At the time, I agreed. Compared to the previous forty years, Biden’s pivot was substantial:
-
investment in infrastructure
-
initiatives to rebuild public capacity
-
antitrust enforcement
-
new regulations for private equity healthcare roll-ups
It wasn’t a revolution, but it was the first time since 1980 that a Democratic president stopped mumbling “the era of big government is over” and instead said, “maybe government should actually do things.”
These gains mattered. But they were also fragile—built on executive decisions, thin congressional margins, and the political lifespan of a mayfly.
History will treat the 2021–2024 period as a brief breather in a much longer struggle.
V. 2025: A Return to the Great Undoing
The Biden pause is over. The privatization machine is humming again—louder, hungrier, and far less apologetic.
The new administration has moved quickly to:
-
deregulate private equity in healthcare
-
expand Medicare privatization through Advantage plans
-
promote new charter-school schemes
-
accelerate defense outsourcing
-
weaken environmental and consumer protections
-
reduce oversight of federal contractors
Everything old is new again, only with more zeroes.
If the 1980s were the birth of the privatization era, the 2020s are its baroque period: gilded, overdone, and slightly grotesque.
VI. What Privatization Actually Delivered: Gains and Losses, Revisited
Back in 2022, I wrote a tidy little “What We Gained / What We Lost” section. With the benefit of three years’ hindsight, I can update it.
The Alleged Gains
Politicians touted efficiency. They promised innovation. They bragged about “doing more with less.”
What we actually got was:
-
short-term savings
-
long-term cost explosions
-
budget holes plugged with asset sales
-
dependency on private firms for basic governance
Privatization is the fiscal equivalent of living on credit cards and calling it balanced budgeting.
The Real Losses
Let’s be blunt:
1. We lost accountability
When public goods become private assets, decision-making becomes proprietary. Corporate secrecy laws swallow public transparency laws whole.
2. We lost resilience
Public systems plan for needs. Private systems plan for quarterly earnings.
3. We lost solidarity
A privatized nation treats services as commodities, not rights. If you can pay, you get lights, water, medical care, education. If not, “please enjoy our automated phone maze.”
4. We lost democracy
This is the big one. Privatization removes functions from elected oversight and hands them to institutions that answer to no one but investors.
The result is a country run by contracts instead of ballots.
VII. The Deeper Truth: Privatization as Soft Authoritarianism
This is the part I did not say clearly enough in 2022, and I’ll say it now:
Privatization is a form of quiet authoritarianism.
Authoritarianism does not always show up with tanks. Sometimes it shows up with procurement processes, lobbying firms, and “public-private partnerships” that look cooperative but function as slow-motion coups against public authority.
When essential functions are privatized:
-
public deliberation vanishes
-
decision-making becomes opaque
-
accountability disappears
-
inequality deepens
-
voters lose power
This is not democracy. It is a corporate monarchy where the king is a consortium of investors headquartered in Delaware.
VIII. Conclusion: Forty Years Later, the Bill Has Arrived
When I wrote my original 2022 post, I subtitled it (perhaps too politely) as a warning. Today, it reads more like a diagnosis of a chronic illness we kept pretending was a cold.
Cohen and Mikaelian called their book The Privatization of Everything. They might have called it The Evaporation of the Public. What we did to ourselves over the last forty years was not a series of efficiency reforms—it was a structural redistribution of power away from citizens and toward corporate actors without obligation to the communities they extract wealth from.
The Biden years showed that the tide could turn. The current moment shows how easily the tide recedes.
So the question remains—sharper now than when I first asked it in 2022:
Do we want a democracy, or do we want a market-state run by contractors, hedge funds, and private utilities?
One path rebuilds the public.
The other continues the long con.
Forty years of privatization hollowed out the American state.
Now, in 2025, the hollowing is complete enough that even the hollow spaces echo.
The only remaining question is whether we continue digging.
Sources & References
Primary Sources
-
Cohen, Donald & Mikaelian, Allen.
The Privatization of Everything: How the Plunder of Public Goods Transformed America and How We Can Fight Back.
New Press, 2021.
https://thenewpress.com/books/privatization-of-everything
Levinson, Mark. “Undoing the Undoers.” The American Prospect (Review of The Privatization of Everything), January 3, 2022.
https://prospect.org/economy/undoing-the-undoers-privatization/
Your Original TPJ Post (Trenz Pruca’s Journal), July 17, 2022.
https://trenzpruca.wordpress.com/2022/07/17/books-on-top-the-privatization-of-everything-how-the-plunder-of-public-goods-transformed-america-and-how-we-can-fight-back/
Privatization, Outsourcing, and Public Sector Research
-
Congressional Budget Office. “Federal Contracting: Information on the Use of Contracting by Federal Agencies.”
https://www.cbo.gov/publication/54970
Project on Government Oversight (POGO). “Bad Business: Billions of Taxpayer Dollars Wasted on Hiring Contractors.”
https://www.pogo.org/report/2011/10/bad-business-billions-of-taxpayer-dollars-wasted-on-hiring-contractors
Economic Policy Institute. “Outsourcing Public Services: The Cost of Privatization.”
https://www.epi.org/publication/the-public-sector-and-privatization/
In The Public Interest. (Cohen’s organization) Research library on privatization failures.
https://www.inthepublicinterest.org/resources/
Privatized Water Systems
-
Desert Sun / USA Today Network. “Apple Valley’s Fight Over Water and The Carlyle Group.”
https://www.desertsun.com/story/news/environment/2017/09/08/apple-valley-water-system-carlyle-group/633140001/
Food & Water Watch. “The State of Public Water in the United States.”
https://www.foodandwaterwatch.org/wp-content/uploads/2021/03/rpt_1903_stateofpublicwater-web.pdf
Privatized Utilities, Climate, and Infrastructure Failures
-
Wall Street Journal. “How PG&E Ignored Maintenance and Sparked Deadly Fires.”
https://www.wsj.com/articles/pge-knew-for-years-its-power-lines-could-spark-wildfiresbut-did-little-about-it-11556966135
ProPublica. “The Grid That Failed Texas.”
https://www.propublica.org/article/the-night-the-lights-went-out-in-texas
Texas Tribune. “Why the Texas Power Grid Failed.”
https://www.texastribune.org/2021/02/16/texas-power-grid-failure/
Private Equity in Healthcare, Housing, and Nursing Homes
-
National Bureau of Economic Research (NBER).
Gupta, Atul, et al. “Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes.”
https://www.nber.org/papers/w28474
New York Times. “When Private Equity Takes Over Nursing Homes.”
https://www.nytimes.com/2021/02/24/business/nursing-homes-private-equity.html
Stateline / Pew Trusts. “Private Equity Firms Now Own More Housing Than Ever.”
https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/08/16/private-equity-firms-now-own-more-homes-than-ever
Center for Economic and Policy Research (CEPR).
“The Rise of the Corporate Landlord.”
https://cepr.net/report/the-rise-of-the-corporate-landlord/
Public Health Under Outsourced Systems
-
Government Accountability Office (GAO). “COVID-19: Federal Contracting and Supply Chain Issues.”
https://www.gao.gov/products/gao-21-444
Kaiser Health News. “Private Contractors and the Pandemic Response.”
https://kffhealthnews.org/news/article/private-contractors-pandemic-response/
General Works on Privatization & Neoliberalism
-
Klein, Naomi. The Shock Doctrine: The Rise of Disaster Capitalism.
https://www.naomiklein.org/shock-doctrine/
Stiglitz, Joseph. The Price of Inequality.
https://wwnorton.com/books/The-Price-of-Inequality/
Harvey, David. A Brief History of Neoliberalism.
https://global.oup.com/academic/product/a-brief-history-of-neoliberalism-9780199283279
UN Special Rapporteur Report on Poverty in America (Phillip Alston).
https://www.ohchr.org/en/press-releases/2018/06/un-expert-finds-us-poverty-hits-shocking-levels
Industrial Policy and Public Investment (Biden Era)
-
White House Fact Sheet: CHIPS and Science Act.
https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/09/fact-sheet-chips-and-science-act-will-lower-costs-create-jobs-strengthen-supply-chains-and-counter-china/
White House Fact Sheet: Infrastructure Investment and Jobs Act.
https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/06/fact-sheet-the-bipartisan-infrastructure-deal/
Department of Energy. “Industrial Strategy and Clean Energy Investments.”
https://www.energy.gov/policy/industrial-strategy
Academic and Investigative Works on the Contractor State
-
Licht, Walter.
“The Rise of the Contractor State.” Journal of Policy History.
https://www.cambridge.org/core/journals/journal-of-policy-history
Brookings Institution.
“The Shadow Government: How the Federal Contracting System Shapes Public Outcomes.”
https://www.brookings.edu/research/the-shadow-government-contracting-system/