Privatizing not magic cure

JOSEPH N. BELL

The people who should go to see “Enron” probably won’t . At the top

of that list would be our congressman, Chris Cox, and the mayor of

Costa Mesa, Allan Mansoor, both of whom genuflect regularly before

the altar of privatization. Hopefully, some of the people who are now

wavering about privatizing Social Security will go and waver no more.

The documentary film is at the Lido Theatre in Newport Beach as I

write this, and from the scarcity of the crowd when I saw it last

Friday, it may not be there much longer. What a pity.

Remember the blackouts a few years ago, while our electric bills

soared? The movie sound track listens to the Enron traders as they

manipulated our supplies of power with downright glee. One of them

was caught referring to Californians as “useful idiots.” That phrase

captured very well the contempt in which they held us as they played

their power games.

“Deregulation,” said another Enron executive, “was the key” to the

excesses that built the company up so rapidly and then brought it

down. Indeed it was. Like the savings and loan debacle a few years

earlier, the Enron cowboys were free to stick it to us. And did they

ever -- leading the way for a dozen other major corporations whose

executives have been caught with their hands in the till while their

employees and stockholders and customers suffered huge personal

losses. I find it small comfort to know that the two chief corporate

officers of Adelphia -- to whom I have paid monthly bills for many

years -- are now in prison after stealing multi-millions from their

own company. Before that happened, I helped buy their eight houses.

Or was it 10?

These were thugs in business suits stealing jobs and pensions and

life savings -- and the documentary caught them in the act. I

especially liked the scene early in the film, when an Enron executive

-- these weren’t actors; these were the real thing -- explained to

the camera that the company’s paper prosperity was based on something

called “HPV -- hypothetical future values.” Another said that in

Enron’s meteoric rise, “perception was reality.”

It is against this backdrop of economic voodoo that our president

is trying to convince us we should pour our Social Security savings

into financial quicksand, our congressman helped turn a sorely needed

ready-made airport into a bonanza for the “private sector,” and our

mayor wants to privatize a job center that is doing just fine under

city management. Different ball parks, but the reverence for

privatizing as a cure for all our economic and social ills is a prime

motive in all three.

And last week, our state senator, John Campbell, urged removing

the management of Crystal Cove State Park from the Parks and

Recreation Department, which has requested more time and about $2

million in additional state funds to complete restoration of the

park’s historic cottages. Campbell would turn the project over to a

private nonprofit group despite what seem to be reasonable Parks and

Recreation explanations for the request.

In all these instances, a case can be made -- perhaps a strong one

-- for turning to the private sector, but that’s not the issue here.

The issue is the danger of regarding privatizing as some sort of

celestial magic that will somehow bypass the human factor. Just as

there are skilled, ethical and socially responsible members of both

the public and private sectors, so, too, can be found greed,

incompetence and arrogance in both. It is just as wrongheaded to

assume, out of a paranoid suspicion of government, that the public

sector should always give way to the private as it is to assume the

opposite.

Social Security has long been the star performer in the public

sector. I’m one of the generation I’m told is dying off at the rate

of 3,000 a day, who actually experienced the Great Depression. My

father was a successful retail merchant who overextended himself and

was destroyed by the stock market crash. We lost everything,

including our home, and he never really recovered. But he found work

in a large department store and, eventually, a safety net in Social

Security that allowed my parents a decent retirement life. Risking

that in the stock market would have been unthinkable to him.

Sure, the times seem to be very different now. But are they,

really? Because employers are increasingly limiting obligations to

their employees in pensions and health care, Social Security -- as in

my father’s day -- is once again becoming the major source of

guaranteed benefits. And this at a time when individual risk taking

is being pushed at people who lack both the skill and knowledge for

successful investing -- especially in a market where “hypothetical

future values” are in play.

The Enron documentary says pretty clearly that this sort of

economic voodoo that brought the company down is still very much out

there. So what I took out of the theater last Friday -- along with

the hope that the Enron chairman will one day join my Adelphia

friends in prison -- was the recognition that the element of risk, no

matter how it is prettied up, would defeat the whole intent and

purpose of Social Security, today as well as in the aftermath of the

Great Depression.

I can ponder that while I watch the El Toro Great Park disappear

in the maw of private development and the day workers return to

street corners in Costa Mesa. Viva privatization.

* JOSEPH N. BELL is a resident of Santa Ana Heights. His column

appears Thursdays.