Privatizing Government Services?

Of course it is not possible for any one person to say “I speak for #OWS”, nor do I presume to speak for anyone else who supports #OWS.  There are as many reasons for supporting the movement as there are people who do.

In previous blogs, however, I did emphasize that I don’t like the word “fairness” in relation to what the occupiers want.  That is a rather weak word, in my opinion, reminding me of all the times my own children would say, “That isn’t fair!”  The word “justice” is a much stronger word, and that one always reminds me of the Book of Amos in the Old Testament, or Hebrew Bible, “Let justice roll like a river, washing oppression away”.

People have also questioned what I mean about justice.  Precisely what is unjust that requires mending.  I have a really good example.  At the last meeting of our local Democratic club we had a representative from our local County Department of Social Services (DSS) discussing various programs that DSS administers, including the food stamp program, which for some dumb reason was renamed here in California as CalFresh.  There was a discussion about the replacement of stamps with debit cards and how convenient these were for the both the clients and the grocery stores.  The amount the client is awarded could be entered on the card which looks just likes a credit card, and thus takes away the embarrassment of having to have food stamps in the first place.  I thought this was a really great idea.  I could see how this would cut down on printing cost for the government and handling of food stamps for the grocery store.

Then, much to my consternation, I read an article on the blog, Faith In Public Life, 11/7/11, titled The Danger of Privatizing Government Support Programs.  The article quoted an article on New Deal 2.0, a project of the Roosevelt Institute which highlighted the fact that since benefits from government programs like unemployment aid and food stamps can now be administered through prepaid debit cards, rather than cash, users are running up fees for using these cards at banks like JP Morgan or Bank of America, and big banks are reaping the rewards.  As the New Deal 2.0 reporter explains:

“Big banks are making a tidy profit by acting as middlemen for what should be publicly provided services.  In just three months, from July and September, Ross reports that U.S.Bancorp, which provides unemployment benefit debit cards, made $357 million in revenue in the division that handles the cards.  That amount is more than one-fourth of its total revenue.  I previously reported that JP Morgan made $5.47 billion in net revenue for most of last year in the division that handles food stamp cards, and it was up two percent in the last three months of the year.  The head of the division himself has said, ‘Volumes have gone through the roof in the last couple of years… This business is a very important business to JPMorgan in terms of its size and scale.’

“In addition to banks profiting off of prepaid debit card fees, some of them are also getting paid directly by state governments to administer these social safety net programs.  Overall, this system results in big banks profiting from hard economic times that strain American families—as more Americans enroll in food stamp programs, banks collect more money from fees and more money from the state.”

These programs could easily be administered by both state and federal government at a much, much  lower cost.  Banks are in the business of making money regardless of the source.  Governments are in the business of providing the assistance to people in need.