WHY GOVERNMENT FUNCTIONS SHOULD BE DE-PRIVATIZED

Privatization of government functions gives a private entity control of a public good or service and is often inefficient and risky. The real goal is often to give businesses profits. Democrats need to reverse privatization. DOD contracts for mission critical capabilities need to be de-privatized.

SUMMARY: Privatization of government functions means giving a private entity control of or power over a public good or service. Privatization is often inefficient and can have safety and national security risks. The real goal of many privatization efforts is to give private businesses an opportunity to make profits. Democrats need to reverse decades of privatization to better serve the public. The companies the Department of Defense has contracted with to provide mission critical capabilities need to be nationalized, most notably Elon Musk’s SpaceX.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and see my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

(Note: For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent Sunday post here.)

Privatization of government functions or “outsourcing” means more than just contracting for a prison or selling off a municipal water system. It means giving a private entity control of or power over a public good or service – essential things we depend on including public health, clean air and water, safe food, good education, transportation, health care, utilities, and safety.

Privatization is often inefficient (i.e., costs more and/or delivers lower quality goods or services than public provision) and can have safety and national security risks. (See this previous post for more information.) Privatization tends to be inefficient because it adds a layer of management and profits onto public functions. Any cost savings typically come from paying workers less. Public transparency and control over the delivery of services are typically lost and, in addition, government can lose its capacity to deliver basic services. [1] Private, for-profit companies tend to cut corners and purposely avoid expensive to serve individuals to maximize profits, compromising quality and fairness.

The real goal of many privatization efforts is not greater efficiency but a desire of politicians to give private businesses an opportunity to make profits. Some politicians may believe that privatization will produce efficiencies despite significant evidence to the contrary. However, some politicians may be looking to curry favor with private companies and their executives who can give them campaign contributions.

Some examples of failed or unwarranted privatization (in addition to ones in this previous post) include:

Privatization of prisons and detention facilities (see posts here and here for more information)
Use of ID.me for logging in to government agencies and information (see this post for more information)
Use of CLEAR for expedited security clearance at airports. (TSA PreCheck is the public alternative which costs less than one-tenth as much.)
Vouchers for K-12 education in private schools. (They divert money from public schools and typically subsidize well-off parents who are already sending their children to private schools.)
Privatization of Medicare through so-called Medicare Advantage plans. (Public Medicare is much more efficient than the privatized plans (i.e., lower cost per patient and better outcomes). Medicare would save about $100 billion a year if these private plans were eliminated. See more information here, here, and here.)

Contracts, vouchers, and just allowing the private sector to provide a service (e.g., rail and bus transportation, electricity, and Internet and phone service) are not the only ways to privatize government functions. For example, federal policies have hamstrung the U.S. Postal Service, including prohibiting it from providing some services, to allow private companies to provide a significant portion of package delivery services. The Department of Defense and other government agencies have been taking ownership shares in private companies, such as strategic minerals, chip making, and small defense manufacturing companies. [2] (For detailed information about privatization and its many variants see In the Public Interest.) [3] (For more information on how the Trump administration has been taking ownership interests in private companies and exerting control over private companies in other ways see this previous post.)

It’s usually more efficient and almost always fairer to have government provide the public goods and services that meet essential public needs (e.g., education, health care, water, sewer, waste removal, electricity, communications, transportation, public safety, and defense). Decades of privatization need to be reversed to better serve the public.

When Democrats take control of Congress in January, they should immediately take steps to slow privatization with a goal of halting additional privatization in the short-term. Over the longer term, they should de-privatize important public functions, such as the provision of Medicare and eventually all of health care.

There are situations where the ownership of private companies should be taken over by the government, i.e., they should be nationalized. The clearest examples are companies the Department of Defense has contracted with to provide mission critical capabilities. Specifically, it has contracted critical satellite-based communications and intelligence capabilities to SpaceX, including use of its Starlink and Starshield communications systems. It is not wise or safe to have these capabilities in private hands, let alone the hands of Elon Musk, the owner of SpaceX. He is a significant national security risk given his business interests, contacts, and engagement with Chinese leaders and investors. [4] Ownership of SpaceX needs to be taken over by the federal government. [5] (See this previous post for more information on Musk, SpaceX, and the national security risks they represent.)

[1] Kuttner, R., 10/13/26, “Time to de-privatize,” The American Prospect (https://prospect.org/2026/10/13/time-to-de-privatize-federal-government/)

[2] Groz, Z., 10/22/26, “As lawmakers scrutinize Pentagon equity deals, Pentagon keeps making them,” The American Prospect (https://prospect.org/2026/10/22/as-lawmakers-scrutinize-pentagon-equity-deals-pentagon-keeps-making-them/)

[3] See also Cohen, D., & Potter, C., 1/7/22, “Why privatization is worse than you know,” Public Seminar (https://publicseminar.org/essays/why-privatization-is-worse-than-you-know/), which, among other things, references the book, The Privatization of Everything, by Cohen and Mikaelian.

[4] Kaplan, J., & Elliott, J., 3/26/25, “How Elon Musk’s Space X secretly allows investments from China,” ProPublica (https://www.propublica.org/article/elon-musk-spacex-allows-china-investment-cayman-islands-secrecy)

[5] Myerson, H., 10/22/26, “SpaceX is a de facto government agency. It should be nationalized.” The American Prospect (https://prospect.org/2026/10/22/spacex-government-agency-nationalized-elon-musk-russia-ukraine-starlink/)

THE RISKS OF PRIVATIZING GOVERNMENT SERVICES

Privatization of government services, promoted by Republicans and some Democrats, rarely delivers greater efficiency. Over 40% of the federal government workforce are now private contractors. The DOD uses contractors extensively; its contracts with Musk’s SpaceX present national security risks.

SUMMARY: Privatization of government services has been promoted by Republicans and some Democrats for over 40 years. Their promises of greater efficiency rarely turn out to be true. Over 40% of the federal government’s workforce are now private contractors. The Department of Defense uses contractors extensively, including for sensitive, mission-critical functions. Its contracts with Elon Musk’s SpaceX company present serious national security risks.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and see my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

(Note: For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent Sunday post here.)

Privatization of government services or “outsourcing” has been promoted by Republicans and some Democrats for over 40 years. Proponents claim it will save taxpayers money, improve public services, and increase public sector accountability. This rarely turns out to be true. Once the profit incentive is introduced, prices are likely to go up and quality is likely to go down. Privatization only tends to be successful if there is strong oversight and regulation, as well as real competition. (See this previous post for more details.)

Poor experiences with privatization at the municipal level led to a wave of de-privatization between 1997 and 2002. Nonetheless, privatization continued to march ahead at the federal level. (I’ve been criticizing privatization since way back in 2012. See previous posts here and here for more information.)

Numerous examples exist of privatization’s failure to deliver its promised benefits. The U.S. health care system is a classic one. The privatized, for-profit system in the U.S. is the costliest system among any of our peer countries and its outcomes are among the worst. All elements of the system are putting profits before patients. (See previous posts here and here for more information on the failures of for-profit health care.)

Other examples of failed privatization include:

Rail transportation is more efficient, dependable, and convenient in the rest of the world than with the privatized system in the U.S.
Bridges, roads, and parking meters that have been privatized by state and municipal governments often did not produce the desired results.
Water, sewer, and solid waste disposal systems’ privatization has been found in most studies to provide no cost or efficiency benefits.
Internet service is cheaper and faster where there are municipally run systems and in Europe.

Privatization is also evident in the increasing portion of the federal workforce that is contractors. The total federal government workforce of roughly 9.1 million people can be categorized as follows: [1]

3.7 million contractors (40.7%),
2.0 million civilian employees (22.0%),
1.6 million people paid through various grant programs (17.6%),
1.3 million active-duty military personnel (14.3%), and
0.5 million Postal Service employees (5.5%). [2]

The use of contractors by the Department of Defense (DOD) on the ground in war zones has gone largely unnoticed. However, more contractors have died (8,000) than US service members (7,000) in post 9/11 military activities. Contractors have become a permanent element of the military infrastructure. In the Middle East region, operational and battlefield contractors greatly outnumbered military personnel (43,800 contractors to 15,000 military) in October 2020. There were three contractors for each member of the military in Afghanistan at the end of U.S. involvement in August 2021. [3]

But the DOD’s privatization goes further and, as has become apparent recently, is jeopardizing national security and U.S. foreign policy. The U.S. DOD has billions of dollars of contracts with Elon Musk’s SpaceX company to provide critical military and national security capabilities. For example, Space X has a multi-billion-dollar contract to build a classified spy satellite network for the DOD. It also has contracts for communication services through Space X’s subsidiary, Starlink. [4]

Recently, Trump and Musk were limiting Ukraine’s use of Starlink and its military version, Starshield. Musk claims that Starshield is operated by the US government. The limitations that were imposed on these communications services prevented or slowed warnings of incoming Russian missiles and drones, and also degraded Ukraine’s offensive military capabilities. [5]

It seems likely that the U.S. DOD is similarly dependent on SpaceX communications capabilities. It doesn’t seem wise or safe to have privatized these DOD mission critical capabilities.

Furthermore, Musk is considered a significant national security risk by DOD and intelligence officials, as well as by other intelligence experts. [6] When Trump took office in 2025, there were three DOD investigations of Musk’s and Space X’s repeated failures to file mandatory national security reports of contacts and involvement with foreign entities. [7] Their significant contacts and engagement with Chinese leaders and investors make this a matter of serious concern. Space X has sizeable investments from Chinese investors, but because of its contracts with the DOD, Space X does not want its investments from Chinese investors to be public knowledge. Therefore, it actively works to make sure those investments are laundered through intermediate entities in the Cayman Islands and elsewhere, which keeps investors anonymous. [8]

Roughly half of Musk’s Tesla vehicles are built in China and China is Tesla’s largest market. Tesla’s largest factory is in Shanghai and its construction received a $2.8 billion investment, major tax breaks, and special permissions from the Chinese government. Musk regularly meets with Chinese government and Communist Party officials due to his multiple business interests, current and future, in China.

It seems quite clear that sensitive DOD capabilities should not be privatized to Musk’s company – or anyone else’s for that matter.

My next post will focus on the need to slow, stop, and eventually reverse the privatization of essential government functions.

[1] Gordon, N., 10/5/17, “Contractors and the true size of government,” Project On Government Oversight (https://www.pogo.org/analyses/contractors-and-true-size-of-government)

[2] Note: These data are from 2017, but overall these numbers have been relatively stable over time. If anything, the percentage of contractors has increased.

[3] Cancian, M., 8/30/21, “In Afghanistan, contractors were unsung heroes of US efforts,” Breaking Defense (https://breakingdefense.com/2021/08/in-afghanistan-contractors-were-unsung-heroes-of-us-efforts/)

[4] Elordi, M., 10/21/24, “Elon Musk’s companies have faced at least 20 federal probes,” Daily Wire (https://www.dailywire.com/news/elon-musks-companies-have-faced-at-least-20-federal-probes-report)

[5] Roth, A. 10/14/26, “Ukrainian military’s access to Starlink satellite internet suddenly restricted,” The Guardian (https://www.theguardian.com/world/2026/oct/14/ukraine-soldiers-combat-access-starlink-satellite-internet-restricted)

[6] Reich, R., 3/21/25, “Is the Muskrat working for China?” Robert Reich blog (https://robertreich.substack.com/p/is-the-muskrat-working-for-china )

[7] House Committee on the Judiciary, 2/13/25, “Fact Sheet: Trump administration, DOGE punish agencies investigating Elon Musk’s companies,” (https://democrats-judiciary.house.gov/uploadedfiles/2025.02.13_fact_sheet_re_musk_investigations.pdf

[8] Kaplan, J., & Elliott, J., 3/26/25, “How Elon Musk’s Space X secretly allows investments from China,” ProPublica (https://www.propublica.org/article/elon-musk-spacex-allows-china-investment-cayman-islands-secrecy)

RESIST GOVERNMENT USE OF ID.me FOR IDENTITY VERIFICATION

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SUMMARY: Our governments should not be requiring us to provide personal identity information to a private, for-profit company in order to access government programs and information. Yet, that’s what’s happening. It’s a dangerous example of privatization that is redundant and costs taxpayers money, and, in this case, their privacy. I urge you to boycott this if you can and to contact your elected officials to protest. Furthermore, the U.S. needs to better regulate the collection and use of our personal data by the private sector, as Europe has done since 2018.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

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Providing citizens access to government agencies and information is an essential government function. Verifying people’s identity for such access shouldn’t be contracted out to a for-profit company. Yet, that’s what the federal government is doing.

Since 2016, some federal agencies have contracted out identity verification for access to their programs and databases to ID.me. ID.me is a hundred-million-dollar, for-profit company. Recently, Medicare and the U.S. Treasury have been added to the list of ID.me users that includes the IRS, Social Security, and Veterans Affairs (which requires it to access family members’ old military records that are public information). As-of 10/29/26, the U.S. Treasury Department will require use of ID.me to access account information. ID.me has contracts for identity verification with 20 federal agencies, as well as at least 50 state agencies, notably those providing unemployment benefits. [1]

ID.me requires you to provide your date of birth, Social Security number, a photograph of your driver’s license or passport, and a picture of your face taken with your cellphone. This puts a biometric facial recognition image in the hands of a private company with little oversight or control over how it uses the data. ID.me also provides identity verification services to dozens of private companies, including Apple, Amazon, Bank of America, Ford, and JPMorgan Chase. ID.me claims it doesn’t sell data and that it makes its money by charging fees for its services, but I find it hard to believe that it isn’t finding ways to monetize the data it holds on hundreds of millions of Americans.

I urge you to resist by refusing to use ID.me if you can. I also urge you to contact your U.S. Representative and Senators to ask them to block the use of ID.me (or at least the expansion of its use). (You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.)

If a login ID and password, along with verification by email, text, or phone message, is secure enough for our access to our bank and other financial accounts, it’s good enough for access to Medicare, Social Security, and other federal data and programs. Furthermore, you can apply for and collect Social Security benefits without going through ID.me and you can sign up for Medicare without it. So, why should it be required to access one’s information at Social Security, Medicare, or the U.S. Treasury? There has been no demonstrated need for this additional security.

Moreover, the U.S. government has its own very similar enhanced security program called Login.gov. So, ID.me is redundant. (Note: I don’t even want to use Login.gov as it puts a biometric facial recognition image in the hands of the Trump regime and I don’t trust how it might use such data.)

ID.me has persuaded government agencies to use its ID verification services through aggressive lobbying and marketing. For its unnecessary services, ID.me has, to date, billed the government (i.e., taxpayers) over $1 billion! ID.me is worse than unnecessary and redundant, it’s another example of privatization taking (stealing?) money from taxpayers. Moreover, once in place, it’s very hard to terminate its use and, eventually, the government may just give in and drop its own capability to perform identity verification. This would mean the end of the historically relatively easy and secure access of citizens to government agencies and programs without giving sensitive personal data to a private entity.

It’s bad enough that for-profit businesses are capturing our personal identity information whenever we interact with them directly. They capitalize on it by using it to tailor their marketing and pricing (aka surveillance pricing; see more here). They also make money by selling our data or sharing it with others. They capture our data through preferred customer and frequent flyer programs, through our activity on social media platforms, through product warranty and purchase registrations, etc.

There should be better government regulation of personal data collection and use by the private sector. For example, regulations should require disclosure of when and what personal data companies are capturing, and how they’re using it. We should have better options for opting out of personal data collection and use, and the ability to require companies to delete our data. Europe has done a much better job than the U.S. of regulating personal data collection and use through its 2018 General Data Protection Regulation (GDPR). It protects individuals when their data is captured and used by private and public entities. There’s a nice overview of it here and more on its legal background here.

What for-profit companies are doing when we interact with them is egregious, but the public sector – our government – should not be abetting the capture, use, and abuse of our personal data by requiring us to provide personal identity information to a for-profit company in order to access government programs and data. However, this is what’s happening with governments’ use of ID.me for login identity verification.

I urge you to contact your U.S. Representative and Senators and ask them to oppose the use of ID.me by the federal government. (See above for links to find contact information for your US Representative and Senators.) You can also contact state officials – your Governor and legislators – and ask them to oppose the use of ID.me at the state level.

For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent good news Sunday post here.

[1] Kuttner, R., 10/6/26, “Identity crisis,” The American Prospect (https://prospect.org/2026/10/06/identity-crisis-federal-government-access-id-me/)

THE AFFORDABILITY CRISIS Part 2

Cost of Living Crisis theme done in a Posterised style. Inflation – Economics, cost, shopping basket, supermarket

The affordability crisis (aka cost of living crisis) in the U.S. is multifaceted and has been growing for 45 years, due to low pay and high prices. There are many factors pushing up prices well beyond normal inflation, including profit-taking middlemen and privatization of public goods and services.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and get notices of my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

My previous post presented an overview of the affordability crisis (aka cost of living crisis) in the U.S., its 45 year history, and began a discussion of why prices are so high. It covered:

Monopolistic price gouging,
Tariffs, and
Personalized (aka surveillance) pricing driven by artificial intelligence (AI).

This post will discuss:

Profit-taking by middlemen (aka intermediaries) from ticket sellers to drug benefit managers that increases costs for consumers, often unjustifiably and even illegally.
Privatization and the fraud that often accompanies it leave consumers and taxpayers with higher costs and often degraded quality.

Middlemen, also referred to as intermediaries, are entities that operate between consumers and the producers of goods or services. Ostensibly, they make the market operate more efficiently by linking consumers and producers, while making transactions easier and smoother. However, given their need to make a profit, they often end up more focused on profit-making than helping markets operate efficiently. They add a layer of costs to consumers’ purchases, pushing up prices. [1]

Pharmacy Benefit Managers (PBMs) are a classic example of middlemen. The original intent was to reduce drug costs, saving insurers and consumers money, but that has morphed into rapacious profit making by manipulating the market and increasing drug costs for consumers. PBMs manage drug benefits for insurance companies and largely determine which drugs are available to insurees and how much they will pay for them. There are three huge, monopolistic PBMs that manage the great majority of drug benefits for private insurers, which is a $600 billion global market. They have found that they can be very profitable by negotiating kickbacks from drug manufacturers (that may be half the cost of a drug) for the drugs they include in an insurer’s formulary, i.e., the list of insured drugs and how much consumers must pay for them. They also sign contracts with pharmacies that tend to reward the big chains and make it very hard for independent pharmacies to exist. It’s estimated that 42 cents of every dollar paid for prescription drugs now goes to a PBM. Meanwhile, the PBM industry spends over $10 million a year lobbying the federal government to block regulation. [2]

As with the PBMs, other monopolistic middlemen often find ways to manipulate the market to make big profits by not only increasing prices for consumers but also lowering the prices they pay to producers. Amazon, once it gained monopolistic control of various e-commerce sectors, has shown itself to be a master at squeezing producers to minimize costs, while also figuring out ways to maximize its revenue from consumers.

Live Nation (parent company of Ticket Master) is another example of a monopolistic middleman. It dominates ticket sales for entertainment events and jacks up prices and adds junk fees to boost its profits. It has increased its monopolistic power by also managing thousands of performers and purchasing many entertainment venues. [3]

Middlemen, from Wall St. asset managers and stock traders to real estate agents, eBay, and the apps that deliver food to your door, add their costs and profits to transactions, thereby increasing prices for consumers. Some have been found to engage in illegal or at least unethical ways to increase their profits.

Meat packers are middlemen that buy meat from ranchers and farmers, process it, and sell it to consumer outlets, e.g., supermarkets. There are four giant meat packers that engage in monopolistic practices, both in the buying and the selling of meat. This, and illegal collusion, has led them to be very profitable as prices for consumers have increased dramatically while the prices they pay to meat producers have fallen. In October 2025, the meatpackers settled two separate price-fixing lawsuits for almost $300 million for illegally jacking up the prices of beef and pork.

As with middlemen, the privatization of goods and services typically delivered by government is presented as a way to make markets more efficient. There are many examples such as privatization of Medicare, roads and bridges with private tolls, and electricity, water, and sewer systems operated by private entities. Often, the profit motive leads to increased costs for consumers and decreased quality of the goods or services delivered.

For example, the federal government has allowed the privatization of the delivery of Medicare health care services to seniors through what are called Medicare Advantage plans. They are run by private insurers and are very profitable because they make it hard to get some health care services (especially expensive ones) and because they cheat the federal government. They cost more than traditional, publicly provided Medicare and deliver worse outcomes. It is estimated that Medicare would save at least $75 billion a year by eliminating Medicare Advantage plans. Because taxpayers pay for Medicare, they are driving up the taxes we all pay for Medicare’s health care. [4] (See this previous post for more detail on the Medicare Advantage rip off.)

Another example is Connecticut’s largest water system, which serves over 200,000 homes and businesses, and is privately owned by Eversource, the large New England utility corporation. It’s asking for a 42% rate increase ($88 million a year) or to allow it to be sold for $2.4 billion to a nonprofit, quasi-public entity. Many experts believe such a sale would lead to higher costs for consumers and weaker regulation. [5] This highlights the complexity and risk of having a public good such as water in private hands.

My next post will discuss the premiumization of markets, meaning that products and prices target consumers with high incomes, and factors that are keeping wages low.

[1] Curry Wimbish, W., 12/5/25, “Meet the connectors,” The American Prospect (https://prospect.org/2025/12/05/meet-the-connectors-middlemen/)

[2] Curry Wimbish, W., 12/5/25, see above

[3] Dayen, D., 4/30/24, “Live Nation strikes up the band in Washington,” The American Prospect (https://prospect.org/2024/04/30/2024-04-30-live-nation-strikes-up-band-washington/)

[4] Johnson, J., 1/28/26, “A $1.2 trillion ‘rip off’: Report spotlights massive scale of Medicare Advantage fraud,” Common Dreams (https://www.commondreams.org/news/medicare-advantage-fraud)

[5] Associated Press, 12/18/25, “Connecticut’s largest water company seeking 42% rate increase,” The Boston Globe, Business Talking Points

WHAT EVERYDAY AMERICANS WANT FROM GOVERNMENT Part 2

Many Americans are worried about the cost of living. Government policies can reduce or control the costs of everyday expenses. If Democrats or others want to garner support and votes, they should aggressively promote such policies. Some examples are presented below.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and get notices of my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

Many Americans are worried about the cost of living. The affordability of the cost of living has two components: 1) the amount of money people make and the benefits they get from their employer, and 2) the costs of everyday expenses from food to housing to health care to utilities. If Democrats, or another party such as the Working Families Party, want to garner support and votes, they should focus on the affordability of day-to-day life. They need to promote a vision of and policies for a more economically secure future for working Americans. This means embracing economic populism, including reducing economic inequality. [1]

This previous post discussed the first component, workers’ compensation. This post discusses ways public policies and government action can reduce, or at least control increases in, the cost of living, i.e., inflation. Over the last 45 years, the cost of everyday necessities has increased faster than workers’ wages, including for food, housing, child care, utilities, health care, and medicine.

Here’s an overview of some government policies that would reduce or control the cost of living. [2]

Rescind Trump’s tariffs. As even President Trump is now acknowledging, his tariffs have and will drive up consumer prices. He recently rescinded some tariffs on beef, coffee, tea, fruit and fruit juice, cocoa, spices, tomatoes and other commodities. He acknowledged that his tariffs may have contributed to higher prices at the supermarket. Since the first day that Trump announced his intention to impose tariffs, every reputable economist has stated that tariffs increase prices for consumers. (Note: Tariffs can be good policies if implemented as part of well-planned, comprehensive jobs or national security policies. However, Trump’s tariffs clearly do not meet this criterion.)
Enforce antitrust laws. Forty-five years of failure by the federal government to enforce antitrust laws (except for efforts to revitalize them under President Biden) have allowed the emergence of huge companies with monopolistic powers. This has harmed everyday Americans in many ways as outlined below. If Democrats or others, such as the Working Families Party, want to attract support and voters, they should unequivocally call out these huge companies and their oligarchic executives and investors for their greed and monopolistic behavior. This does mean that Democrats will have to stop cozying up to the oligarchs to get campaign donations.

Stop price gouging. Monopolistic or near monopolistic size allows companies to raise prices on consumers who have few if any options. In the short term, governments should implement windfall profits taxes and/or price controls to stop price gouging. In the longer term, governments should enforce antitrust laws and break up or impose very large fines on companies that engage in price gouging and other unfair, monopolistic business practices. This applies to a wide range of consumer goods and services from food to rent to air travel to health care to drug prices. It also applies to the big tech companies, Amazon, Meta (Facebook, Instagram, etc.), Alphabet (Google), Microsoft, and Apple.

Restore competition. By stopping mergers and acquisitions that lead to monopolistic power, and by breaking up monopolistic companies, competition could be restored to consumer markets. Without competition, prices go up and quality goes down, and consumers suffer.

Restoring competition would also reduce employers’ power over workers. Although this wouldn’t reduce costs, it would improve workers’ compensation and therefore the affordability of the cost of living. Employers’ power over workers has grown in multiple ways. The huge and monopolistic size of many employers limits the options for employees and, along with globalization, has allowed employers to undermine unions and cut workers’ compensation. Furthermore, many employers, including some fast-food chains, require employees to sign non-compete employment contracts that limit their ability to move to other employers for better jobs and better pay. President Biden took steps to ban non-compete agreements, but President Trump stopped this effort.

Stop privatization of public services and public goods. Privatization is often sold to the public with claims that the private sector will deliver cheaper and better services or products. This rarely turns out to be true. Once the profit incentive is introduced, prices are likely to go up and quality is likely to go down.

Nowhere is this clearer than in our health care system. The privatized system in the U.S. is the costliest system in any of the well-off countries of the world and its outcomes are among the worst. All elements of the system are putting profits before patients. Medicare is much more efficient than any of the private health insurance companies. The health care industry vehemently resisted including a public, Medicare-like option in the Affordable Care Act (ACA) because it knew the public option would deliver better care at lower prices. (See this previous post for more information on the failures of for-profit health care.)

Numerous other examples exist. Rail transportation in the rest of the world is more efficient, dependable, and convenient than the privatized system in the U.S. Internet service is cheaper and faster in Europe than in the U.S. (I’ve been criticizing privatization since way back in 2012. See this previous post and this one for more information.)

Stop the abuse of patents. Pharmaceutical companies abuse patent laws to keep cheaper generic versions of drugs from being introduced to the market. Classic cases of this are insulin and EpiPens. (See this previous post for more information.)
Enhance regulation. Regulations and enforcement of regulations need to be strengthened to protect consumers from fraud, price gouging, and unsafe food and products. Particularly where large companies have monopolistic power, strong regulation is needed. For example, millions of homeowners lost their homes in the aftermath of the 2008 financial crisis because large financial institutions were pushing fraudulent mortgages. The Consumer Financial Protection Bureau (CFPB) was created to protect consumers from financial fraud and abusive practices, such as exorbitant late and overdraft fees. The Trump administration is trying to eliminate the CFPB so big financial institutions can maximize their profits by ripping off consumers. (See this previous post for more information on the Trump administration’s weakening of regulations and the scams that are likely to be the result.)

My next post will discuss economic insecurity and inequality and the government policies that are needed to address them.

[1] Reich, R., 11/3/25, “What the Democrats must do. Now!” (https://robertreich.substack.com/p/what-the-democrats-must-do-now) /

[2] Kuttner, R., 11/12/25, “A blessing in disguise?” Today on The American Prospect (https://americanprospect.bluelena.io/index.php?action=social&chash=9a32ff36c65e8ba30915a21b7bd76506.3779&s=6009966078bda0f5 056f960a346ead8a

MUSK AND DOGE ARE ALL ABOUT CORRUPT SELF-ENRICHMENT

Musk, DOGE, and Trump do not care about efficiency & reducing waste. They’re not targeting for-profit contractors, which is where the bulk of fraud & waste occurs. They’re focused on ending investigations & enforcement actions against Musk’s companies, letting Musk corruptly line his own pockets.

Musk, his Department of Government Efficiency (DOGE), and Trump do not care about efficiency and reducing government waste. They’re not targeting for-profit government contractors, which is where the bulk of fraud and waste occurs. Instead, they’re focused on ending investigations of and enforcement actions against Musk’s companies, and providing them with new government contracts. Musk is corruptly lining his own pockets.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

I’m sure I don’t need to tell you that Elon Musk’s Department of Government Efficiency (DOGE) is not focused on efficiency and reducing government waste. DOGE’s haphazard actions of laying off workers and dismantling government programs, processes, and agencies that Musk and Trump don’t like are actually decreasing efficiency. (See previous posts here and here for more detail.) Musk and Trump are focused on lining their own pockets, i.e., on corrupt self-enrichment.

Contrary to Musk’s and Trump’s claims that the government workforce is bloated, the federal government had fewer employees before Trump took office (3 million) than at its peak in 1990 (3.1 million), despite significant growth in the responsibilities of the government. Federal government employees were 4.3% of the U.S. workforce in 1960; they’re just 1.9% of the workforce today. In general, government agencies are understaffed, due to budgetary restrictions.

If Musk, Trump, and DOGE were serious about increasing government efficiency, they would be targeting for-profit government contractors – like Musk’s companies. Before looking specifically at Musk’s companies, overall, the major sources of waste, fraud, and abuse in government spending are contractors for military hardware and services, and insurance companies that are contractors providing Medicare coverage through so-called Medicare Advantage programs. It’s estimated that 40% of the people working for the federal government are contractors and not employees. For example, in 2019, in Iraq and Afghanistan, there were 50% more U.S. contractors than U.S. soldiers.

Between 2013 and 2023, spending on government contractors grew by nearly 63%. This reflects the mistaken belief by many that private, for-profit contractors are more efficient than government employees. A 2011 study found that contractors are overpaid in comparison to government workers and that when waste and fraud are identified in government programs it is often for-profit contractors that are the culprits. A 1994 Defense Department Inspector General’s report had similar findings.

For-profit contractors are seeking to maximize profit. They do this by maximizing their prices and minimizing their costs, which generally means minimizing the quality of services and products delivered. Contractors are exempt from transparency and accountability laws that cover government programs, making waste, fraud, and abuse hard to identify, eliminate, and punish. Contractors also violate the law with shocking regularity and repetitiveness. Defense contractor RTX (formerly Raytheon) averages over five sanctions per year for illegal activities. Insurance companies operating Medicare Advantage programs regularly and repetitively engage in fraudulent billing of the government. (See this previous post for more detail.)

To feather their own nests, government contractors spend millions lobbying the government and send employees through the revolving door to work in government roles often overseeing their contracts or work. In 2024, the ten largest federal government contractors spent $71 million lobbying the hand that feeds them. They also spent $8.5 million in the 2023-24 election cycle on contributions to federal candidates’ campaigns, although this is technically illegal. They circumvent laws banning contractors contributing to campaigns by setting up supposedly independent political action committees (PACs).

Musk is lining his own pockets as a government contractor and businessman in two main ways:

Dismantling or emasculating agencies that regulate his business activities, often ending on-going investigations and enforcement actions, and
Having the Trump administration award his companies billions of dollars in new contracts, while continuing to pay billions of dollars under existing contracts.

Musk has obtained much of his enormous wealth through government subsidies and contracts. His companies have received over $38 billion in government funding over the last 20 years. Currently, among other things, Musk’s Space X company is receiving billions of dollars a year from NASA for rocket launches and from the Department of Defense (DOD) for satellite launches and Starlink communications services. Musk’s Tesla vehicle company got significant funding from the Department of Energy for its development of electric cars. (Note: This support was called wasteful by Republican presidential candidate Mitt Romney.) [1] In 2023, Space X and Tesla got almost $3 billion from 100 contracts with 17 federal agencies. [2]

When Trump was sworn into office, Musk’s six companies were the subject of more than 32 ongoing investigations by at least 11 federal agencies. The agencies conducting these enforcement actions are being emasculated by Musk, DOGE, and Trump. Therefore, these investigations and potential penalties from them are now likely to be ended. This means Musk’s companies are now worth far more than before because they are no longer threatened with government penalties or constraints on their operations. As their major shareholder, Musk is a huge winner. [3]

The enforcement actions against Musk and his companies included: [4]

A Securities and Exchange Commission lawsuit accusing Musk and his companies of violating federal securities laws.
A lawsuit by the Federal Aviation Administration accusing him and his rocket company, Space X, of violating worker safety.
24 separate investigations by the National Labor Relations Board into violations of workers’ rights.
Over a dozen investigations of Tesla and Space X for unfair labor practices, safety violations, and workplace discrimination by various agencies of the Department of Labor.
Several open investigations by the National Highway Traffic Safety Administration into safety issues with Tesla vehicles.
An investigation by the Federal Aviation Administration (FAA), which had fined Space X for previous violations, for issues with its rocket launches, including post-launch explosions that had interrupted air traffic and spread debris and toxic pollution in the atmosphere.
At least three investigations by the DOD of Musk and Space X for repeatedly failing to meet reporting requirements aimed at protecting national security, including reporting information on Musk’s meeting with foreign leaders. This non-compliance with national security protocols has led to investigations by the DOD Inspector General (now fired), by the Air Force, and by the Under Secretary of Defense for Intelligence and Security.

My next post will discuss actions by Musk, DOGE, and Trump to block regulation, investigations, and sanctions of Musk companies; Musk’s and Space X’s China connections; and new government contracts for Musk’s companies.

[1] Heinz, B., 4/1/25, “Rule by contractor: DOGE is not about waste and efficiency – it’s about privatization,” The American Prospect (https://prospect.org/power/2025-04-03-rule-by-contractor-doge-privatization/)

[2] Elordi, M., 10/21/24, “Elon Musk’s companies have faced at least 20 federal probes,” Daily Wire (https://www.dailywire.com/news/elon-musks-companies-have-faced-at-least-20-federal-probes-report)

[3] Reich, R., 2/11/25, “Fraud and Musk,” Robert Reich blog (https://robertreich.substack.com/p/fraud)

[4] House Committee on the Judiciary, 2/13/25, “Fact Sheet: Trump administration, DOGE punish agencies investigating Elon Musk’s companies,” (https://democrats-judiciary.house.gov/uploadedfiles/2025.02.13_fact_sheet_re_musk_investigations.pdf