The government website where people are supposed to be able to go online and sign up for health insurance under Obamacare has proven incredibly dysfunctional. The Obama administration and Obamacare supporters tried to argue this was just because so many people were eager to participate that the high traffic caused the problems. That spin couldn’t withstand much scrutiny. The New York Times in a recent article acknowledges that the main problem was the website’s design, but adds its own spin:
The technical problems that have hampered enrollment in the online health insurance exchanges resulted from the failure of a major software component, designed by private contractors, that crashed under the weight of millions of users last week, federal officials said Monday.
Aha! So, you see, the problems with HealthCare.gov are not the government’s fault, but the private sector! The private sector built a site with problems including the following:
In some cases, the Web site does not recognize users who established accounts before Oct. 1, when the online marketplaces opened for consumers to shop for insurance. Other users are prevented from establishing accounts. Some who successfully established a marketplace account received an e-mail asking them to verify their e-mail addresses, but the link provided did not work.
The identification of the software component as the main cause of the Web site’s problems was the most detailed explanation that federal officials have given since the online marketplaces opened.
So, what private contractors built the site?
The prime contractor for the federal exchange — CGI Federal, a unit of the CGI Group, based in Montreal — and the company operating a “data services hub” for the government — Quality Software Services Inc., a unit of the UnitedHealth Group — told Congress at a hearing on Sept. 10 that they were ready for a surge of users when enrollment opened on Oct. 1.
But here’s the thing: these are not “private sector” businesses. Hunter Lewis points out the fallacy here in his new book Crony Capitalism in America:
The term Government Sponsored Enterprise (GSE) is often applied to so-called private enterprises that have been founded by government and still enjoy public support of one kind or another. Pre-eminent examples include the mortgage giants Fannie Mae and Freddie Mac. It is appropriate, however, to apply the term GSE more broadly … [to] “private” firms and organizations [that] reach out and try to ally themselves with public officials.
Lewis provides a long list of businesses that do not operate within a free market, but through alliance with government. The distinction is immensely significant.
In a free market, individuals engage in voluntary exchange for mutual benefit, but government uses force to expropriate wealth from some individuals to redistribute to others.
The voluntary exchange of the free market creates prices determined by supply and demand that help to direct scarce resources towards productive ends as determined by the subjective choices of consumers, but the forceful expropriation of government directs resources away from those ends and towards other purposes determined at best arbitrarily by bureaucrats, or, worse, for corrupt reasons.
Any business that relies on government contracts by definition is not operating in a free market and so it is misleading to characterize any such business as belonging to the “private” sector. The defense industry, for example.
Neither are they strictly “public”, true, since the government doesn’t own these businesses. It is not a socialist system. Instead, what we see is a merger of state and corporate power. This is what Mussolini called “corporatism”. Otherwise known as “fascism”. I’ll just call it the “private-public sector” to distinguish it from the truly “private” sector.
If you click the link provided by the Times to visit the CGI Federal website, you’ll find:
For more than 36 years, U.S. defense, civilian and intelligence agencies have partnered with CGI to support their mission-essential needs at every stage of program, product and business lifecycle. These partnerships fuel our deep understanding of the challenges and opportunities facing our clients and inform the development of solutions to help them improve outcomes and maximize results.
If you click the link to the Quality Software Services, Inc., website, then from the menu select “Strategic Partners” and “Clients“, you’ll find:
QSSI delivers solutions that improve how Federal, State, and Commercial organizations service their constituents and stakeholders. We focus on delivering cost savings and improved efficiency across IT projects of all sizes.
As a CMMI Maturity Level 3 Certified organization, QSSI provides consulting expertise on multi-year projects across several Federal agencies and State Governments.
We have nearly a decade of experience in the full life cycle management of IT Practice Areas for application in:
Does this look like the “private” sector to you?