Paul Krugman: Tax Farmers, Mercenaries, and Viceroys

Also straight from the OpEd pages of The New York Times (well, with one side trip through The Progressive American and I'm still kicking myself for missing his appearance with Jon Stewart on The Daily Show last night), here is Paul Krugman's latest, "Tax Farmers, Mercenaries, and Viceroys", with a snippet here of what truly is a nightmare scenario:

Yesterday The New York Times reported that the Internal Revenue Service would outsource collection of unpaid back taxes to private debt collectors, who would receive a share of the proceeds.

It's an awful idea. Privatizing tax collection will cost far more than hiring additional I.R.S. agents, raise less revenue and pose obvious risks of abuse. But what's really amazing is the extent to which this plan is a retreat from modern principles of government. I used to say that conservatives want to take us back to the 1920's, but the Bush administration seemingly wants to go back to the 16th century.

And privatized tax collection is only part of the great march backward.

In the bad old days, government was a haphazard affair. There was no bureaucracy to collect taxes, so the king subcontracted the job to private "tax farmers," who often engaged in extortion. There was no regular army, so the king hired mercenaries, who tended to wander off and pillage the nearest village. There was no regular system of administration, so the king assigned the task to favored courtiers, who tended to be corrupt, incompetent or both.

Modern governments solved these problems by creating a professional revenue department to collect taxes, a professional officer corps to enforce military discipline, and a professional civil service. But President Bush apparently doesn't like these innovations, preferring to govern as if he were King Louis XII.

So the tax farmers are coming back, and the mercenaries already have. There are about 20,000 armed "security contractors" in Iraq, and they have been assigned critical tasks, from guarding top officials to training the Iraqi Army.

Like the mercenaries of old, today's corporate mercenaries have discipline problems. "They shoot people, and someone else has to deal with the aftermath," declared a U.S. officer last year.

And armed men operating outside the military chain of command have caused at least one catastrophe. Remember the four Americans hung from a bridge? They were security contractors from Blackwater USA who blundered into Falluja — bypassing a Marine checkpoint — while the Marines were trying to pursue a methodical strategy of pacifying the city. The killing of the four, and the knee-jerk reaction of the White House — which ordered an all-out assault, then called it off as casualties mounted — may have ended the last chance of containing the insurgency.

Yet Blackwater, whose chief executive is a major contributor to the Republican Party, continues to thrive. The Department of Homeland Security sent heavily armed Blackwater employees into New Orleans immediately after Katrina.

To whom are such contractors accountable? Last week a judge threw out a jury's $10 million verdict against Custer Battles, a private contractor that was hired, among other things, to provide security at Baghdad's airport. Custer Battles has become a symbol of the mix of cronyism, corruption and sheer amateurishness that doomed the Iraq adventure — and the judge didn't challenge the jury's finding that the company engaged in blatant fraud.