Among the most persistent and far-fetched of modern myths is the one that says government is always wasteful and inefficient, and the private sector never is. It's repeated ever so often by right-wingers, though every study of government programs like Social Security and Medicare finds they're run far more cleanly and cost-effectively than are private insurance companies. For one thing, government programs don't squander millions of dollars on salaries for executives.
In the current debate over health-care reform, we again hear people shouting that it's the private sector that's well-run, and the government that's incompetent. At town hall meetings, fearful and unenlightened citizens inadvertently reveal that not only do they not know how the various programs run, they don't know who's running them. Some alarmists warn that if the government gets into health care, it'll want to take over Medicare and Social Security too. Others, confused from a different perspective, say that the failure of these two hugely successful programs demonstrates why the government shouldn't be put in charge of anything.
When the government (that is, the taxpayers) bails out banks, conservatives insist the government refrain from regulation, that banks be allowed to run themselves off a cliff again. As they always do, without government oversight. Lemmings are prudent compared to bankers.
In World War I, the federal government took over the railroads and made the trains run on time. As soon as the war ended, private interests who'd mishandled the railroads before demanded the chance to do so again. It was quite a problem, David A. Shannon writes in “Between the Wars: America, 1919-1941,” because “the plain fact was that the government had operated the railroads more efficiently and with better and safer service than had private enterprise before the war. Indeed, private management's inefficiency had been the cause of the federal government's assuming control of railroading. In December 1917, American railroads were in a frightful crisis that jeopardized the success of the whole war effort.”
The problem was resolved the way these things generally are by the American Congress. Corporations kicked in, and corporations got their way. The Transportation Act of 1920 was a mishmash, whose main beneficiaries were the stockholders in the strongest companies. “Help those who least need help” is ever the cry of the conservatives.
The law poorly prepared the railroads for increased competition from cars and trucks. Despite advertisements by an actor named Ronald Reagan urging Americans to ride the trains, American railroad passenger service by 1950 was the worst of any major industrial country in the Western world.