[WS:] One thing that strikes me in these proposals is the "thinking with a box" of people who propose these solutions. The problems they identify are real, no doubt, but the solutions they propose are all within the narrow confines of ideological orthodoxy "private is beautiful." A simple thought experiment can go beyond the trite market failure / government failure dichotomy. For example, why only private operators can use price mechanisms? What prevents government operators from using price incentives to regulate behavior?
Think of a simple thought experiment in which the government acts in its "conventional" capacity of paying for public goods when it comes to building transportation facilities, but then acts in the "mixed capacity" of public good provider and private operator when it comes to operating these facilities. For example, government pays for roads and transit and operates them, but then imposes user charges on both to achieve the most efficient use. If roads are getting congested, the road tolls go up and transit fares go down, if trains are getting congested, fares go up and tolls go down, until an optimum is achieved. A single agency is in a much better position to achieve that equilibrium and incur lower transaction costs than multiple private agencies (it is a no brainer, really, for a transaction cost economist.)
So why seemingly bright people stay within the box? Ideological blindness, I suppose.
Wojtek