Archive for Privatization
Thinking about the Keystone XL pipeline. Perhaps you’ve seen a similar scenario before. It could be General Motors or a new real estate development or Goldman Sachs or infrastructure privatization or, really, any other business with political clout. The company insists that the public financially back the venture, or pass legislation to allow it, or amend existing rules (others must abide by) to permit it, or subsidize it with public services, land, or tax breaks, or bail out its failure.
The public – voters – object, citing a multitude of reasons. Good reasons, maybe. Bad reasons, maybe. It’s our community and our right to whatever we damned well please reasons. Maybe We the People simply don’t like your looks or the smell of the deal.
Executives behind the proposal paint objectors as Luddites or communists or NIMBYs or tree huggers or all of the above. How dare citizens stand in the way of unbridled progress, profit, Manifest Destiny? How dare they impede job creators? (“Stand aside, everyone! I take LARGE STEPS!”) Why, if the rabble don’t accede to their wishes and soon, the project will be stillborn. The business model won’t work! Profits and jobs and tax revenues will be lost.
Exaggeration? Of course. And so familiar.
Self-described risk-takers think it impertinent of mortals to question their assumptions, but We the People should anyway, especially when their plans impact our communities. Here is a question rarely asked and less rarely answered:
“How is the success of your business model our problem?”
File away for future use.
(Cross-posted from Hullabaloo.)
Since the GOP took over in North Carolina in 2011, we’ve been warning about efforts by industry and ALEC to privatize public schools and public infrastructure:
Public private partnerships are a hot, new investment vehicle. PPPs are a way for getting public infrastructure — that you, your parents, and their parents’ parents paid for and maybe even built with their own hands — out of public hands and under the control of private investors who are more than happy to sell your own property back to you at a tidy profit. A turnpike here, an airport there, or your city’s water system.
Psst. Hey, bud. C’mere. I got this bridge in Manhattan …
In fact, the Macquarie Group is “buying” a bridge in Manhattan. As the nature of public-private partnership deals (P3s) for new highway expansions became clear, both the left and the right have found a common adversary: kleptocrats stripping America for parts.
David Dayen wrote yesterday at Salon about Sen. Elizabeth Warren’s opposition to investment banker, Antonio Weiss, President Obama’s nominee for Treasury Department undersecretary for domestic finance. One of Weiss’ biggest clients is Brazilian private equity fund 3G. Dayen describes deals that would make Paul Singer blush. (Okay, maybe not.) They seem almost designed to reward failure:
The deals also exhibit the modern hallmark of corporate America: financial engineering. Decisions are made to satisfy shareholder clamoring for short-term profits rather than any long-term vision about building a quality business. The manager class extracts value for their own ends, and the rotted husk of the company either sinks or swims. It doesn’t matter to those who have already completed the looting.
Nicholas Kristof provides an opening this morning to spend more time discussing education with his celebration of Conor Bohan, founder of a college scholarship program for Haitian students: the Haitian Education and Leadership Program (HELP).
“Education works,” Bohan said simply. “Good education works for everybody, everywhere. It worked for you, for me, and it works for Haitians.”
It’s a noble effort. But it’s the attack on public education in this country that gets under my skin. Kristof explains why:
Over time, I’ve concluded that education may be the single best way to help people help themselves — whether in America or abroad. Yet, as a nation, we underinvest in education, both domestically and overseas. So, in this holiday season, I’d suggest a moment to raise a glass and celebrate those who spread the transformative gift of education.
A few days ago, we saw the news of the horrific Pakistani Taliban attack on a school in Peshawar. The Taliban attacks schools because it understands that education corrodes extremism; I wish we would absorb that lesson as well. In his first presidential campaign, President Obama spoke of starting a global education fund, but he seems to have forgotten the idea. I wish he would revive it!
Education corrodes extremism is a pretty concise explanation for why Wall Street has joined forces with the religious right in this country in a cynical effort to undermine public education under the rubric of “choice.” For the Big Money Boyz, the “education market is ripe for disruption.” Education reform is about mining public education and transferring as much as possible of that steady, recession-proof, government-guaranteed stream of public tax dollars to the investor class by expanding charter schools. For the religious right, it’s about shielding their kids from knowledge they perceive as in conflict with their religious views. Like other fundamentalists, they want to keep modernism at bay. Because freedom. And because they resent having their tax dollars fund public education and not their religious schools.
Welcome to Hollywood! What’s your dream? Sadly, there’s no hooker with a heart of gold to melt the cold hearts of corporate raiders stripping America for parts. (Where’s Julia Roberts when you really need her?) But some people are, however, finally seeing the vultures for who they really are. Take the Trans-Texas Corridor, for example [emphasis mine]:
The TTC, a proposed 4,000-mile toll road, rail and utility project, died a death of a thousand cuts in 2010. First proposed as a much-needed infrastructure investment, the well-intentioned project grew into a monstrosity of politically connected contractors, private property concerns and conspiracy theories. The biggest blow to TTC was statewide opposition to granting Spanish-owned developer Cintra a 50-year, multibillion-dollar deal to control and collect tolls on a concrete corridor bisecting the very heart of Texas. The plan even proposed turning over to Cintra land seized by eminent domain, where the company could franchize roadside amenities like hotels and rest stops to supplement its collected fees.
Set in the 1980s, the show examines a community split over a plan to build public housing in the upscale — predominantly white — east side of Yonkers, NY. It was a breakdown driven not only by race, but by fear and money.
Simon sees the dispute as allegorical of the political dysfunction in an America that no longer knows how to solve its problems. The period coincides, he believes, with the breakdown of the social contract in America, the triumph of capital over labor and the unpairing of tides and boats that had risen together in a postwar America we had come to believe was normal.
This is a point forcefully made by ex-Clinton labour secretary Robert Reich in his recent film, Inequality for All. He dates the busting of the labour unions and the rupture of the social compact to Ronald Reagan’s firing of 11,000 air traffic controllers in 1981. From then on, the idea that a market-driven society would mutually benefit those who held the capital and those who provided the labour was no longer in place, he says. For Simon, this is the point at which the shared community of interests that walked side by side as the American economy surged after the second world war came apart. The collective will that bound together communities, cities and, ultimately, America started to erode.
“What was required in Yonkers was to ask: ‘Are we all in this together or are we not all in this together?’ Is there a society or is there no society, because if there is no society, well, that’s the approach that says ‘Fuck ’em, I got mine’. And Yonkers coincides with the rise of ‘Fuck ’em I got mine’ in America.
“That’s the notion that the markets will solve everything. Leave me alone. I want maximum liberty, I want maximum freedom. Those words have such power in America. On the other hand ‘responsibility’ or ‘society’ or ‘community’ are words that are increasingly held in disfavour in the United States. And that’s a recipe for cooking up a second-rate society, one that does not engage with the notion of collective responsibility. We’re only as good a society as how we treat those who are most vulnerable and nobody’s more vulnerable than our poor. To be poor is not a crime, except in America.”
A guy I knew in the T-party once insisted that there is no society, just as Simon describes. And if there is none, by that logic how could he bear any responsibility for it? T-party members may clasp copies of the U.S. Constitution to their breasts, but they’ve lost its spirit after rejecting the document’s first three words. There is no we in their America, just I and me. And community? Sounds too much like communism. And an excuse for low-caste Irresponsibles to collect a government check for not working.
The view portends a grim, decidedly unexceptional American future in which doomsday preppers barricade and arm themselves against their neighbors while the rich retreat to lush, gated sanctuaries protected from both by armed security.
The thing is, as more Americans slip out of the middle class and find themselves struggling to get by, they are catching on to the barrenness of that future. The Moral Monday movement caught on by bringing together a diverse community to call out the depravity of the ‘Fuck ’em I got mine’ culture of Wall Street’s Jordan Belforts, and among ALEC corporations out to strip America for parts.
But David Simon doesn’t believe We the People are quite there yet.
“I think in some ways the cancer is going to have to go a little higher. It’s going to start crawling up above the knee and people are going to have to start looking around and thinking ‘I thought I was exempt. I didn’t know they were coming for me’.
“It’s happened to the manufacturing class, it’s happened to the poor. Now it’s happening to reporters and schoolteachers and firefighters and cops and social workers and state employees and even certain levels of academics. And that’s new. That’s not the American dream.”
First they came for the air traffic controllers, and I did not speak out—
Because I was not an air traffic controller.
Then they came for the factory workers, and I did not speak out—
Because I was not a factory worker.
Then they came for the schoolteachers, the firefighters, the cops, the academics … .
(Cross-posted from Hullabaloo.)
Perhaps it is not just a coincidence or a quirk of American policy-making that the words “innovation” and “reform” lately seem to attach themselves to ideas that drive more public money, public infrastructure, and public control into the hands of private investors. Nor that this meme is driven by lobbyists for public-private partnerships (P3s) where corporations stand to rack up profits by privatizing the commons.
Whether it is turning over state prisons to for-profit Corrections Corporation of America or public education over to publicly traded K12 Inc., we are to believe that despite the scandals and poor outcomes, the private sector will always do a better job than big gummint. We hear the private sector is more “efficient” than efforts run by the people and for the people. But more efficient at what?
This last week, as we noted, ITR Concession Co, and its parent company, the Spanish-Australian consortium Cintra-Macquarie declared bankruptcy on its concession to operate the Indiana Toll Road. The 75-year deal fell apart after only eight.
But getting back to efficiency. Think maybe the Germans could do it better? Maybe not.
The GSV manifesto declares, “we believe the opportunity to build numerous multi-billion dollar education enterprises is finally real.”
Venture capitalist, Eric Hippeau, believes the “education market is ripe for disruption.”
Writing for the Nation Investigative Fund, Lee Fang details how venture capitalists and firms such as K12 Inc. view it as their mission to disrupt traditional public schools through vouchers applied to private schools, expanded charter schools, and the “next breakthrough in education technology.”
[D]espite wave after wave of negative press, K12 Inc. figures as a solid investment opportunity to many. Baird Equity Research, in a giddy note to investors this year about the potential growth of K12 Inc., noted, “capturing just two million (3.5%) of the addressable market yields a market opportunity of approximately $12 billion … Over the next three years, we believe that the company is capable of 7%+ organic revenue growth with modest margin expansion.” How will it achieve this growth? According to Baird, K12 Inc.’s “competency in lobbying in new states” is “another key point of differentiation.” The analyst note describes “K12’s success in working closely with state policymakers and school districts to enable the expansion of virtual schools into new states or districts” as a key asset. “The company has years of experience in successfully lobbying to get legislation passed to allow virtual schools to operate,” Baird concludes.
In the process, they also educate children. It’s there in the footnotes in 6-point type.
Look, there are friends who happily send their kids to small, community-based, parent-organized charter schools that provide them with a quality education. These aren’t them. Lobbyists and campaign donations from would-be “multi-billion dollar education enterprises” will make mincemeat of those schools the way Walmart kills off mom-and-pop stores. But in the scheme of things, they’re small potatoes. Privatizing public education itself is the breakthrough the Walmarts of the education industry seek.
Next year, the market size of K-12 education is projected to be $788.7 billion. And currently, much of that money is spent in the public sector. “It’s really the last honeypot for Wall Street,” says Donald Cohen, the executive director of In the Public Interest, a think tank that tracks the privatization of roads, prisons, schools and other parts of the economy.
Investors call that steady, recession-proof, government-guaranteed stream of public tax dollars “the Big Enchilada,” as Jonathan Kozol wrote in Harpers before the market crash.
Standing in their way? “Unions, public school bureaucracies, and parents,” says Hippeau. Because it sure isn’t neoliberals in the Obama administration. It’s hiring education industry veterans to oversee applying to educating our children Monsanto’s tactic of using its GM crops to crowd out competing seed sources.
As I wrote awhile back,
From this perspective, it’s bad enough that states are not providing education on at least a not-for-profit basis. But it’s far worse than that. They’re giving it away! That’s a mortal sin. A crime against capitalism. The worst kind of creeping socialism. Hundreds of billions of tax dollars spent every year in a nonprofit community effort to educate a nation’s children, and the moguls are not skimming off the top. The horror.
(Cross-posted from Hullabaloo.)
The UK must prepare for “the worst droughts in modern times” experts will warn this week at a major international conference to discuss the growing global water crisis.
Britain is looking at ways of reconfiguring its water infrastructure — expanding reservoirs, imposing tougher water extraction licenses, considering more desalination plants. “In the past we have planned for our water resources to cope with the worst situation on record but records are only 100 years long,” explains Trevor Bishop, the Environment Agency’s deputy director. “We may get a situation that is worse than that – with climate change that is perfectly possible.”
With the imposition of a state-appointed emergency manager for Detroit, a local activist says half the voting population of Michigan has, essentially, lost the right to vote. As we noted during our recent visit, they’re also cutting off the water to thousands of Detroit families and headed towards privatizing the water and sewer systems. Sally Kohn looks at The Republican Occupation of Detroit:
Why would any city want to privatize its water system? A report by Corporate Accountability International (CAI) shows that water privatization fairly universally leads to higher prices for cities and consumers and, in many cases, decreased efficiencies. In fact, the track record for water privatization is so abysmal that CAI found more than 20 American cities that had once privatized their water have taken back control of their systems since 2002. If water privatization is bad for the city of Detroit and its residents, who is it good for? Corporations. Which is where the state’s interest comes in.
Government governs best that’s closest to the people? Not so in Michigan. Republican Gov. Rick Snyder’s GOP may hate what they decry as the nanny state, but they are just fine with a paternalistic daddy state.
Under Governor Pat McCrory and the GOP-led legislature, North Carolina is headed there as well. Michigan just got there first.
Don’t mess with Maureen Taylor.
Scroll to 1:08:40. “This monstrous thing that’s going on in Detroit … beyond demonic … You gotta leave here changed! … Water is a human right.”
Seems we got their attention:
Detroit suspended its aggressive policy of cutting off water to customers with unpaid bills on Monday, the latest response to a controversy that has prompted large protests and caught the attention of the judge overseeing the city’s bankruptcy.
The city said there will be no shutoffs for the next 15 days. The disclosure was made in bankruptcy court where Judge Steven Rhodes is overseeing the nation’s largest ever municipal bankruptcy. He has been encouraging Detroit to come up with alternatives to shutting off water for thousands of homes and businesses.