The Privatization Backlash

[xchrom]

http://www.theatlantic.com/politics/archive/2014/04/city-state-governments-privatization-contracting-backlash/361016/

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A few years ago, Chicago residents accustomed to parking on the street got a rude shock. Parking-meter rates had suddenly gone up as much as fourfold. Some meters jammed and overflowed when they couldn't hold enough change for the new prices. In other areas, new electronic meters had been installed, but many of them didn't give receipts or failed to work entirely. And free parking on Sundays was a thing of the past.

The new meter regime sparked mass outrage. People held protests and threatened to boycott. But there was little recourse: The city had leased its 36,000 meters to a private Morgan Stanley-led consortium in exchange for $1.2 billion in up-front revenue. The length of the lease: 75 years.

If the meter situation seemed like a bad deal for Chicago's parkers, it would soon become clear that it was an even worse one for the city's taxpayers.

An inspector general's report found that the deal was worth at least $974 million more than the city had gotten for it. Not only would the city never have a chance to recoup that money or reap new meter revenue for three-quarters of a century, clauses buried in the contract required it to reimburse the company for lost meter revenue. The city was billed for allowing construction of new parking garages, for handing out disabled parking placards, for closing the streets for festivals. The current bill stands at $61 million, though Mayor Rahm Emanuel has refused to pay and taken the case to arbitration instead.

[catrose]

1. oh, would I love to see the end of privatization!

Did the City of Chicago seriously sign a 75-year lease with no oversight or recourse?

[2naSalit]

2. It's Chicago

...pretty sure it's true.

Privatization needs to become a thing of the past when it comes to public infrastructure and other things like schools and public land. This is one of the best arguments against allowing states to rule our public lands... we can be damned sure this is the kind of crap that will happen to our public resources and everything else that they don't already own..Eminent Domain will be the rallying cry of every oligarch on the planet.

We need to find a collective way to not participate in all this BS.

[abelenkpe]

12. Yes please

end privatization and begin nationalizing things. There should be no private prisons. Nationalize them all. No charter schools, nationalize them. Nationalize the banks, etc etc etc

[TheFarseer]

3. really disappointed a democrat did this

I expect this from a republican that has friends at Morgan Stanley.

[Jackpine Radical]

5. Is Rahm a Democrat?

Who knew?

[yourout]

10. +1.....if your suprised Rahm would do this you have not been paying attention.

He is a snake.

[TheFarseer]

18. not surprised. just disappointed

Rahm Emanuel is not on our side.

[tritsofme]

19. The meter deal preceded Rahm's time in office

But please continue your two minutes of hate.

[Enthusiast]

23. In name only.

[hedda_foil]

11. I have no doubt Rahm is capable of doing this, but this deal was done by Richie Daley.

[TBF]

14. Doesn't matter which actor did it -

it is the same old, same old.

Privatization=Capitalism

It needs to go.

[Jackpine Radical]

17. I realized that moments after posting. Nevertheless…

[deutsey]

4. Gives new meaning to Dylan's line

"Don't follow leaders/Watch the parking meters"

[Crunchy Frog]

6. Private companies are always so much more efficient than the government.

These should be called "Freedom meters".

[Baitball Blogger]

7. I wonder how the public attorneys who negotiated that contract are doing today?

Probably living in million dollar houses that back up to water fronts.

[kmlisle]

8. Question: Who pays the police to enforce use of the meters?

I am betting it is tax payers -not Morgan Stanley.

[lonestarnot]

9. Got to pay that City Manager $315k per year covertly or overtly, apparently doesn't matter.

[BlueJac]

13. foolishness and shortsighted

[Trust Buster]

15. There are a few things that you must know about the Chicago parking meter lease...

1) the deal was reached in 2008 when Richard Daley was mayor.

2) if for any reason parking meters are rendered inoperable for parades or water main breaks, the City of Chicago must pay the lesee's the average daily meter take from city coffers.

Points 3) and 4) refer to information from Matt Taibbi's excellent book "Griftopia" that explains how Wall Street destroyed our economy and then pitched these lease deals to states to fill budget shortfalls that Wall Street's own destruction created in the first place.

3) Wall Street aggressively dangled these lease deals in front of state legislatures when the ruin that Wall Street created decreased state tax revenue to the point that huge wholes were blown in state budgets. These deals allowed states to receive huge amounts of money up front to fill those budget gaps that Wall Street's previous crimes had created.

4) Allow me now to explain to you what that cute name "Morgan Stanley-led consortium" in the OP really means. In 2008, credit was pretty well frozen up in this country. Therefore Wall Street banks and hedge funds went global to seek out foreign investment. And who was the most cash rich entities on the planet in 2008 as a result of the way Wall Street bid up oil to $141 a barrel ? Middle East Sovereign funds, that's who. But Middle East Sovereign Funds are run by smart people. They refuse to take more than a 49% interest in these so called "consortiums" to avoid disclosure requirements.

In summation, through manipulation of mortgage backed securities and manipulation of the oil markets, Wall Street destroyed our national and state economies and made a boat load in the process. Then they enticed the Middle East Sovereign Funds to invest the billions of dollars extracted from the pockets of Americans by way of manipulated oil prices to enter into these lease deals to fill state budget gaps that they created. That's right, your money was invested by Wall Street on behalf of these Middle East Sovereign Funds to buy up hard infrastructure assets in this country. Now when you park in Chicago, a Saudi oil sheik thanks you for your patronage.

I urge you to read Matt Taibbi's Griftopia and learn the "full" spectrum of evil that Wall Street is engaging in.

[snagglepuss]

20. Thanks for the Griftopia recommendation.

Thanks for the informative post. Welcome to DU.

[Trust Buster]

21. You're welcome.

[Half-Century Man]

16. Un-privatize any and all traditional governmental functions.

Infrastructure; public buildings, streets, sewers, bridges etc. Include new technologies of power grid, urban rail systems, and mass transits.

Corrections and Law enforcement; all prisons, jails, and places of detention; all armed security officers who move about in the public domain (armed security specific to a place or task , regulated by but not under the direct control of the government would be allowed).

Intelligence; All espionage should be under the exclusive strict control of the executive branch, overseen by a legislative review board.

Education; No public monies for anything other than public schools. All public schools under the direct control of local elected school boards operating under a nationally common standard. Any private, home based, or remote education of minors to comply with the common standard. Theological teachings to be called as such.

Information networks and grids; those which are available to the public should be regulated to be free, neutral, and open.

[Major Nikon]

22. Here's how privatization is so engrained in Texas

Several municipalities started installing red light cameras here in Texas all of them managed by contractors. The backlash against them was so strong the state legislature passed a law against them, but allowed all existing contracts to remain until expired. So my town renegotiated a long term contract for all the ones they had before the law was signed.

One interesting development is the tickets that are issued (through the mail) are criminally unenforceable meaning if you don't pay them the worst they can do is put a hold on your registration. Fortunately the county said they would not put any holds unless the city pays them to do it. So basically you can throw the ticket in the trash and there's nothing the city can do to you.

[Nye Bevan]

24. Nothing wrong with charging people for street parking

providing that the city gets a good deal.