THOMAS FRANK: The REAL Chicago Way (further proof that privatization is corruption+theft)

[yurbud]

If you saw the documentaries THE CORPORATION or THE END OF POVERTY, this would not surprise you, but would concern you even more. The quickest way for the wealthy to get even wealthier is to take something from the commons, that were previously used for the good of all, and keep whatever profits come from it for themselves--and most of the time charging extortionate prices for what used to be few or provided on a non-profit basis.

In the formative days of capitalism, this was done by getting together a band of thugs, putting a fence around some property, and either chasing off the people who previously worked the land or making them pay for the privilege of continuing to work it. Or in the case of colonization, they just kill the previous residents if you want.

Today the same thing goes on, but before they can send the band of thugs, they have to bribe a handful of politicians(which can be done by legal means usually) and they will sell the public asset for well below market value.

The example Frank mentions in this article is parking meters in Chicago. The mayor sold the right to run it for half of what the city would have taken in parking fees if they would have kept it, and the private company promptly began to charge more and do a shitty job.

This should be low hanging fruit for Democrats. They simply have to start saying and repeat as needed that privatization is corruption and theft of our common inheritance. When it is demonstrated that pols have sold out their constituents in these matters they should go to prison.

Democrats have already had the courage to say (if not act courageously) that one of the pillars of conservative government is an epic failure--deregulation. They need to do the same with privatization. The problem is too many of them are on the receiving end of the bribes, and we don't have enough money to outbid the wealthy.

The details of the parking meter deal, for example, were negotiated by the Daley administration with almost no public scrutiny. When it came time to approve the billion-dollar arrangement, the city council got exactly two days. It was a farce. According to a report issued by Chicago's inspector general, "No financial analysis was provided of the value of the parking-meter system to the City if it retained the system, since no such analysis had been done. . . . There was no public comment; no testimony from critics or experts; no presentation of recent studies" on privatization elsewhere.

It was not until months later that Chicagoans discovered what a lousy deal it was. The inspector general's report estimates that the private investors paid a little more than half the amount that the system would have generated had the city held onto the meters itself.

***

Meanwhile, the cost of parking increased dramatically, as the new parking-meter proprietor sought to maximize its return. Meters broke down from the unaccustomed load of quarters. Tickets were handed out with abandon. Chicagoans were furious.

What they eventually learned is that they had handed over a component of self-governance to a private company that is, by definition, unconcerned with the public interest. Chicago police will still hand out parking tickets; the state of Illinois will still suspend drivers' licenses; but for the next 75 years all of it will be done to ensure that citizens render proper tribute to Wall Street.

And now comes the inevitable denouement. Last week, the Chicago City Council voted to plug a hole in its 2010 budget using funds remaining from the billion-dollar parking-meter haul, despite earlier plans to invest the money for the long term. Almost all of it will be gone by the end of next year.

http://online.wsj.com/article/SB10001424052748703558004574584232074750544.html">FULL TEXT

[Larkspur]

1. Gov. Rendell of PA is following Daley's example

Privatization = balkanization of America. This has got to stop.

[yurbud]

2. the Bolivian water example should have been enough to end it, but there's too much graft

available for pols to ignore.

[MisterP]

8. FRANCHISING of America, rather nt

[jtrockville]

3. We need further proof? How about just ONE example

where privatization has benefited anyone other than the profit-takers?

[yurbud]

4. yep. you can leave something to the market or you can have it gov't run, but when gov't

sells or contracts its functions to private parties, it either screws the public or does that AND sets up a continuous loop of corruption, contracts, and pols moving back and forth from private sector to government office.

[Waiting For Everyman]

7. And oversight ends. There's no transparency with privatization.

It's a way of eliminating the level playing field (that we used to have). Private entities can be as unfair as they want, with no recourse.

[Waiting For Everyman]

5. We need some class action fraud suits to reverse this stuff.

Taking it to the courts might start a ball rolling. In the case of foreclosures, the courts are beginning to occaisionally go back to enforcing traditional contract law against the big corporate players. Defrauding the public is still fraud. Anyway, there's not much to lose by trying. You never know what might come of it.

Public assets should be unsellable. Period. (We also used to have publicly owned hospitals and universities, once upon a time.)

[yurbud]

6. note that Daley gave them a 75 year contract, possibly to get around that ''selling''

objection.