Privatization’s Trick Bag

OAKLAND, CA — Politicians these days all push the Austerity line that “there just isn’t any money.” The next step is to tout the wonders of privatization, often called “public-private partnerships,”which are supposed to keep America’s dilapidated infrastructure fixed and shiny, better service at lower costs.
President Obama called for massive privatization in his 2013 State of the Union Speech:
“So, tonight, I propose a “Fix-It-First” program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country. And to make sure taxpayers don’t shoulder the whole burden, I’m also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children.”
In other words, Obama plans to turn over ownership of roads, ports, bridges and schools to private corporations. Obama has even proposed to privatize the Tennessee Valley Authority, the set of dams that brought electricity into the South! Such pacts with the devil are a one-way street to Hell. We can see how well privatization works from Chicago’s experience privatizing its parking meters.
In 2008, then Mayor Richard Daley turned over control of 36,000 parking meters to a group of financial investors, who would rake in the profits. Why pay public workers when you can send the money directly to corporations? The mayor didn’t bother to explain the small print.
Privatization contracts routinely contain an Adverse Action clause, which forbids government from hindering the profits of the corporations. So what happens when the city puts in a bike lane or fixes the sewers or the neighborhood holds a street fair? These actions idle the parking meters for a period of time, so Chicago must reimburse the corporation for all the lost revenue!
When the meters were public property, there was no need to guarantee private profits. But now, the city must put additional money into every construction project to cover the lost profits of the financiers. Privatization is another scheme to loot the public.
For more on privatization scams, search for Ellen Dannin.