Sober Realist's  Instablog

Every week, Marcia Carroll collects examples of privatization (that is, corporatization of the peoples' assets).  Looking at her website, Privatizationwatch.org, will either make you laugh helplessly or make your blood boil.

The "off the wall" giveaways at bargain-basement prices of what you and other Americans own eclipses imagination.  The latest escapes from responsible government are called "public-private partnerships" and are designed to enable the likes of Morgan Stanley and Goldman Sachs to take over highways, meter-collecting, and public buildings in deals that are loaded with complex tax advantages for the investors.

Here are two of her latest entries.  Arizona lawmakers and Governor Jan Brewer are moving to fill a $3.4 billion budget shortfall by selling state-owned buildings.  These include not only prisons, but also the House and Senate buildings.  That's the state legislature, fellow Americans!  Metaphor becomes reality!

The proposed sale has bipartisan support and will require a leaseback by the buying corporation to the lawmakers with the right to repurchase the premises within twenty years.

The Arizona Republic reports that the deal, which includes 32 state properties, would bring in $735 million in upfront money and entail state lease payments totaling $60-70 million a year.

"We need the money," State Minority Whip Linda Lopez, Tuscon Democrat said, adding, "You've got to find it somewhere."  Well, why not rent out the backs of the state legislators to their favorite corporate funders?  At least the public would get full disclosure of ownership.

"I look at it as taking out a mortgage," practical Arizona House Majority Leader John McCormish, a Republican, told the Wall Street Journal.

The second item comes from the Denver Post, which reports that the foreign consortium, Auto-estradas de Portugal (Brisa), operating the toll road Northwest Parkway under a 99-year lease, objected to improvements on a nearby public road.  Under the complex leasing contract, the company could cite the improvements as an "adverse action" reducing toll revenue and the number of vehicles using the parkway.  This action would presumably entitle this foreign company to compensation from Colorado taxpayers.

Last year, Pennsylvania Governor Ed Rendell tried to push through the legislature a complex, 75-year lease of the storied Pennsylvania Turnpike in exchange for $12.8 billion up front.  All kinds of tax breaks and trap-door evasions filled the 686 page lease.  The Governor was prepared, for example, to agree to pay the consortium of foreign investors if new safety measures or emergency vehicles entered the toll road and affected the flow of traffic.  Fortunately, the legislature rebelled and blocked the deal.

The Indiana Toll Road was turned over to private companies in 2006.  The 75-year lease was for $3.8 billion, which is a little more than the cost to repair the Woodrow Wilson bridge over the Potomac River between Virginia and Washington, DC.

Tolls on the Indiana Toll Road have already doubled and are expected to double again within ten years, according to the Dallas Morning News.

Last year, Mayor Richard Daley of Chicago privatized the city's parking meters.  Chicago's inspector general concluded that the meters were worth nearly twice as much to the city as the $1.15 billion that the city received under an agreement rushed through the City Council with no civic input.  A fourfold increase in meter rates this year has driven many motorists to residential neighborhoods in search of free parking spaces.

Indiana, a leader in outsourcing governmental functions to private corporations, gave the servicing of the state's welfare program to IBM.  According to the Indianapolis Star, error rates since corporatization have risen 17.5 percent last November and 21.4 percent in December.

The myth that corporatization is "better, faster, and cheaper" is falling apart.  This year, the IRS announced that it will end the use of private tax collectors after consumer groups argued that taxpayers were subjected to immediate payment demands by private collectors while IRS employees would offer citizens an array of options to help pay their tax debt.

Then there are the corporatized water systems where the companies deliver poorer service at higher cost.

Since the 19th century, privatizing public functions has opened the doors to kickbacks, price fixing, and collusive bidding.

New depths of corruption were reached in Pennsylvania recently when two state judges pleaded guilty to taking bribes in return for sending youths to privately-owned jails.

After reading report after report about the vast, relentless waste, fraud, and abuse arising out of corporate contractors to the Pentagon in Iraq, why should readers be surprised at this domestic scene whereby taxpayers pay through the nose for corporations to govern them?

So, you're not surprised.  But are you indignant?  Are you ready to make sure the politicians hear from you in no uncertain terms, hear from you to stop this recklessness and restore public control of the public infrastructure under accountable government?

If the state politicos try to pull a fast one, demand public hearings with thorough reviews of the proposed contracts or leasebacks.  Better yet, in states like Arizona or Colorado, require any such proposals go through the open, state-wide referendum voting process.

Corporatizations such as the above just pass on to our children the burdens that our generation should have assumed itself to run government within its means funded by fair taxation.

 

    The nation quickly descending into chaos

 

August 13, 1:24 PMColumbia Conservative ExaminerAnthony G. Martin

A very dangerous thing occurred last Thursday and Friday.  The Federal Reserve monetized roughly 40% of the nation's enormous debt.  This means that the Fed printed money to flow into the economy in order to cover over 40% of the debt burden the U.S. now carries.

Within days the U.S. government quickly sold off this portion of the debt, creating even more debt, leading Treasury Secretary Timothy Geithner to request from Congress a lifting of the debt ceiling so that we could cover our obligations.  That, of course, will create even more debt.

This economic shop talk may sound like gobbledygook to most average citizens, like myself.  But the bottom line is that what the Fed did last week will create what is known as 'hyper-inflation.'  The cost of goods and services rises so fast that average citizens can't afford the basic essentials of living.

However, the dirty little secret among economists and government bureaucrats is that what's bad for the citizens in this scenario is actually good for the government.  In a hyper-inflation scenario the government makes more money due to the tax structure being based upon percentages.  Thus, the government makes more money without having to enact an official tax increase.

In a free, Constitutional Republic, a very careful balancing act must be undertaken by government in this situation.  The amount of hyper-inflation that benefits government must be carefully balanced with the tolerance level of the public for the ever-rising costs of goods and services, or else the citizens will vote out every politicians who contributed to this dastardly plan.

The salient point here, though, is that we are headed for a round of heavy hyper-inflation.  We'd better get set.

But this is not the only troublesome area.

Many economists who closely watch the mortgage and housing markets are saying that we are going to experience yet another major crisis with foreclosures within the next year or two.  The reason?  Homeowners will owe more on their mortgages than their homes are worth on the market.  One economist in particular stated on Fox News that this crisis will not only prevent a recovery but throw the nation back into a deeper recession or even a depression.

Barack Obama has stated, on the record, that the U.S. is 'out of money.'

For once in his life, he told the truth.  We are broke.  Yet at the worst point in at least 30 years for our economy, Obama and the Democrats wish to pass a 9 trillion-dollar healthcare plan, just so roughly 10 million Americans can have some insurance.  And to boot, they want a cap-and-trade plan that will cripple business, decimate jobs, and add $1500-$3000 per year in extra energy costs to the average American family.

There are only 2 ways that the government can cover the costs of such a head-splitting load of debt, on top of the debt we already have.  One is to raise taxes.  The other is to print more money.  Neither solution is acceptable.  If inflation is headed through the roof, how will the citizens pay for more taxes?  If the government continues to print more money, inflation will only continue to increase.

In short, the Barack Obama plan for the nation is a prescription for chaos.  Some would argue we are already sliding into chaos without the healthcare plan or cap & trade.  Obama and the Democrats have led us to a point in our history where the very survival of the Republic hangs in the balance.  We are edging ever closer to a precipice, and if we fall off of it the Republic will be lost.

Obama and the Democrats who control Congress have given us snake-oil remedies that are leading us closer and closer to that precipice.  Perhaps this is a slight hint as to why the citizens who shout at town hall meetings are so passionate.

And perhaps this is why the voices calling for a complete change in Congress, from top to bottom, are growing.