Apparently there is yet another showdown looming. The Highway Trust Fund is scheduled to run out of money in the summer. If nothing is done (and nothing ever is ) ongoing highway projects will be shut down. Yves Smith has some interesting observations at Naked Capitalism. She suspects that this will give Obama another chance to work with Republicans toward forming more “Public/Private partnerships”, which is another term for handing taxpayer money over to rich people, by giving them monopolies on what were previously publicly funded and operated services. In this case, Smith suspects a push to hand our highway system, or chunks of it, over to the rent seekers. I suspect it won't happen, because although the Republicans normally are quite anxious to serve the interest of the rent-seekers, it's a different story if Obama wants to do it too. Visceral Obama hatred has served us surprisingly well in the last few years; it may have saved Social Security as we know it. This trust fund issue may be a recurring topic over the next few months, but this post will veer in a slightly different direction.
It occurred to me that the experience of some states in privatizing infrastructure may hold some lessons for those like our own Dannel Malloy for the likely outcome of his efforts to hand our schools over to corporations. It turns out that, once they get the ability to do so, these rent-seekers start to demand terms that turn the situation into a heads they win, tails we lose situation (okay, that’s the norm, but this is particularly outrageous). If things go bad, the state steps in to help, and in some situations, the states involved have agreed to let purely public infrastructure deteriorate in order to benefit the rent seekers.
Infrastructure privatization contracts are full of “gotcha” terms that require state or local governments to pay the private contractors. For example, now when Chicago does street repairs or closes streets for a festival, it must pay the private parking meter contractor for lost meter fares. Those payments put the contractors in a much better position than the government. It gets payments, even though Chicago did not get fares when it had to close streets…..
Highway privatization contracts also often include terms that forbid building “competing” roads or mass transit. Some even require making an existing “competing” road worse. For example, the contract for SR-91 in Southern California prohibited the state from repairing an adjacent public road, creating conditions that put drivers’ safety at risk. A proposed private highway around the northwest part of Denver required that local governments reduce speeds and install speed humps and barriers and narrow lanes on “competing” roads to force drivers to use the privatized road….
Virginia decided to promote carpooling to cut down on pollution, slow highway deterioration and lessen highway and urban congestion. As a result, Virginia must reimburse the private contractor for lost revenues from carpoolers, even though not all of the people in a car would otherwise have driven individually….
via Truthout via Naked Capitalism
It is entirely foreseeable that once the school privatization train gets rolling, the rent seekers in that area will also demand protections for their profits and, indirectly but surely, deterioration of the remaining public schools. They are actually already achieving the latter by avoiding or discouraging children with special needs, who are then disproportionately the responsibility of the public schools. They are already exempt from some legal requirements that are imposed on public schools in many states, including, apparently, here in Connecticut. As they gain more influence by buying more legislators (given that they already own the governor here in Connecticut) they will be given ever greater leeway to allow education quality to deteriorate. After all, a guaranteed profit comes first.
One Comment