The Privatizer-in-Chief

Between tweets, Donald Trump is a big proponent of privatization, and those he has named to cabinet positions share his passion for turning government over to the private (for-profit) sector.

A couple of examples: Betsy DeVos wants to privatize public schools; Jeff Sessions is a fan of private prisons. (Neither of these ideologues is likely to let mounting evidence of their favorites’ poor performance persuade them otherwise; evidence is so last century!) So it shouldn’t surprise us that of the (many) really bad ideas being championed by our erratic new President—a man who has never worked in government and quite obviously never considered the meaning of “public service”—is using private companies to repair America’s decaying infrastructure.

This proposal raises all sorts of practical questions, of course, but when you peel back all of the reasons to suspect that our genuine need to repair our roads, bridges and electrical grid is being used to leverage another giveaway to the rich and connected, there is a more profound issue that generally gets ignored: who should own and benefit from the country’s infrastructure?

I was prompted to focus on that question by an article in Engineering News-Record, (not, I confess, a periodical I regularly read. My husband, a retired architect, is a subscriber.) The article described a legal challenge to the Gordie Howe International Bridge being built by  the United States and Canada. The challenge to the authority of Michigan’s Governor to acquire land for the approach to the bridge was brought by the Moroun family, private owners of an existing bridge, the Ambassador, also connecting Detroit with Windsor.

The Morouns claim that their own bridge could lose 75% of its traffic, and they have threatened to close it.

What is really being lost here is the public interest. Infrastructure should serve public needs; instead, the current bridge is a profit-generating enterprise owned and controlled by a family whose interests are the bottom line, not the common good. That’s not to say that private interests can never build roads or bridges to augment those constructed with our tax dollars, but those efforts should be undertaken with a clear understanding of the primary purpose of the network they join and the risks they assume.

This is not an isolated case.

America’s prolonged anti-tax hysteria has meant that local governments—desperate for revenues to provide public services—have increasingly sold off public assets. In my home city of Indianapolis, the city entered into a fifty-year “lease” of its parking meters in 2011, trading control of its curbsides and parking rates for up-front cash. The results—which haven’t been pretty—are an object lesson in why such infrastructure should be civically owned and operated.

After Indianapolis leased its parking meter operations to a private company, rates skyrocketed, hours expanded and the number of metered spaces increased. But when I last looked, the city was receiving only about a quarter of the revenues the private vendor projected when it paid $20 million to the city for the right to operate the meters until 2061.

Aside from everything else, the length of the contract was unconscionable. Decisions about where to place meters, how to price them, what lengths of time to allow and so on have an enormous impact on local businesses and residential neighborhoods. They are decisions requiring flexibility in the face of changing circumstances; they are most definitely not decisions that should be held hostage for decades to contracting provisions aimed at protecting a vendor’s profits.

The contract profited the vendor at the expense of citizens. More often than not, new  construction interrupts adjacent parking. If the city is managing its own meters, it can choose to ignore that loss of parking revenue, or decide to charge the developer, based upon the City’s best interests. Street festivals and other civic celebrations also require  that meters be bagged, and usually there are good reasons not to charge the not-for-profit or civic organization running the event. The Indianapolis contract requires the City to pay the vendor whenever such interruptions disrupt its projected revenue from those meters.

There was never a satisfactory response to the obvious question “why can’t we do this ourselves, make parking decisions based upon the public interest, and keep all the revenues to provide badly-needed public services?” Why couldn’t Indianapolis retain control of its infrastructure, and issue revenue bonds to cover the costs of the necessary improvements? (Interest rates were at a historic low at the time, making it even more advantageous to do so.) If the administration at the time was too inept to manage parking, it could have created a Municipal Parking Authority and hired that competence. There really was no compelling reason to enrich private contractors and reduce future (desperately needed) City revenues. (That “up-front” payment was very enticing, of course. Let subsequent administrations worry about the long term.)

There are times when so-called “public-private partnerships” are useful and appropriate. There are other times when they amount to theft from the public till. It behooves us to distinguish between those situations, and to remember that constructing and maintaining an infrastructure owned by and operated for the use of all our citizens, rich and poor, is one of the most basic obligations of government.

 

 

 

 

 

 

28 thoughts on “The Privatizer-in-Chief

  1. Thank goodness those fine folks who sold off the parking meters were NOT able to build a criminal justice center based on private profit. They sure tried hard enough.

  2. I have not parked on the streets downtown for years because of the unbelievable hassle I experience when the new meters were first installed. What I am really saying is that I avoid going downtown PERIOD.

  3. It should be noted that in Indianapolis the privatization of public property began during the Goldsmith Administration. The rape and plunder began with him, and we the citizens are still paying for it.
    What is fascinating is that elected Republicans who engage in the selling off of public assets when money is tight would NEVER engage in the selling off their own private property when money got tight at home. Having declared taxes to be evil and all expenditures to run government unnecessary, any increase in taxes is seen as going in the wrong direction and a sure path to losing the next election. Thus the citizens of Indy have lost a state of the art sewage treatment plant and part of the parkway along White River to name two assets gone forever. Now, the assurance of easy and inexpensive parking in downtown Indianapolis is gone. This is progress?

  4. There is a belief that all government workers are lazy and rude, therefore their jobs should be done by people who can easily be fired. The thought is that non-government workers will be better, brighter, friendlier and will do the job for less. None of that is true, but it is a widely held belief. I would like anybody to cite an example of any public function that was taken over by the private sector and done better, more efficiently and at a lower cost.

  5. I lay awake last night worried about a voter issue in addition to my previous comments regarding my concern that my vote did NOT count in November due to a malfunctioning ballot machine. I decided this is important enough to put before all of you aside from today’s issue. Trump talks much about illegal voters and those who are registered in more than one state – or district. Since my first election at age 21 in 1958, I have been a registered voter in TWELVE different districts/precincts in three states. When we move and register to vote; what happens to our previous voter registration? I have not seen questions regarding previous voter registration or request to remove it; is there a process to automatically remove our name or does it lay dormant, waiting for times such as we are subjected to under Trump, to be counted as being an illegally registered voter in multiple area? If maintained on voter registration books, wouldn’t this be part of the gerrymandering problem?

    On to “The Privatizer-in-Chief” Indianapolis had it’s own PC (certainly not meaning politically correct) with Steve Goldsmith. Much of his privatizing benefited businesses in the state of Ohio thanks to the able assistance of Warren Tyler, Vice President of a bank in Columbus, Ohio, heavy contributor to Goldsmith’s campaigns and illegally working for the City of Indianapolis government and being paid (probably at both ends of his dubious deals). One that sticks in my mind (and my craw) is the 15 pieces of property on Indiana Avenue sold to a developer from Hamilton, Ohio, for $82,000. It is that section near 10th Street; what is that area worth today? That section of properties had originally been given to the City during Mayor Hudnut’s administration, by Beurt Ser Vaas who also owned the Indianapolis Water Company and was on the City-County Council for many years. I’m sure Mr. Ser Vaas meant for his largesse to benefit the city of Indianapolis, not a private developer in another state.

    Dear God; has it only been three WEEKS! So much news and so many lies; I can’t remember the name of the Representative or Senator from California last night who spoke on MSNBC about the immigration roundup over the past 48 hours in six states (and lied about the number). He stated that the public seemed to be incensed that Trump (like Sheila, I have a problem using his title) is keeping his campaign promises – Trump is keeping his campaign THREATS and is escalating at an unbelievable and now terrifying rate. The roundup of immigrants appears to be the documented immigrants who followed the rules and maintained their documentation as required. Turns out their action put them in the line of fire rather than protecting their status in this country. ICE going into private homes and workplaces will not rid this country of the illegal, undocumented immigrants who are the problem. We, as private citizens need to form a privatized organization to find assistance and protection for them. Can this be a primary aim of Women 4 Change?

  6. The framers of our country are rolling over in their graves. They wanted education to be part of the commons as well. But look what is happened to that greatest of ideas. GREED IS GOOD ? Not what the good book that they so often use to justify their criminal activity.

  7. Theresa Bowers; we seem to be of like mind this morning, probably due to my working in the Goldsmith administration and your work during Mayor Bart Peterson’s administration trying to sort through the shambles of city government and remaining publicly owned properties left by Goldsmith before progress or repairing the damage could begin.

    Also in line with your comments yesterday, quoting from my favorite author, Stephen King, movie “Shawshank Redemption”, I have another quote to strengthen us. “We have to decide if we want to get busy living or get busy dying.” We are doing our best, against incredible odds, to “get busy living”. Women 4 Change is an excellent beginning and a strong one.

  8. It’s fine to steal from the public till if you wear a suit & drive a nice car. If you cheat on your food stamps, though, tread carefully.

  9. Timothy,

    “The framers of our country are rolling over in their graves.”

    Talking about “graves”… It looks like it to me that, from an ALLEGORICAL perspective, the Trump/Pence Junta is quickly digging its own grave. I’m reminded of the history behind the Arlington National Cemetary, it was created on the lands once owned by the defeated Confederate General Robert E. Lee. Is there a common thread here?

    Please excuse my CAUTION. I don’t want to be on the list of Donald Trump’s next round-up. Bail money and attorney fees can become very expensive. At 80, I don’t want to be looking for a job to pay for all of that.

  10. As a summertime resident of Michigan I am acquainted with the bridgegate dustup there where the public interest is last in line of priorities. It is not to be confused with Christie’s bridgegate lesson in retalitary politics in New Jersey, but it does point out the problems in the coming (unless prevented) privatization of our transportation system.
    My personal problem is this: I have been blogging for years that we must repair and renew our infrastructure, citing the bridge collapse in Minnesota that killed several Americans as our call to arms. The Congress ignored this tragedy; nothing happened in response to this horrible event, and all while the Society of Civil Engineers warned of the accruing dangers of doing nothing while citing statistics on our deteriorating bridges and roads that were enough to keep one awake nights.
    Trump to the rescue! He said that he wanted a massive infrastructure project to renew and rebuild America’s ports, airports, bridges, roads, public buildings etc., pointing out that such a project in addition to making for more efficiency in transportation would employ millions in good-paying jobs, so I thought to myself, great! At least there may be something good come from this buffoon; but then he laid out a few of the details and I found his plan for financing this otherwise great project would come from Wall Street and I am now against it for that reason. I am aware of the dangers to the public with delay, but I have to balance that against the privatization of transportation, one of the last few mostly-public systems we have.
    Trump, of course, is trying to have his cake and eat it, too. He doesn’t want to run up the deficit and enrage his Republican deficit hawks in rebuilding our infrastructure, but he wants to look good in keeping with his narcissistic vanity in being for such a widely-approved public project, hence his proposed sellout of our system to Wall Street. Painfully, I vote no.
    If the rich and corporate class (whose activities would be well-served with improvements in our infrastructure) were to start paying their fair share of the tax load and were deprived of their many exemptions (such as carried interest) by the tax code, perhaps we could get this job done with minimal if any addition to our deficit. In any event, if we can afford to cut their taxes and thus enlarge the deficit, we can afford to renew and rebuild America’s infrastructure and enlarge the deficit. I will vote for safe bridges over corporate welfare (and control) any day.

  11. ILLEGAL IMMIGRATION: A local Evansville roofing contractor laid off his entire crew of American workers and began subcontracting to a Mexican Labor Lord because the labor Lord only charged $50 per square for tear off-install-and haul off. The labor Lord paid his illegals by the unit of work,many did not make minimum wage. They stayed in an old motel in a seedy area. They were paid cash so no taxes,Medicare,social Security, unemployment, not workmanship comp were paid. They displaced all off these social benefits that were paid by the displaced American workers. The labor Lord got caught for not having a contractors license by one of our building inspectors. The roofing contractor said “I guess we will have to put you on the payroll”. The labor Lord did not want that because he was exploiting the illegals financially and making himself more money. His reply was that the payroll proposition was a problem because none of the illegals had Social Security cards, but he could buy them for $300 each. This was reported without success. They are still there and I do know the fate of the laid off American boys. It is not the building inspectors responsibility to enforce INS duties. However, the house that was being roofed when he shut work down is on Rietz Hill and the citation is on file. ROUND THEM AND DEPORT. Bob Gooch

  12. Another area that the current Administration would love to see privatized is air traffic control. And guess who’s really in favor of that? The airlines. Then they get to decide how our airports, and more important, our air space, is used. And they don’t give a hoot about any form of aviation that’s not theirs. The once-thriving general aviation sector in the US would, very likely, be eventually squeezed out of the skies. And general aviation accounts for over 200,000 direct jobs in the US, over 1.1 million jobs directly and indirectly, and adds over $200 billion to the US economy. But Southwest, Delta, et al don’t make any of that money, so why should they care?

  13. Robert; the 2006 severe hail storm on the far east side of Indianapolis did millions in damage, primarily roofs and vehicles. My small neighborhood was hard hit; I walk daily so saw the many, many Hispanic roofers, only two white crews did I see throughout the summer. Also, all license plates were from out of state; Texas to Connecticut. Apparently no qualified roofers in Indiana? My son gave up roofing because he could get no job, they were filled with Hispanics. None spoke English; I learned this because I needed someone to reroof my home and tried to talk to them. I picked up roofing nails and screws from streets and sidewalks for months; had three tires blowout due to the nails. The roofers did do a decent job on this house. This is an issue that Republican Senator Mike Delph of Carmel did try to attack by submitting two bills requiring fining employers knowingly hiring illegal immigrants and landlords renting to them. Republican Senator Jim Merritt of Indianapolis shot both bills down; stating it was the responsibility of federal government to deal with the problem. Eleven years later and Republicans still shutting down all immigration reform bills. These situations add to the privatization problems as well as the jobless problem. Qualified local workers of all races are turned away due to expecting above minimum wage for heavy manual labor jobs that are also physically dangerous.

  14. Mr. Gooch has a fine morality story.

    Assuming that he has the facts rights, it is the darker skin, Spanish speaking, illegal Mexican immigrants, willing to work for less money than U.S. workers, who are the villains. They are the ones who broke the law by coming here and are illegally taking Americans’ jobs, and causing all the problems.

    What seems to be left out of Mr. Gooch’s morality tale and his solution for it is that none of that could have or would have happened without the willing participation of U.S. companies, business owners, employers, and us citizens, who hire the illegals off the books, BREAKING THE LAWS OF THE U.S., in order to make more profits for themselves or save money on having your house re-roofed, your grass mowed, your kids watched after.

    Yet Mr. Gooch doesn’t seem to think that the employers should be rounded up and put in prison. Perhaps he does, but just left that out in his eagerness to get rid of the all the brown skinned, Spanish speaking “foreigners.”

    It’s easy to blame “the others,” people who aren’t like us or don’t look like us, or speak the same language for all our problems — which is exactly what the Trump/Pence/Bannon cabal are doing. But if the U.S. employers don’t and won’t hire them, they wouldn’t be here in the first place, and many of them — as actually been happening since the start of the Depression — would return back to Mexico, where there are now more good paying jobs thanks to NAFTA. Oh, but Trump wants to do away with NAFTA too.

  15. Robert,

    A look at the whole picture shows different aspects to your complaint.

    First, the Evansville roofing contractor alone made the decision to use “slave” labor in order to feed his greed. He is the one who put his workers out and brought in illegals… not the illegals.

    Second, if the Republicans in Congress really cared about the flood of illegals into the country over a decade ago, they had ample opportunity to fix it. They chose to keep a mass of desperate human beings living in the shadows so that labor costs would remain low and profits for their supporters high.

  16. Privatization of the parking meters had the usual silent suspects – The Local Democratic Party and our McMega-Media. The old meters were certainly not up to today’s technology. However there were ways to finance their replacement and have people collecting the fees. As is usually the case here in Indianapolis the McMega-Media failed in it’s responsibility to investigate and analyze Ballard’s proposal vs other options.

    The Blue Indy was another fiasco. Why should Blue Indy receive a bunch of choice parking spots and no other car rental company received the same deal??? I have seen exactly one Blue Indy car on the road. Maybe I live in wrong part of Marion County.

    I used to go to Broad Ripple to eat often. Not anymore since the Private Parking Company was allowed to confiscate all the free parking spaces next to the canal. By the way just as hypothetical question – Why should we have to pay to park on a public street anyway??? Our tax dollars paid for streets, including the parking spaces. I suppose the next trick will be Privatization of side walks, you will have to pay a fee and go through a turnstile, to use them.

  17. When I was Mayor in Marion, several undocumented roofers came in to complain that a local Hispanic contractor refused to pay them. He had told them that, since they were ‘illegal’ he’s merely call the Immigration. After verifying the truth of their report, we spoke to the contractor. He said he’d decided to go out of business. The City Attorney (pro bono) got a judgment for the roofers. Every time the ‘out-of-business’ contractor came in to get a roofing permit, the Court was notified and he was made to pay toward what he owed these workers. Wish I could say this ended happily, but the roofers all left the area with no forwarding addresses. The State of Indiana gets the money. At least the crooked employer didn’t.
    These folks are often victimized. And the General Assembly is the accomplice to it all.

  18. Still another example of how this can go very wrong was the employment of private contractors by the Department of Defense to supplement their active duty forces overseas during the wars in Iraq and Afghanistan. There are numerous tragic and truly horrific examples of the vile behavior of some of these private contractors that have led to trials regarding rape, assault, and other types of aberrant behavior that would fall under the category of war crimes. All of this occurred because we chose to fight wars that were too big in their scope given the size of both our active duty and reserve armed forces.

    This wrong headed thinking also led to many contracts with these organizations being canceled, with many of them ending up in lengthy court trials regarding their actions in Iraq and Afghanistan. They also sullied the reputation of this country in the eyes of people we were there to protect. It also ended up in the creation of many financial boondoggles that cost the taxpayers billions and billions of dollars.

    So this type of behavior doesn’t only happen in this country but happens all over the world and reflects very badly on this country in the process. When you try to fight wars on the cheap, and also try to support those that are fighting them on the cheap, you end up paying more, accomplishing less, and spending even more money to fix the mess that they create. At some point in time I truly hope we will be able to learn from this experience but I’m not gonna hold my breath.

  19. Tom; and Trump’s appointment of Betsy DeVos as Secretary of Education is a two-point win for him. Easy access to her billions for campaign funds and easy access to her brother, Eric Prince, organizer of Blackwater USA for when he decides who he wants to declare war on. All of these current leaders seem to “speak with forked tongues” regarding their dedication to the jobs to which they have been appointed, confirmed and sworn in.

    “At some point in time I truly hope we will be able to learn from this experience but I’m not gonna hold my breath.”

    Nor will I hold my breath; it will shorten my already brief life span due to nearing 80. I had not yet adjusted to Trump being elected on November 8th when he was inaugurated and our Holocaust began in earnest.

  20. I remember this new bridge was going to be voted on and the Moroun family operatives posted false warnings in Black and poor neighborhoods claiming the state or city would take poor people’s property for the bridge.

    I believe at one time Canada offered to pay for the whole bridge. Ford Motor Co wanted another bridge because their trucks and stuff were forced to wait in line to get to Canada.

  21. Does anybody know much about the Blue car situation? my understanding is that the vehicles are made by an obscure mini company in Paris, not a normal car company that has the capability (Toyota, Nissan, Chevy) to design and certify to safety standards, which means the vehicles cannot be licensed or driven on the street, but were imported under an exhibit permit for off road and car show display use only. There are many interesting new and older cars I would love to import, but they would be seized and scrapped. AND, aren’t the parking / charging spaces RENTED from XEROX, so all the spaces are permanently rented to the government? d/b/a Marion County taxpayer.

  22. Just a note to JoAnn Green. I too lived in Indy at the time of that hailstorm. Heard one insurance company adjustor say that the insurance companies paid out about a Billion dollars mostly to repair roofs in the Indianapolis Metro area as a result of that one storm. Found out in the aftermath, that along with insurance adjustors from out-of-state, there is a whole roofing industry made up of “roofers” who essentially are storm chasers. Once a storm hits in an area that results in roofs being damaged, these “roofers” descend like locusts; sending sales guys out through the neighborhoods offering to deal with the insurance companies if they can fix your roof. You’re also right that most of the actual workers, at least back then, were Hispanic, most likely Mexican. Illegal? Legal? Who knows, but suspect most probably weren’t legal, and probably didn’t get paid much.

    On the other hand, at that time, the work crews of even the local, reputable roofing companies were also almost all Hispanic, many speaking Spanish only. Most of the owners claimed they couldn’t get anyone else to do the work who would reliably show up for work everyday and work hard. Legal workers? Rationalization? Perhaps. Perhaps not.

    One final note on illegal workers, when I lived in Indy an acquaintance owned a local chain of eateries. He employed a large number of Hispanics to work in his restaurants. He always said they were his best, most reliable and hardest workers, and that without them he wouldn’t be able to keep his restaurants open. Never did press him on whether he checked on whether they were legal or whether he was paying them the same wages and benefits (if any) as his other employees.

    It’s a complicated world out there.

  23. Louie: Parking meters are a merely a Tax in disguise. The same as other fees one has to pay to the governments to do things. Just another way to raise revenue without having to say the “T” word. Not saying it’s right or wrong, but local governments have to get revenue from somewhere.

  24. David F; thanks, I always wondered where so many Hispanic “all called Mexicans by the sub-contractors” workers came from at once. And why none spoke English. This situation not quite so complicated with your explanation.

  25. Not a privatization issue but thought you would want to know; CVS has fired all undocumented workers. Will not be hiring replacements, will hire temps to work only 4 hour shifts, no lunch and of course no benefits. Can the ICE roundups be far behind?

  26. I would like to point out another privitation example that stinks. The I-69 stretch from Bloomington to Martinsville. This project has experienced serious delays, subcontractors payments missed and many accidents. Also, when I drive that route, on a weekly basis, I never see any Indiana Department of Transportation (INDOT)vehicles. INDOT is the governmental agency that is responsible for our roads and our safety. Who is watching this construction? I personal have many years in construction management and know that projects like this need strong owner presence. In this case INDOT is the citizen’s owner presence. As best I can tell the construction is being managed by the contracting entity, for profit firm. This is just one glaring example of “privitation” in our midst. I blame this on Pence for the most part and from the scant details coming out of the drumph cabal, they want to do the same thing nationally. We cannot allow this to happen.

Comments are closed.