While we have been frantically playing defense against relentless assaults on multiple fronts, from anti-union legislation to draconian anti-choice laws to the attempted privatization of Medicare, the selling off of public assets to the private sector has received little attention.
As states face a budget shortfall of $125 billion dollars for fiscal year 2012, leaders are searching for creative ways to fill budget gaps, while refusing to consider the one legitimate solution: forcing tax-dodging corporations and the rich to pay their fair share in taxes. Rather than upset the moneyed interests who bought their seats in office, politicians of all stripes prefer to cut pensions, close schools, slash child nutrition programs, and most importantly privatize, privatize, privatize!
flickr image By Casey Serin
In 2008, Chicago Mayor Richard Daley auctioned off the city's 36,000 parking meters to a Morgan-Stanley lead partnership, for a lump sum of $1.15 billion. According to Bloomberg, Chicago drivers will pay Morgan Stanley at least $11.6 billion to park at city meters over the next 75 years, 10 times what the system was sold for. The Mayor used millions from the deal to help balance the budget, but since then, Morgan Stanley has raised parking fees 42%. It now plans on stuffing more cars into fewer metered spaces by getting rid of marking lines, raising the number of metered slots and expanding the hours that require fees. Chicago gave up billions of dollars in revenue for a short term fix and now, if the city faces another fiscal crisis, it will be left with an asset that generates revenue for Morgan Stanley. Despite the controversy in Chicago, the Associated Press reports that New York is exploring private options for its parking spaces as well.
Meanwhile, Rep. Dennis Ross (R-FL), a member of the Tea Party Caucus, has suggested that one way to help close the nation's budget deficit is to "start liquidating" public lands in Utah by privatizing large parts of the state, 70 percent of which is owned by the federal government. Soon after, Utah Governor Gary Herbert hopped on board, agreeing that Ross's idea was "worth exploring." He even went so far as to claim that the land would be better in private hands because private owners maintained Indian artifacts and burial grounds better. Apparently his position is quite popular, since it has been embraced by Senators Mike Lee (R-UT) and John McCain (R-AZ), who proposed a bill which would sell off land in Utah and other western states.
The most insidious privatization scheme so far this year was in Wisconsin, the center of the state budget battles. A provision in Republican Governor Scott Walker's budget repair bill would have empowered politicians to sell any state-owned heating, cooling, or power plant, including those located in prisons and the University of Wisconsin campuses, to anyone for any price at any time, without public approval or a call for bids. Although the provision was ultimately removed from the budget bill just before it passed, it is expected to be taken up again later this year.
In an effort to offset an $8 billion budget deficit, Ohio Republican Governor John Kasich has proposed privatizing five prisons, a sale expected to bring in an estimated $200 million. Florida's GOP-controlled Legislature is set to require the state to privatize prisons in South Florida, home to one-fifth of the statewide inmate population of 101,000. Louisiana Republican Governor Bobby Jindal plans to sell three state prisons to private operators. Similar bills have sprung up in other states, nevermind that evidence showing that private prisons actually save any money is seriously lacking.
In more desperate and bizarre attempts to fill in budget gaps the City Council in Naperville, IL is considering giving corporations exclusive rights to plaster their logos on city property. One proposed municipal sponsorship deal would allow Kentucky Fried Chicken to repair potholes in exchange for stamping the fresh asphalt with the chicken chain's logo.
It would be foolish to assume that the push for privatization is isolated to the GOP or the states. The "liberal" Obama administration has proposed legislation that would establish a presidentially appointed, seven-member Civilian Property Realignment Board, tasked with evaluating excess federal properties. The surplus includes 12,000 buildings, pieces of land and other property nationwide that the federal government wants to get rid of.
According to McClatchy, the White House claims it would see savings of as much as $15 billion by no longer having to maintain or pay for utilities at some of the underused or unused facilities. The government in 2009 reported spending $134 million to maintain buildings that have been declared excess. It costs an estimated $1.3 billion a year to maintain federal buildings that aren't yet declared surplus but that go underused. However, it remains unclear if and how this strategy would result in a significant enough amount of savings to make a dent in a trillion dollar deficit.
Ironically, the list includes land where the dorms in Daniel Boone National Forest are located, which once served as a camp for workers from the Civilian Conservation Corps, a Great Depression work program. Rather than invest in jobs programs to put the unemployed back to work like FDR did during the Great Depression -- an idea that the Obama administration has all but abandoned -- the President has instead chosen the path of austerity and privatization, tactics that have historically been detrimental to society.
It's no secret that corporate behemoths, backed by their free-market think tanks and foundations have long dreamed of privatizing everything public. Thus far, they have been largely successful in hollowing out the defense department by outsourcing computer, intelligence, and even combat operations to for-profit companies like Lockheed Martin, Halliburton, and Blackwater, to name a few. We now know that this was done intentionally, strategically planned by the likes of Donald Rumsfeld and Dick Cheney, who profited magnificently as a result. The terrorist attacks on 9-11 presented the Bush administration with the opportunity to accelerate the outsourcing of war.
In the Shock Doctrine, Naomi Klein thoroughly documents how wealthy elites often use times of crisis and chaos to impose unpopular policies that restructure economies and political systems to further advance their interests. She calls these orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities, "disaster capitalism."
While catastrophic events, such as natural disasters or terrorist attacks, are difficult to predict, economic disasters are not. With this in mind, it's difficult to deny that the economic crisis has been somewhat manufactured to serve as a pretext for draconian cuts into social programs that the corporate state has long been eyeing. On it's face, this theory seems conspiratorial, however a brief review of recent history demonstrates a trend of intentional crisis generation.
Paul Krugman understood this concept in 2003, during the implementation of the Bush era tax cuts for the wealthy, when he wrote the following:
"the gimmicks used to make an $800-billion-plus tax cut carry an official price tag of only $320 billion are a joke, yet the cost without the gimmicks is so large that the nation can't possibly afford it while keeping its other promises.