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[BREAKING NEWS: Tens of Thousands of Police March on Central London]
Paul Krugman: Austerity Is So Wrong!
A Rebellious World or a New Dark Age?
Austerity Can't Be Just for Regular People
Did you really think a slug like Rahm Emanuel (Israeli Army partisan with family Irgun,* possibly Mossad connections), was serving anyone but himself and his fellow leeches as Chicago Mayor? How'd you like his prior clever recruiting of the Blue Dog Dims for Obama?
It's all good, as the good ole boys everywhere say.
For them.
(My guess is that like Obama, he "won't care that he is only a one-term" mayor if he gets to do the good things he knows are needed. Right.)
Wednesday, May 9, 2012
Wall Street’s Infrastructure Racket
Mayor Rahm Emanuel's new strategy for financing renovations isn't actually new - and it rewards the greedy
By Marshall Auerback, Alternet
Rahm Emanuel (Credit: AP/Jacquelyn Martin)
When Mayor Rahm Emanuel introduced a “new and innovative” financing tool last month to help Chicago renovate failing infrastructure without precipitating another budget crisis, many in the city were understandably critical.
Chicagoans have already endured the notorious 75-year lease of their parking meters to a consortium headed by Morgan Stanley. That sale promulgated a system wherein the public is held hostage by private finance, due largely to the inclusion of arcane legal stipulations like “non-compete clauses” and “compensation events” in the language of the contract.
Ellen Danin, writing in the Northwestern Journal of Law and Social Policy relates that: “Chicagoans learned about compensation events when CBS reported that the city’s parking meter contract required reimbursement for events like repairing streets. Public records showed that in the first quarter of 2009, the city was liable to the parking meter contractor for more than $106,000 in lost income during the slow months for street repair and street closings for festivals, parades, and holidays, as well as repairs and maintenance. At that rate, it is not unreasonable to predict that Chicago will owe roughly $500,000 a year to the private contractor.”
The city essentially acts as an insurer for the meter merchants, with the return being a one-time injection of roughly a billion dollars that the previous mayor, Daley the Second, haphazardly exhausted on closing budget deficits in the waning years of his two-decade tour at the helm.
With the current infrastructure deal, Emanuel has repeatedly claimed that this is not privatization: This is not like the parking meter deal. Can the public believe him?
Here is how the “infrastructure trust” works: the city pays for upgrades to its roads, rail or schools with dollars pooled by Emanuel’s friends from the banking and investment world.
Meanwhile, the city retains “ownership” of the infrastructure, though this comes at the cost of having to ensure a revenue stream for the fund. Emanuel’s favorite example is his $225 million pet project to green-retrofit some of the city’s older buildings. The savings on energy usage stemming from the renovations are then extracted and used to pay off investors. Of course, the city could also sell municipal bonds to raise necessary funds, and then use the savings in energy costs to pay the loan back at a much lower cost to taxpayers. But then Emanuel’s friends (and campaign donors) would not be the richer for it.
While the mayor bills his plan as “bold” and “innovative,” the reality could not be further from the truth. Public-private partnerships (PPPs) have been around for decades in various forms and their track record is replete with delays, cost overruns and prolonged legal battles. What’s more, the beneficiaries of these investment mechanisms are the same rapacious Morgan Stanleys and Goldman Sachs that gave us the mortgage-backed securities scandal and the ensuing recession. Using the economic malaise they created as cause, they have ratcheted up their advocacy of PPPs as a means of helping cash-starved public entities finance capital-intensive projects.
The upshot is that they are holding us hostage all over again. They are using infrastructure built over decades with public monies as collateral to extract profit off of the back of taxpayers. A cursory look at some past projects of this nature demonstrates that PPPs are often inefficient, overly costly and inherently unjust.
The London Tube Nightmare
The granddaddy of all PPP debacles is the London Underground. Metronet PPP is the brainchild of former Prime Minister Gordon Brown. The contract design kept London Underground in public hands while privatizing the renovation and renewal elements to the system. As with the Chicago parking meter deal, the contract was replete with virtually unintelligible legalese designed to give the private partners an advantage in court, while also rendering public scrutiny of the contract exceedingly difficult. Bureaucratic costs related to drawing up contracts with external bidders ultimately surpassed 500 million pounds.
In the Guardian, Christian Wolmar notes that “the idea that the PPP would keep costs down has also proved fanciful. It is a recipe for disputes, which often end up in the hands of expensive lawyers.
During the first contract, there is a mega dispute brewing over Tube Lines’ failure to complete the resignalling of the Jubilee Line which should have been finished this month and is now set to take until the autumn, with numerous extra weekend closures. In addition, the arbiter’s report says that claims involving a staggering £727m have been laid by Tube Lines, £500m of which are still outstanding.”
As bloated contractual costs and project overruns spun out of control, Metronet ultimately collapsed in 2008. A year later, the entire PPP went down with it after an arbiter refused to allow funds for the other private partner, Tube Lines, to do further renovations. The final cost to taxpayers is estimated at somewhere between 170 million and 410 million pounds, which does not account for the inconvenience of relentless service stoppages and construction delays. Former London Mayor Ken Livingstone complained at the time: “We are being asked to write a blank cheque in order to prop up failing Tube Lines. In other countries this would be called looting, here it is called the PPP.
Orange County’s Privatized HOV Lane
Almost equal in disrepute to the London Tube fiasco was the privatization of one high-occupancy vehicle (HOV) lane on California’s SR-91. In the early ’90s, the Orange County Transportation Authority (OCTA) proved incapable of procuring necessary funding for implementation of the new HOV using traditional revenue streams, so instead developed a private partnership to construct and manage the project, which opened December 27, 1995.
This contract included “non-compete” clauses that prevented the public from providing necessary maintenance to the adjacent free lanes. The California Department of Transportation hoped to add new lanes between SR-91 and another recently completed public toll road. These improvements would have violated the non-compete terms of the contract, though CalTrans argued there were overriding safety concerns that permitted them to proceed with the construction.
The ensuing public row served to turn opinion against the private toll lane. Ultimately, the outcry led to passage of Assembly Bill 1010, which authorized OCTA to acquire the lane for $207.5 million in 2003. California’s earliest experiment with private financing of a publicly controlled entity, like the London Tube, came crashing to a premature halt on the heels of widespread public outrage.
What is most telling is that popular frustration centered on a principal term of the contract, which was publicly available for viewing prior to approval. Once again, a common ploy of instigators of these contracts is rendering the terms so confusing as to limit public scrutiny.
Meanwhile, the mainstream press tends to focus on the bottom line and avoid the esoteric legal mumbo jumbo, much to the detriment of an enlightened public.
Read more here.
* Emanuel (Hebrew: רם עמנואל) was born in Chicago, Illinois. His father, the Jerusalem-born Benjamin M. Emanuel, is a pediatrician and former member of the Irgun, the Zionist pre-State military group in Palestine.
Royal Princes Trained In Palaces To Bomb Peasants: Have They No Shame?
Global Research
The ”Distinguished Humanitarian Leadership” award: “recognizes outstanding achievement” and is presented annually by the Atlantic Council. Prince Harry and his brother, Prince William, have been jointly nominated, with Prince Harry traveling to Washington to accept on behalf of both, on 7th May.
Madeleine Albright’s latest honour for her services to humanity, has been awarded to others who compete admirably with her dedication. They include such peerless war mongers as Henry Kissinger, Donald Rumsfeld, General Colin Powell, whose pack of lies to the United Nations (February 2003) initiated Iraq’s destruction – and former UK Prime Minister Tony Blair whose offices and officers provided those lies.
That human dove of peace, Dick Cheney has been a recipient, as has his Israeli counterpart, Shimon Perez and General Norman “No one left to kill” Schartzkopf, to name a few.
Fellow recipient of the Award with Albright is Bob Dylan. Funny world..
Prince William and Harry are both in the armed forces (between social engagements.) In a career move that has been dubbed by many: “a cynical PR stunt”, William flies Naval Rescue helicopters. Seemingly it no longer looks good for a future king to kill people. Harry clearly faces no such trying constraints.
Deployed to Helmand Province, Afghanistan, in 2007, he reportedly lurked safely, deep in a bunker, out of harms way, surrounded by a phalanx of armed Royal Protection Officers whilst playing at being a Forward Air Controller, who remotely (in all senses of the word) guide in aircraft to attack the locals.
There is not alone an irony, but a terrible deviance, about a supremely privileged young man, whose entire upbringing has been in palaces, castles and most elite of schools, calling in aircraft to destroy peasant farmers, in remote, poverty stricken villages – along with their subsistence livilihood and simple adobe homes.
There is a further irony in that his “child within” knows loss. At thirteen he walked behind his mother, Princess Diana’s coffin, as it was transported for her funeral, after her death in Paris in an appalling car crash, with her Muslim lover – some say fiancée - Dodi al Fayad.
Freud might have had something to say of his display of Crusading contempt for the people of Afghanistan – 99% Muslim population - just before he was hurriedly whisked out of the country for his safety in January 2008, once the media had exposed that he was there. His attitude, “day job” and his fleeing, beneath contempt. If Albright sacrificed children by proxy, the Prince, arguably, killed them by proxy.
Back home he and his brother have their own households, with flunkies to provide, and an aristocratic titled adviser to oversee the all and their lives.
Now his delayed return to Afghanistan to hone his killing skills, is seeming more imminent. He will be more hands on, having been awarded his Apache Flying Badge, so he can return and dissect living beings from an air born, mass human shredder of obscene and terrifying destructive power.
That the two Princes have established a charity to aid needy children in Africa, whist has been involved in orphaning, maiming and ending fledgling lives in Afghanistan, and now returning, is surely a near schitzophrenic perversity.
The Atlantic Council presentation for the pair’s humanitarian endeavors however is “for efforts in championing” others soldiers involved in invading and killing in two decimated lands which posed no threat to anyone, let alone far away Britain and America.
Prince Harry: “is being recognized (with The Distinguished Humanitarian Leadership trinket) for support to Forces charities like Walking With The Wounded, ABF The Soldiers’ Charity and Help For Heroes.” All of which are funded with the sort of moneys which would help the maimed, destitute and traumatized in the countries the Charity’s beneficiaries have helped destroy, back to normality for many years.
“You fasten the triggers for others to fire,Then you sit back and watch,When the death count gets higher.You hide in your mansionAs young people’s bloodFlows out of their bodiesAnd is buried in mud.”
(“Masters of War,” Bob Dylan)
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