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Wisconsin’s Walker Joins Government Asset Giveaway Club (and is Rahm Soon to Follow?)

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Mike Konczal (thanks to ed at ginandtacos) reported earlier today on the latest release of a movie coming to states and cities all over the US, namely the sale of state and local government assets to alleviate pressures on strained budgets.

For those new to this concept, the term of art is the anodyne “infrastructure sales” and the company that more or less invented this lucrative business is Macquarie Bank of Australia (known down under as “the millionaires factory”), although US firms clearly intend to exploit the once in a lifetime opportunity presented by widespread state and municipal budget distress and downgrades.

The problem, of course, is that these deals put important public resources paid for by taxes (or even worse, financed by bonds and thus potentially not even yet fully paid for) in the hands of private investors. They then earn their returns by charging user fees of various sorts. The public must rely on the new owners for reinvestment and maintenance, and depending on how the deal is negotiated, may have ceded control as far as fee increases are concerned. This is tantamount to selling the family china only to have to rent it back in order to eat dinner.

Now defenders will argue that there is nothing wrong with this in practice, as long as the price is fair, no one is harmed. That’s spurious. This is worse than an intergenerational transfer. Those future fees not only must recoup maintenance costs (which any owner would presumably pay) and the time value of money, but also the investor’s target return in excess of that. In addition, the large transaction costs of these deals are ultimately borne by the seller.

And the list of shortcomings thus far are merely those that result if you have two sides that are equally sophisticated. That is hardly the case with municipalities versus bankers and investors. As the old saying goes, “If you sit down for a game of poker and you don’t know who the sucker at the table is, it’s you.”

But even that dim view presupposes that the government body will try to avoid being fleeced but will. Imagine what happens when government officials are in a position to lend a helping hand with a wholesale giveaway to their cronies.

Consider this section from Wisconsin’s Budget Repair Bill (emphasis ours):

16.896 Sale or contractual operation of state−owned heating, cooling, and power plants. (1) Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state−owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).

Now this looks really heinous, right? Government officials can hive off assets to anyone they like, literally including their brother in law, although they are certain to be a tad more discreet and will purvey them to credible-looking parties.

But the worst bit is that this language is likely merely to provide an official fig leaf (and therefore effective notice of intent) for actions it is likely Walker could have taken anyhow. I am certainly not an expert on the Wisconsin legislative code, but I’ve had a few chats with infrastructure experts. In general, while pretty much every government body in the US bigger than the dog pound has well codified policies for disbursements and contracting. By contrast, it is apparently close to universal that state and local entities lack legal restrictions on and procedures for asset sales.

Look what happened in the notorious case (to those who follow this netherworld) of the 2008 lease of Chicago’s parking meters. Mayor Richard Daley ramrodded it through, informing the city council of the complex deal a mere two days before the vote. The city had projected revenues foregone over the 75 year life of the deal on present value basis of between $700 million and $1.1 billion for cashflows over the life of deal in the $4 billion to $5 billion range. Chicago got $1.15 billion for the arrangement. Sounds like a winner, right? Well, funny that. The selling memorandum for Morgan Stanley-led investors on the very same deal said revenues would not be $4 billion or $5 billion, but at least $11.6 billion, or more than double the top amount projected by the city. And since they’ve put through two rate increases totaling over a 40% increase already, looks they they are on the way to making that happen.

And as of late summer 2010, more deals were expected; imagine how the ones in the pipeline have increased since then. From Bloomberg:

Indianapolis, Las Vegas, Los Angeles, Pittsburgh and other cities may follow Chicago in selling future parking revenue for cash to help fill budget holes, according to the Reason Foundation, a Los Angeles-based researcher that advocates public-private partnerships. Chicago may also lease Midway International Airport, a regional hub 10 miles from downtown.

And even more of this sort of thing is in the offing. Note that the City Clerk of Chicago is trying to unwind the parking meter transaction on the basis that Morgan Stanley representatives did not register as lobbyists, and the state attorney general has been asked to investigate. But mayoral candidate Rahm Emanuel opposes contesting it. And perhaps more telling, Rahm insists that Chicago solve its financial crisis, yet observers have noticed the details so far don’t add up. Fro the Chicago Sun Times:

Emanuel’s plan to create jobs and solve the city’s financial crisis is one of three major addresses Emanuel has delivered during the mayoral campaign.

But the speech delivered at a Near West Side T-shirt company raised more questions than it answered.

Aside from an immediate spending freeze, following by giving city department heads 60 days to draft plans to cut spending, there was precious little new information.

Emanuel talked about creating so-called “charter” city departments that minimize “bureaucratic interference” and give commissioners “flexibility to achieve programmatic goals in innovative ways.” But, he never really explained what that means.

Given how unpopular the parking meter sale has proven to be, and how Rahm is emphasizing “innovation” and “minimizing bureaucratic interference”, can the secret plan he is loath to voice be more infrastructure sales?

It’s not hard to see that these deals are going to be the sort of “heads I win, tails you lose” arrangements that bankers are so skilled at cutting with the great unwashed public. If they have no or few caps on fee hikes, the Morgan Stanley example shows that the public will be subjected to increases in charges that bear no relationship to inflation rates or maintenance costs. And if the sellers impose restrictions, the investors can skim on maintenance, or in a worst case scenario, dump the project back on the government body (think even a city like Chicago has a snowball’s chance in hell of getting recompense in that scenario from investors like Allianz or the Abu Dhabi Investment Authority, both of which were major participant in the parking meter deal?).

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90 comments

  1. Sarath

    Sounds like gov’t is too stupid to be involved in those infrastructure projects anyway, eh? Good to divest themselves and shrink.

    1. YankeeFrank

      Government ran those meters for decades with no problem. You are setting up straw men to justify looting by criminal rackets (aka investment banks).

    2. DownSouth

      Thanks to people like Sarath and jwillie, the United States is rapidly being transformed into the land of stupid. Haven’t these geniuses figured out that these are the kinds of things you do to other people, like those brown people down south of the border, and not to yourself?

      The devil’s workshop where neoliberalism was road tested and perfected was Latin America. The scam is pretty well laid out in books like Greg Grandin’s Empire’s Workshop and Naomi Kline’s The Shock Doctrine.

      First the oligarchs manufacture a “crisis.” Then in order to solve the “crisis,” the public infrastructure has to be sold off.

      Perhaps the most high-profile case of this was when Mexico sold off the publicly owned telephone company to Carlos Slim and a handful of partners, including U.S. telecom giant SBC. There was no regulatory infrastructure in place. So for a long time those of us who live in Mexico paid five or ten times the rate you paid in the United States for the exact same telecom services. And as a result, Slim was catapulted into being the richest man in the world.

      But you have to leave it up to the U.S. and Great Britain to sew the real flowers of evil. This required a cultural change, the application of the ethos of neoclassical economics to the public sector. Public sector workers were no longer encouraged to serve and to protect, and concepts like duty, patriotism and the common good were discarded in favor of an orgy of self-interest. Adam Curtis did an outstanding job of documenting the changeover in his film The Trap, which can be seen here.

      So you have an unholy alliance: Public sector workers who are no longer “public servants” but instead are told that the Holy Grail is to be found in maximizing their own self-interest; and private investors who are in possession of large parts of the public infrastructure whose sole purpose in life is to make a profit. So the goal of serving the public is jettisoned in favor of greed and self-interest. And according to neoclassical economic theory this is all good, this is how collective utility—-the “Wealth of Nations”—-gets maximized. It’s kind of like Adam Smith’s parable about the butcher, the brewer and the baker on steroids.

      Perhaps nowhere are the evils of neoclassical economic theory, put into practice, better showcased than in the U.S. criminal justice system, where the doctrine reigns supreme and unchecked. The economic wreckage pales in comparison to the human wreckage. A heart wrenching example occurred only a couple of days ago. A Juvenile Court judge in Scranton, Pennsylvania was convicted
      for taking kickbacks from a private prison facility for sending thousands of young people to the facility. Here we have a hangin’ judge who was paid millions to hang ‘em high. But in the process, how many thousands of young people’s lives did this neoclassicists’ wet dream ruin? One distraught mother was waiting outside the courtroom, and here was her highly emotional response, captured on video by CNN.

      In the comments thread for the CNN piece is a comment by -don’t profit from justice-. It pretty much sums up what’s going on in U.S. criminal justice, and may help explain the unholy alliance between Gov. Walker and the police and state troopers:

      it’s is a sick scam that needs to be stopped. this judge is just the tip of the iceberg. yes, the mother may have let her son stray too far before she tried to help; she also employed poor judgement trusting the judicial system to help her in a “boys will be boys” scared straight tactic.

      this isn’t the old days anymore where the police know the neighbors and bring the boys home to mom and dad when they are caught behaving in a delinquent manner. the judicial system is an industry now, and they are having a field day flipping pawns into cons and cashing in.

      the entire system profits from being clogged with violators. they round up kids every weekend, infringe upon their unalienable rights, catch them with something illicit, and then choke the system while cashing in on their violations.

      meanwhile, protecting and serving is taking a back seat.

      so let me get this straight:

      this kid gets caught with a pipe and gets 7 months (30 days in holding, 6 mos in juvi)

      the judge (an adult) gets caught in a kleptocratic ring that resulted in invol. manslaughter, and he walks that day and gets to go home to his family?

      1. T H Huxley

        It seems that many Wisconsinites, like the tea baggers, lack critical thinking skills. Therefore, I propose that the legislature revise the budget repair bill. The bill should clearly state that the powerplants will be sold to the Koch brothers for pennies on the dollar. Then the dumb ass tea baggers won’t have to connect the dots.

  2. jwillie

    Sell the family china and rent it back? I grew up with a mother like you. She had Sunday china, everyday china and in-between china. It was so over the top that to this day, i refuse to have “china” in my house. We probably don’t even have four plates that match, but my wife, kids and I could care less, while my mother still wants to know where the “everyday china” she gave me is every time she comes to visit.

    Anyway, the tangent about china serves to make a bigger point. Value is in the eye of the beholder. You look at china and you see something of value; I look at china and see mostly pretense and hypocrisy. You look at governments selling assets that they can’t afford to manage and you see “potential” diminution/deterioration of taxpayer asset base, and you are upset. I look at that transaction and see real cash proceeds from an asset sale that can be used to reduced real debt and associated interest burden, reduced government personnel and operating expenses associated with managing those assets, and an overall real reduction in government scope. You’re sad, I’m elated. You can have my mother’s china if it will make you feel better, because otherwise it sits in my attic collecting dust.

    1. YankeeFrank

      The china wasn’t the point. Parking meters generate income, china doesn’t. Selling off public infrastructure to sharks who will just turn it into more rent income they can jack prices on is not progress. People like you act as if there is no public sphere in life. You may just get what you wish, but remember to be careful what you wish for.

    2. Yves Smith Post author

      Can you read and reason? Your comment suggests not.

      Since when does it make sense to sell something for too cheap a price and have to rent it back? This isn’t about extra china, this is about infrastructure used on a daily basis.

      1. Paul Tioxon

        Most people of a certain age would recognize burning the furniture to stay warm as an act in futility. Where does the fuel come from when the furniture is gone. This round of down business cycles will leave governments stripped of any assets to offer in the future, except for the power to tax. Of course, when that is sold off, it will not tax the rent collectors only the workers, each and every of the unionless, powerless workers.

    3. craazyman

      sounds good jwillie.

      Let’s raise even more money for Wisconsin by selling the police and fire departments. Why in hell should we pay those salaries when we can hire unemployed kids to stand gaurd and throw water when something burns.

      I bet we can raise fees faster than medical insurance.

      Let’s sell the state troopers too. I bet we can get a bunch of dudes to pay us to drag race all day in mirror sunglasses. This shouldn’t be a public expense. Could be a revenue source.

      LOL.

      dude, let’s get rich together.

      Sincerely yours,

      John E. Cash, Esquire and Chief Skimmer
      Lootem & Howe Infrastucture Partners

      1. King Midas

        I’ve got an even better idea! Let’s turn everything into gold, then everyone will be enormously rich!

    4. Roger Bigod

      “jwillie” sounds like a plant.

      Consider the odds of someone having a mother who’s obsessive about grades of china (1/1000 ?), and who finds this morally offensive and hypocritical (1/1000 ?), and who happens to read Yves’ posting on a particular day in time to post a response within 30 min in the middle of the night (1/1,000,000).

      And who constructs a “hook” with the comment that his mother was like Yves’, when she didn’t mention her mother. Followed by a set of generic talking points.

      It would be interesting to know how much this cost.

    5. Jason X. Ray

      I agree with you about the china, but everything else is junk. Value is not in the eye of the beholder; beauty is. Value is related to production; price, on the other hand, is what one would pay for (or sell) a thing regardless of its value.

      Regardless, these assets are public; they belong to the people, were paid for by the people, and help to minimize the cost of doing business. They are being sold off to private interests at low prices to enable these private interests to extract economic rent from society. They are scum middle-men who wish to raise the cost of living for everyone. The Chicago fiasco is a good example because now the city cannot even close down its streets for public events (parades, festivals, etc…) because the rent extractors want their profit even if it is far above what they orginally promised it would be.

      These actions are the antithesis of a free society and a free market, but few people understand this. Instead they use arguments (such as yours), which are mired in ignorance, to justify the wholesale thievery.

      Don’t be fooled by the argument that the governments cannot afford the costs of maintaining these assets. The governments, through the representatives, ensure that taxes are cut or diverted so as to create a shortage. We have to richest society in the world yet cannot manage to feed and shelter everyone; we also have some of the highest levels of income disparity in the world; something doesn’t add up?

      1. Pixy Dust

        Excellent!

        And now we have a generation or two that believes government is bad and the private-for-profit sector will grow a conscience and become concerned, fair “citizens”. Then who will get to determine what is fair?

  3. Dennis

    Why cant these governments just negotiate that the sold properties will deposit x amount of dollars, per year, for 10 years, into the governments budget? Even if somehow the super clever bankers figure out that an asset is worth even more wouldnt that prevent the ‘robbery’? Especially since the government in question is incapable of increasing operating profits?

  4. Christopher Fay

    Sarah, jwillie, you missed the point. The point is first which entity, the city of Chicago in the example, or the private investor will continue to deliver the service to the public at the lowest cost. The private investor has to seek to maximize its return for a monopoly service. The private investors are smarter bargainers than the public representatives. This is the path that Mubarack’s Epypt took, look who got rich

  5. Foppe

    Ah yes.. Matt Taibbi also describes a number of these things in his most recent book. Charming practice.

  6. Doc Holiday

    Dirty filthy laundry everywhere today.

    This is kinda OT, but sorta close; interesting read on pension stuff in Wisco.

    Tom Barrett says gubernatorial rival Scott Walker was reckless in using pension obligation bonds to solve a crisis

    Finally, Walker and the County Board underfunded pensions by $41 million from 2004 to 2008.

    By late 2008, the county faced a nearly $53 million payment from its budget to the pension fund.

    Instead of making the payment through tax increases or budget cuts, at Walker’s urging the County Board took a borrow-and-invest approach using pension obligation bonds. The county issued $400 million in pension-related notes on March 19, 2009, a county summary of the plan shows.

    That partially shores up the county pension fund right now, but the county must repay the debt over 25 years. If the invested funds earn 8 percent, it could save the county $240 million. If they don’t earn at least 6.19 percent, the county could wind up paying extra.

    ==> I can’t think straight anymore…

  7. attempter

    This is simple embezzlement, and such deals have no moral or sovereign validity. Therefore shouldn’t care to what extent the crimes were legalized through mechanisms like the descriptions above.

    The sovereign people are free to retrieve their stolen property any time they wish. They should do so immediately.

    A few years ago the people of Madagascar toppled their kleptocracy over its attempt to alienate literally half the country’s land in a deal like this. Another example of the non-Western world putting us to shame in our passive decadence.

    Do you really think you’ll be more “free” and “prosperous” once there’s literally nowhere you can go and nothing you can do without being on one or more meters?

  8. Max424

    YS: “This is tantamount to selling the family china only to have to rent it back in order to eat dinner.”

    Too funny.

    That does seem to be the “Grand Strategy of the United States” going forward; sell off all the good rooms in the warm ancestral abode for one/tenth the going market price, then voluntarily take up occupancy in the icy basement — which also has a tendency to flood now, as the cracks in the crumbling foundation are no longer being tenderly sealed.

  9. Crocodile Chuck

    Ah, the Macquarie model! Clipping the ticket, at each step, and all the way through the route map from public good to ‘privatised entity’.

    To jwillie@3:07 am: the Sydney Airport (a Macquarie Airports asset), boasts the second highest parking rates on Earth (not inherited with the operation; they levied this themselves). About $100 for eight hours (I’ve never used it, since it was sold down the river)

    Highest: Budapest Ferihegy in Hungary. Owner: Macquarie Airports.

  10. F. Beard

    I reckon those WI assets will be bought with loans from the government backed counterfeiting cartel, the banking system?

    So the bankers wreck the economy and are allowed to profit from the destruction?!

    Here’s a nationwide solution:

    1) Set reserve requirements to 100% to put the banks out of the counterfeiting business, the cause of our problems.

    2) Send an equal bailout check to every US adult citizen sufficient in total to all US private debt.

    3) Fundamentally reform the money system. This should include,imo, separate government and private money supplies. Government money would only be legal tender for debts to government (taxes and fees) and private monies would only be good for private debts. The free market would determine all exchange rates.

    Matthew 22:16-22

    1. Mansoor H. Khan

      The “cartel” is printing and giving trillions of dollars to the U.S. Treasury (100% reserve) to finance the federal budget deficit. And even the FED’s interest charges earnings on treasury debt are rebated to the government.

      We don’t have to stop private money creation in order to send a check each month to each citizen to combat global wage arbitrage and “technology” unemployment.

      Allowing private monies makes tax collection much, much, much more difficult to administer. Whichever money is used to collect taxes in will in no time become king again and we will be back (practically) in the same place as now.

      Mansoor

      1. F. Beard

        Allowing private monies makes tax collection much, much, much more difficult to administer. Mansoor H. Khan

        Some taxes such as the income and capital gains tax would have to be repealed. Excise taxes should work OK.

        Whichever money is used to collect taxes in will in no time become king again and we will be back (practically) in the same place as now. Mansoor H. Khan

        Only if and as long as the government money supply was well managed. And with no lender of last resort, fractional reserve banking would be too dangerous to practice to excess.

        1. Mansoor H. Khan

          In order to stop FRB all you really have to do is take away government deposit insurance protection. But there will be near riots if you did that. You will then have to give each citizen the ability to store electronic cash safely at the FED.

          Mansoor

      1. F. Beard

        A 100% reserve requirement means that banks can only lend money that is deposited with them for that purpose. And since that would lead to a severe money contraction then a 100% reserve requirement should be combined with a bailout of the entire population with debt and interest free United States Notes to compensate.

        1. Mansoor H. Khan

          The bailout you suggest is kind of already happening via FED printing of 100% reserve money and financing of the deficit and purchases of crap assets from the banks!

          The private credit creation machine is broken anyway. The banks are zombies. Money must be printed by the FED and given away at this point to avert a deflationary spiral. The banking system is just too out of balance with respect to incomes.

          Mansoor

          1. F. Beard

            The bailout you suggest is kind of already happening via FED printing of 100% reserve money and financing of the deficit and purchases of crap assets from the banks! Mansoor

            If the bailout money had been given to the population, instead of the banks, it would have fixed the entire system from the bottom up including the banks and local tax revenues. The population would be debt-free and the banks would be solvent.

            But the Fed should not be source of the bailout money since a sovereign government should never borrow money. It should just spend and tax and in that order too.

  11. Mickey Marzick in Akron, Ohio

    Commodification from the womb to the tomb!

    From Hoover Dam to the TVA to the Grand Coulee,
    The Yellowstone to Arcadia and back to Yosemite.
    This land was YOUR land, this land is OUR land.
    Family silver and china in a firesale.
    Next it will be you and me into slavery.

    La Follette is turning over in his grave and Milton Friedman just had a wet dream with Freidrich Von Hayek in a neoliberal circle jerk. Which way is the wind a blowin? Need a weatherman to tell you?

    The descent into darkness on the other ROAD to SERFDOM continues…

      1. Mickey Marzick in Akron, Ohio

        Twenty years of schoolin’
        And they put you on the day shift
        Look out kid
        They keep it all hid
        Better jump down a manhole
        Light yourself a candle
        Don’t wear sandals
        Try to avoid the scandals
        Don’t wanna be a bum
        You better chew gum
        The pump don’t work
        ’Cause the vandals took the handles

        1. salesanalyst

          But remember for the last 30 years the meme has been that no one can understand what BDylan’s been singing….

    1. prostratedragon

      Is that the same place?

      I would not describe the 3000 N. Broadway block as Newr West Side, or any kind of West Side. Maybe almost Uptown. NWS sis an area with an especially great need for jobs and redevelopment, not that Uptown can’t use these things as well.

      Two locations maybe?

    1. JZ

      They have a storefront location on Division street near Paulina, which would qualify as the near West Side.

  12. Christopher Harlos

    I thought the term of art was “asset stripping”. Michael Hudson writes frequently on this pernicious practice. He terms the outcome a tollbooth economy. It should be as clear as day that no private enterprise can ever provide public goods or services as cheaply as a governmental agency. The benefits for the insiders are obvious, but why anyone else affected would buy this bill of goods is astonishing and depressing. At current course and speed, the US should achieve a neo-fuedal economy in very short order. It seems the Russian kleptocrats had as much influence on our beloved Chicago School economists as those clowns had on the Russians.

  13. Veri

    Am I correct in assuming that Governor Walker is a Tea Party member? Am I also correct in that The Tea Party is bankrolled by The Koch Brothers? Is it safe to report that The Koch Brothers were Governor Walkers #2 campaign contributors? And, if I recall correctly, The Koch Brothers own a very large, lucrative energy conglomerate.

    And, does it not seem odd that the above proposed ‘bill’ is concerned with Wisconsin’s public utilities in the energy production business? Would the public have no recourse if this bill passes and the utilities are sold at very lucrative prices to someone, or representatives of someone?

    In the real world, 2+2 does equal 4.

  14. steelhead23

    This blog entry is sad, but not too surprising. What is surprising is the number of mind-numb folks who have decided to comment. This nation’s infrastructure is an economic boon. Take electrical transmission systems – partly private, partly public. Substantial operating costs are born by consortiums or public entities. Would you really prefer that those costs were borne by the likes of Enron?

    There is a related question I have asked on other blogs. What public assets are secure from creditors? That is, we all know that a number of states and municipalities are in danger of default on their debts. Are the public assets held by those states and municipalities accessible to creditors? Does anyone out there know? I much prefer getting my water from my local special district than from some foreign firm wishing to maximize its profits.

  15. Paul Tioxon

    Former Pennsylvania governor Edward Rendell.

    Greenhill & Company announced on Wednesday that it had hired Edward G. Rendell, the former Pennsylvania governor, as a special adviser for government and public-private assignments.

    http://dealbook.nytimes.com/2011/02/02/greenhill-hires-rendell-for-infrastructure-deals/

    In May 2008, he announced an agreement to lease the 537-mile Pennsylvania Turnpike to an investor group led by Citigroup and Abertis of Spain for $12.8 billion. The deal — one of the largest privatizations of a toll road in the United States — came after a series of other similar deals in Illinois, Indiana and other states.

  16. Vortex

    The calls for sacrifice are made by those who would steal from us with no shame and loot everything to their own detriment. The Government is indeed rotten and needs replacement. Clear the corruption from the organizations that can help us and start a revolution. We need to replace those who would charge us rent to produce with those who would pay us to create.

  17. profoundlogic

    Something tells me Mr. Walker’s efforts to obfuscate the truth aren’t going to end well. Perhaps the sleeping giant (an organized working and middle-class populous) has awaken from a restfull slumber? One can only hope.

  18. psychohistorian

    This speaks volumes to the dumbing down of the American public. How could anyone believe that selling off public infrastructure is a good idea?

    The end can’t come soon enough!!!!!

  19. Doc Holiday

    The Walker agenda, which goes above and beyond governing Wisconsin people and their revenue — is not related to teachers, pensions or budgets, it’s about theft and ethical recklessness.

    1. Fredric Dennis Williams

      Surprisingly enough, the idea of a fire department that charges by the fire is not unknown. I lived in a suburban area north of Tucson, AZ, that had a private fire company. You could pay an annual charge for fire service, or you could pay the cost of the service in the event of an actual fire.

      As someone who exerts more care and therefore can reasonably expect to be safer than average, I avoid insurance and prefer to take the risk myself. These days most people seem afraid of a thousand things and thus prefer to buy insurance against everything — even against dying, which I have always considered a certainty.

  20. petridish

    I hope he will sell the fire department next and agree to pay “by the fire,” solving not only the budget crisis but the problem of real estate oversupply.

    Rebuilding all those burned out buildings will also bring much needed employment to the state.

    Maybe I should run for office.

  21. Norman

    Well, as long as this food fight is taking place, I shall add this one: Ex-Gov “Ill Be Back” decided to sell the Golden States infrastructure or part of it, but then the new Gov, who I might add, came thundering out of yesteryear, to rescind the proposed sale of State Property. I agree that it’s a bad deal for the taxpayers, for the increased rent paid only drains more $$$$’s from the already strapped economy. It never ceases to amaze me, how over the years, those who benefit from the infrastructure bought & paid for by the taxpayers, scream about the costs of up keep, but are willing to commit to paying higher costs above the maintenance costs at the taxpayers expense, while also resisting tax increases to pay for it.

  22. DH

    Koch Bros already looking for managers in Wisco?

    See: Plant Manager

    Energy client is looking for experienced Plant Managers for multiple power plants located in Wisconsin. You need 15+ years of operations & maintenance experience in a power plant environment. You should have at least 5 years of experience managing operations & maintenance teams in an operational power plant. The ideal candidate has experience in a coal fired power plant. Salary is commensurate with experience.

  23. Yossarian

    Wait, the govt who is in charge of managing these assets is too ignorant to figure out a fair value for them? Then perhaps they should not be managing them. What is wrong with putting 20 year leases with stipulations attached up for bid? As long as the process is thoroughly transparent and properly supervised I see no problem. Of course, those like me who are skeptical of both the motivations and abilities of govts foresee fraud and waste either way- at least in the case of a LT lease it will be a one-time event while when the govt runs things the service and financials are perpetually poor…

    1. emca

      “Of course, those like me who are skeptical of both the motivations and abilities of govts…”

      Of course not all gov’ts are equal:

      “Did Gov. Scott Walker Pull a Tracy Flick?”

      (Mother Jones News by Adam Weinstein)

      “It’s well-known among Wisconsinites that their embattled, union-busting governor, Republican Scott Walker, never graduated from college. But in four years at Milwaukee’s Marquette University, he got plenty of campaigning practice—running for student body president and confessing (eventually) to multiple electioneering violations, according to the school’s paper. “For Walker, a questionable campaigning strategy is apparently nothing new,” the Marquette Tribune reported at the height of Walker’s contentious campaign for governor last October.”

      As the article points out, one shouldn’t get too wrapped up in college antics, but I’m somehow reminded of one Richard M. Nixon and his early dirty tricks campaigning in CA…

      1. Walker/Palin 2012!

        “I’m somehow reminded of one Richard M. Nixon”

        Walker for President!!! No… wait, what about Palin?

  24. emca

    Walker the hawker selling public assets?

    Try this (January from the Malaysia Times):

    “Burmese government plans mass sale of state assets”

    “Burma, also known as Myanmar, is one of the most repressed countries in the world, run by a dictatorship with tight control of the people and the economy, but new reports suggest a mass state asset sale is in the pipeline.
    Dramatic changes may be afoot for the Burmese economy, according to reports by local news media, which say the government is planning to privatise 90% of state-owned companies in the country.”

    a political, not economic move:

    “I think what’s really going on is there’s going to be a bit of a firesale, if you like, of these assets to people closely connected to the current regime,” said Sean Turnell, a professor of economics at Macquarie University in Sydney, Australia when speaking with the BBC.

    Of course Myanmar ain’t Milwaukee; at least “people closely connected to the current regime” didn’t help finance the last election (…?).

  25. MIchaelC

    The specificity of the language signals that the deals are already in the pipeline and would close on passage.

    Konczal outs the Koch brothers again.

    At least there’s an organized constituency (the unions) in place to battle the worker rights grab.

    No one (till Konczal) seems to have picked up on the legalized looting aspect of this budget move. This would have slipped by unnoticed absent the union rights grab.

    Scary stuff, If passed it would serve as a nice template for Emmanuels plans to

    give commissioners “flexibility to achieve programmatic goals in innovative ways.”

    I guess all Democrats are Republicans when it comes to gifting state assets.

  26. Deus-DJ

    God you libertarians are pathetic maggots. You use this example as another episode of incompetent government but it’s really you and the free market ideology that is causing dumb government to exist. If you’re a libertarian and you’re reading this: go to hell and stay there.

  27. Jerry

    MADISON — State Superintendent Tony Evers issued a statement today calling for compromise on Gov. Walker’s budget adjustment bill.
    “Now is the time for compromise to move Wisconsin forward. The table has been set for a compromise that has the Legislature implementing benefit and retirement concessions to help fix the budget, while Wisconsin preserves long-standing bargaining rights.
    “These immediate wage cuts for state and local public employees, supported by union leaders, provide the savings Governor Walker’s budget repair bill seeks. Let’s get this done.
    “We need to make tough decisions, but we must be careful not to abandon fairness and a sense of decency. We need to strengthen relationships among educators and school leaders to implement current innovations around teacher compensation, evaluation, and improvement. Together, we can tackle these budget problems, grow our economy, and improve our strong public school system without doing permanent harm to long-standing rights.”
    ###

  28. emca

    California was (is) trying this route also, up front monies offset by long term liabilities to correct state deficits caused in large part by the recent economic melt-down (I don’t know about Wisconsin, but CA. economy was substantially dependent on construction, or private enterprise gone wild with government asleep at the wheel, if someone can appreciate irony).

    How’s it other than a temporary fix?

    According to the California State Analyst’s office from April, 2010, its money loser for the state taxpayers:

    “Evaluating the Sale-Leaseback Proposal: Should the State Sell its Office Buildings?”

    For 23 real properties and 11 parcel owned by the state, “the 2010–11 Governor’s Budget estimates sale proceeds would provide $598 million to the General Fund.”

    but…

    “We estimate leasing the facilities would cost $30 million more than ownership in the first year and continue to increase over time—eventually costing the state approximately $200 million more annually than maintaining ownership.”

    Remember also that the state’s budget shortfall is in excess of 20 bn dollars. The problem, as this article,“State Governments Hocking the Family Silver to Cover the Rent” in Minyanville points out is long term structural. Any short-term solution which worsens future budget matters need to be evaluated and rejected if doesn’t solve the overall problem.

    This doesn’t even get into whether one’s friends or campaign donors profit by the sale, which would appear to me to be a serious ethical issue.

  29. Tertium Squid

    The “infrastructure sales” that will be most attractive to private enterprise are scarce resources without competition. The people of Chicago would be justified to freak out – they just sold vehicular access to the city for the next two generations.

  30. Utah starts Walker Recall!

    Thank God the recall process is started!

    http://www.sltrib.com/sltrib/home/51289920-76/recall-group-wisconsin-democrats.html.csp

    American Recall Coalition filed the paperwork on Tuesday with the Wisconsin Government Accountability Board. The group has 60 days to collect the required signatures to force a recall vote.

    The group needs roughly 16,000 signatures to recall a senator, although the exact number varies based on how many votes were cast in the governor’s race in the targeted district.

    …but why did the effort start in Utah… hmmmm?

  31. mikefromArlington

    You can’t go an article without taking digs at this admin or previous admin officials can you?

  32. Paul Tioxon

    REPUBLICANS USE THIS HANDY CHECKLIST FROM THE KOCH FUNDED MERCATUS CENTER AT GEORGE MASON UNIVERSITY:

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    http://mercatus.org/sites/default/files/publication/mop87-11-ideas-web.pdf

    PLEASE SPREAD THE WORD ABOUT KOCH FUNDED POLITICAL ACTIVITY

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    1. No work, no pay

      Re: Fellows gain real-world experience, take a crash course in market-based policy analysis, and acquire the professional skills necessary to effect change.

      I guess we know where Sarah is going to finish her degree… and I guess Walker can finish his degree there on-line as well..

  33. Pixy Dust

    “minimizing bureaucratic interference”

    Well at least Rahm feels confident enough now to come out of the shadows and peddle right-wing rhetoric.

    Next, it’ll be “replace the lazy public workers with dedicated H1B visa workers”.

    1. Pixy Dust

      Oh wait. There won’t be any public workers left because there won’t be any public assets left.

      Silly me. I should have thought this through before I responded.

  34. gordon

    Since Australia gets a mention, I will note two useful references on public ownership and privatisation Down Under, mostly for the benefit of anybody who wants to look in a lot more detail at those things in the Australian context:

    Walker, Bob and Walker, Betty Con (2000): “Privatisation: Sell Off or Sell Out?”, ABC Books.

    This historically aware downloadable piece by Prof. M. Goot, Macquarie University (which has nothing to do with Macquarie Bank, by the way)

    http://www.thefreelibrary.com/Labor,+government+business+enterprises+and+competition+policy.-a0227079226

    We have had two major privatisation events recently; the privatisation of Queensland Rail, and of NSW power generation. Unfortunately, the two works I mentioned appeared before these events, so don’t cover them.

    1. emca

      Thanks for the link.

      From the conclusion:

      “A recent, more broadly based, review of GBEs, which looked at hundreds of international studies, concluded: that capital investment had increased in the newly privatised firms and there had been small productivity gains; that improvements on financial performance were no different from those reported by a control group of companies (or by companies that had been nationalised!); that some services were better, a product of effective ‘regulatory and public accountability requirements’, while others were worse; but that while promised price reductions had not materialised, inequality–fewer jobs, higher executive salaries–had increased and low-income consumers had suffered

      (emphasis mine, if its there, otherwise its not)

      Not just Australia I’m guessing.

  35. Why no petitions in Wisco (dudes)?

    No petitions are being circulated by democrats in Wisconsin — how sad that so many people are protesting and yelling, but no one has a clue what to do? This is why democrats always get their asses kicked. Democrats get emotional about soundbites like “change” but do they ever really get off their asses and do anything? walker will win this without a battle, because the crowds at the capital love the circus party and the chaos … and that’s it — they’ve already lost, so party on dudes!

  36. Malware here????

    Not good

    _bizo_set_session_cookie(“_bizo_bzid”,”b8597d41-423f-411e-a386-d57269b7dedf”,1);_bizo_fire_rm(“P1K”,”C9Q”);_bizo_set_session_cookie(“_bizo_cksm”,”AE51EE3607AF1EF7″,1);_bizo_fire_partners([{pid:"217",t:"image",u:"http://ad.yieldmanager.com/pixel?adv=76762&code=C9Q&code=P1K&t=2"},{pid:"107",t:"image",u:"http://osmdcs.interclick.com/pixel.aspx?dp=D43FD6B4-D81E-4E62-A223-F8F94AFB896A&sid=2b21635a-4d64-4db4-a3ff-12b2880e9bd3"},{pid:"155",t:"image",u:"http://ib.adnxs.com/seg?dongle=b34tl35&add=15520"},{pid:"224",t:"support",u:"ind:ind_bizser"}]);

  37. nice

    What is going on here?

    Window wisconsins-walker-joins-government-asset-giveaway-club-and-is-rahm-soon-to-follow.html#comment-333138

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  38. Tom Laws

    Should anyone think sales like these are post meltdown, we’ve been playing games like this in Michigan for 7 or more years. Our tunnel to Canada was sold by the same Kwame Kilpatric you’ve read so much about in the news. The governor Jennifer Grandholm slipped in special legislation to award generous grants to any Michigan city with a population over 1 million. Of course it was a targeted gift that onlt Detroit qualities for, Kwame reciprocated with getting Jenny reelected through the black vote. Another one time trick was to pull next years property taxes one year forward to balance the budget. Maybe we’ll pay 2012′s now. Another one time trick was to allow Detroit and only Detroit to open Casinos, generating gambling revenues of 3 million a day or taxes amounts of 250 million a year. Obama jumped on the band wagon with a special 500 million gift to Detroit schools because they keep running a deficit. Not sure why since schools are funded by the state and Detroit receives 15,000 per student while suburban schools about 9,000 per student.

  39. Psychoanalystus

    The Shock Doctrine is obviously being implemented at lightning speed across the United States.

    Regarding the Chicago parking meters deal, I have one comment about an aspect not mentioned. Immediately after the privatization, an army or petty parking ticket issuers was deployed on the streets, literally waiting by your car to write you a ticket one nanosecond after the meter expires. They are likely making at least as much money from tickets than from parking fees.

    Psychoanalystus

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