logo

Get the best of Commons Magazine — FREE!

The Fight Against Privatization

Two blogs showcase the latest business attempts to make money from public infrastructure.

Here are two resources that will be helpful to anyone tracking the latest trends in privatization. The first is a news-digest blog, PrivatizationWatch.org, a joint project of the Center for Study of Responsive Law and Essential Information in Washington, D.C. Five times a week, the site has brief summaries of the latest business attempts privatize the public’s highways, parks, schools, sports stadia, public spaces and other infrastructure.

It contains stories about how the Haverhill, Massachusetts school system paid for losses sustained by its food service provider; how Roanoke, Virginia, plans to privatize its civic center; and how school systems all over are outsourcing custodians, crossing guards and food service personnel in order to cut wages and benefits. In the New Orleans school district, privateers are exploiting the Katrina disaster to introduce a $10 million voucher plan and dozens of private charter schools.

Highway privatization remains one of the biggest, most ominous trends on the privatization front. J.P. Morgan has raised $2.5 billion in capital in an attempt to secure long-term investments in public highways, which will then become toll roads. You can expect maintenance to decline and new tolls or higher tolls. (For more on this topic, read this essay by U.S PIRG’s Phineas Baxandall.)

Privatization is an increasingly popular strategy now that state and federal agencies are so strapped for money they can’t properly maintain public infrastructure. Many states, such as Indiana, have succumbed to the lure of “free” private investment as an alternative to public taxation. Politicians and bureaucrats are able to balance budgets and meet pressing needs – while pushing the financial sacrifices onto future generations, who will pay far more than if the infrastructure had remained in public hands.

Another wonderful group doing work in this area is Good Jobs First. GJF is a citizen lobby that promotes accountability in economic development and smart growth for working families. It fights big-box retailing, sprawl, wasteful job subsidies, and a raft of tax dodges and financial subterfuges used by companies to subsidize themselves at taxpayer expense.

Excellent updates on the fight against privatization can be found on Good Jobs First’s blog, Clawback The term “clawback,” as the site explains, refers to “a step taken by a government to recoup subsidies paid to a company that does not fulfill its job creation promises. Here we also deal with clawing back in a broader sense: making economic development serve the common good rather than narrow private interests.” Good Jobs First is an aggressive, extremely well-informed critic of government subsidies to companies who promise economic development and jobs – and then fail to deliver.

A recent sample from Clawback: the New York Yankees are asking New York City for an additional $350 million in public financing for their new stadium. The team has already gotten $800 million in subsidies, and the new stadium is being built on land once used as parkland and playgrounds. But now that construction costs are soaring, as they so often do, the Yankees want more taxpayer money. They also want Mayor Bloomberg to lobby the IRS to allow tax-free financing of the project. Clawback points out that “the team reportedly said it would finish the stadium even if it didn’t get the financing” — yet the Mayor is still offering to help them deal with the IRS.

Since so many privatization schemes flourish in the shadows, and through contrived complexities that mask what is actually going on, it’s good to know that that these two groups are prowling the latest enclosures of the commons.