Privatizers Have No Shame in Proposal to Lease Mass. Turnpike to Corporations

When the threat of privatization - the transfer of control over public infrastructure or services to corporations - rears its pathetic failed head in these days of capitalist collapse, we always like to chat with our friend and occasional contributor, Suren Moodliar of Mass. Global Action. MGA is an organization that has done much work in the fight against the privatization of public water supplies in the last few years, and Moodliar has academic training in urban planning in addition to many other talents.

So when we heard about the proposal to privatize the Mass. Turnpike - the largest road owned by our state government - as a potential solution to the need for toll increases and even to the heavy debt load of both the Big Dig and the MBTA, we got Moodliar on the phone immediately.

When asked about the support Sen. Steven Baddour (D - Metheun), co-chairman of the Mass. Legislature's Joint Transportation Committee, has given to privatizing the Pike, his response was immediate and blunt , "These are people without shame. Talking about privatization in the midst of the ongoing financial crisis is like saying you want to talk about single party socialism after the Berlin Wall comes down. They've certainly got balls.

"All these far right-wing fringe people who are constantly being quoted [on the issue] like the Reason Foundation - these are the people that wanted to cut the state budget by 40 percent."

We certainly share Moodliar's visceral disgust for anyone with the temerity to suggest that any private interest can ever run public infrastructure better than government employees. And not because we're simple enough to believe that there's no corruption in government. There is ... as there is in any human institution. But it is minor compared to the way privatizers have looted the public till around the U.S. and around the world for over 30 years - aided and abetted by neoliberal governments at every level.

The reason (a quality we think we display vastly more of than right-wing libertarian cabals that stamp the word all over their publications and organizations) we hold this belief is solidly based in fact. It is not possible to privatize anything public without strangling it. That's because although the mantra of privatization is that it will perform the same service that public agencies do, that is totally impossible - for the simple reason (there's that word again) that you can't extract 20 percent profit from the budget of any once-public enterprise, and bust unions, and cut staff past the bone, and eliminate core functions, and offer anything like the previous level of service.

Not only that, once you privatize something, you remove it from the realm of public control. Oh there are still regulations, but little oversight. And no matter what the privatizers say about government, in most countries (including the U.S.) there's far more democracy in the public sector than in the private - run as it is by dictatorially-controlled corporations.

Also, in the frenzy that usually surrounds such giveaways of the public trust, the deals that are negotiated with corporations are often lousy - and the public ends up paying out far more than we receive. For example, when privatizers slash jobs, who picks up the tab for the negative effects on our local economies? Who retrains people for new jobs? Who provides them with health care? Who feeds their families if the fired workforce can no longer do so? The much-weakened public sector.

But it's far worse than that. Most deals, like a number of recent deals for public infrastructure in other states are allowing corporations - in many cases the same corporations that helped create the financial crisis with wild unregulated speculation - to benefit in two major ways: 1) they take advantage of artificially low interest rates for credit to leverage the deals - the cost of which is ultimately borne by taxpayers, and 2) they are able to shelter profits they made in highly-questionable investment schemes over the last many years in safe infrastructure investments.

In addition, due to the generally bad contracts signed by often-complicit politicians in such deals, the privatizers can usually change the rules of how they run their new holdings at anytime.

So in the event Massachusetts should be stupid enough to sell off our most important state-owned road - in the name of lowering or eliminating tolls - the reverse could quite easily come to pass. The new private owners of the Pike could raise tolls at will, and it would be exceedingly difficult to dislodge them once they have control.

Particularly because the talk is of some kind of 100-year lease. Like the one Britain had on Hong Kong after repeatedly defeating the Chinese imperial government in the quest for "free trade" rights in that country back in the 1800s.

Actually a lease on public infrastructure can be even worse than outright ownership. In the wonderful world of water privatizations, multinational water combines have frequently leased control over public water systems, but found ways to stick the government they leased it from to continue paying upkeep and maintenance costs on the systems - screwing the public coming and going.

Worst of all is the right-wing libertarian "free market" ideology behind such buyouts. All the talk is of "shrinking government" and "efficiency," but the reality is one of bypassing regulation, exploiting workers, wealth extraction from those least able to afford it by passing costs onto to individuals, and profound inefficiency.

Take for example the privatization of much of the former welfare and unemployment systems in this country - Massachusetts, a supposedly "liberal" state, leading the charge in that direction for a couple of decades. Prior to 1995 when Massachusetts first instituted welfare "reform," and even more so prior to the beginning of the Reagan Administration in 1981 (though some say that Gov. Michael Dukakis' first term in 1974 was when things started getting bad on this front in the Commonwealth), we had a welfare system that allowed some measure of security for people who were poor largely because the jobs available to them were insecure short-term part-time jobs at minimum-wage. We had an unemployment system that allowed some measure of security for people who were laid off from longer-term full-time jobs at higher wages. In both systems, there were once publicly-run jobs programs and retraining programs. There were also publicly-funded educational opportunities to allow people to get more skilled jobs in the future - and climb their way up the economic ladder. There were public child care programs to free up the women who were often tasked with such duties to the detriment of their earning-power to improve their lot. There were health programs and addiction treatment programs and counseling programs.

Following the "reform" of these institutions, most of these programs were dismantled on the altar of privatization, and corporations were allowed to bid to provide supposedly similar services in a more "efficient" and "cost-effective" way. The reality was something else entirely. The newly privatized employment service sector took advantage of huge giveaways of public money, then proceeded to "cherry pick" those people most likely to succeed in their programs, and refused to take people in the most serious need of the remaining programs. Punitive "work first" regulations were enacted that functionally eliminated education and training benefits - and forced people to work any job offered, no matter how bad or how low its pay. Health programs, treatment programs and counseling programs were slashed.

The health burden then shifted onto already overloaded community hospitals - many of which were also being privatized or simply sold off ... often, as in the case of Peabody's public J.B. Thomas Hospital, just before a private hospital was being conveniently built in the same city. A private hospital that lacked the public mandate of its predecessor to treat any person that came through its doors with little or no concern for their ability to pay cash on the barrel head.

One could go on and on. The privatization of the mental health system had particularly grim consequences back in the 1980s, and led directly to the huge numbers of homeless people in our cities and towns whose ranks are now exploding as the economy continues to spiral downwards.

The privatization of the energy sector has led to huge rate spikes, and rolling blackouts in some parts of the country. The privatization of the housing sector has led to the displacement of poor families from publicly-owned housing developments and their replacement with middle-class families - yet another cause of the rise of homelessness and family disintegration.

Long story short, only an idiot would back privatization of anything in this day and age. Or someone who is going to profit handsomely off the deal. At Open Media Boston, we certainly try not to be idiots, and we're sure as hell not going to profit from privatizations anymore than the rest of the public. So we ask all our viewers to call up their legislators and tell them to put the kibosh on this horrible proposed Turnpike fire sale before its too late.

There's not all that much support at the moment for Pike privatization judging from press coverage of the issue, but if enough monied interests get behind it - there could be green lights across the board before the middle of the upcoming legislative session. And that would be a disastrous development in an already disastrous period of the American story.

Full Disclosure: As mentioned in previous editorials, Open Media Boston Editor/Publisher Jason Pramas, is a founder and former Director of Mass. Global Action. He remains a member of its Board of Directors.