The Privatization Scam

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A similar argument was advanced by Noam Chomsky in a 2011 lecture titled "The State-Corporate Complex: A Threat to Freedom and Survival". He said:

[T]here is a standard technique of privatization, namely defund what you want to privatize. Like when Thatcher wanted to [privatize] the railroads, first thing to do is defund them, then they don't work and people get angry and they want a change. You say okay, privatize them . . . .

Privatization (or "asset relocation" as it is sometimes euphemistically called) means selling public utilities to private equity investors, who them rent them back to the public, squeezing their profits from high user fees and tolls. Private equity investment now generates an average return of about 11.8 percent annually on a ten-year basis. That puts the cost to the public of financing $1 trillion in infrastructure projects over 10 years at around $1.18 trillion, more than doubling the cost. Moving assets off the government's balance sheet by privatizing them looks attractive to politicians concerned with this year's bottom line, but it's a bad deal for the public. Decades from now, people will still be paying higher tolls for the sake of Wall Street profits on an asset that could have belonged to them all along.

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This page contains a single entry by cul published on May 22, 2017 4:02 PM.

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