Wall Street rakes it in when cash-strapped governments are forced to sell off public assets

[marmar]

from OnTheCommons.org:



Want to Buy a Bridge Cheap?
Wall Street rakes it in when cash-strapped governments are forced to sell off public assets

By Donald Cohen


A century ago, con men got away with selling the Brooklyn Bridge to immigrants looking to buy a piece of America and get rich quick. The swindle became standard joke for gullibility. 

Today it’s no punchline. Mayors and governors staring down massive budget gaps are putting bridges, buildings, parking lots, and more up for sale.

Who’s buying? Wall Street, which, in turn, wants to sell off your public assets to investors with the promise of sure-fire returns. Sound familiar— and too good to be true? It is. But with layoffs and severe public service cuts looming, the prospect of fast cash – whatever the long-term consequence – is intoxicating. And politicians are drinking it up.

In December 2008, Chicago’s Mayor Daley rushed a 75-year lease of the City’s 36,000 parking meters through City Council for $1.15 billion in much-needed cash for the city budget. There were no public hearings, no financial analysis, no alternative solutions given to the Council before it voted. The Mayor’s maneuvering was so airtight that his next proposed budget included this revenue even before the deal was done.

Aldermen were given the impossible choice – question the deal or fill a $150 million shortfall. The result: a Morgan Stanley-led venture, Chicago Parking Meters, snagged a “win-win” deal for themselves, and a “win now-lose later” deal for the city.

The way the deal went down, and its implications, underscore the troubling developments examined by Janine Wedel in her recent book, Shadow Elite.
Increasingly, small groups of power brokers, not public servants, are helping to midwife decisions, with little or no oversight, that benefit themselves, the politicians and players they’re connected to , but not necessarily you, the voter and taxpayer. .........(more)

The complete piece is at: http://onthecommons.org/content.php?id=2684

[Skink]

1. the debt was then immediately repackaged into subprime bonds...

and insurance was taken out in the form of credit default swaps and the rest is history.

[Jokerman]

2. Indiana's republicans are robbing us blind this way.

Daniels sold off the Indiana Toll Road now our repub mayor Ballard is trying to do the same with our water company and downtown parking.

It's all just a scam to reward the politically connected republicans.