History is Happening Now

1.

This is a quote from a recent NYT article by Jenny Anderson about our national infrastructure crisis.

The American Society of Civil Engineers estimates that the United States needs to invest at least $1.6 trillion over the next five years to maintain and expand its infrastructure. Last year, the Federal Highway Administration deemed 72,000 bridges, or more than 12 percent of the country’s total, “structurally deficient.” But the funds to fix them are shrinking: by the end of this year, the Highway Trust Fund will have a several billion dollar deficit.

The proposed solution to this problem, which Anderson’s article implicitly advocates, should be quite predictable:  privatization. 

It used to be that the public was resistant to the idea of privatizing public assets built with its hard-earned tax money, but “[w]ith politicians like Gov. Arnold Schwarzenegger of California warning of a national infrastructure crisis, public resistance to private financing may start to ease.”

This is almost a textbook case of what Naomi Klein calls the “shock doctrine,” the use of crises–natural and manmade–to convince or force the public to accept unpopular privatization.  In this case, our crumbling national infrastructure–the crisis spurring this round of proposed privatizations–is the direct result of divestment by government.

We have been running up bad debt, using our money for consumer spending and not capital investment in infrastructure.  The “free market” seems unwilling to do any such investing on its own, but seems more than willing to snatch up public assets at fire-sale prices at our moment of desperation.  We have simultaneously, at least at the national level, but also locally, been slashing taxes.  The result:  no revenue, crumbling infrastructure, lots of debt.  This is what Republicans call “starving the beast,” spending like crazy while undermining the revenue stream so that at the end of the day the public discovers it has no choice but to accede to the demands of privatization proponents.

Grover Norquist notoriously said “My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.”

2.

Our “liberal” media–and remember this is a news article, not an opinion piece–goes to extensive lengths to make the case for privatization, giving the lion’s share of column inches here to privatization enthusiasts and their enablers in government, but giving little to no credit to the possibility that there are strong counter-arguments.

As David Bollier notes, this article “supplies no critical analysis of why governments and politicians are failing to make needed infrastructure investments, or how government might pursue public-spirited alternatives to private equity.”  OK, the article provides some, minimal critical analysis, but of an easily refuted straw man variety.

Here are the substantial critiques of infrastructure privatization offered by this article:

Critique: “[W]ary of foreign investors, who were among the first to this market, taking over their prized roads and bridges. When Macquarie of Australia and Cintra of Spain, two foreign funds with large portfolios of international investments, snapped up leases to the Chicago Skyway and the Indiana Toll Road, ‘people said “hold it, we don’t want our infrastructure owned by foreigners,”‘ Mr. Mineta said.” 

Implied Message: Some Americans are xenophobic dolts who don’t recognize a good thing when they see it.

Critique:  “And then there is the odd romance between Americans and their roads: they do not want anyone other than the government owning them.”

Implied Message:  Some Americans are romantic/nostalgic dolts who don’t recognize a good thing when they see it.

Critique:  “The specter of investors reaping huge fees by financing [infrastructure] assets… also touches a raw nerve among taxpayers” because “[p]rivate investors recoup their money by maximizing revenue — either making the infrastructure better to allow for more cars, for example, or by raising tolls.”

Implied Message:  Privatization will either improve your roads or might raise your tolls.  Better infrastructure?  That doesn’t sound so bad!

Critique:  “For many politicians, privatization also remains a painful process. Mitch Daniels, the governor of Indiana, faced a severe backlash when he collected $3.8 billion for a 75- year lease of the Indiana Toll Road. A popular bumper sticker in Indiana reads ‘Keep the toll road, lease Mitch.’”

Implied Message:  Some poor, hard-working politicians are being given a hard time for privatizing public assets.  Why?  We’re not told.

3.

All of which is to say, by the end of this article you would have no sense that there is an informed and sophisticated counter-argument to the case for privatization, beyond opposition by the bumper-sticker-wielding, xenophobic, yahoo straw men who emerge in Anderson’s piece.

If you want to read some of these counter-arguments, I direct you to this article by Phineas Baxandall, who argues among other things that “long term road contracts pose a variety of serious threats to the public interest,” including “fragmentation and a loss of public control over transportation policy, and an inability to prescribe future needs in contracts signed decades earlier.”

Anyone who admits how disastrous the privatization of Fannie Mae has been–like, say, the Bush administration!–should recognize that privatization is not always the answer, and is sometimes exactly the wrong answer.  In the case of public infrastructure, it is a recipe for expensive and damaging deprivatization, at taxpayer expense, years down the line.  The private companies get to keep their profits, of course, even after they’re proven themselves to be bad managers.