Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Tag: Corruption

Privatization Is Always A Ripoff

By

On November 11, 2021

Comments

Water edition, from the UK

Analysis in 2020 found that privatised (sic) water companies paid £57bn in dividends to shareholders since their foundation in 1991 to 2019. Now they say they need better infrastructure to stop piping sewage into rivers, lakes, and sea.

Up here in Toronto, Canada, we privatized half our trash collection, dividing the city in half. The West has private collection, the East has public. When it went into force, the arguments were strong: private was cheaper. Now, a few years later:

Oh, hey, what a surprise. It costs more and they pay workers less than the City does.

Let’s keep this simple, as free market fundamentalists who usually understand nothing about markets often say, “There is no such thing as a free lunch.” TANSTAAFL.

Private companies have to make a profit. Public companies do not. Private companies are not miraculously more efficient, to be cheaper than public companies, they have cut costs. Often that is wages, other times it is not paying to maintain or upgrade infrastructure required to keep sewage out of the water.

For anything where we know how to do it; where there is actually little room for innovation, and where the service provided is about the same for everyone (this includes almost all universal or near universal insurance, all utilities including water and power and internet) public provision is more efficient and private provision can only be cheaper by cutting costs you don’t want cut. That includes, of course, pushing costs into the future: the trash company in Toronto knew it’d raise prices in the future, it undercut for a few years to get its foot in the door.

Once you do privatize it can be difficult to take something back public. You’ve sold the assets, and the people you sold them to are making money and don’t want to sell back. Especially at lower levels of government you may not be able to force them to, or force them to at a reasonable price. In addition, they now have a constituency of rich people who need them to continue (investors, executives) and who can use their money to lobby and bribe officials.

As a rule, most privatizations are fraud, and the politicians who do them are corrupt, helping out friends and donors and doing well out of the process. Most politicians who do this should be treated as criminals and thrown in prison for defrauding the public, corruption and fraud.

(About half of the neoliberal agenda initiated by Thatcher and Reagan was and is just “privatize everything you can so the rich can get richer.” It’s not capitalism, it’s rentierism and corruption and makes economies weaker, not stronger.)

TANSTAAFL. There is no free lunch, if a private company can make money off a public asset, it’s been sold to them for less than its worth, and the people who will pay in the end are taxpayers.

If it is a public good, it should be provided publicly.

(My writing helps pay my rent and buys me food. So please consider subscribing or donating if you like my writing.)

 

 

Obama Starts to Cash In

By

On March 1, 2017

Comments

It took Bill and Hillary years to get to 100 million. The Obamas, well…

Barack and Michelle Obama have sold the rights to their next books to Penguin Random House for a sum that has reportedly passed $60 million, according to a report by the Financial Times. (They will be writing separate books, but the rights were sold jointly.) As far as past and present presidential book deals go, this one’s a biggie: It surpasses previous records set by George W. Bush’s reported $7 million deal and Bill Clinton’s reported $15 million dollar advance.

Penguin-Random House, of course, is the result of a merger that Obama’s administration should not have allowed.

I’m waiting for the speeches, those should be wonderful.

I think this is only fair, though. Clinton may have carried water for the rich, but Obama played a huge part in making sure that they didn’t lose all their money after the financial crisis (yes, Bush and Bernanke started the bailouts, but Obama had them all by the short and curlies and could easily have put almost every senior executive in the financial industry in prison for fraud, and could have spiked large parts of the bailouts had he chosen to do so.)

This is why I don’t get very worked up about Trump’s conflicts of interest. They are real, but the only difference is that he’s getting paid now as opposed to later. Politicians exist to do what rich people want, Trump is only cutting out the middle man and the partial delay.

This is an important point, and I want to encourage you to read this longer article on how politicians are paid by rich people to fuck over ordinary people. It’s not about donations for elections.

Obama continued the trend, which has gotten worse for decades, of the rich getting more and more of all the gains of the economy. He did not try, in any way, to reverse it. And that’s because he knew he was being paid to funnel money to the rich. That was his job, he did it, and now he is getting his reward.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

US Corruption vs. World Corruption

By

On July 31, 2015

Comments

One of the most hilarious things to me is Americans whacking other countries for being corrupt.  Russia is a favorite target, but the US abuses virtually every non-Western country for “corruption.”

I’ve pointed out before that this is absurd. There is no more corrupt country in the world than the US. The bank bailouts were pure corruption, performed even though a supermajority of the population was against them, even though the banks had broken the law systematically, and even though the banks were bankrupt due to decisions they knew were corrupt, illegal, and (yes), stupid.

The US election system is flagrantly corrupt, with billions of dollars of direct and indirect donations from the rich. You buy supper with a candidate for thousands of dollars a plate. You buy White House access with much larger donations. Third party PACs spend hundreds of millions.

The bribery in the US is legal. Legal. That does not mean it is not bribery. That does not mean it is not corruption. This system was arranged by the monied classes to ensure that politicians owe them and do not harm them, and that they continue to pass laws and take actions which help them.

The regulatory class is completely owned. There is a revolving door between Wall Street and the Treasury and Federal Reserve, for example, and Wall Street pays far better. When senior officials leave, they get jobs from those whom they regulated, or give speeches for six figures a pop. Politicians are treated the same, receiving lobbying jobs worth six to seven figures, board positions, and so on.

This is all legal, but it is corruption.

Jimmy Carter recently said this, with respect to Citizen’s United:

an oligarchy, with unlimited political bribery

But don’t be deceived, Citizen’s United was just the final capstone: The US was already a completely corrupt, bought, and owned regulatory state before Citizen’s United.  Citizen’s United just made it much easier.

I repeat, in absolute terms, there is no more corrupt country in the world than the US. In relative terms? Who knows, but the US being corrupt matters more than corruption in any other country.  (Though China is coming on strong.) US financial law is essentially extra-territorial: The US is capable of crippling other countries’ economies almost entirely with simple Treasury orders. The US has the world’s largest military and regularly intervenes in other countries with air strikes, assassinations, and general terror.

What is unique about America is not its corruption, many countries are corrupt, it is the sheer hypocrisy the pretense that America is not corrupt, because Americans have made their corruption legal.

Corruption is the inevitable consequence of concentrated wealth.  It always occurs when you have great inequality, it cannot be avoided.

You want corruption back to reasonable levels? You want it illegal again? Take the oligarchs’ wealth away from them and break the great monopolistic and oligopolistic companies or bridle them with uncorrupted regulators who will crawl up their backside and tax the hell out of them.

Nothing else works (and the second solution works for a while). Nothing else has ever worked.  Anyone who tells you otherwise is lying to you.

You want you country back, and your children and yourselves to have a future?

It’s you or them. So far Americans keep choosing them.

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.

 

Powered by WordPress & Theme by Anders Norén