Privatization has set the stage for rising far-right populism

“The privatization of schools, water, and other public goods increases inequality, which leaves people more susceptible to far-right leaders,” writes Jeremy Mohler of the anti-privatization organization In The Public Interest (ITPI):

It’s one sentence in a 1,244-word article, but it made me pause and think deeply.

The article was a guest essay in the New York Times about the rise of Sweden’s far-right political party, which was created out of a neo-Nazi group and resembles the increasingly Trumpian Republican Party with its hatred of immigrants, journalists, and others.

The sentence: “Once one of the most economically equal countries in the world, Sweden has seen the privatization of hospitals, schools and care homes, leading to a notable rise in inequality and a sense of profound loss.”

That makes me wonder: How much has privatization contributed to soaring far-right populism, white nationalism, and fascism in the U.S.?

In Sweden, argues journalist and author Elisabeth Asbrink, high levels of political and economic inequality leaves people looking for answers to why they’re suffering and who is to blame—and far right leaders are happy to provide them.

“It was better in the good old days, [those leaders] say, and people believe them,” Asbrink writes. “Back to red cottages and apple trees, to law and order, to women being women and men being men.”

Sound familiar?

Indeed it does sound famliar.

I always argue about privatization the same way:

Let’s say you have a city’s publicly-owned water utility, the major expenses of which can be grouped into four main areas:

  1. Water (getting and treating water)
  2. Distribution (moving the water from the utility to customers)
  3. Labor (wages, benefits)
  4. Operations (all the equipment and systems needed to do the first three)

Let’s say, for the sake of argument, that each of those is 1/4 of the budget.

Now let’s say that the city council sells the utility to a private company in exchange for a large lump sum payment up-front.

Now you have:

  1. Water
  2. Distribution
  3. Labor
  4. Operations
  5. Profit Motive (including huge sums for executive salaries and money to stockholders)

You’ve only added another major expense — the profit motive — which actually now is the most important expense to its new owners, Wall Street. The previous four are now secondary considerations.

You have to take money somewhere from 1 through 4 to help pay for 5.

Who gets the shaft? Ratepayers, who end up paying much higher rates even though the Wall Street company has slashed employee benefits and pay, and started cutting corners on Distribution and Operations.

Nowhere, ever, in the history of major public utility privatization, has the public come out ahead. It hasn’t happened. You cannot point to a reliable source that says it has.

So the public, which doesn’t pay attention to the finer points of utility privatization politics, only knows its water bills are skyrocketing while the water tastes funny and the public can’t get anyone to answer the customer service lines at the water company because they’ve slashed payroll.

To the public, the water company is still the government, thereby feeding into the notion that government doesn’t work and we should throw all the bums out in favor of right-wing candidates who scream about “the swamp.”

How a Wall Street company made Jackson, Miss., water crisis worse

I knew the Jackson, Mississippi, water crisis has much of its roots in the fact that the state has been gerrymandered so much for so long that Republicans have an iron-fisted hold on all three branches of government, including the House and Senate — plus its congressional delegation.

Mississippi is still Klan country in many ways, and no doubt those kinds of sympathies are never very far from the surface in the good ole boys who run the place. That 38% of the state is Black no doubt accounts for the fact that Mississippi ranks dead last among the 50 states in most quality-of-life indicators. Wouldn’t want non-whites to get too uppity and full of themselves with actual electoral power and generational wealth.

What I did not know is that the water crisis also has much of it roots in a Wall Street company fleecing the city of Jackson and its water customers. It all started with white flight from Jackson, which decimated the city’s tax base in a state where the white folks in control were not in the mood to help a largely Black city, according to Judd Legum over that Popular.Info:

But while the city’s population and tax base shrunk, it still has 114 square miles of aging water infrastructure to maintain. The state, dominated by Republicans, has been largely unwilling to help a city populated by Black Democrats. In 2021, for example, intense storms left Jackson residents without drinking water for a month. The city asked the state for $47 million in funding for emergency repairs. Mississippi allocated $3 million.

Mississippi lawmakers have blocked “attempts by the city to raise infrastructure funds through a sales tax hike.” Meanwhile, top state officials, including Mississippi Governor Tate Reeves (R), have said that Jackson needs to solve its own problems. After the city lost access to clean water in 2021, Reeves said that the city needs to do a better job “collecting their water bill payments before they start going and asking everyone else to pony up more money.”

Reeves is right that Jackson has had difficulties collecting fees for water. But those difficulties — and its struggles to generate enough revenue to cover even routine maintenance — can be traced back to the actions of a multi-billion dollar corporation: Siemens.

But there is no such thing as systemic racism, dontcha know?

It cannot be said enough times: If someone in your town or city EVER proposes privatizing its water, sewers, parking meters or anything else, help to fight it in any way you can.

Paula Conley, a resident of Jackson, Miss., sprays disinfectant on dishes she hasn’t been able to wash because of a lack of water.

Chicago turning its parking meters over to private equity just keeps getting worse with each passing year

Turning public works — water, prisons, parking enforcement, the list goes on — over to private companies always turns out to be a boon for private companies while local taxpayers get shafted. Such is the ongoing disaster that is the privatization of Chicago’s parking meters.

David Cohen of In The Public Interest has been following this dumpster fire:

New numbers are out, and this past year Chicago lost another $136.2 million in potential revenue. That’s how much in parking fees went to the group of global investors who operate the meters.

As you recall, Chicago (like all cities) was struggling financially because of the Great Recession. Out of desperation, the city rushed to take a $1.15 billion offer from private investors—including some from as far away as Abu Dhabi—in exchange for control of 36,000 parking meters for 75 years.

Once the ink was dry, the deal’s finer details came into focus. The city’s inspector general concluded that the meters had been sold off $1 billion dollars under their value. And because the investors demanded a healthy return on their investment, parking rates shot up to some of the nation’s highest.

Since, the investors have made out like bandits. By 2019, they had made back their initial investment plus $500 million in profit on top.

Combined with two other privatization deals made around the same time—four parking garages and the Chicago Skyway bridge—the parking meters have sucked billions from Chicago’s budget.

“Chicago today would have between 3 and 4 billion dollars more than it has from these three deals together,” Clint Krislov, director of IIT Chicago-Kent’s Center for Open Government Law Clinic, told the Chicago Sun-Times.

As I told Paul Rosenberg for Salon earlier this year, it was an “incredibly stupid way” to borrow money on the city’s future revenues.

But what I really try to get across when I tell the story is the extra, extra, extra stupid (and anti-democratic) part.

Get this: The contract is written to make it harder (and much more expensive) for the city to introduce transit alternatives, like bus or bike lanes. The city essentially has to “buy back” parking spots to cover revenue that could have been generated over the life of the (75 year!) contract.

If anyone in your town, city or county even proposes so much as a “study” regarding privatizing any of your public works, start organizing early against it because these deals never benefit taxpayers in the long run, no matter how slick Wall Street is in lying about it.