I smell the meat a’cookin’. The new privatization scam.

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We’ve posted before about infamous Illinois politician, Paul Powell who when salivating over another crooked political deal said, “I smell the meat a’cookin’”. 

Ah, Illinois, the land of the incarcerated pol, where the tried-and-true political route is: First, get elected; then, steal money; then, go to jail.

The smart ones, like the recent Mayor Daley, don’t go to jail, but rather are rewarded by an insider law firm with a do-nothing, “thank you” job.

Otherwise, from the top — governors — to the bottom — Chicago aldermen — it is a well-travelled path of Illinois political chicanery.

We frequently have posted about another well-travelled path of political chicanery: Privatization.

Examples are:

1. TSA and the great privatization scam: Part II;

2. Why Privatization? Here’s why;

3. PRIVATIZATION: The Road to Perdition in the United States of Koch;

4. Presenting!! The Great Privatization Scam!

And, there are others.

“Privatization” actually can have two, significantly different meanings. One can refer to government contracting out for goods and services. When the federal government builds planes, tanks, bullets, roads, and dams, typically it pays private contractors to do the work.

The federal government acts as a customer, not as a partner.

That is not true “privatization,” which is when the government sells or gives to private industry its toll-roads, its jails, its mail delivery, its policing — functions typically handled by government employees.  That is the kind of privatization where stealing is most rife.

The key question is this: Who owns and runs the business?

The key question is this: Who owns and runs the business? In one sense, it is not possible for there to be a real partnership between the federal government and a private party, because they have different motives and goals.

Ostensibly, the federal government wants some task accomplished in the most efficient, most expeditious manner. That is its primary goal.

The federal government has no need for, nor should it take, profits. If the federal government were to accept profits, those dollars would be taken from the economy and have the same recessive effect as a tax.

By contrast, the primary goal of a private investor is profits. Unless the program is set up for charitable purposes, the accomplishment of a task only is the medium by which profits may be obtained.

The difference between profit-maximization and output maximization is decisive in how the business is run.

If the federal government owns and runs the business, what would motivate an investor to put his money into it? And what would motivate a Monetarily Sovereign federal government to solicit the investor’s money?

If the investor owns and runs the business, the result is not a partnership. Rather, the federal government plays the role of a customer, which it already does for millions of products and services.

So exactly which format is Trump proposing? As with so much Trump, his proposals are vague wishes, with specifics “to follow later.”

The classic example is his border wall. Trump’s “plan” is: “I will build a wall and Mexico will pay for it. You figure out how.” 

There are two facts — excuses really —  repeatedly given for government privatization:

1. The government needs private money. This may be true for state and local government privatization but never, ever is true for our Monetarily Sovereign federal government.

2. The private sector is smarter than the government, so will do a better job.  This is true or not depending on specifics. There are smart and non-smart individuals in the private sector and in government.

Neither sector has a monopoly on brains. Remember, it was federal employees who created atomic energy and the man on the moon, two of the most complex initiatives in human history,

There is a 3rd fact about privatization:

3. Private sector leaders are motivated by personal profits, while government leaders are motivated by votes and bribes.

When the sole motivation is profits, you reliably will see excessive pricing and under-servicing in privatized businesses, which often are given monopoly status by the government.

Privatized jails, privatized toll roads, privatized parking meters, privatized electric service, privatized TSA — all offer examples of excessive pricing and under-servicing by privatized, monopoly businesses.

As is the custom for privatization, governments sell or give public property or exclusives at a discount to rich insiders, while claiming #1 and #2 above, and hiding #3.

Trump’s Plan for Infrastructure, by Michael Likosky

To remain a land of opportunity, all citizens—and many businesses—must have access to state-of-the-art affordable infrastructure.

It includes transportation,  water, communications, schools, public hospitals, community colleges, and public universities. Today, most of us simply do not have this access. Moreover, we cannot attract and retain global businesses with the resources we have.

We are in this situation in part due to dysfunctional politics. The Beltway cannot agree on the basics: how to pay for the needed infrastructure, how to prioritize our needs, and the most efficient way to design and build projects.

In reality, the issue is “how to pay,” and for the federal government, it is no issue at all.  It is a pretend issue. Our Monetarily Sovereign government can pay for anything.

As for “prioritize,” this is something the federal government has to do, whether or not it privatizes.

The same is true for “efficient way to design and build.”  The government sets the standards. It will employ architects and engineers to provide the plans and contractors to organize the work. No “privatization” needed.

However, more significantly, we find ourselves in such sorry shape because for decades we have suffered from a mindset that refuses to recognize that a rising tide, in this case investment in Infrastructure, raises all boats.

At times the wealthy do not want to pay for the infrastructure of the poor, metropolitan areas the rural, the coasts for the Rust Belt, and so on.

Some wealthy may be ignorant of Monetary Sovereignty, so they truly believe they must pay (via taxes).  The majority of wealthy understand their taxes not pay, but they want the poor to believe reasons for not improving infrastructure.  They want to widen the Gap between the rich and the rest.

But, infrastructure projects benefit the 99.9% more than the .1%. The benefits come from added jobs and from improved services. Thus, these projects could narrow the Gap — which the rich don’t want — unless the rich receive inordinate compensation.

President-elect Donald Trump is coming to office with a mandate to fix all this.

These days, losing by more than 2 million votes is considered a “mandate.” Imagine what they would call it if he actually won the popular vote.

The elements of the plan are clear. However, how it all fits together is not self-evident.

It’s neither “clear” nor “self-evident,” because there is no plan.  It’s just a vague wish list.

Before getting into even the elements though, let’s get the sticker shock out of the way. The plan aims to bring $1 trillion of public and private dollars to the table into infrastructure over the next decade.

As for “sticker shock,” all the dollars contributed by the federal government constitute a stimulus to the economy. Why would anyone be “shocked” by that?

His (Trump’s) elements read like a who’s-who of the most innovative ideas in Washington.

They include public-private partnerships, a special bond program, the repatriation of corporate profits sitting overseas, the streamlining of environmental and regulatory review processes, among others.

“A who’s who of the most innovative ideas in Washington”?  How strange, considering the “innovative ideas” either are fuzzy, non-existent, or are conservative-usual: More money in the pockets of the rich.

“Public-private partnerships” generally mean a few, rich insiders receive the exclusive right to overcharge for shoddy services.

“Special bond program” is unnecessary in a Monetarily Sovereign nation, and probably will turn out to be a feeding trough for rich, criminal banksters.

“Repatriation of profits” has no value to America. Corporations do what is best for business, and unless repatriation stimulates American business it is meaningless. Corporations will spend here only if such spending is good for business.

And here is the best one: “Streamlining of environmental and regulatory review processes.”  That, very simply means, don’t regulate business.

It means: “Let the criminal bankers, the overcharging pharmaceutical companies, the dishonest food processors, the cheating car manufacturers, et al do whatever they please without the intrusion of inconvenient rules against deceiving their customers and exploiting their employees.”

The idea is: “Let ’em pollute, overcharge, and steal.  It’s big business first, big business last, and big business always, and the public be damned.”

That is why billionaire, proven cheater Trump has filled his cabinet with fellow billionaires. And amazingly, the public believes these billionaires represent beneficial change or concern about the “little people.”

Remember, we’re talking about the same Donald Trump who has a history of cheating his employees out of their wages. (Does the phrase, “from the frying pan into the fire” come to mind?)

News flash! Trump and his cabal didn’t get to be billionaires by caring about your family’s finances.

The bond proposal is based upon the Build America Bonds which were, according to Alan Kruger, the former Chief Economist of President Barack Obama’s U.S. Treasury Department, the “unsung hero of the recovery”.

In fact, Steven Mnuchin, the president-elect’s choice for U.S. Treasury Secretary, even mentioned recently that the incoming administration was looking at a National Infrastructure Bank, the holy grail of bipartisan politics.

“Bonds are the unsung hero of the recovery”? The only thing that took us out of the recession was federal deficit spending. Period.

Bonds added a few dollars of interest, and benefitted the kind of people who invest in bonds. But that’s about it.

There have been dozens of different proposals for a “National Infrastructure Bank,” so many that today, no one knows what it is.  Supposedly the bank would borrow from the federal government and lend to private developers to build infrastructure — or something.

Aside from not being a plan with specifics, and aside from the fact that the Monetarily Sovereign federal government never needs to lend  (It only should give), and aside from the Bank having no function that Congress already doesn’t have, it’s wonderfully “bipartisan” (i.e. both parties “smell the meat a’cookin’.”)

So that bipartisanship makes it an “innovative idea” (an idea that has been tossed around for the past ten years.)  It’s the “holy grail of bipartisan politics” because the .1% loves it.

Public-private partnerships are the cornerstone of his plan. Rather than use public outlay of money to pay the entire cost of infrastructure build-out, these partnerships use public money as honey to attract global investor money from pensions, insurers, sovereigns, endowments, and other sources.

Except that the federal government doesn’t need “global investor money,” especially when these global investors are the same billionaires who will be making decisions in Trump’s cabinet.

“Conflict of interest?? Who me?”

Additional partnerships are formed with global design, engineering, and construction firms with astounding capabilities to build the projects themselves.

“Astounding capabilities“?? The author has no idea who these firms are, but he is sure they have “astounding capabilities”?  Who really wrote this article?  Does it sound like anyone you know?

My view is that Mr. Trump’s plan, boiled down, is about three things: moving money to market very quickly; raising money from investors who do not expect to be repaid in the near term; and designing and building projects with engineering prowess.

Oh, puh-leeze! “Not expect to be repaid near term”? Who says? And “engineering prowess“?  Gimme a break.

The government can move money to market even more quickly by eliminating FICA than with a convoluted, mysterious “National Infrastructure Bank.”

The plan is a good one, including the spirit of prudent innovation behind it. The question will be whether Mr. Trump can inspire us to pull together as a single community one project at a time.

The “plan” (which doesn’t exist) includes “prudent innovation” (whatever the heck that means), but we should “pull together” (i.e. let Trump and his billionaires steal the house without us objecting.)

The author of the article, Michael Likowsky works for “32 Advisors.” This is what they say about themselves:

“We assist governments and companies in developing, structuring, and financing public-private partnerships and traditional infrastructure opportunities.”

That may explain the hard-sell for Trump’s non-existent programs. If what pays your salary is public-private partnerships, then you will shill for public-private partnerships.  Self-interest is the most powerful motivator.

You will hear much more about phony “public-private partnerships,” those. devices for widening the Gap between the billionaires and the rest of us. The concept is too delicious for the greedy rich and the crooked politicians to forget.

Just, let your politicians know you know what they are doing and you aren’t fooled by this scam.

Sunlight is the enemy of political criminality.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY