Trump not alone in being wrong about infrastructure, public-private partnerships

From gun control (arm the teachers) to tax reform (benefits for billionaires), you can count on Donald Trump to do the wrong thing, either for blatant self-interest or for those who pay the freight (i.e. large donors).

Governing is not ideological with Trump, unless ego-stroking and narcissism are ideologies.

Take his infrastructure “plan,” for instance. Many politicians subscribe to privatizing public resources and the hype of so-called public-private partnerships (P3) simply for ideological reasons … if only to mask their outright greed. But Trump is on board simply because he and people of his ilk stand to make money at the public’s expense.

Talking about spending $1.5 trillion on infrastructure also has the added benefit of sounding impressive, and Trump is all about his image. Getting there by spending just $200 billion in federal funds sounds like an astute business move of the kind he routinely brags. That he doesn’t actually have the money, but could find it by cutting things like Medicaid and Social Security, speaks volumes. That individual states and municipalities don’t have the money to kick in is immaterial to Trump.

If anything happens, there’ll be some sales of valuable public assets and a few P3 projects that inevitably come with guaranteed profits to large investors (i.e. donors) and guaranteed losses to taxpayers (i.e. everybody else).

Wholesale sell-offs of public assets, usually at fire-sale prices, are a favourite of governments looking to cook the books and help out those corporate donors that paid their way to power. P3 projects are another way to make the books look better while guaranteeing private companies profits with taxpayers’ money. It’s precisely the kind of things Ontarians have seen from the Wynne government, which has been lambasted by the Auditor General and other financial watchdogs for the practice, along with pretty much every other move the incompetent Liberals make.

Historically, such partnerships began as a way for governments to sell off profitable assets, usually to friends and supporters, for short-term injections of cash and long-term profits to benefactors.

Despite the misgivings of many, it’s a practice that remains in place today, as with Kathleen Wynne’s determination to strip the public of its hydro assets in a bid to fake a balanced budget and somehow win this year’s election.

Public-private partnerships have been used by politicians as a form of off-book accounting to make it appear as if public spending and deficits were lower than they actually were – but then public auditors forced governments to include these obligations on their books.

P3 proponents then claimed that their projects could be less expensive, more innovative, speedier, and more accountable than public service delivery – but a string of failures, delays, little transparency, and secretive deals proved these claims wrong.

Most recently, P3 advocates have acknowledged that they cost more, but they try to justify these deals by claiming that P3s transfer massive amounts of risk from the public sector to the private sector. By using highly questionable value-for-money accounting, they claim that the higher costs of P3s, particularly on the financing side, are offset by transferring colossal amounts of risk to the private sector.

That Trump is an advocate should set off alarm bells everywhere.

As U.S. economist Marshall Auerback, a market analyst and commentator, wrote in a piece last week, the P3 zombie continues despite a track record that should have seen the practice put down years ago.

“In essence, these public-private partnerships are one of the sick jokes that the neoliberal era visited on all of us in the name of economic efficiency and responsible government – a ‘joke’ because the beneficiaries of all this public largesse have been laughing all the way to the bank as stupid public officials continue to fall prey to their lobbying as they joyfully hand over the keys to the public purse. Trump is simply perpetuating the trend of allowing governments to continue to abrogate their true responsibilities to pursue and safeguard public purpose,” he writes.

“Governments should never have become agents of private profit. But under PPPs of the sort proposed in Trump’s infrastructure deal, public purpose disappears and governments simply become underwriters of private profit, while assuming any contingent losses. Society gets more expensive toll roads, toll bridges, more sprawl, more cars, more rake-offs and in the end, more financial trouble and more bail-outs. The fact that governments have become active facilitators of this process gives another reason why our huge global economic and social crisis shows no end of respite.”

Ideally, we would strip away corporate power to have any say in public policy and elections, particularly the oft-exercised ability to buy politicians through donations. Likewise, we should get rid of the revolving door between the ranks of large corporations and the senior public service. The same goes for the overlap of consultants.

To curtail the ever-growing damage done by corporate power, we would have to rely on government controls. But, having been co-opted by corporations, politicians and bureaucrats do just the opposite. We don’t trust in governments’ ability to do the right thing.

That’s troubling across the board. Alarm bells should be sounding around the clock, but we’re pretty much oblivious and/or blasé about “boring” things such as infrastructure. That money is squandered on today’s pleasures at the expense of tomorrow’s essentials is lost on many, most notably those making today’s decisions.

Keeping with Trump’s plan, the American Society of Civil Engineers have long advocated for infrastructure investments, typically issuing a “D” on report cards of the state of U.S. infrastructure. Getting to a “B” would require some $1.6 trillion over five years. A good chunk of (actual) money, to be sure, but, to put it in perspective, less than half of what the country has spent on useless, if murderous forays into Afghanistan and Iraq.

In Trump’s world, there’s more real money for the military, but nothing but lip service to an important aspect of governance, one that improves the quality of life and the economy for citizens.

But we live in a time of flashy spending and photo ops, coupled with raiding the cookie jar … repeatedly. Don’t expect good governance any time soon.

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