Public-Private Partnership Is NOT a Libertarian Concept!

reposting this article from 2017….

Privatized Isn’t the Same as Private

Several years ago, when I saw protests in Europe against austerity and privatization, I thought they were misguided. If a country is powering down the welfare state in favor of free enterprise, the people should be happy. Then I realized that privatization isn’t exactly free enterprise. Often it involves taking an industry that is served by a government monopoly and delivering it wholesale to a private entity or individual while keeping in tact regulations that restrict competition, mandates that individuals purchase the product or government contracts that generate all the firm’s revenue.

When I see that some of the richest men in the world got that way buying government-run monopolies that remain insulated from competition long after being taken “private,” I don’t think of the oligarchs as entrepreneurs. When I look at single-payer healthcare vs mandated health insurance purchases, I don’t see one as socialist and the other as libertarian, I see one as socialist and the other as fascist. And when I see NGOs or defense companies entirely funded by government contracts, I do not feel like these are private organizations responding to the demands of the free market, I feel like these are self-serving cronies feeding off the taxpayer. It is my position that if an entity is in a highly-regulated industry, if it’s revenues are a result of government-mandated spending, or if it contracts exclusively with government, it’s a government program funneling money to the government-connected rich or those who wish to be.

I’m an anarcho-capitalist–as far from a communist as you can get–but I recognize that if the government provides a service, it’s very hard for an individual to become a billionaire providing that service without breaking the law and risking punishment. Having a public-private partnership not only allows the government-connected rich to siphon off huge amounts of cash from the government and lay legal claim to it (basically, laundering it), it transfers vast assets and industries to these protected cronies (see the video below).

In true private enterprise, companies cannot make out-sized profits because customers will go to competitors or simply stop purchasing an overpriced product. If customers are required to buy the product, or worse, if the customer is the government itself, there is no market force ensuring efficiency or honesty because these industries are always highly regulated with a tightly controlled competitive landscape. The natural economic forces that drive prices down to the marginal cost of all inputs are absent without unbridled competition and a freely acting customer base.

For these reasons, among others, I’m not a fan of the public-private partnership. (For other factors to consider, watch the video below.)

It’ll Take a Republican to Silence the Small Government Right

As a general rule, Republican voters see infrastructure projects as the cronyistic money pits they are and resist them. Oddly, however, Donald Trump has made as a staple of his campaign and his presidency, massive infrastructure spending. As a matter of fact, this was the only policy goal he mentioned in his acceptance speech on election day, and I suspect it will be the only campaign promise he sees through to the end, actually accomplishing it instead of just blowing it up and saying “I tried.”

Perhaps to make this plan more palatable to the Republican base, Trump and his team claim to want to spur $1 trillion of infrastructure spending without actually spending that much on the federal level. How? By encouraging partnerships with the federal government on the state and local level–that is, by getting your local governments to spend your tax money on a federal agenda–and by partnering with private enterprise beginning with air traffic control. This particular agenda item alarms me.

I was never afraid of air travel. As a matter of fact, I was on one of the first commercial flights to take off in the United States after 9/11. I figured it was the safest day in human history to fly, though we waited hours at the gate for the airline to find a flight crew who agreed with me.

After I had children, however, I began to worry, then I started to develop a fear of flying. I renewed my old habit of praying during take off and landing (this did not endear me to my cabinmates!) and making sure the last thing I did was text my family: “I love you.” Then I read this remarkable news in Forbes Magazine and my fear disappeared completely:

Nobody died in a crash of a United States-certificated scheduled airline operating anywhere in the world in 2016.
This probably should no longer qualify as “news.”
That’s because it is the seventh straight year that nobody died in a crash on a United States-certificated scheduled airline operating anywhere in the world.

Granted, our air traffic control cannot be responsible for our airlines’ safety all over the world and it stands to reason to credit the airlines themselves for the safety they achieve, but I might err on the side of “if it ain’t broke don’t fix it” top to bottom. I stand by this view despite the hyperbolic statement by the clearly biased Journal that “only the most cynical on the left could claim a spinoff threatens passenger safety.” (Why? It can’t possibly improve it, because it’s perfect. I do hesitate to point this out though, lest it become less perfect all of a sudden the way Cowboys Stadium fell into disrepair just as its owner was lobbying for government bonds to fund the new stadium. You want cynical? That is cynical.)

Please don’t get me wrong. I would support a truly private solution and a return of all commercial aviation functions to the providers of commercial aviation–let them pay for it, let them pass the cost onto their users, let them be responsible for the quality and safety of their product, and let their customers evaluate the risks. Even if one is concerned with negative externalities–that non-participants can be affected by airline accidents and hijackings–the public sector is not the answer. (Case in point, 9/11 itself occurred squarely on the watch of the United States government with its near trillion dollar defense budget alongside what might be the most regulated sector in human history because, according to then-Secretary of Defense Donald Rumsfeld if I recall correctly, “we were looking out not in.”)

The interests of airlines and their passengers are perfectly aligned, whereas our interests and those of our pathocracy are not so aligned. In our rich society, the affluent businessmen and women who provide critical airline revenue have effectively zero tolerance for accidents and have a ready substitute for business travel in telecommuting. They are willing to pay for safety, they do pay for it and they get it. It’s a canard that big government is necessary for big safety–plenty of poor, dangerous countries have big governments–it’s the wealth generated by capitalism that allows a society to spend lavishly on safety and have zero tolerance for danger. What’s more, the coercive, monopoly government relies on fear to justify the security it claims to provide. Distasteful though it is to acknowledge, there is an inherent conflict of interests here: no danger, no fear.

So I would be happy to get government out of airline safety, but I’m not happy to see government align with cronies to what end I don’t think we yet know. The private air traffic control entity is being billed as non-profit and we are told, again by the hyperbolic and biased Wall Street Journal, that the air traffic control assets would rightly be contributed to the entity at no cost because “no company would buy the equipment in this scrapyard.” (So all the air traffic equipment in this country, which guided probably 25,000 flights a day for seven years straight without a single fatality, is worth $0 at the most?)

Having watched the video above, and given the whole topic quite a bit of thought, I can’t help but conclude the actual point of the exercise is to put control of these assets into an opaque, privately-owned but government-enforced monopoly on which we would forever depend but over which we would have no control. The entire public-private partnership trend reminds me of Zbigniew Brzezinski’s ultimate solution to The Crisis of Democracy: foster non-governmental entities in all sectors of society, from unions to universities, to make the population reliant upon non-democratic institutions where they have no influence.

This is yet another example (drug legalization and immigration are two others) of cronies or social engineers offering to shoe-horn into the welfare-warfare superstructure quasi free market solutions whose purpose is not to increase freedom but to serve other aims while co-opting libertarian principles and support.

Update: Case in point on “privatizing” meaning cronyizing…

Dianne Feinstein’s Husband’s Real Estate Firm Poised to Make $1 Billion Selling Post Offices
Washington business model: spouses spot deals with huge upsides.

Feinstein dismissed the conflict of interest allegations at the time, which were followed by numerous investigative reports criticizing the deal. The USPS Inspector General issued a report saying the contract was not how it previously sold properties and was unlikely to reduce USPS costs. California-based investigative reporters found that CBRE was selling properties below market value to clients, which means those buyers could likely profit if they resold them.

and guess who won the bid for the cream of the crop, the DC Post Office?

Donald Trump Is Going Postal
“The Trump people said all the right things” said a former member of his team. “He never intended to stick with it.” How Donald Trump won control of a prized D.C. landmark. A BuzzFeed News Investigation.

The decision to award the contract to Trump was announced in 2012 with considerable fanfare, but the details of how he actually won the bid — beating out teams that included major hotel chains and then locking in near-total control of the landmark — have remained largely unknown. A spokesperson for the federal agency that handled the transaction, the General Services Administration, or GSA, called it “one of the most highly scrutinized deals” the agency has ever done, but it has kept many details hidden, heavily redacting the property’s lease and refusing to release Trump’s initial proposal. Officials declined BuzzFeed News’ requests for interviews about how the deal was struck and did not respond to questions in time for publication.

Going Postal
Richard Blum, the husband of Senator Dianne Feinstein, obtained a contract to broker sales of USPS facilities, but no evidence documents that it was due to his wife’s influence.

In 2011, the CB Richard Ellis Group (now CBRE Group, Inc.), the world’s largest commercial real estate services firm, was awarded an exclusive contract to market USPS facilities which provides CBRE with a commission of 2 to 6 percent on the sale of those properties.
This award has been the subject of some controversy, as CBRE’s Chairman of the Board is Richard C. Blum, the husband of Senator Dianne Feinstein, who represents the state of California in the U.S. Senate.

Trump would violate DC hotel lease the moment he takes office

Trump’s luxury hotel in the Old Post Office Building officially opened earlier this year. A provision in the lease with the GSA states that “No … elected official of the Government of the United States … shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.”

Update (9/2/17):
Trump Infrastructure Plan Seeks to Shift Decisions—and Bills—to States, Cities
White House puts localities in driver’s seat for funding as it aims for $1 trillion goal, but some local officials raise alarms

Ep. 77 – Is the Opioid Crisis A Government Created Plot?

President Trump recently declared the opioid epidemic a ‘public health emergency’ in the United States. While this focused national attention on America’s deadly drug addiction, the opioid crisis hasn’t spiraled out of control because of a lack of government intervention. It’s spiraled out of control largely BECAUSE OF GOVERNMENT INTERVENTION. Bad government policy like the war on drugs has lead to the creation of illegal black markets where the deadly narcotic drug fentanyl is being laced into the drug supply at an increasing rate. Drug addicted users who believe they’re buying painkillers, cocaine, heroin, or other opiates, are actually getting heroin laced with fentanyl, cocaine spliced with fentanyl, or fentanyl death pills (pain killers disguised to look like Oxycotin, Percocet or Xanax, but are actually made with fentanyl). The results of the dangerous drug combination has been deadly, In the past three years, the fentanyl death toll has risen by 540%.
If that’s not bad enough, government rehab programs offered through medicaid enables drug users to live a drug addicted lifestyle free of charge. Medicaid takes care of the bill. Not only will they provide free methadone, enabling users to substitute one dangerous addiction for another, in some states Medicaid will pay for the cab ride over to the methadone clinic. And if that’s not enough, in some cases, Medicaid gives known drug addicts a free card loaded with unlimited government funds and will even transfer the funds directly into the users bank account. This makes it easy for those suffering from heroin addiction or opiate addiction to fund their lifestyle without any income.
If the powers that be wanted to win the war on drugs they wouldn’t be talking about creating more poisonous policy, they’d be getting rid of bad policy that nurtures this opioid epidemic. But solving the drug problem would threaten the power and profits of those who thrive of off keeping Americans down, which makes you wonder if this opioid crisis we’re facing is not accident. With the problem spiraling out of control, it’s time that we seriously ask, is the opioid epidemic a government engineered crisis?
[amazon_link asins=’0970312598,193543926X,0806114576,0805067892′ template=’ProductGrid’ store=’propagandarep-20′ marketplace=’US’ link_id=’e2e4be9f-c939-11e7-bcb5-917b258298f3′]On today’s episode of the Propaganda Report podcast, we explore that question, talk about how those in power exploit America’s drug problem for their own benefit, look at the problem through a libertarian lens, and we take calls from those who are currently struggling to overcome addiction, those who have lost loved ones to drug overdose, and those whose stories of survival remind us that even in the darkest of times, nothing is more powerful than hope.
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Kevin Spacey's Apology, Pedophilia Normalization, & Conservatives Celebrate BuzzFeed (Video)

Kevin Spacey responds to allegations of sexually assaulting a minor by apologizing, saying that he was probably just drunk, and then coming out as gay. Spacey had no reason to validate the claim. He could denied them. So why did he willingly throw himself under the bus? Here are a few reasons.

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Very Clever, Mr. Musk! (follow-on to yesterday's post)

musk bannonYesterday, in my post, The Musk Special: Government-Privilege Two Ways, I pointed out how government policy, government subsidies, government-sponsored research and government regulation are crucial to Elon Musk’s Tesla empire, complete with examples of plummeting electric vehicle sales in markets where governments stopped fostering them.
This guy’s success is clearly dependent on government policy, and if government policy is the key to his success, what does he need on his side? (Hint: Binkley’s all over it! Just check out his reading list.) The answer is: PUBLIC OPINION!!! And what’s the key to public opinion? That’s an easy one. MEDIA! Sooooo……what did I read in the paper today???? Tesla took on two new directors and both happen to be media mega-wigs.
Tesla Names James Murdoch and Linda Johnson Rice to Board of Directors
Silicon Valley auto maker has faced criticism from investors about lack of independent directors

Tesla Inc., which has faced criticism from its investors about a lack of independent directors, named 21st Century Fox Inc. Chief Executive James Murdoch and Ebony Media CEO Linda Johnson Rice to its board.

Looks like the official story is that Tesla is doing this to improve the perceived integrity of the board. If so, they made an interesting choice! The rest of this article* reads like an apologia for James Murdoch’s phone-hacking scandal in the UK as well as an ad for a kinder & gentler Fox News–no more racism or sexual harassment, promise! But hey, the Murdochs own The Journal–of course they’re going to take every opportunity to influence public opinion–that‘s my point!
(Another example–and a spectacular one–of The Journal blatantly serving the Murdochs’ personal interest, or at least their thirst for vengeance, was the way they went after Elizabeth Holmes of Theranos, a highly-hyped blood-testing company.
My husband was fascinated by the story–Holmes’ meteoric rise and her equally meteoric descent. He kept saying, “Man, The Journal has got it in for this chick–they are going after her!” I didn’t think much of that, and I’m not saying she didn’t deserve it, but I had to give my husband credit when I read in one of the later WSJ articles (after the damage was done and no one questioned the motive of the stories) that Rupert Murdoch was a major investor in Theranos and lost it all: $125 million.**
For Holmes, getting in bed with the Murdochs probably seemed like a good idea at the time. I suppose Travis Kalanick would say the same about letting Über get in bed with Google, but look what happened to him!)
*in the print version anyway–there’s other stuff online
**It wasn’t a total loss when The Journal started covering it, but it was clear by then that an arrogant Holmes would end up turfing it.
Update (7/22/17):
California Says Tesla Is Too Big to Fail
State Democrats can’t stop throwing taxpayer money at the electric vehicle wunderkind.

Update (9/2/17):
Elon Musk Wants to Save the World—At What Cost?
The life of one of the most driven innovators of our time is also a testament that outrageous success does not come without sacrifice.
Reminds me of this Forbes headline from 12/15/15:
Elon Musk Has A Plan To Save The World

Below-Market Rent Is an Old Scam

BN-SJ958_0307IV_J_20170307210142I personally have known two people in positions of influence who either got free rent or way below-market terms on their mortgage as a way to transfer value under the table. There was also the story of the Obamas’ house, which they allegedly bought for a below-market price from a crony. So as soon as I saw this headline about Ivanka Trump and her husband Jared Kushner renting from a would-be crony in DC, I smelled a rat, but without leaping to judgment–I wanted to know a few things first.
I read on to see if (a) they disclosed the rental price, and (b) if the Trump/Kushners had a hand in picking the property up front–before it was purchased by their landlord. The first question-did they disclose the rental price?-I was not surprised to find they did not. But the second item-did they pick the house themselves?-I was amazed to find they did! That’s very fishy. Now I really want to know the rent they are paying–if it’s below $20,000 per month, it’s below-market value, and you have to ask why.
Ivanka Trump’s Landlord Is a Chilean Billionaire Suing the U.S. Government
President Donald Trump’s daughter and her husband, White House adviser Jared Kushner, live in a Kalorama house owned by a Chilean business titan. His company is suing the U.S. over a Minnesota mine

Ivanka Trump and Jared Kushner are renting a Washington, D.C., home from a Chilean billionaire who bought it after the November election and whose company is embroiled in a dispute with the U.S. government over a mine potentially worth billions of dollars….
Rodrigo Terré, a relative…who manages the billionaire’s personal investments….said that a Luksic company, Tracy DC Real Estate Inc., bought the Washington house as an investment and that the rental to the couple was coincidental. He said the couple was paying “absolute market value” in rent, declining to disclose the amount….
The couple was shopping for a house late last year and looked at the Kalorama mansion. They weren’t interested in buying it and instead wanted to rent it, the White House spokeswoman said. Their broker said he represented someone who had a bid on the house and helped facilitate the match.

The following two paragraphs did not appear in the print edition of the paper this morning, but were in the online version, which I checked later in the day. They serve to attempt to diminish the apparent impropriety, in my opinion.

Trevor Potter, a Republican lawyer who formerly chaired the Federal Election Commission, said: “To me, the favor is having a house made available to them on short notice.”
The house was not listed for rent on the Metropolitan Regional Information System, used to advertise listings. Mr. Terré said that, before closing on the house, he instructed his real-estate agent to tell other agents that the house would be available for rent.


#WTWOF: Afghanistan for DynCorp?

What to Watch Out For:
The New York Times recently reported that financier Steve Feinberg would be helping President Trump “assess” US intelligence agencies.

Feinberg was the founder of Cerberus which is the owner of DynCorp, a major IT provider to the US government that got hit hard when Obama started winding down military operations in Afghanistan.
I immediately looked into Trump’s position on Afghanistan and found nothing.
Today, however, I heard on the news that he would be reassessing whether to ramp back up operations there.

Defense Secretary Mattis to decide soon on troop levels in Afghanistan

DynCorp does not seem to be a winning investment for Cerberus–I wonder if that will change. Let’s watch out for that. #WTWOF
Update: Not sure if it’s for DynCorp, but it didn’t take long to re-up in Afghanistan. 82nd Airborne already on way to Afghanistan as Trump mulls more deployments
Update: Another win for DynCorp! Big IT contracts surely to result from Trump’s executive order, Presidential Executive Order on Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure

Nepotism, Cronyism & Corruption

I don’t get it–did they make his face extra orange on purpose?
From today’s Wall Street Journal:
Donald Trump Son-in-Law Could Face His Own Conflict-of-Interest Questions
Even as an unpaid adviser, Jared Kushner’s financing arrangements for his real-estate firm could draw scrutiny

The real-estate company controlled by Jared Kushner, President-elect Donald Trump’s son-in-law, has hundreds of millions of dollars in loans outstanding from domestic and foreign financial institutions, markets condominiums to wealthy U.S. and foreign buyers and has obtained development financing through a controversial U.S. program that sells green cards.
Those and other business activities could raise conflict-of-interest issues if Mr. Kushner is named to a staff position in the Trump administration. Executive branch employees are prohibited from participating in any matter in which there is “a close causal link” between that matter and a “real possibility” of a financial gain or loss, according to the U.S. Office of Government Ethics.

This dovetails with an alarm bell that went off for me when I was reading the Journal yesterday:
Donald Trump’s Spending Push Rankles Fiscal Conservatives
Republicans hope to avert ballooning deficits that may result from president-elect’s low-tax, big-ticket agenda

Mr. Trump’s advisers have floated different ideas, including an infrastructure bank or a plan to use tax credits to spur up to $1 trillion in spending by private developers.

I wonder if one of the advisers who thinks a bank dedicated to development projects might be the guy with the huge development business dependent on outside financing? If Jared learned his methods from the father who gave him his start in business (and bought his way into Harvard??), mere cronyism will be the least of the problems with this guy. Don’t know what I’m talking about? That’s because the story of Kushner père was buried not only by the mainstream media, but also by all the Republican primary rivals who knew about the tangled history of Kushner, Trump, Clinton & Christie.
Here was my blogpost shouting into the wind from Spring of this year:
Trump’s First MegaDonor Was Senator Hillary’s Biggest Contributor
Charles Kushner, the father of Donald Trump’s son-in-law Jared, was sent to jail by Chris Christie for paying a prostitute to seduce his own brother-in-law so his sister wouldn’t testify against him for embezzling money from the family business for use in influence-peddling campaign contributions.
You can’t make this stuff up! But wait–it gets better: the seduction worked but the blackmail didn’t! Even the prostitute testified!! As Nelson would say, “Ha Ha!”
Googling for a picture of Jared to use, I came upon this tidbit from 2012…if it’s to be believed, looks like media cover is old hat for this crew…

New York Post Kills Scoop on Kushner Connection to Manhattan Madam

Young Jared and Rupert Murdoch [the owner of the Post] are quite close. Kushner made it known to the Post that he didn’t think an old business meeting that didn’t go anywhere was a story. We’re sure that if he rang his pal and asked him to keep his father’s name out this whole Gristina mess, Rupert would have obliged. MacIntosh, we hear, was furious at having her story spiked.

Fox spiking–even completely distorting–stories for friends is not unprecedented…ever hear of Jane Akre?