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a stark example of the role government plays as handmaiden for the wealth transfer between the sheeple and the F in FIRE . . .
Matt Taibbi
Readers of my last book, Griftopia, might recall a chapter about the city of Chicago leasing 75 years of its parking meter revenue to a coterie of private investors, some of them from the Middle East. The end result was and is a political obscenity: Native Chicagoans are now completely at the mercy of private interests when it comes to parking rates, collections, even holidays. When elected officials in Illinois can’t shut off the parking meters on Abe Lincoln’s birthday because a bunch of sheiks in Dubai don’t want the revenue stream turned off even for a day, you know something has gone seriously sideways in the national body politic.
Well, Chicago isn’t alone anymore. Hizzoner Michael Bloomberg in New York has decided to do his own version of the Chicago infrastructure bake sale; the city announced that it is putting up nearly 90,000 parking meters for lease. They’re expecting to get over $11 billion in upfront money from the deal, which is great news if you’re Mike Bloomberg, who gets to use that money to patch current budget holes instead of making tough cuts or raising taxes. The news is less awesome for the next half-dozen New York City mayors, or for the citizens of New York, who now will get to spend most of the 21st century grappling with its increasingly monstrous deficits with a major tributary from the city’s revenue stream shut off.
A New York parking meter deal, like the Chicago deal, would be a perfect example of the deeply cynical short-term thinking of many American politicians these days. These deals involve a sitting executive selling off a valuable piece of city property at a steep discount to private financial interests (often, to friends or campaign contributors), in order to solve a current cash flow problem that, surprise, surprise, will still be there the year after you finish spending the proceeds of your sale.
In Chicago’s case, Mayor Richard Daley sold 75 years of meter revenue – worth an estimated $5 billion – for $1.2 billion. So he gets 20 cents on the dollar for the city’s parking meters in 2008, and then in 2009 the city still has a budget problem that’s now worse, because there’s no parking meter revenue anymore, ever. Meanwhile, a bunch of private investors rounded up by Morgan Stanley – these bankers go on road shows here at home and abroad to places like Geneva and the UAE to hawk discount American infrastructure to foreign billionaires and sovereign wealth funds – get to enjoy the fruits of raised rates. In some Chicago neighborhoods, the meter rates went from .25 cents an hour to $1 an hour in the first year of the deal, and then to $1.20 after that.
The city of New York is insisting that it won’t make the same mistake Chicago made, at least when it comes to rates. Bloomberg helpfully quoted Julie Wood, a spokesperson for the news agency’s namesake, i.e. the mayor:
“We are taking a careful and deliberate approach to avoid mistakes others have made,” Wood said. New York would retain “full control” of rates and violations enforcement, she said.
We have to hope she’s telling the truth, because meter rates in some New York neighborhoods are already at $5 an hour. A Chicago-style price hike for fat-cat investors might leave us paying thirty bucks an hour to oil barons in Qatar and Saudi Arabia in order to park for dinner in the West Village. Unlikely, sure, but how likely was the city of New York selling its parking meters ten years ago?
There’s simply no legitimate rationale for selling off a critically valuable public revenue stream to private interests. Sure, it makes sense for Bloomberg personally – he gets to govern for another year without having to make tough decisions on budget cuts and taxes – but for the city in the long run, it’s a disaster. Criminal, even. This is like a man with a wife and dozen dependent children selling his family's lottery winnings to J.G. Wentworth so he can go on a skiing vacation in Gstaad with his mistress before the divorce goes through.
Meanwhile, whoever gets to own all of those meters will now be sitting on the ultimate investment. You get all the certainty of tax revenue, but you don’t have any of the accountability attached to public governance. It’s profit without risk, customers without responsibility. Cash now!
Matt Taibbi
Readers of my last book, Griftopia, might recall a chapter about the city of Chicago leasing 75 years of its parking meter revenue to a coterie of private investors, some of them from the Middle East. The end result was and is a political obscenity: Native Chicagoans are now completely at the mercy of private interests when it comes to parking rates, collections, even holidays. When elected officials in Illinois can’t shut off the parking meters on Abe Lincoln’s birthday because a bunch of sheiks in Dubai don’t want the revenue stream turned off even for a day, you know something has gone seriously sideways in the national body politic.
Well, Chicago isn’t alone anymore. Hizzoner Michael Bloomberg in New York has decided to do his own version of the Chicago infrastructure bake sale; the city announced that it is putting up nearly 90,000 parking meters for lease. They’re expecting to get over $11 billion in upfront money from the deal, which is great news if you’re Mike Bloomberg, who gets to use that money to patch current budget holes instead of making tough cuts or raising taxes. The news is less awesome for the next half-dozen New York City mayors, or for the citizens of New York, who now will get to spend most of the 21st century grappling with its increasingly monstrous deficits with a major tributary from the city’s revenue stream shut off.
A New York parking meter deal, like the Chicago deal, would be a perfect example of the deeply cynical short-term thinking of many American politicians these days. These deals involve a sitting executive selling off a valuable piece of city property at a steep discount to private financial interests (often, to friends or campaign contributors), in order to solve a current cash flow problem that, surprise, surprise, will still be there the year after you finish spending the proceeds of your sale.
In Chicago’s case, Mayor Richard Daley sold 75 years of meter revenue – worth an estimated $5 billion – for $1.2 billion. So he gets 20 cents on the dollar for the city’s parking meters in 2008, and then in 2009 the city still has a budget problem that’s now worse, because there’s no parking meter revenue anymore, ever. Meanwhile, a bunch of private investors rounded up by Morgan Stanley – these bankers go on road shows here at home and abroad to places like Geneva and the UAE to hawk discount American infrastructure to foreign billionaires and sovereign wealth funds – get to enjoy the fruits of raised rates. In some Chicago neighborhoods, the meter rates went from .25 cents an hour to $1 an hour in the first year of the deal, and then to $1.20 after that.
The city of New York is insisting that it won’t make the same mistake Chicago made, at least when it comes to rates. Bloomberg helpfully quoted Julie Wood, a spokesperson for the news agency’s namesake, i.e. the mayor:
“We are taking a careful and deliberate approach to avoid mistakes others have made,” Wood said. New York would retain “full control” of rates and violations enforcement, she said.
We have to hope she’s telling the truth, because meter rates in some New York neighborhoods are already at $5 an hour. A Chicago-style price hike for fat-cat investors might leave us paying thirty bucks an hour to oil barons in Qatar and Saudi Arabia in order to park for dinner in the West Village. Unlikely, sure, but how likely was the city of New York selling its parking meters ten years ago?
There’s simply no legitimate rationale for selling off a critically valuable public revenue stream to private interests. Sure, it makes sense for Bloomberg personally – he gets to govern for another year without having to make tough decisions on budget cuts and taxes – but for the city in the long run, it’s a disaster. Criminal, even. This is like a man with a wife and dozen dependent children selling his family's lottery winnings to J.G. Wentworth so he can go on a skiing vacation in Gstaad with his mistress before the divorce goes through.
Meanwhile, whoever gets to own all of those meters will now be sitting on the ultimate investment. You get all the certainty of tax revenue, but you don’t have any of the accountability attached to public governance. It’s profit without risk, customers without responsibility. Cash now!
The parking ticket revenue is a BIG deal too. It is SO big that I once caught a meter maid writing a ticket for my car BEFORE the time had expired. On top of this is a city sticker to even have a car which is $85. Many neighborhoods have zoning which requires another permit (you pay more for visitors to use zone parking). Other ridiculousness: Highest sales tax (up to 12% in downtown); highest gas prices; (similar to the parking) they sold the Sky way expressway to a French group that charges like $8 to get to Indiana (and the automated toll booths on it are constantly malfunction); high hotel taxes (which you only discover upon check out), dirty cabs with high rates and rude/dangerous drivers. Side note, to ride the CTA (buses and trains) is up to $2.25 (it was 90 cents when I moved into the city). At least they still have a free zoo.
Oh yeah, one more thing, the whole time you are paying all of this you know in the back of your mind that the state of IL is bankrupt and will soon be raising taxes, cutting services etc...
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