The Great Public Private Partnership Robbery
Taxpayers have been funding for-profit private enterprise for generations
We’ve been taught big businesses take risks through private investments and thus are entitled to private gains. The reality is quite different.
Football, Internet, Nuclear Power and Taxes; a love story.
Instead of the public owning what they pay for, America’s system gifts taxpayer money to private companies which turn around and profit off publicly funded infrastructure—making the tax payer pay a second time:
- Over 90% of the NFL’s privately owned stadiums were built with public money.
- ISPs were gifted hundreds of billions to build out a never delivered fiber optic system over 20 years.
- Nuclear power since its inception has been publicly subsidized with billions in handouts and guarantees.
The justifications for these subsidies often lay bare immense inconsistencies.
Expensive and Undelivered
Today Minnesota announced $34 million in handouts to ISPs to serve underserved households because tax payer money is necessary to prime the pump where profit motives fail.
However, taxpayer run broadband of the taxpayer built system is illegal in 2o states. Instead of keeping costs low and returning profit to the people who paid for it, the public money is literally just given away to private enterprise.
In Minnesota’s example, the Lieutenant Governor can hand out public money, but if the public wants to profit from it, 65% of the voters have to approve to create something run by the people.
This is unfortunately necessary because ISPs don’t actually build what they get the money for. One used hundreds of millions for trips, expensive food and wine, and luxurious parties while not actually delivering anything. The $200 billion handout in the Telecommunication Act of 1996 was supposed to fund fiber to the home. Instead:
other countries made sure the money went into ground wiring and other upgrades. The U.S. lacked the regulatory will...and thus, the phone companies were able to simply spend less and not be held accountable.
Taxpayers continue to gift billions a year in good faith that Comcast and TimeWarner will have impeccable integrity and work in the public interest. Running things funded through the public, by the public, for the public, appears to be against core values.
Even if a citizen despises and never wants to give money to a particular company, these corporate welfare models often make that impossible because municipal taxes go there regardless.
What we get for spending the most is internet that globally ranks with Nigeria and Honduras on affordability and reliability. This is what public-private partnerships looks like:
Jobs and Tax Dollars
The NFL, which was tax exempt for 70 years until 2015, often uses the argument of jobs and taxes so wealthy team owners of profitable teams don’t take the financial risk of capital investments.
However nearly all activity creates jobs: A car crash creates jobs for ambulance workers, police, clean up crews, fireman, and hospitals. Brothels, strip clubs, pornography studios, all job creators.
The jobs created by a sports stadium are seasonal, low paying, temporary positions and come at an enormous cost. So much so that after Cincinnati footed $424 million for the Bengals they later had to sell a public hospital to close budget holes. Where the public can’t even break even, the $925 million dollar owner who invested $0.00 saw profit on day 1.
This is how the system works. Whether it’s $1.3 billion to Tesla, $158 million to Airbus, $2 billion to Nike, $381 million to Disney, or $246 billion to meat and agriculture on the condition that they do not grow fruit or vegetables the idea that the market is more efficient or that the public should fund private enterprise because they can stand on their own two feet is exploited to shakedown the public and line the pockets of the rich.
Safe Nuclear
One of the largest incongruities is the risk-taking entrepreneur: The business owner takes all the financial risk so they are entitled to the profits!
The reality is that the public takes the risk and is cheated out of the profits.
Except in nuclear it’s worse. The safest part of nuclear power is owning it. Government backed loan guarantees are given so if things don’t work out, the nuclear companies doesn’t assume any financial risk or liability. If things do work out, then once again, they get all the profits! It’s a built-in bailout.
Even the Big Business PR group, the Heritage Foundation, has pointed this out:
Loan guarantees also distort the risk of failure businesses traditionally take into account when financing a project…
While a loan guarantee may be good for the near-term interests of the individual guarantee recipient, it is not good for consumers, taxpayers, or long-term competitiveness.
It’s Industry Wide
Whether it’s the State Department hustling for Monsanto, the for-profit education government-backed loan scam, the prohibition on price negotiations for Medicare, or that costly drugs are often developed by taxpayer-funded research, the hoodwinking of the taxpayer to assume all the risks and privatize all the rewards is why a US citizen can have a tax rate commensurate with Denmark and the Netherlands and higher than Cuba.
Americans pay to build the same thing the Nordic countries do, they just gift it all away when it comes time to generate revenue. Then they must pay for it all a second time.
If the company mismanages, the tax-payers bail them out: private banks, auto makers, even hedge funds like BlackRock.
They don’t take the investment risk, are guaranteed profits, get propped up if they fail and distribute bonuses with tax payer bailout money.
The costs are hidden and distributed, risks are averted and passed on, yet profit and power is kept in tact defended by the sacred myths of the free market. All the while, the money flows upward from the tax payer to the rich.
It’s time to end these games and expose the fraudulent system for the sham it is, the public owns what the public pays for.
