The Battles

Banksters: Index

With many thanks to Common Dreams (U.S.).

This is an extremely helpful article for Canadians, by Bernie Sanders.

https://www.commondreams.org/views/2017/06/07/why-trumps-so-called-infrastructure-plan-good-wall-street-bad-america

NOTE:  scroll down below to:   TOP 10 FAILED PUBLIC-PRIVATE PARTNERSHIPS (USA).  This is important documentation.

These kind of projects are being proposed for Canada, under the $188 billion (up from $180 billion) in infrastructure spending we are to embark on over 12 years.

The Canada Infrastructure Bank (CIB) has to be stopped!   Please find some friends who will talk to their local, provincial, or federal representative – expand our numbers.   We should be on the warpath.

More info:  Banksters: Index

Why Trump’s So-Called Infrastructure Plan Is Good for Wall Street But Bad for America,

by Bernie Sanders

Donald Trump’s so-called infrastructure plan is a huge giveaway to Wall Street that fails to create the millions of jobs we need to modernize our roads, bridges, water systems, rail, airports, levees and dams.

At a time when the American Society of Civil Engineers says we need to spend $2 trillion above current spending levels just to get our infrastructure back to a state of good repair, Trump actually cuts direct federal spending on our crumbling infrastructure by nearly $145 billion over the next decade. This would force state and local governments to shoulder more of the financial burden for our infrastructure needs at a time when they can least afford it.

Just like Trump’s “health care” bill is actually a $231 billion tax cut for the top 2 percent, his infrastructure plan would create $200 billion in new tax loopholes and other giveaways for wealthy investors, and it would reward corporations that have stashed their profits overseas with huge tax cuts.

Under Trump’s proposal, billionaires on Wall Street, wealthy campaign contributors and even foreign governments would receive hundreds of billions in tax breaks to purchase our highways, airports, and water treatment plants. They would then be allowed to impose huge new tolls and fees on the backs of American commuters and homeowners.

The reality is that Trump’s plan to sell off our nation’s highways, bridges, and other vital infrastructure to Wall Street, private investors, and foreign governments is an old idea that does not work.

Trump’s plan to rebuild America relies heavily on the use of public-private partnerships to finance infrastructure projects with private equity capital. Such financing, whether through private equity or traditional tax-exempt municipal bonds, is repaid by ordinary citizens through a combination of taxes and user fees. Private equity financing is markedly more expensive than traditional government financing, however — by as much as three to six times. Considering the scale of infrastructure development under consideration, that difference could be enormous. For example: the charge for a $100 million-dollar investment using traditional government bond financing (at 3 percent, over 30 years) is about $90 million. For private equity capital, at a 15 percent return, the total skyrockets to $450 million.

For example, in Chicago, a private investor group led by Morgan Stanley will collect $11 billion as part of its 75-year contract to run the city’s parking meters. Not only have they raised parking prices by as much as 800 percent in some neighborhoods but incredibly, the city has been forced to pay $31 million and counting to cover lost revenue whenever a street is temporarily closed for maintenance. Chicago is already struggling with high crime and unfunded teachers’ pensions, yet it is diverting resources to pad the bottom line of these investors.

In Indiana, tolls on a privatized road more than doubled this month as commuters wait in long lines and visit unsanitary rest stops. In Bayonne, New Jersey, many homeowners are at risk of foreclosure because they cannot afford water bills that have spiked dramatically after the water system was taken over by a private equity firm. In Atlanta, after taking over the water system in 1999, the new private operators fired 400 workers and cut training for those who remained. The result? More water main failures, and water quality declined.

In California, Texas, and South Carolina, privately-owned toll roads went bankrupt or were foreclosed because of exaggerated projections from investors. Time and again, these private companies who take over public infrastructure showed they do not represent the public’s best interests.

In addition to the obvious siphoning of public resources that Trump’s tax breaks and private equity financing entail, his Administration has been pushing “asset recycling,” i.e., selling off existing assets, like airports, bridges, and highway rest stops, to private investors and using the revenue (“recycling” it) to fund new facilities.

It is important to note, moreover, that weak investment in America’s infrastructure is not due to lack of access to financing, but because of constraints associated with insufficient state and local government revenue. Trump’s public-private partnership model does not address this problem, and in fact, exacerbates it by increasing overall costs to taxpayers. And because smaller-scale projects, like those in rural areas, may not be profitable enough to attract private equity investors, his model risks leaving many parts of the country behind.

But Donald Trump wants to hand over more critical public infrastructure to private investors who will squeeze profits from the American people by putting up new tolls and exorbitant users’ fees. That would be unacceptable. We shouldn’t be selling off public assets to billionaires to make huge profits on the backs of working people.

Trump’s plan is the exact opposite of what we should be doing as a nation. Instead of creating more tax giveaways to corporate America and Wall Street, we should be eliminating tax loopholes that allow profitable corporations to stash their cash in offshore tax havens around the world. And we should be using this revenue to directly invest $1 trillion to modernize our nation’s infrastructure — a plan that would put 15 million Americans back to work in good-paying jobs.

Today, the United States spends less on infrastructure, as a percent of GDP, than at any time in the past twenty years. The reality is that every day, Americans drive to work on potholed roads and rundown bridges. They ride in overcrowded buses and subways, and journey through shabby airports. Children struggle to concentrate in dark, overcrowded classrooms; and in some parts of the country, their schools lack adequate heat and basic cleanliness. The structures that most Americans don’t see are also in disrepair — from spotty broadband and an outdated electric grid, to toxic drinking water and dilapidated levees and dams. This is what happens when a nation underfunds the physical infrastructure on which its people and economy depend. We need to be spending more on infrastructure, not less. And we should not be providing more tax breaks to fund risky privatization schemes. 

The failure of privatization plans — transferring control of public infrastructure to private interests — that Trump would double down on can be seen across the country.

TOP 10 FAILED PUBLIC-PRIVATE PARTNERSHIPS

1. Chicago Parking Meters

 In 2008, the city of Chicago sold the right to manage the city’s parking meters for 75 years to Morgan Stanley and its financial partners for $1.15 billion.

From 2009 to 2013, parking rates in Chicago increased by as much as 800 percent.

While working people in Chicago are paying more for parking, the Wall Street and foreign investors that own the parking meters are making enormous profits. Morgan Stanley and its investors will likely collect $11 billion from Chicago as part of this deal, all on the backs of its residents.

Even as Chicago runs yearly budget deficits over $100 million, they have been forced to pay Morgan Stanley $31 million to cover their lost revenue every time streets are closed in the city.

Because of this public-private partnership, not only are Chicagoans paying more to get to work, but taxpayers are on the hook for a bad deal that Wall Street will profit off of for decades.

2. Indiana Toll Road

In 2006, Indiana signed a 75-year lease for a 175-mile highway for $3.8 billion with investors from Spain and Australia.

That company went bankrupt in 2014 partly because its risky financial deals left investors debt-ridden. That lease was then sold to Australian investors after the original investors went bankrupt in 2014.

While the debt held by this project increased by $2 billion before the bankruptcy, the Australian parent company is doing extraordinarily well. They reported record profits for the last fiscal year, and their CEO is among the highest paid in Australia.

This month, E-Z Pass drivers on the toll road saw their rates double when a state rebate program from the privatization deal expired. Since the road was privatized in 2006, all drivers of two-axle vehicles have seen the maximum toll rise from $4.65 to $9.70.

Today, the toll road is deteriorating, and travelers often wait in long lines at toll plazas, and use rest stops that are unsanitary.

 (INSERT:  please go to the URL at top if you wish links to more of the source docs below.  I have not copied them.)

3. Bayonne, NJ Water Deal

In 2012, Bayonne, NJ leased its municipal system to a multinational corporation and private equity firm in exchange for an up-front payment of $150 million.

For the residents of Bayonne, this deal has come with a significant cost. Water rates have skyrocketed nearly 28 percent since the system was leased to private interests. This is after the city told residents when negotiating the deal that rates would stay frozen for four years.

Bayonne residents are not able to afford these high rate increases, and the amount of government liens against properties increased from 200 in 2012 to 465 in 2015. People should not be at risk of losing their homes because a private company’s profits were more important than the needs of consumers.

4. Norfolk, Virginia Midtown Tunnel

In 2011, Virginia signed a contact with a private consortium to expand and extend the Norfolk, Virginia Midtown Tunnel. In exchange, they allowed the private investors to receive toll profits from the tunnel for 58 years.

In addition to instituting new tolls on a road that had been free to use since the 1980s, the private operator created a predatory pricing scheme that caused some low-income drivers to rack up debts as high as $18,000 from the tolls. The pricing scheme charges higher rates and fees to non-E-Z Pass drivers, who are more likely to be low-income people who cannot afford to fill an E-Z Pass account.

Like similar P3 agreements, Virginia’s contains *a non-compete clause that will make it more difficult for the state to improve the tunnel and freeway, and ensures that the private investors make a healthy profit at the expense of working families.

* (INSERT:  The Hazards of Non-Compete Clauses in Public-Private Partnerships  https://www.americanprogress.org/issues/economy/reports/2016/07/27/141873/the-hazards-of-noncompete-clauses-in-public-private-partnership-deals/    

5. Atlanta Water

In 1998 the city of Atlanta signed an agreement for United Water, part of a French conglomerate, to operate their water system for twenty years.

After taking control of the system, United Water fired nearly 400 workers and dramatically reduced job training for its remaining employees tasked with keeping water safe for the people of Atlanta.

Water service in Atlanta suffered as United Water could not keep up with the system’s maintenance needs. After United Water took over water-main breaks increased and the city needed to issue occasional “boil only” alerts when water wasn’t drinkable out of the tap.

United Water is another example of a company that poorly managed our critical infrastructure, harming both taxpayers and workers in the process.

6. Chicago Skyway

A Spanish and Australian investment consortium paid Chicago $1.83 billion to operated and collect tolls on the Chicago Skyway.

To cut costs, the private entity cut wages for its Skyway jobs from at least $20 an hour to as low as $12 an hour.

The agreement to operate the Skyway included ballooning interest rates, like many of the risky mortgages that caused the great recession.

After cutting ages for working people, these investors cashed out to another private entity less than 10 years into the 99-year lease, showing yet again that private entities running public infrastructure projects are only interested in their profits, not serving the public and treating their workers fairly. The majority owners of the Skyway project, the Spanish company Ferrovial, pocketed $269 million from the sale.

7. State Highway 130

Texas contracted out the construction and operations of toll road State Highway 130 to a private company for $245 million in toll revenue.

During their ownership of the road, the private company was cited by the Texas Department of Transportation for poor road maintenance. In addition to problems resulting from the deteriorating road, the area around the toll road began to flood following its construction.

The private consortium that owned the project declared bankruptcy last year, while still owing the federal government $430 million from an infrastructure loan program. The toll road was taking in much lower revenue than expected because traffic was 70 percent lower than expected.

8. SR-91 Express Lanes in Orange County

In 1995 California built express lanes on SR-91 in Orange County through mostly private dollars from three corporations.

Because of a non-compete clause in the agreement, California was unable to expand the roads to better serve commuters. Instead of looking out in the best interest of Orange Country residents, this deal made sure these corporations profited at their expense.

9. South Bay Expressway

In 2003, a toll road owned by an Australian investment firm opened in Southern California. The project was touted as a successful TIFIA loan that demonstrated the benefit of public private partnerships.

However, seven years later the firm went bankrupt and imposed a 42% loss on the taxpayers from the TIFIA loan. Taxpayer dollars should not be put at risk so that private investment firms have a chance to profit on public infrastructure.

10. Capital Beltway Hot Lanes

In Virginia, a private consortium constructed new High Occupancy Traffic lanes on Interstate 495 in exchange for toll revenue for the next 80 years

While reducing congestion and encouraging carpooling are worthy goals for this project, under the partnership Virginia taxpayers could pay this private consortium millions of dollars anytime carpoolers are over a quarter of the drivers on the road. This deal values the bottom line of its investors over the environment and the commute times of Virginia workers.

© 2017 Bernie Sanders

Bernie Sanders (I-Vt.) was elected to the U.S. Senate in 2006 after serving 16 years in the House of Representatives. He is the longest serving independent member of Congress in American history. Elected Mayor of Burlington, Vt., by 10 votes in 1981, he served four terms. Before his 1990 election as Vermont’s at-large member in Congress, Sanders lectured at the John F. Kennedy School of Government at Harvard and at Hamilton College in upstate New York. Read more at his website. Follow him on Twitter: @SenSanders or @BernieSanders

Banksters: Index

National Post View | Last Updated: Jun 4

Photo by Shaughn Butts / Postmedia Keith Gerein story

Federal Finance Minister Bill Morneau along with the Honourable Amarjeet Sohi, Minister of Infrastructure and Communities.

As the Liberal government moves closer to making the Canada Infrastructure Bank a $35 billion reality, you would think Canadians would be getting more clarity about the bank, not less. Instead, alarming new questions about the bank surface almost daily. And the Liberals — who are rushing to get implementing legislation passed before the summer — seem uninterested in addressing critics’ key concerns, including those relating to the bank’s independence and potential subsidization of private-sector investments.

Many will recall that the bank got off to a rosy start. The Liberals’ sexy new economic growth council pitched the idea for the bank back in the fall, and the proposal was embraced widely across the spectrum. As former Bank of Canada governor David Dodge noted in a November 2016 letter to the finance minister, Ottawa deserved praise for focusing on “‘revenue generating projects’… which generate real productivity enhancements.”

Indeed, the idea had widespread appeal because it twinned the goals of productivity-boosting infrastructure with efficiency and cost-effectiveness. Specifically, the council proposed using the bank to harness private money and expertise for large infrastructure projects that would have traditionally fallen to government to fund, with some too unaffordable for that.

The party that criticized Harper for burying important legislation in voluminous omnibus bills has squeezed its blueprint for the bank into a more than 300-page omnibus bill

The carrot? Investors would have an incentive to invest, because the bank would screen projects for their ability to generate future revenue streams. That is, users (as opposed to taxpayers at large) would pay for things like subways, bridges and roads through tolls or user fees over long periods of time. As economists have long argued, the user-pay model is frequently ideal, as it ensures projects only get built where there’s a need for them, and that they’re used efficiently once built.

But all that early reputational capital amassed for the bank has been depreciating rapidly. For one, there are concerns over how the Liberals have approached implementing its founding legislation, Bill C-44. The party that repeatedly criticized Harper’s Conservatives for burying important legislation in voluminous omnibus bills has squeezed its blueprint for the bank into Division 18 of Part 4 of a more than 300-page omnibus bill. Naturally, the Liberals are also now ignoring calls for standalone legislation.

This concern might have been mitigated if the parliamentary committee scrutinizing the bill had done a proper job. Alas, on the very day the committee began studying the bill, Liberal MP Jennifer O’Connell said the Liberal-majority committee would not be suggesting changes to the bill’s infrastructure provisions — making it unclear why they are bothering to review it at all. The bill’s best hope of receiving scrutiny now rests with the Senate — which is, we suppose, better than nothing.

The bank’s structure runs contrary to the council’s express recommendation that the bank have an ‘independent governance structure’

There’s also the matter of the bank’s design. This week, François Beaudoin, the former president of the Business Development Bank of Canada (BDC), contacted The Globe and Mail to express his worry that the bill fails to insulate the bank’s leadership from political pressure. Beaudoin knows a thing or two about the importance of institutional independence. It was during his tenure as president of that Crown bank that the BDC became involved in the “Shawinigate” affair, which concerned allegations that former prime minister Jean Chrétien had pushed Beaudoin to approve a loan application by a businessman from Chrétien’s riding, who allegedly owed Chrétien money. Beaudoin resigned after suggesting the loan be recalled, and subsequently won a wrongful dismissal suit for BDC’s treatment of him.

As written, Bill C-44 fails to protect the bank’s leadership from the kind of pressure Beaudoin faced. Cabinet is empowered to appoint the bank’s directors and approve the board’s choice of CEO, and to remove them for any reason — including, say, failing to endorse projects that cabinet wants built. This structure runs contrary to the council’s express recommendation that the bank have an “independent governance structure,” including a “highly independent board of governors and CEO.” Such independence is critical to ensuring the bank attracts capital and talent. Just as troubling, the bill requires the finance minister to approve all loan guarantees provided to investors. This power further heightens the risk of loan decisions being influenced by politics.

Finally, there are financial concerns. As a number of economists have observed, it’s unclear why the government is contributing capital at all. Any infrastructure project that is likely to generate profits should attract private capital easily enough. The Liberals have not explained why the public must pony up additional billions. While the council did recommend that the bank be capitalized by taxpayer dollars, it added that the “bank should be mandated to attract four dollars of institutional capital for every government dollar invested upfront.” Bill C-44 includes no such obligation.

Most worryingly, there are signs that Ottawa intends to privilege investors’ interests over taxpayers’

Most worryingly, there are signs that Ottawa intends to privilege investors’ interests over taxpayers’. iPolitics reported this week that government officials have apparently been promising investors they will get satisfactory returns even if revenues fall below estimates. If true, taxpayers will effectively be guaranteeing a revenue floor for investors. This would distort investors’ risk analysis of whether to invest, and would increase the likelihood of taxpayers picking up tabs for poor performance.

There is a role for government in promoting private-sector infrastructure development, albeit a limited one. Many of Ottawa’s valuable functions are already spelled out in the bill — such as receiving proposals, structuring agreements across project proponents, collecting data and providing advice. As Jack Mintz argued in the Financial Post, government might also need to regulate user fees where projects have quasi-monopolistic characteristics.

But the Liberals have not explained why public funds are needed to get these profit-oriented projects off the ground, or why taxpayers should be assuming most of the downside risk, while guaranteeing investors the upside.

On their own, concerns about the bank’s independence and design would be worrying enough. Taken together, they make a strong case for putting the brakes on this plan — if not parking it altogether.

National Post

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MY COMMENT

Larry Summers was hired by the Liberals to advise them on economic policy prior to the 2015 Election. The guy sounds good, he has “credentials”.

He was part of the 2007-08 financial fiasco in the U.S., see the documentary Inside Job.

He was a civil servant, advising Clinton and later Obama. Under Clinton he helped de-regulate the financial system in the U.S.   Under Obama he assisted the Wall Street fraudsters further. He himself became rich.

He was President of Harvard for 5 years – – BUT he was booted out. For good reason, but apologists come to his rescue.

Canadian Foreign Affairs Minister Chrystia Freeland was a student at Harvard. Later she worked in a variety of editorial positions at the Financial Times. One report credits her with getting Summers a column at the Times. Summers is listed among her “friends in high places”.

So then we come to the Liberals’ Advisory Committee on Economic Growth. Dominic Barton appointed by Finance Minister Bill Morneau to head it up. Barton co-founded the “Inclusive Capitalism Initiative“.  And has had Summers come to confer with the Advisory Committee. Barton is head of McKinsey Co., currently from London UK.  McKinsey has 25,000 employees around the globe “advising” Governments and others.

His “inclusive capitalism” is a response to the success of the Occupy movement and the growing Anti-Capitalism in the wake of the corruption among the international “banksters”.  Barton is key in re-branding of capitalism, to save the elites from getting crucified.

The Canada Infrastructure Bank (CIB) and $188,000 000 000 in infrastructure spending over 12 years will do exactly what the “banksters” have been doing to developing countries for decades – someone gets rich but it isn’t the public.

Last, re bailout of Canadian banks:  economist David Macdonald – “he revealed in 2012 that there had been “secret bank bailouts” of Canada’s top six banks amounting to at least $108 billion and likely as much as $114 billion between September 2008 and July 2010.”

As I see it – – Conservatives, Liberals, the potential for betrayal of Canada is equal. There are both good and bad in both parties. Maybe the biggest problem is how susceptible we all are to “spin”.

The little book, Beyond Banksters is well worth taking the time to read.  (Not all the preceding is from it.)