8 Ways Privatization Has Failed America

[jugoso]

When I respond in forums, my comments are meant for the entire group. I just find it interesting that over in the conspiracy forum that the Trilateral Commission is right up there with Bilderberg, the Free Masons, Bohemian Grove, the Illuminati, and the Jooooossssss.

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Well, considering you were responding specifically to my post, I was puzzled with your talk about conspiracy theories and the tri-lateral commission. I don´t spend too much time there so I guess i don´t fall into the "you guys category". If you are quoting me, I assume you are responding to me.

I'd also be interested in seeing your evidence that states that wind energy could "completely satisfy" (your words) US energy needs.

Sure.

According to the Earth Policy Institute's Lester Brown, just "three wind-rich states—North Dakota, Kansas, and Texas—have enough harnessable wind energy to easily satisfy national electricity needs."

In fact, the development of wind energy in the great plains is coming under threat not because the resource can't produce enough energy (as naysayers often exclaim), but because it's producing too much.

From McClatchy on Monday:

The windswept prairies of the Midwest are undergoing an energy transformation the electric grid can’t handle.

Wind turbines tower over rural vistas in the heartland, where the clean energy source is becoming increasingly popular with utility companies that face state-mandated renewable energy standards. Unfortunately, the nation’s aging power grid is hampering those efforts.

Quoting industry representatives and energy experts, McClatchy found that though energy creation has risen sharply in recent years, the necessary infrastructure to actually bring that energy to market is still being delayed by an energy system built for the burning of fossil fuels.

There hasn’t been a lot of investment in the grid for the last two decades,” said Michael Goggin, a senior analyst at the American Wind Energy Association, the industry’s main trade group. “We just don’t have a strong grid that’s built out in the parts of the country where there are a lot of wind resources.”

The transmission grid was built a generation ago for coal, nuclear and hydropower plants without renewable energy in mind. It makes transmission from wind farms in rural areas difficult and costly.

https://www.commondreams.org/headline/2013/08/05-0

[Frank Merton]

A problem with state-owned banks is that they come under political pressure (if not legal compulsion) to make loans to other state entities that are money-losers and to entities that exist for social rather than economic reasons. This leads to an inefficient economy and banks that drag down the country.

On the other hand, privately owned banks engage in overly risky loans with other people's money, or discriminate unfairly in various ways, and so on.

It takes maintaining private bank competition at all levels and considerable regulation, plus the presence of state banks for certain specific purposes but not general banking, at least that's what I see as optimal,

[+DieChecker]

Does that include water also?

Yes. The public water system is subject to supply and demand and the costs of such just like everything else.

Portland has open reservoirs on the hillsides, and due to people tossing stuff into them, has wanted to cover them to improve water quality, but due to financial reasons such has not been done in the 10 years since the city council decided it should be done. Money decides quality.

[+DieChecker]

Though a private company operating a flawed system which receives government funding is a separate entity and citizens have less of a say of how they operate. Whereas at least with government citizens do (or at least in some cases given a guise of having) a say in how the government operates.

One of the biggest government shortfalls is poor management. Iron out problems like these and for the appropriate areas have solely government ownership instead of private which is also a lot more malleable at times and big changes on methodology can be made without much consent.

And what is the evidence that fixing the issues with the flawed system used by the privatized utilities is so much harder then fixing the government management issues? It is easy to say fixing the issues with your favored side is what needs to be done, when what should be done is to evaluate what would work better at a lower price to the public.

[+DieChecker]

Some people seem to forget that ALL government runs on Money also. People want to complain that they pay $100 a month for water from a private company, but have no problem paying $120 a month to the government if it is hidden in handfuls of taxes and fees.

My water bill is from the City and is always around $100 a month, with $10 of it being the water, and $90 being various usage fees (Sewer access, main water access, metering fee, various taxes...).

While my electric come from a private company and varies tremendously. From $30 in the summer to $120 in the winter. With very little being taxes and fees. Almost all of what I pay is what I used.

That to me is the difference between government and private utilities. One you always pay the same large amount, and the other, you have the ability to cut back and pay a little if you only use a little.

Garbage = Flat rate = Controlled by city

Natural Gas = Varies a lot ($20 to $100) = Private corp

Phone/Internet/Television = Fixed rates, but you can change/shop for the rate to pay less = Private

Edited August 9, 2013 by DieChecker

[jugoso]

Some people seem to forget that ALL government runs on Money also. People want to complain that they pay $100 a month for water from a private company, but have no problem paying $120 a month to the government if it is hidden in handfuls of taxes and fees.

My water bill is from the City and is always around $100 a month, with $10 of it being the water, and $90 being various usage fees (Sewer access, main water access, metering fee, various taxes...).

Investor owned utilities typically charge 33 percent more for water and 63 percent more for sewer service than local government utilities. Food & Water Watch compiled averaged statewide water and sewer rates survey data from dozens of states and found that typical annual household bills were much higher when service came from for-profit, private utilities. Private ownership increased drinking water bills by 4 percent in Alaska to 75 percent in Delaware; and sewer bills by 7 percent in West Virginia to 154 percent in Texas.

http://www.foodandwaterwatch.org/water/private-vs-public/facts-and-figures/

[Einsteinium]

Investor owned utilities typically charge 33 percent more for water and 63 percent more for sewer service than local government utilities.

http://www.foodandwa...ts-and-figures/

Key word in that sentence: "local government". As soon as you socialize things at the federal level the equation changes. Local governments are far better at providing local services and pricing things conservatively because they have a very well defined budget to live within.

[questionmark]

Yes. The public water system is subject to supply and demand and the costs of such just like everything else.

Portland has open reservoirs on the hillsides, and due to people tossing stuff into them, has wanted to cover them to improve water quality, but due to financial reasons such has not been done in the 10 years since the city council decided it should be done. Money decides quality.

Yes, money precedes quality, but it gets worse when the equation is money +10-15% for the investor= quality. In that case the local government is capable of offering a better service. Which has been ignored in all this privatization hype.

[+DieChecker]

Yes, money precedes quality, but it gets worse when the equation is money +10-15% for the investor= quality. In that case the local government is capable of offering a better service. Which has been ignored in all this privatization hype.

Is that actually true, or is it because the government utilities have decades of infrastructure already paid for? If there was a private water system and a government water system and both were 25 years old and of the same size, then I think the private utility would be competitive, or maybe cheaper. And if there was 3 private water companies and they competed (Rather then colluding prices with each other) then it could be even cheaper.

Profit does not automatically mean more expensive.

[+DieChecker]

Investor owned utilities typically charge 33 percent more for water and 63 percent more for sewer service than local government utilities. Food & Water Watch compiled averaged statewide water and sewer rates survey data from dozens of states and found that typical annual household bills were much higher when service came from for-profit, private utilities. Private ownership increased drinking water bills by 4 percent in Alaska to 75 percent in Delaware; and sewer bills by 7 percent in West Virginia to 154 percent in Texas.

http://www.foodandwa...ts-and-figures/

Which does not invalidate my point that you end up paying a flat $100 dollars for water with the government, where if it was private the cost would range from $40 to $150 a month. Where the customer could DELIBERATELY cut back and control their household costs MUCH better then if they always had to pay a flat amount. The point I suppose is to take the easy, lazy way of just paying one amount... predictable.... OR taking responsibility for your own expenses and controlling what you spend.

[questionmark]

Is that actually true, or is it because the government utilities have decades of infrastructure already paid for? If there was a private water system and a government water system and both were 25 years old and of the same size, then I think the private utility would be competitive, or maybe cheaper. And if there was 3 private water companies and they competed (Rather then colluding prices with each other) then it could be even cheaper.

Profit does not automatically mean more expensive.

The infrastructure has to be renewed constantly. That is what you don't consider. The lure for the government is that the private investor hauls over a bunch of cash that can be invested in something else. And as seen with Tames Water, British Rail and about 100 examples more the investor starts neglecting the infrastructure, runs the place to the ground and the government has to buy it back (as if it still had the old value) to ensure the service. The other option is that when the place is run down far enough (i.e privatization of mail services) the investor hikes the price to keep up the services or reduces the quality (i.e. privatization of city mass transportation).

There is hardly anything regarding municipal services that a private investor has shown to do better than the municipalities, the government may have 10-20% friction losses, the private investor expects 10-20% on return of capital or more if invested using loans. And the private investor can just run the place down and then tell you to go get the water in a pail from the river. The municipality would not dare.

[+DieChecker]

The infrastructure has to be renewed constantly. That is what you don't consider. The lure for the government is that the private investor hauls over a bunch of cash that can be invested in something else. And as seen with Tames Water, British Rail and about 100 examples more the investor starts neglecting the infrastructure, runs the place to the ground and the government has to buy it back (as if it still had the old value) to ensure the service. The other option is that when the place is run down far enough (i.e privatization of mail services) the investor hikes the price to keep up the services or reduces the quality (i.e. privatization of city mass transportation).

There is hardly anything regarding municipal services that a private investor has shown to do better than the municipalities, the government may have 10-20% friction losses, the private investor expects 10-20% on return of capital or more if invested using loans. And the private investor can just run the place down and then tell you to go get the water in a pail from the river. The municipality would not dare.

I agree there is the fact of responsibility. The government is obviously not going anywhere and has to take that into account. Where as the private company could easily fold up and disappear.

I suppose my point of the consumer being able to limit what they pay through usage would probably end up ruining the company anyway. Since the company would have to raise rates when income projections started coming in wrong.

I think it still does not prove that privatization is inherently worse. But that if the profit motive is the bottom line, that then the services and infrastructure will start to degrade.

Large corporate campuses like I work at here produce some of their own utilities. Such as Intel uses Solar Panels to cut their expenses. These initiatives are not innately worse then a equivalent public owned initiative. It is all in the management and motive behind the privatized industry.

[Orcseeker]

And what is the evidence that fixing the issues with the flawed system used by the privatized utilities is so much harder then fixing the government management issues? It is easy to say fixing the issues with your favored side is what needs to be done, when what should be done is to evaluate what would work better at a lower price to the public.

I guess that comes back to my first point then.

[Frank Merton]

I guess I'm a socialist (as one would expect given my background). The only times I trust private enterprises is either when they have vigorous competition or when they are rigorously regulated. The profit, though, so long as it is not outrageous, is not really that much a factor.

It occurs to me that the problems of public services I read about above are all political -- different political parties trying to undermine each other in front of the electorate. In a one-party command state a decision made is a decision done, and if it is a serious wrong the official making the decision gets demoted.