Privatization Promises

by: Hopeful

Fri Apr 06, 2007 at 11:21:58 AM EDT

While those concerns are worth considering, opponents of privatizing - or "monetizing," as Gov. Jon S. Corzine puts it - the New Jersey Turnpike and the Garden State Parkway would do well to look at the ports in Newark and Elizabeth and on Staten Island for a glimpse at how public agencies have learned to work with such firms.

Ah, so it turns out that Wall Street companies have been operating seaports, and we have lots of experience to show that there won't be any problems.  So here goes, with emphasis added :

In February, A.I.G. Global Investment Group, an arm of the insurance giant A.I.G., which has never run a port terminal, bought leases to the Port of Newark terminal. The Ontario Teachers Pension Plan Board is awaiting approval to take over the lease to operate a terminal at Howland Hook, on Staten Island, from Orient Overseas International Limited, a shipping conglomerate.

And last month, a division of Deutsche Bank, Germany's largest bank, agreed to buy Maher Terminals, which runs the operations at the Port of Elizabeth in New Jersey and the Port of Prince Rupert in British Columbia.

So far, we have two months, zero months, and zero months experience with how well these deals work.  Wonderful.  This is not evidence at all.
 

...competition is limited... current interest rates are relatively low, making it easier to finance such purchases, which can run into billions of dollars.

Basically we are seeing another of the series of bubbles that have been inflated by the Fed and excess liquidity.  If it were just a matter that investors are overpaying for assets at their own risk, I'd say take advantage of it.  But the problem is that since we are granting a private company a monopoly at public expense, the 'investors' can't lose.  We citizens are going to left with the bill.