crossposted from unbossed
Consider just how bad a deal would have to be to make you willing to pay $126 million to walk away from it. That’s what happened a week in Chicago. The consortium that had put up $126 million in earnest money - and that Mayor Daley had given a 6 month extension - decided to call it quits and leave the money on the table.
From one perspective that seems unsurprising. The worldwide economic crisis is unlikely to improve within 6 months. So the chances of coming up with the investment to make this deal happen seems not to be in the cards. You could change the timeline to a year, and it still seems unlikely to happen.
Now you would think that this occurrence would give the privatization cheerleaders at the Reason "think" tank pause. But when you’re in the [Think] Tank for privatization, you apparently never come up for air.
MuniNet Guide published an interview with Leonard Gilroy, Reason’s Director of Government Reform, that provides Gilroy with a platform so he can carry water for infrastructure privatization.
Reason claims to be all about the market and freedom of the market and just plain ol’ freedom. But the reality of privatization is a lot of subsidies that make it possible. Subsidies that come from your and my pockets. Unbossed has carried many stories that lay out the details of this subject, and you can find them here.
To get back to Gilmore, I’m going to provide the real answers - not what he actually said, so you can read what Gilmore really "thinks" - so you can see what it’s like to be interviewed when you’re think tanked. (Note: Some of the words are from the interview. Most are just in its spirit.)
MuniNet: In your opinion, does the collapse of the Midway deal foreshadow a declining trend for public-private partnerships?
Oh, heck no! It actually means that things are great, and we will be seeing even better and better privatization deals in the future. Why you can easily compare what happened to the mortgage market for home buyers right now. To some it might look like a train wreck, but to those who can hear profit in the wind this is just the bestest time to be financing houses or any deal. So, no, I don’t see this as a serious setback for the partnership concept or the potential of the asset class in the market.
MuniNet: Was the $2.5 billion price tag too high in light of today’s recessionary economy?
Oh, heck no! This is the best of all possible economies. In fact, current economic conditions have, in many cases, provided great opportunities. I’ll be more than happy to send you a list of my 100 top privatization opportunities, ones I would certainly invest my own money in.
MuniNet: You mentioned that public-private partnership infrastructure deals are still coming to the market today. Can you offer some examples?
Yeah, sure .. . . . Well, let me see if I can just throw out a lot of names of deals and hope this reporter and editor are just your usual press stenographers and never bother to do their fact checking. It works for us pro-privatization folks all the time. . . . (Note to readers: Bad guess, Gilmore, MuniNet fact checks, including your "facts". And prints the corrections for its readers to see.)
MuniNet: Is there a silver lining to the Midway deal falling apart?
Oh, heck, there is always a silver lining at worst, and a gold lining at all other times. Chicago gets to keep the earnest money, and that a few mill it didn’t have before. In fact, getting a sucker privatizer to put down earnest money and lure him into a very bad deal - so bad that he walks away - might be the very best way to raise funds for our cash-strapped cities and states.
Second, it means that I get to be interviewed, and you guys print what I say. And that brings more attention to Reason and the thinks it thinks. And maybe I’ll get some speaking or consulting gigs. Like maybe that time Ahnold hired Reason to write the California Performance Review Report.
And, third, the "Barnum" rule means that this just opens a door for opportunity to walk through. And as long as they can find "bridge" money, they will be making the same sort of quality investments.
MuniNet: Do you believe that the privatization of public infrastructure projects is still a viable option for states and municipalities?
Oh, you betcha, heck yes! haven’t you been listening to what I’ve been saying? And don’t you remember that I’m with "Reason", and when you’re Reason, you believe there are always options and you believe that the free market is free even though the evidence it is not is just staring you in the face. And even if you think it is "impossible" that public infrastructure privatization is a viable option, let me just say it is among the six things I believe every day before I’ve even had my breakfast.
More on the failed Midway privatization deal here.
Really.
From the Chicago Sun Times.
Really.