Archive for December, 2010
Monday, December 20th, 2010
While one might expect sources like Matt Taibbi and The Huffington Post to take note of Wall Street profiting from the financial hardships of American cities, even Bloomberg.com takes up the issue here in relation to Chicago’s lease of their parking meters:
‘The deal illustrates how Wall Street banks, recipients of more than $300 billion in taxpayer bailouts in the worst credit collapse since the Great Depression, are profiting from helping states and cities close record recession-induced deficits by selling bonds and leasing public properties. Chicago gave up billions of dollars in revenue when it announced in 2008 that it leased Morgan Stanley its 36,000 parking meters, the third- largest U.S. system, for $1.15 billion to balance its budget, said Alderman Scott Waguespack.” Alderman Scott Waguespack.’
The article states that Chicagoans will pay out at least $11.6 billion in meter fees to a Morgan Stanley-led partnership in the next 75 years — ten times what the city received for the agreement. That would be public assets at bargain basement prices.
The players behind the deal in Chicago and the proposed deal in Pittsburgh are one in the same. And, as Councilman Peduto put it in a City Council meeting last week, these folks are purely in it for their own bottom lines. Expecting Wall Street firms to have our city’s best interests at heart is like believing that check cashing companies have the best interests of the poor at heart.
The article mentions our mayor’s proposed deal for Pittsburgh.
It also mentions the fact that once you sell or lease your public assets, you cannot go back to that well again.
The Chicago deal — made in 2008 — doesn’t even have enough left to cover their projected budget deficit for next year. If this all sounds a little too familiar in terms of Pittsburgh’s pension problems, it should.