UK-Type Public-Private Partnerships: A Disaster About to Be Brought to Your Doorstep by Obama

The Democrats are starting to give some clues as to their plan for our debt crisis, and it involves Public-Private Partnerships (PPP).

Public-Private Partnerships ("PPP") were an invention of the Thatcher regime in the UK in the 1980s.  While the term seems somewhat harmless, the reality of PPPs is not.  Essentially, PPPs represent a sale of traditional, key government assets (such as trains, subways, postal services, roads, etc.) to the government's loyal cronies by private arrangement.  The government gets desperately needed cash up front, and turns the service over the a company owned by some fat cat.  That company usually proceeds to screw to public as much as possible under the law by raising prices and providing a service level which is substantially lower than that which which the public would otherwise accept.  These transactions also drum up significant work for certain investment bankers, consultants and lawyers.

The UK government and other governments that have experimented with PPPs have traditionally argued that PPPs make sense because the there is always a company that can provide a service better than the government can.  That idea of a company profiting from improving a public service is ordinarily repulsive to liberals.

Today, we see that the Democrats are no longer the party pushing an agenda for the people.  Rather, the Obama administration and the Democrats in Congress are a group of thugs pushing their own political agenda that represents their own corporate backers.

This morning, CNBC was featuring one of Obama's so-called economic advisors from Chicago who happens to run one of the largest minority-owned banks in the country.   He ended his piece by saying that his firm was gearing up to work on public-private partnerships. 

Chicagoans should know as well as anyone that PPPs will not work in the US.  About 30 months ago, the city turned over its parking meter system to a private company and the consequences have been a disaster.

If the Democrats force us down this road, we will all suffer.

Aron Livrone
Aron Livrone: Aron is a 2008 Wharton MBA with a consulting background prior to moving from Sweden to the US to begin his MBA.

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  • Garbage

    March 20, 2010

    Are there any PPP that you are specifically referring to or is this all conjecture based on a CNBC interview? The article itself is full of all kinds of broad speculation that wouldn't even be accepted on Fox News.

  • Rubbish

    March 20, 2010

    the ad hom would be accepted on fox news


    March 20, 2010

    Wow is this ever wrong! Here are the facts: PPP, or PFI as it is known in the UK, was started in 1992 under Major, not Thatcher, though the Australians have been doing it for about as long. It is not a sale, but a long-term contract for designing, building, operating and maintaining a public asset. There is open and transparent competitive bidding for projects and there are risks that more often than not are successfully transferred to the private sector. In an age when governments can no longer afford to build their own schools, roads, water systems, etc. it's surprising how little is known about this form of engagement with the private sector. There is also proven value-for-money in many PPPs around the world, and it's interesting to see how many developing countries are clamoring to use it. Canada now uses PPP as the default method for delivering public assets, while South Africa is using it to prepare for the World Cup in two months. It may never be a favorite pet program of the far left, but we need to get creative in getting the infrastructure our country needs now. Visit my website and read up on this because this is a megatrend for not just America, but the world.

  • Anonymous

    March 20, 2010

    If UK style PPP's are so bad, why has the Labor Government under, first Tony Blair, and now Gordon Brown done 700 PFI projects, including new schools, hospitals and other social facilities? Aron Liv should get his facts straight - there is a fundamental difference between privatization, which is the transfer of ownership of an asset, and PPP (or PFI in the UK), which is where the private sector contracts to create and run an asset, but does not own it.

  • JRodgers

    March 20, 2010

    @p3 = The author may be wrong about Thatcher vs. Major, but he is right that PPP or PFI is bad for the public. Code words like "value for money" are nice, but obscure the fact that the government can provide these services as well as anyone. The US may be going through a rough time right now, but we have a strong education system and brilliant people willing to work in the public sector. This megadisaster may work in Europe and the less developed world, but should not be used as a quick fix to our financial woes.

  • John Hunter North Vancouver Canada

    March 23, 2010

    The article is full of misinformation and in my opinion qualifies as fiction. The first PPP I can find was the Eddystone Rocks lighthouse in the UK in 1709. Here in BC we built a water treatment plant in White Rock in the early 1900s and the Lion's Gate Bridge in the 1930s as what are now called PPPs. I built a PPP power plant in Shanghai in the 1990s. Governments are LOUSY at large projects. The rest of the diatribe is just nonsense.

    John Hunter
    J. Hunter & Assocites Ltd.
    North Vancouver BC Canada

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