The US to Go Down the UK’s Horrible Infrastructure Path
Image Courtesy: Portobelloroad.co.uk

The US to Go Down the UK’s Horrible Infrastructure Path

I lived in London in 2000 and 2001 and worked for a consultancy that pushed so-called public-private partnerships (“PPPs”).  As an American and as an entrepreneur, I became personally disgusted by the concept of PPPs.

The Republicans and the Orange Monarch are about to start pushing PPPs at us, and it is time to look at why this is such an awful idea for the US.  (It is an awful idea for the UK as well – just Google “PPP disaster”)

The core of Private-Public-Partnerships is based on the myth that private enterprise can fulfill a public service better than the government.   It requires a buy-in to the core philosophy that government cannot collect the trash, deliver the mail, operate the subways, supply water, provide social housing, and / or build highways, bridges and runways as well as someone or some entity in the private sector.   Once you are fooled into believing that, you then become willing to give full responsibility for a private sector project to a public entity. 

The public entity, of course, that is going to be appointed to provide the service will ultimately win the right following a competitive bidding process.  (Given the way that Washington is being run these days and to the extent that Republicans continue to control all branches of the government, it would be safe to assume that the process will be anything less than competitive and will be designed to benefit only Republican donors, whatever their competencies, who are out to mess with everyone for their own benefit.)

The winning entity or person after the competitive bidding process will be politically connected, but will not likely be any better suited than anyone else to build or deliver an essential service.  They are certainly not going to be an entrepreneur or a genius.  These entities will have no Steve Jobs, Jeff Bezos or Elon Musk at their helms.  There will be no innovation applied to anything.  Rather, their function will be to cut production costs and increase their charges in order to operate with wide profit margins (and thus strong equity returns).

In a very few years, we could see the Republicans taking credit for a new bridge or two.   We’ll also probably see a lot of bridges built that are not even necessary.   But, the average person will see corners that are cut (think of the Grenfell Tower) and service levels in essential services that decline to third world levels.  Costs will be attached to essential services that they wouldn’t have dreamed imaginable in 2018.   And, some fat cat political donors will be laughing at the Malibu mansions.

But, maybe we’ll be so indifferent to everything that we’ll just watch some social housing tower burn down without emotion and be so socially immune to the plight of the hundreds who are killed that we will forget to care.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to financial literacy and bank transparency. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.
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