Zippidy Doo Da

I'm not stupid, I'm from Texas!

Saturday, November 08, 2008

Chupacabra Report

News that gets my goat..

The Thursday Chronicle had a story about Metro facing $14 million in default payments over lease agreements with several banks.

In these deals, Metro leased trains, buses, and other assets to the banks, who them claimed tax deductions for the depreciation of these assets.

These agreements were guaranteed by insurance giant AIG, whose fallen credit rating has triggered these defaults.

Paper pushing like this is increasingly common as the US economy is financialized. They’re called non-productive transactions.

It’s like our former senator Phil Gramm, who retired as chair of the Banking Committee to take a position as VP at Swiss banking giant UBS, lobbying Gov. Rick Perry to sell The Texas Lottery for an up-front payment in return for future proceeds, or pitching a scheme to take out life insurance on retired schoolteachers with the state collecting the benefits when they die.

Rick Perry also had a scheme for the state to build a warehouse and distribution center to lease out to WalMart. And of course there’s that deal he tried with Spanish company CINTRA to lease state highways and collect toll revenues.

Is there any difference between this and what a crooked stockbroker does when he churns your account to make commissions? You might make some money on the deal, or you might get burned; mostly it’s a chance for some sharp operator to get his hand in the till and leave you munching on your seed corn.

I like a “wall of separation” between church and state, and one between business and government too. Most privatization schemes I see look like they’re privatizing the profits and socializing the costs. As I see it, stock is falling in the “church of the market.”


At 6:05 AM , Anonymous motor hedman said...

Yep, there's a line should be drawn with this capitalism thing. 'We the people' not only lose control, but end up being responsible for the results, with a much limited recourse to direct the responsibility to them that done it. It's corporate government - the whole point of a corporation is to separate/protect the individual from liability/responsibility.

And there's that great privatized military that's been operating in Iraq... How the hell did that happen? I don't remember voting on a plan to start hiring private thugs to fight my dirty war!

The capitalism branch of democracy has run amok, and we're just seeing the tip of the iceberg. It might implode after all. Hang on...


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