US President Joe Biden: Don't give Wall Street control of our public water systems
New advisory report pushes disastrous privatization schemes
This week, President Biden’s National Infrastructure Advisory Council issued a report recommending the privatization of the nation’s water systems.
The chair of the advisory council is the CEO of Global Infrastructure Partners, an infrastructure investment bank with an estimated $100 billion in assets under management that targets energy, transportation, digital and water infrastructure.
The report recommends, among other things, that the federal government “[r]emove barriers to privatization, concessions, and other nontraditional models of funding community water systems,” and open up all federal grant programs to support privatized utilities.
Food & Water Watch Public Water for All Campaign Director Mary Grant issued the following response:
Water privatization is a terrible idea. President Biden should have never appointed an investment banker to chair an advisory council for the nation’s infrastructure. Wall Street wants to take control of the nation’s public water systems to wring profits from communities that are already struggling with unaffordable water bills and toxic water.
Privatization would deepen the nation’s water crises, leading to higher water bills and less accountable and transparent services. Privately owned water systems charge 59 percent more than local government systems, and private ownership is the single largest factor associated with higher water bills — more than aging infrastructure or drought.
Instead of relying on Wall Street advisers, President Biden should support policies that will truly help communities by asking Congress to pass the Water Affordability, Transparency, Equity and Reliability (WATER) Act (HR 1729, S 938). After decades of federal austerity for water, the Bipartisan Infrastructure Law was a step forward, but it provided only about seven percent of the identified needs of our water systems. The WATER Act would fully restore the federal commitment to safe water by providing a permanent source of federal funding at the level that our water and wastewater systems need to ensure safe, clean and affordable public water for all.
Certain resources/commodities/services like water, food, electricity and health should remain in public domain. I don't understand the askance that is associated with this view.
Once these fall to the profiteering domain, we will be sucked dry and forced to accept abnormal standards as normal to gain access to these which in first place should be in public domain protected in public interest by public representatives.
These resources will be and are used by IMF and sister organisations that are usually called "banks" as leverage to get their debts serviced or sold as AAA+ securities.
They tried that with real estate but that burst since a physical house doesn't just disappear which leads to emergence of derelict patches within the estates. This would certainly destroy the demand and the dead estate would translate into toxic securities by just being there and not disappearing. Similarly things that are too volatile will also not be accepted as essential by the public as was the case with electronics/net. So that's not worth it.
But what if the resource or commodity is essential, which means it has sustained demand, as well as it is volatile enough which means it vanishes after its monetary utility. Now that's "gold". Theoretically its value will not only be retained but it may even increase with no downside. Perpetual profitability.
Looks like the report is here.
It's mostly not about privatization. The executive summary doesn't mention it. Looks like it's in recommendation 2 under "Recommendations to Aid Infrastructure Owners and Operators "
(Emphasis added.)
Why would they recommend these things? Replacing a community's old water system with a modern one is expensive and somewhat risky infrastructure project. Small communities are likely to put it off. Here's how they put it:
Two examples of dramatic water system failures are Flint, Michigan and Jackson, Mississippi. It tends to be poor communities that suffer. There will probably be more.
So, it might be a good idea to look into non-traditional ways of funding water systems, instead of each small community doing it on their own, which they can't afford? They recommend "regionalization" meaning that communities should work together more. Maybe state governments should do more?
They recommend creating a Department of Water at the Federal level. Looks like lots more government involvement.
Why might private companies play a role? One thing to keep in mind is that for government projects, by default the government takes the risk and any cost overruns get paid for by taxpayers. Outsourcing to contractors might sometimes mean outsourcing substantial risk, depending on contract terms. (This is a reason to be suspicious of cost-plus contracts. Taking risks is what shareholders are for.)
But this leads me to ask, potentially from an uniformed position: why not just subsidize water? We subsidize a number of industries, and I can't imagine allowing the "invisible hand of the market" providing better outcomes for low cost in these already heavily polluted areas.
I think it does makes sense for state and federal governments to pay for a lot of improvements. That’s where they’re going with the “regionalize” thing. Hoover Dam was a federal project.
Who funds it is different from who builds it, though. Hoover Dam was built by a private consortium called Six Companies.
Sorry, I posted without pasting the link in the appropriate box so it shows as text post but its actually an article. Anyways I linked it to the online sources in the text.
If you want to know how wrong this can go, look at the UK. Rivers and beaches full of chemicals and sewage.
To provide some reference for this:
https://www.theguardian.com/environment/ng-interactive/2022/dec/01/down-the-drain-how-billions-of-pounds-are-sucked-out-of-englands-water-system