Gee, You Think

It appears that the radical Marxists at the Financial Times have finally noticed that privatizing municipal water service are basically a license to steal, with a soupcon of incompetence thrown in:

How hard can it be to be the chief executive of a privatised British water company? Your customers are determined by geography, your prices set by a regulator and designed to offer ample scope to fund both capital expenditure and to pay returns to your investors. Pretty much all you have to do is to make sure your sewage plants work and to keep the public waterways clear of human waste.

Yet even this bare minimum seems to have eluded Martin Baggs, the former boss of Thames Water. He, you might recall, was the man at the corporate stopcock when the utility’s malfunctioning plants spilled so much excrement into the Thames that locals in the Berkshire town of Little Marlow took to referring to the scum-covered surface as “crappucino”. The company was this year fined a record £20m for venting 4.2bn litres of raw sewage into the rivers Thames and Thame between 2012 and 2013.

Not that this escapade unduly crimped Mr Baggs’ career prospects. Despite evidence of negligence in its operations that later led a judge to brand the company’s actions “borderline deliberate”, he not only prospered after its disclosure, but received a rise of 60 per cent in 2015, taking his pay to a princely £2m. He stood down last year, showered with encomiums for his “huge contribution”.

To be fair to Mr Baggs, he is not alone. The boring job of plumbing seems almost an afterthought in determining the rewards of water supremos. Not only is pay uniformly high: Steve Mogford, chief executive of United Utilities, collected £2.8m last year, for instance. But if things go wrong, well, why should a bit of sewage stop those cheques rolling? In 2016, Yorkshire Water was fined £1.7m for polluting a lake near Wakefield and a section of the River Ouse. But that didn’t prevent it handing its boss Richard Flint £1.2m.

………

The regulator needs to look again at the generosity of its regime, and its cock-eyed governance. As things stand, water privatisation looks little more than an organised rip-off. Quite why this natural monopoly should not operate through not-for-profit, public interest companies is ever less clear.

This observation is not a surprise, though the source is a bit of a shocker.

This is what happens when you privatize water: higher prices and (literal) random sh%$ty events.

The above article being about the UK, we aren't seeing riots as happened in Bolivia, but it's still an ugly picture.

Unfortunately, our current international trade regime makes deprivatization extremely difficult, which is another reason to oppose those deal.

Asshole Loser of the Day: Vinod Khosla

Venture Capitalist Vinod Khosla has just lost an appeal in his attempt to shut off public access to a public beach in California:

A California court has ordered a Silicon Valley billionaire to restore access to a beloved beach that he closed off for his private use, a major victory for public lands advocates who have been fighting the venture capitalist for years.

An appeals court ruled on Thursday that Vinod Khosla, who runs the venture capital firm Khosla Ventures and co-founded the tech company Sun Microsystems, must unlock the gates to Martins Beach in northern California by his property.

The decision is a major blow to Khosla and other wealthy landowners who have increasingly tried to buy up the internationally celebrated beaches along the California coast and turn public lands into private property.

The beach was a popular destination for fishing, surfing and other recreational activities for nearly a century, and the previous owners provided a general store and public restroom. But Khosla eventually bought the property and in 2010 closed public access, putting up signs warning against trespassing.

Khosla, who has a net worth of $1.55bn and does not live on the property, has faced multiple lawsuits and legislative efforts to get him to open up the gate to the beach near Half Moon Bay, about 30 miles south of San Francisco. The law in California states that all beaches should be open to the public up to the “mean high tide line”.

The decision this week, affirming a lower court ruling, stems from a lawsuit filed by the Surfrider Foundation, a not-for-profit group that says the case could have broader implications for beach access across the US.

“Vinod Khosla, with his billions of dollars, bought this piece of property and said, ‘No, no, the public isn’t going to use this anymore. End of story,’” the Surfrider attorney Joe Cotchett said by phone on Thursday. “He got away with it for many years … This is probably one of the most important public right-of-access cases in the country.”

You know, maybe if we actually enforced the rules against the rich, we would have a better society.

Private Prisons

In Estancia, New Mexico, a private prison is threatening to close unless the authorities throw some more people in prison:

The company that has operated a private prison in Estancia for nearly three decades has announced it will close the Torrance County Detention Facility and lay off more than 200 employees unless it can find 300 state or federal inmates to fill empty beds within the next 60 days, according to a statement issued Tuesday by county officials.

“This is a big issue for us,” Torrance County Manager Belinda Garland said in a phone interview Tuesday. “It’s going to affect Torrance County in a big way.”

Jonathan Burns, a spokesman for CoreCivic — formerly known as Corrections Corporation of America — had this to say about the closure:

“The city of Estancia and the surrounding community have been a great partner to CoreCivic for the last 27 years. CoreCivic is grateful for the support the community has shown through the years and we’re honored to have been a part of that community. Unfortunately, a declining detainee population in general has forced us to make difficult decisions in order to maximize utilization of our resources.”

Garland said the prison’s imminent closure will affect the county in a number of ways, not the least of which is that the county, which does not have its own jail, will have to find another place to house the 40 to 75 inmates it sends there each month.

Seriously, holding a town for ransom in an attempt to get law enforcement to lock up more people.

That is pretty f%$#ing cold.

And Today in Charter School Corruption

Kipp Schools, the star of the hagiography Waiting for Superman, has been caught ripping off poor parents by demanding illegal fees, and when caught they refused to refund them:

Charter schools claim they are public schools. They are not. What public school is part of a corporate chain? What public school operates for profit? What public schools charges fees for service?

The KIPP schools in Houston have been charging fees to poor parents. Now that the scam has been exposed, KIPP refuses to refund the money to parents who need the money far more than the multi-million dollar KIPP organization does. KIPP [should] ask its patron, the rightwing Walton Family Foundation, for a few more dollars, enough to reimburse the needy families that it ripped off.

Supporters of school privatization will claim that this is an aberration.  It isn't.

This is a natural and foreseeable consequence of applying the for-profit business model to a public good.

It's all about maximizing profit on while being paid by the taxpayers.

This is a feature, not a bug.

What Part Of, "Working with Peter Thiel," Don't You Get?

Peter Thiel is a gay bashing gay man, an Ayn Rand loving sociopath, and one of the founders of the Big Brother wannabee software company Palantir.

Needless to say, his history should be a red flag for anyone who would want to do business with him.

Subscribing to a philosophy which maintains that self-interest is the only form of morality does not imply that they would deal fairly or honestly with clients.

Case in point, the New York Police are terminating their contract with the firm, and Palantir is refusing to transfer to the department as is required in the contract, because supplying an overpriced and difficult to use product, your business model has to be lock in:

A showdown over law enforcement information — and who controls it — is taking place between the New York Police Department and Palantir Technologies, the $20 billion Silicon Valley startup that for years has analyzed data for New York City's cops, BuzzFeed News has learned.

The NYPD is canceling its Palantir contract and intends to stop using the software by the end of this week, according to three people familiar with the matter who weren't authorized to speak publicly. The department has created a new system to replace Palantir, and it wants to transfer the analysis generated by Palantir’s software to the new system. But Palantir, the NYPD claims, has not produced the full analysis in a standardized format — one that would work with the new software — despite multiple requests from the police department in recent months.

Lawyers from each side have gotten involved, showing that this dispute — which hasn’t previously been reported — has the potential to escalate into a legal fight. And given the work Palantir does for a host of other government clients, the standoff over a seemingly arcane technical issue has implications for a range of services, from international espionage to battlefield intelligence.

………

The NYPD has been a Palantir customer since at least 2012, and Palantir has touted the relationship to help it drum up other business. The software ingests arrest records, license-plate reads, parking tickets, and more, and then graphs this data in a way that can reveal connections among crimes and people. In late 2014, for example, the police department used Palantir's analysis to plan a sting that landed the rapper Bobby Shmurda behind bars, just as his career was taking off, according to an internal Palantir email seen by BuzzFeed News.

………

The NYPD quietly began work last summer on its replacement data system, and in February it announced internally that it would cancel its Palantir contract and switch to the new system by the beginning of July, according to three people familiar with the matter. The new system, named Cobalt, is a group of IBM products tied together with NYPD-created software. The police department believes Cobalt is cheaper and more intuitive than Palantir, and prizes the greater degree of control it has over this system.

The NYPD was paying Palantir $3.5 million a year as of 2015, according to an internal Palantir email that describes a contract to be signed in late 2014. Other Palantir customers — including Home Depot, which canceled late last year — have also raised concerns about Palantir’s prices.

The emerging dispute is not over the data that the NYPD has fed into Palantir's software, but over the analysis that the software has produced — all the insights like the one that underpinned the Shmurda arrest.

The NYPD asked Palantir in February for a copy of this analysis, and for a translation key so that it could put the analysis into its Cobalt system, the people familiar with the matter said. But when Palantir delivered a file in May, it declined to provide a way to translate it, arguing that doing so would require exposing its intellectual property, the people said.

The NYPD then asked Palantir for the information in a translated format — asking Palantir to do the translation itself — according to the people. Palantir responded this month, providing a file that was indeed readable. But according to the NYPD’s examination of the file, it contained only the original data the NYPD had fed into the system, the people said. The analysis appeared to be missing.

If the dispute is not resolved by the end of this week, the NYPD can continue to view the analysis by using Palantir software, given that customers retain a perpetual software license even after canceling, two people familiar with the matter said. But this could mean having to switch between systems to see information relating to a case, a situation the NYPD wants to avoid. Plus, as an ex-customer, the NYPD will not have access to the same product upgrades or support should the software fail.

The standoff highlights a thorny issue for companies and governments that outsource their data-mining tasks to outside contractors. Technology experts say software companies have little incentive to smooth a customer’s transition to a rival’s product. In some situations, a software company would genuinely risk devaluing its intellectual property if it shared information with a customer, since that could show the customer how the information was created, according to Tal Klein, chief marketing officer of IT monitoring company Lakeside Software.

I may be a bit unfair to Thiel and Palantir here:  It appears to me, at leastdescribed Mr. Klein, that this is a part and parcel of privatized IT operations and the cloud.

In a truly competitive and open market, the profits approach zero, so any business would put as much friction into changing services so as to maximize its power over its clients.

This is why you should not privatize this sh%$ or move it to the cloud. 

It's a computerized roach motel:  Your data checks in, but it never checks out.

Live in Obedient Fear, Citizen

In today's United States, a judge could sentence you to jail based on a software generated risk report which the defendant has no right to review.

There is already anecdotal evidence that these programs will show higher risk for non-white defendants:

When Chief Justice John G. Roberts Jr. visited Rensselaer Polytechnic Institute last month, he was asked a startling question, one with overtones of science fiction.

“Can you foresee a day,” asked Shirley Ann Jackson, president of the college in upstate New York, “when smart machines, driven with artificial intelligences, will assist with courtroom fact-finding or, more controversially even, judicial decision-making?”

The chief justice’s answer was more surprising than the question. “It’s a day that’s here,” he said, “and it’s putting a significant strain on how the judiciary goes about doing things.”

He may have been thinking about the case of a Wisconsin man, Eric L. Loomis, who was sentenced to six years in prison based in part on a private company’s proprietary software. Mr. Loomis says his right to due process was violated by a judge’s consideration of a report generated by the software’s secret algorithm, one Mr. Loomis was unable to inspect or challenge.
Continue reading the main story

In March, in a signal that the justices were intrigued by Mr. Loomis’s case, they asked the federal government to file a friend-of-the-court brief offering its views on whether the court should hear his appeal.

The report in Mr. Loomis’s case was produced by a product called Compas, sold by Northpointe Inc. It included a series of bar charts that assessed the risk that Mr. Loomis would commit more crimes.

The Compas report, a prosecutor told the trial judge, showed “a high risk of violence, high risk of recidivism, high pretrial risk.” The judge agreed, telling Mr. Loomis that “you’re identified, through the Compas assessment, as an individual who is a high risk to the community.”

The Wisconsin Supreme Court ruled against Mr. Loomis. The report added valuable information, it said, and Mr. Loomis would have gotten the same sentence based solely on the usual factors, including his crime — fleeing the police in a car — and his criminal history.

At the same time, the court seemed uneasy with using a secret algorithm to send a man to prison. Justice Ann Walsh Bradley, writing for the court, discussed, for instance, a report from ProPublica about Compas that concluded that black defendants in Broward County, Fla., “were far more likely than white defendants to be incorrectly judged to be at a higher rate of recidivism.”

………

In 1977, the Supreme Court ruled that a Florida man could not be condemned to die based on a sentencing report that contained confidential passages he was not allowed to see. The Supreme Court’s decision was fractured, and the controlling opinion appeared to say that the principle applied only in capital cases.

Mr. Schimel echoed that point and added that Mr. Loomis knew everything the court knew. Judges do not have access to the algorithm, either, he wrote.

There are good reasons to use data to ensure uniformity in sentencing. It is less clear that uniformity must come at the price of secrecy, particularly when the justification for secrecy is the protection of a private company’s profits. The government can surely develop its own algorithms and allow defense lawyers to evaluate them.

This is why the privatization of an essential state function is a bad thing.

This is as about a perfect example of a Kafkaesque situation as is possible:  Condemned with a secret report using a secret method.

More of This

Well, it looks like one Trump administration disaster, Education Secretary Betsy Devos, is actually producing a positive response in the Democratic party, with pro education privatization Democrats being linked to the Amway Heiress:

It’s rare that Democrats are cast as puppets of the Trump administration. But on the issue of education, many Democrats who have long supported school choice are newly on the defensive within their party, forced to distance themselves from President Donald Trump and his education secretary, Betsy DeVos.

The unusual dynamic started soon after Trump’s inauguration, when a teachers union in Los Angeles sent voters mail depicting two charter-school-friendly school board contenders, both Democrats, as “the candidates who will implement the Trump/DeVos education agenda in LA.”

The message was repeated in New York, where the Alliance for Quality Education, an advocacy group partially funded by teachers unions, likened Democratic Gov. Andrew Cuomo’s education policies to Trump’s. The group urged online audiences to “stop Cuomo from doing Betsy DeVos’s dirty work.” In New Jersey, Sen. Cory Booker opposed DeVos’ appointment but came in for criticism for working with DeVos on school choice initiatives when he was mayor of Newark.

………

But with Trump and DeVos ascendant, defenders of traditional public education policies have a foil in Washington to bludgeon their reform opponents.

“DeVos and Trump have been explicit about a message of privatizing education and defunding public education in a way that I think reflects us saying, ‘We need to push back on that. We need to protect and strengthen education,’” said Tony Thurmond, a California state assemblyman running against Tuck for the open schools chief post next year. “I’m being really intentional about speaking out against those things.”

While education in recent years has rarely risen to the top of voters’ minds in statewide elections, the effort to yoke reform Democrats to DeVos could prove effective, especially in heavily Democratic states.

I would note that until this January, the most powerful advocate of school privatization and the attack on teachers was one Barack Obama, and his Education Secretaries, Arne Duncan, and John King, Jr.

Now that a Republican is in control of the federal burocracy, and endorsing marginally worse policies, Democrats are suddenly against it.

Support for labor unions, and the dignity of workers should be a core Democratic Party value.

It wasn't under Barack Obama, (he abandoned card check) it wasn't under Bill Clinton, (NAFTA, etc.) and it certainly would not have been under Hillary Clinton.

We need better Democrats.

The Headline Says It All

This Major City’s Drinking Water Was Fine. Then Came the Private Water Company

4 years after putting a private consultant, Veolia, in charge of managing the system, 81,000 homes have been warned that their drinking water may be lead contaminated due to a cost saving change in the chemical additives that Veolia implemented without consulting anyone.

Stealth privatization sucks just as badly as the open kind.

This is So Not a Surprise

In news that surprise no one, Eve Moskowitz's Success Academy has been sued for systematic discrimination against disabled students:

When it was revealed that a Brooklyn school run by the Success Academy charter network was systematically pushing out struggling and disabled students identified on a "Got to Go" list, the company's head Eva Moskowitz said the list was the work of a rogue principal, unrepresentative of any broader policy. Critics of the lucrative, influential 36-school network have long alleged that it maintains high test scores by pressuring parents of students with disabilities to pull them from its schools. A federal civil rights complaint filed yesterday by 13 parents along with politicians and advocacy groups bolsters the case, alleging that difficulties faced by special-needs kids are actually the result of a company-wide policy that has been in effect for years.

"Success Academy operates schools in some of the most distressed neighborhoods of this city and receives considerable public funding but fails to serve students with disabilities in accordance with the law," Legal Services NYC direct Raun Rasmussen said in a statement. "These children deserve better."

………

When it was revealed that a Brooklyn school run by the Success Academy charter network was systematically pushing out struggling and disabled students identified on a "Got to Go" list, the company's head Eva Moskowitz said the list was the work of a rogue principal, unrepresentative of any broader policy. Critics of the lucrative, influential 36-school network have long alleged that it maintains high test scores by pressuring parents of students with disabilities to pull them from its schools. A federal civil rights complaint filed yesterday by 13 parents along with politicians and advocacy groups bolsters the case, alleging that difficulties faced by special-needs kids are actually the result of a company-wide policy that has been in effect for years.

"Success Academy operates schools in some of the most distressed neighborhoods of this city and receives considerable public funding but fails to serve students with disabilities in accordance with the law," Legal Services NYC direct Raun Rasmussen said in a statement. "These children deserve better."

 ………

The other cases all echo this one, with some variations—some parents have already withdrawn their child, one was expelled in his fourth year, and some parents, like Jackson, are still fighting to receive special education within Success schools.

Each set of allegations involves school administrators ignoring or downplaying disability diagnoses, and when confronted with them, failing to provide such support measures as small classes or paraprofessionals. When behavioral problems arise with the inadequately accommodated special-needs child, rather than reassessing, the schools allegedly suspend the kids, force parents to pick them up early, and in some cases, call paramedics to take them to emergency rooms.

 ………

Meanwhile, the State University of New York, which licenses charter schools, is planning to investigate Success's alleged pressure tactics, according to a New York Post report.

This is how charter schools work, because this is what we pay them for.

Essentially, they get paid for high test scores, and the easiest way to do this is to make sure that under-performing or difficult students never enroll, and to make sure that those who do enroll leave.

What a Surprise: Privatizing London's Rail System Failed

After decades of poor and inconsistent service, incomprehensible fares, higher costs, and a lack of investment in essential infrastructure, London is moving to re-privatize its commuter rail lines:

So, last week, the Centre for London think tank published a report called "Turning South London Orange", which argued that Transport for London (TfL) should take over all suburban rail services in the south of the capital.

This morning, the mayor of London Boris Johnson and the British government's transport secretary, Patrick McLoughlin, released a joint statement, saying, basically: Okay.

Wow, that happened fast.

Actually the statement goes rather further than that, mentioning services into six different rail terminals. They're only proposals at this stage - "views are being sought". Even if it does happen, TfL will only take control of different routes once the various franchise come up for renewal, so the change will take five years or more to take effect.

But this is nonetheless a remarkable statement of intent that the capital's rail network should be run by the capital's transport authorities. It's a big deal.

………

When a private rail franchise controls a route, its ultimate goal is to make money for its shareholders: running trains is the means, not the end.

By contrast, when TfL controls a route, its ultimate mission is to run lots of trains to help the city run smoothly. That's true even when TfL's role is contract management, and the actual trains are run by a private firm, as happens with the London Overground.

Some London train franchises have a history of cancelling train services at the drop of a hat, just because it's easier and cheaper than letting them run late. Maybe we're being utopian, but it's hard to imagine a TfL-run network doing the same. Even without investment, this would be a big change.

The author notes that this is odd, given that Boris Johnson only has a few more months in office, and explains why they are moving now:

The message here is the Conservatives can be trusted to back Londoners against any big businesses that might be making their lives hell. It's almost as if there's an election coming up.

It's true. Privatized rail is so sidely loathed that the even the bloody Adam Smith Institute, which describes itself as working to, "Promote libertarian and free market ideas through research, publishing, media commentary, and educational programmes," is cheering the return of publicly owned and operated rail:

You know the trains are utterly terrible when the entire @ASI office cheers at hearing that TfL is taking over the London commuter railways.

— Sam Bowman (@s8mb) January 21, 2016

Unleashing the private sector frequently does not deliver the promised results.

H/t Atrios.

In Your Face Bill Gates

Basically, they said that the structure of charter schools, public funds but no public review or public accountability, violate the state constitution:

The Washington State Supreme Court, in a late Friday surprise, delivered a ruling that the state’s voter-passed, billionaire-backed charter school initiative is unconstitutional.

The high court’s 6-3 ruling found that the independently organized schools do not pass muster as common public schools and therefore cannot receive public funding.

“We hold that provisions of Initiative 1240 that designate and treat charter schools as common schools violate article IX, Section 2 of our state Constitution and are void,” Chief Justice Barbara Madsen wrote in the majority opinion.

“This includes the Act’s funding provision, which attempts to tap into and shift a portion of moneys allocated for common schools to the new charter schools authorized by the Act. Because the provisions designating and funding charter schools as common schools are integral to the Act, such void provisions are not severable …”

………

I-1240 passed by a 1 percent margin in 2012, after charter schools had previously been rejected three times by Washington voters. Ninety-eight percent of its $10 million-plus war chest came from just 21 individuals. Bill Gates put up $3 million, Wal-Mart heiress Alice Walton gave $1.7 million, Vulcan Inc. (Paul Allen’s development company) was good for $1.6 million, and liberal entrepreneur Nick Hanauer donated $1 million. The father of Amazon CEO Jeff Bezos gave $500,000.

………

In another telling passage from Madsen’s opinion, the court stated: “Under the Act (I-1240), charter schools are devoid of local control from their inception to their daily operations.”

“The Supreme Court has affirmed what we’ve said all along — charter schools steal money from our existing classrooms and voters have no say in how these charter schools spend taxpayer funds,” said Kim Mead, president of the Washington Education Association.

(emphasis mine)

Of course, over at Curmudgucation, Peter Green offers a modest proposal^* to deal with this ruling:

………

So, find ways to rewrite the law so that charter money can stay in its own little lock box in its own big silo. This seems a bit overthought and overwrought. The court's decision, as I understand it, is based on the idea that charter schools cannot receive "common school" public funds because they are not overseen by an elected school board. And if that's the case, charters can fix this very easily. Are you paying attention, charter operators? I have your solution right here.

Just submit to being overseen by an elected school board.

Act like the public schools you claim to be. Make your finances and operation completely transparent to the public.

And allow yourselves to be overseen by an elected school board instead of a collection of individuals who are not answerable to the voters or the taxpayers.

I mean-- what's more important to you? Providing a strong educational alternative for those 1,200 students, or holding on your ability to do whatever you want without having to answer to the public? Is it so important to you that you not be accountable to the public that you would rather engage in time consuming rewrites of state law, or even just close your doors, rather than let yourself submit to transparent and open oversight by a group of citizens elected by the very taxpayers whose money you use to run your school?

We already know that charter schools are prone to overpaying their founders, forcing kids out who would bring down their test scores through abuse of the disciplinary process, and ignoring federal law on disabilities, so adding oversight to ensure that contracts, discipline, and special education policies is not a bad idea.

The impetus for charter schools have come from two sources, those people determined to destroy teachers unions because they hate unions, and the financial types who see a profit center funded by the general public.

Neither of these groups can tolerate the idea of transparency or due process, because it makes it too difficult for them to accomplish their nefarious goals.

H/t Diane Ravitch for pointing me to Mr. Greene.

^*Yes, this is a allusion to Jonathan Swift's essay.

Ukrainian Humor is Odd

Have you heard the one about how the Ukraine Prime Minister wants to reduce corruption in the country by privitizing state assets?

I'm not quite sure what the punch line is, but it's clearly a joke: There has never been a privitization deal that has lessened corruption:

Ukraine's Prime Minister is calling on Canadian investors to take part in a massive privatization of state assets organized by Kiev as a way of weakening the power of wealthy oligarchs blamed for spreading corruption in his country.

Arseniy Yatsenyuk cited, for instance, Ukrainian businessmen who have been "sitting like vampires" on the country's publicly owned energy sector.

Mr. Yatsenyuk spoke to The Globe and Mail Tuesday after he joined Prime Minister Stephen Harper in Chelsea, Que., to announce that Ukraine and Canada had struck a free-trade deal.

Ukraine is preparing to spin off billions of dollars of government enterprises – including power generation and distribution assets and chemical plants – and the government wants Western investors to bring more orderly business methods to the Eastern European country.

"I don't want Ukrainian tycoons to buy these state-owned enterprises," Mr. Yatsenyuk said. "We would be happy to see Canadian folks buying Ukrainian assets and bringing into Ukraine good corporate governance, new investment and new jobs.

"That is what I asked the Canadian Prime Minister: 'Please tell your investors and your businesses to jump into Ukraine.'"

Mr. Yatsenyuk said Ukraine's leadership feels privatization and deregulation are the answers to the corruption that has plagued the country for decades.

"Big government always leads to big bribes and big corruption, so the less regulations you have the less authority the government has and the less chances to take bribes," Mr. Yatsenyuk said.

OK, this isn't a joke.  It's a lie.

It's a lie that is driven by a need to placate his masters in the west who want to buy state assets at pennies on the dollar.

It's what Naomi Klein has called The Shock Doctrine, where, "Leaders exploit crises to push through controversial exploitative policies while citizens are too emotionally and physically distracted by disasters or upheavals to mount an effective resistance."

To call this an anti-corruption measure is like calling a case of the Clap aid to picking up women.

You Would Have Thought that They Would Have Learned After the Ottoman Empire and the Ferme Générale Debacles………

Or, if they don't want to go back so far, the Chicago parking meter debacle, but history repeats itself, and Chris Christie's privatization of the New Jersey lottery shows once again that privatizing the collection government revenues, does not produce additional revenue, it just produces waste and corruption:

The state Assembly budget committee chairman is calling for a review of the contract privatizing parts of the state lottery following a news report that the firm hired to manage the system fell short of revenue benchmarks.

Assemblyman Gary Schaer (D-Passaic), reacting to a Bloomberg report Monday that Northstar New Jersey missed its projections by $24 million in the first fiscal year of a 15-year contract, said the shortfall puts programs for seniors, veterans and people with disabilities at risk.

The premise of the lottery contract is increasing lottery revenues according to Northstar’s own projections, Schaer said.

“The administration brought in a company to work on the lottery system, and clearly the results are not what they should be,” he said.

Christie inked the deal with Northstar in July 2013, making New Jersey the third state to hire a private firm to help run its lottery in hopes of boosting lottery sales.

Four months into the arrangement, which began Oct. 1, 2013, Northstar secured a contract amendment reducing its revenue goals, according to Bloomberg. Northstar cited slowed sales from Superstorm Sandy in its request.

These deals never generate more revenue.

At best, what they do is generate a dollar today at the cost of many more dollars tomorrow.

In this case, considering that it is Jabba the Governor, it's about payback for politically connected friends of Chris.

Hopefully, the media is over their man-crush on Christie, and and will begin to notice the morass of cronyism and self-dealing that is his tenure as Governor.

And I Would have Gotten Away With it Too, if it Weren't for You Meddling Voters

The very rich seem to think that democracy is a drag, because it gets in the way of their making even more money by privatizing essential public functions:

The newest bit of “wisdom” for public education comes to us from Netflix Chief Executive Officer Reed Hastings, who is a big charter school supporter and an investor in the Rocketship Education charter school network. At a meeting of the California Charter Schools Association on March 4, he said in a keynote speech that the problem with public schools is that they are governed by elected local school boards. Charter schools have boards that are not elected and, according to his logic, have “a stable governance” and that’s why “they constantly get better every year.”

Here’s a transcript of part of the Hastings speech, published on stoprocketship.com (and you can watch the video below):

And so the fundamental problem with school districts is not their fault, the fundamental problem is that they don’t get to control their boards and the importance of the charter school movement is to evolve America from a system where governance is constantly changing and you can’t do long term planning to a system of large non-profits…The most important thing is that they constantly get better every year they’re getting better because they have stable governance — they don’t have an elected school board. And that’s a real tough issue. Now if we go to the general public and we say, “Here’s an argument why you should get rid of school boards” of course no one’s going to go for that. School boards have been an iconic part of America for 200 years. So what we have to do is to work with school districts to grow steadily, and the work ahead is really hard because we’re at 8% of students in California, whereas in New Orleans they’re at 90%, so we have a lot of catchup to do…So what we have to do is continue to grow and grow… It’s going to take 20-30 years to get to 90% of charter kids….And if we succeed over the next 20 or 30 years, that will be one of the fastest rates of change ever seen around the world for a large system, it’s hard. [applause]

Actually, all charter schools don’t have stable governance and all of them aren’t getting better every year (plenty close because of their lousy governance) and even charter advocates have called for changes to improve governance structures. What Hastings is suggesting is that democratic elections themselves create unacceptable instability in governance of public education.

Note that Hastings has invested millions in Rocketship charger schools, and while they claim to to be a not for profit, stoprocketship.com does provide numerous links that seem to indicate that much of their activities are structured so as to provide profits for its principals and those who make contributions.

No wonder Reed Hastings thinks that voters are annoying.  It makes the grifting too hard.

Note that this is not limited to education, where charter schools do not (when comparing apples to apples) outperform the public school system, and where in the extreme case (New Orleans 90% charters) we are seeing increasing cases of malfeasance and misfeasance requiring greater oversight.

It also applies to things like trade deals, or the Simpson-Bowles commission.

Even if this actually resulted in good policy, it would be wrong, but when you look at things like NAFTA, CAFTA, TPP, TTIP, etc., it is clear that all it does is that it creates an orgy of corruption and rent seeking.

When you decide to take democracy out of the mix, and run this stuff "like a business", someone gets the profit, and ain't the taxpayer.

Why Do I See the NSA Behind This Sh%$?

The Internet Engineering Task Force has proposed a way to speed up encrypted connections that works by removing the encryption for part of the journey. Rather unsurprisingly it looks like a way allow the NSA, FBI, etc. to crawl up your ass into your encrypted data:

A draft put forward at the Internet Engineering Task Force has drawn the ire of prominent privacy activist Lauren Weinstein as “one of the most alarming Internet proposals” he's ever seen.

The document that's upset Weinstein is this one, out of the HTTPBis Working Group and posted as an Internet Draft on 14 February 2014.

Entitled Explicit Trusted Proxy in HTTP/2.0, the standard proposes a mechanism by which an upstream provider – say an ISP – could get permission to snoop on decrypt user traffic for the purposes of caching.

Using proxies to cache traffic in the service provider network is unremarkable and uncontroversial: it's been normal practice for a long time. The end user benefit is better performance; the service provider benefit is a reduction in traffic over their upstream transit network links.

From that point of view, encryption is a pain in the neck: the service provider can't see into the encrypted traffic, which reduces the effectiveness of its caching strategy.

The Internet Draft has this to say:

“To distinguish between an HTTP2 connection meant to transport "https" URIs resources and an HTTP2 connection meant to transport "http" URIs resource, the draft proposes to 'register a new value in the Application Layer Protocol negotiation (ALPN) Protocol IDs registry specific to signal the usage of HTTP2 to transport "http" URIs resources: h2clr.'”

In essence, to try and protect their ability to cache, the authors of the standard propose that providers seek their customers' permission to decrypt their traffic (solely for the purposes of offering a better customer experience, naturally).

For some reason, Weinstein finds this proposal outrageous: “The proposal expects Internet users to provide 'informed consent' that they 'trust' intermediate sites (e.g. Verizon, AT&T, etc.) to decode their encrypted data, process it in some manner for 'presumably' innocent purposes, re-encrypt it, then pass the re-encrypted data along to its original destination,” he writes.

Considering that AT&T proposed this, and that AT&T's record vis a vis illegal surveillance is pretty horrific, I do not see this as a positive proposal.

Would You Let the Vampire Squid Get a Hold of Your Dong?

It appears that the coalition in Denmark has collapsed over this issue:

After a recent spate of controversies and ministerial resignations, the Danish centre-left government suffered another blow on Thursday when the Socialist People's party (SF) left the ruling coalition amid anger over Goldman Sachs's investment in Denmark's state-owned energy company.

Goldman's 8bn kroner (£900m) purchase of a 19% share in Dong Energy has been championed by the government but caused a revolt among SF's parliamentary group. After a night of tension and discussions, SF's leader, Annette Vilhelmsen, announced her resignation and said her party was leaving the coalition.

"It has been a dramatic 24 hours," Vilhelmsen said. "Yesterday it became clear to me that it wasn't possible to unite the party. For the sake of SF, I take the consequence of this."

The Goldman Sachs deal was approved by the parliament's finance committee on Thursday, but it has come under widespread scrutiny and criticism in recent weeks. A poll showed 68% of Danes were against the sale, and close to 200,000 people signed an online petition opposing the deal.

(emphasis mine)

Even worse, like most privatization deals, it is a hand out from taxpayers to overpaid CEOs:

My friend Niels-Jakob Harbo Hansen and I calculated some of the financial aspects of the deal, and they don’t look that good. The bidders are offering about 107.25 kroner per share, supposedly valuing the company at 31.5 billion kroner before the investment. In addition to a healthy package of minority rights, they also get a put option for 60% of the shares: if DONG doesn’t go public within 4 years or so (and Goldman can veto that), the investors can sell 60% of their shares at a strike price equal to the purchase price of 107.25 kr per share, plus a healthy return of about 3% per year.

That’s like an insurance policy that covers not only your loss, but also the insurance premium you originally paid, plus interest.

Once you account for the put option, the deal values the shares at 24.5 billion kr., around 47% of book value. Maybe that’s fair because DONG just had a big loss and will be constrained by its business plan to invest in windmills and such, but it still seems awfully low. On the other hand, the investment bankers have deemed it Fair™, so who am I to question that.

The main thing we did was to compare the deal to the most obvious alternative: the Danish government (AAA rating, 26% debt/GDP, 45% including local government) could borrow at an interest rate of about 1%, and make the investment itself. The expected loss from the deal compared to a government investment is about 2.5 billion kroner.

So, it costs the taxpayer 3x as much as a public investment, and you can be certain that rates will go up faster than they would if the company were to remain completely publicly owned.

A Couple of Important Education Stories from New York State

I would note that the New York Daily News has looked at administrator salaries, and discovered that executives at 16 charter schools in the city are payed more than the New York City school chancellor.

Like I said, looterz want to loot.

More significant is that the Southold School District Superintendent on Long Island has demanded that all student data be removed from Bill Gates' latest attempt to monetize our children:

After finding out that student data is being shared through the New York State Department of Education Department with a private third-party vendor, Southold School District Superintendent David Gamberg has formally requested to have its students’ data removed from the controversial software system, citing privacy concerns.

Newsday has reported that although student data is currently kept on state computer systems, New York is moving toward contracting with nonprofit Atlanta data company inBloom, Inc. to “store student test scores, disciplinary records, disabilities and other vital subjects.”

Mr. Gamberg fired off a letter to inBloom CEO Iwan Streichenberger on Monday, requesting to “opt-out” from its data storing system, known as the Shared Learning Infrastructure. He has found a clause in the contract that allows districts to request their records be removed from the system, according to Mr. Gamberg’s letter.

“It is our position that this data contains sensitive and highly personal student information that we prefer not be subjected to the potential for breach, unintentional distribution, access, or abuse without parental consent.,” Mr. Gamberg wrote.

Gee, you think?

I figured out that it was evil when I heard Bill Gates.

Attention Greece: You Now Have the Chance to Screw the Germans, Do IT!

I was listening to NPR this morning, and discovered that the privatization/fire sale of Greek owned state assets that the IMF and the EU (really, the Germans) is not going as as quickly as expected, and one of the reasons is that some of the privatization deals actually effect the Germans and the rest as well, and they are objecting:

European governments, as well as Washington, are reportedly concerned over Russia's possible expansion into Europe. Gazprom, Russia's state-owned gas monopoly, has made a high bid for the Greek gas utility company. Media reports suggest the privatization agency has delayed choosing a buyer — under international pressure.

There are also other strategic concerns, such as conflict with China over Greek ports.

George Stathakis, an economist and lawmaker for the opposition leftist party Syriza, says China wants to expand its current control of a part of the Port of Piraeus and also buy the south-north railway link, raising fears China will flood the European markets with its inexpensive products.

"German and Dutch interests are opposing the idea of using Greece as the primary source of Chinese trade with Europe," Stathakis says.

(emphasis mine)

It's not like the cheap Chinese crap will put Greek manufacturers out of business.  The Germans and the Dutch already did that.

Someone Greek will unload the ships, and someone Greek will fuel the ships, and someone Greek will operate the locomotives.

If some Germans lose their jobs over this, why should Greeks care?

Sauce for the gander.  The EU austerity caucus, with the Germans at the lead, had demanded, and got the dismantlement of the Greek public health insurance system.

Share the misery.

Another Inspector Renault Moment

I'm shocked, shocked to find that gambling is going on here!

So, now that we are looking into the corruption and cronyism in Mubarak's Egypt, and it turns out that it has its roots in the American led privatization of the Egyptian economy, just like the rampant corruption in post-Soviet Russia:

Beginning two decades ago, the United States government bankrolled an Egyptian think tank dedicated to economic reform. A different outcome is only now becoming visible in the fallout from Egypt’s Arab Spring.

Formed with a $10 million endowment from the U.S. Agency for International Development, the Egyptian Center for Economic Studies gathered captains of industry in a small circle — with the president’s son Gamal Mubarak at the center. Over time, members of the group would assume top roles in Egypt’s ruling party and government.

Today, Gamal Mubarak and four of those think tank members are in jail, charged with squandering public funds in the sale of public resources, lands and government-run companies as part of a dramatic restructuring. Some have fled the country, pilloried amid the public outrage over insider deals and corruption that toppled President Hosni Mubarak.

“It became a crony capitalism,” Magda Kandil, the think tank’s new executive director, said of the privatization program advocated by its founders. Because of the corruption, the center now estimates, the assets that Egypt has sold off since 1991 have netted only about $10 billion, $90 billion less than their estimated worth.

The privatization saga is a cautionary tale about the power and perils of U.S. foreign aid — most notably the nearly $8 billion that the United States has provided to Egypt since the 1990s to push the country toward economic reforms.

This is not a bug, it's a feature. This sort of economic liberalization is all about creating a few corrupt individuals, because it's cheaper to allow cronies to get siphon off a billion or two while our banksters steal the rest than it is to allow those resources to accrue legally to the workers and the country.

I may seem cynical about this, but the corruption in Egypt, or Russia, or pretty much all of other privatization schemes outside of the Scandinavian countries run this way, so I've come to the conclusion that this is the actual goal of these policies.

IMFed

Yes, going through a debt crisis means selling off state assets at pennies on the dollar, so that private operators can underfund basic maintenance and overcharge consumers for luxuries like, you know, water:

Greece on Wednesday outlined plans to sell stakes in state-owned railway, water and real estate companies as part of a drive to raise billions of euros to help restore its ailing public finances.

…………

The European Union/International Monetary Fund bailout for the heavily indebted country projects revenue of 1 billion euros ($1.22 billion) per year from privatizations for the 2011-13 period.

…………

As part of the plan, the cash-strapped government will sell 49 percent of loss-making railway company OSE, 39 percent of Hellenic Post, 23 percent of Thessaloniki water EYATH and 10 percent in Athens water EYDAP.

I hope you are ready for the riots when people's water bills triple overnight.

It's sh%$ like this makes things worse.

The method is: sell the assets at an undervalued price, remove the revenue stream from your control, and they tell you that net result will be financial stability.

No, it's just a slope to bankruptcy and the destruction of the middle class, and it is why the IMF is so justifiably despised across the world.