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Est. April 5, 2002
 
           
July 23, 2015 - Issue 616

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Privatization
Of Public Services
It’s The Hand
In Your Pocketbook

 

"This control-of-water problem is not just
in a few communities across the U.S., it
is in fact a part of a larger plan of 'investment'
in the necessities of life across the world."


What if you had to pay $100 a month for the privilege of having water flow into your home, when you turn on the faucet?

For those on a fixed income, or those whose income is low to start with, it could be devastating to have to shell out $1,200 a year for water, yet that’s what is happening in various communities around the country because their elected officials thought it would be a good idea to sell the peoples’ water to a private company. It’s what has happened in Coatesville, Penn., and Missoula, Mont.

Say your income is $14,079 a year, which is the per capita income of Coatesville, where the officials sold off the water system in 2001 to a private firm, which promised to repair and modernize the water system that has long been in need of upgrading. The company promised, but it has yet to deliver on it.

The good people of Coatesville thought they would take care of some other longstanding problems with the cash that the company, the Pennsylvania American Water Company (PAWC), paid as part of the deal. That money is gone, spent on other, pressing needs of the community. Since the population did not grow as some expected, the water system is being paid for by the community of 13,000, a smaller population than was planned for, so the cost to the remaining residents is higher than expected.

According to Al Jazeera America, Coatesville’s population is about half African-American, about a quarter Latino, and “the dilapidation of Coatesville is closely intertwined with the growing cost of water…Now, thousands of low-income people must pay exorbitant prices to access a basic resource…” PAWC, like many other companies, has made water a commodity, something to be sold like mousetraps, rather than something that is vital to human life and is increasingly viewed as a human right around the world.

Coatesville was a one-industry city for many decades, supported by a steel mill and, when the mill closed, the non-Latino white population left for other parts and, according to the 2010 census, only represented about 27 percent of the population. There has been no replacement for the steel mill and the community has been in a downward spiral for many years. No wonder they saw the one-shot, up-front payment by PAWC as a way out, along with the transfer of the water and sewer system to the private firm. What they didn’t reckon with was the increasing cost for every household, when they no longer had any control over what always had been a public service, controlled by elected officials and regulatory boards.

The same thing happened in Missoula, according to In the Public Interest, an organization that is “committed to promoting the values, vision, and agenda for the common good and democratic control of public goods and services.” In the Montana city, the per capita income is $17,166, somewhat more than Coatesville’s rate of income, but it is certainly far less than affluent. They too realized that the sale of their water system to a private firm was not a benefit to the citizens, but it took the possible sale of their water to a foreign company, from Canada, for a court to find in favor of returning the water system to local ownership and control.

When the pending sale was announced, Missoula went to court, backed by 70 percent of its ratepayers, demanding that the water be returned to the municipality, rather than be sold to a foreign entity. Judge Karen Townsend agreed with the citizens and ruled that the water system should be returned to public control, which would be inclined to make decisions based on public health and safety, rather than return on investment. And, that’s the name of the privatization game: Turning a profit on public service.

Food and Water Watch, based in Washington, D.C., is a nationwide advocacy organization, which has studied the sale of public water systems, said recently that individual homeowners pay about 33 percent more in water rates to private companies, than they do when their local municipality owns the system. However, economically struggling cities can be convinced that salvation lies in privatization and they take the plunge, not knowing how much the new company will charge ratepayers or how much the annual increases might be. All they know is that they will no longer be responsible for either the operation of the system or the cost to homeowners.

This control-of-water problem is not just in a few communities across the U.S., it is in fact a part of a larger plan of “investment” in the necessities of life across the world. In Missoula, for instance, the local water company is owned by the Carlisle Group, which describes itself in this way: “The Carlyle Group is a global alternative asset manager with more than $193 billion of assets under management across 130 funds and 156 fund of funds vehicles. Founded in 1987 in Washington, DC, Carlyle has grown into one of the world’s largest and most successful investment firms, with more than 1,650 professionals operating in 40 offices in North America, South America, Europe, the Middle East, Africa, Asia and Australia.”

The Carlisle Group claims George H.W. Bush (after his single term as U.S. president) as one of its heavy hitters, having convinced the Bin Laden family to invest and the group had for a few years on its board the second President Bush, George W. As it can be seen, the reach of this organization is dispersed far and wide and deep into the lives of real citizens in many countries. It does not appear that the group makes any political distinctions as it scurries about the planet piling up profits by making money deals. In the case of Missoula, it involved the “product” that is vital to the lives of all Missoulans…water. What saved Missoula’s people was the prospect of selling Montana water to a foreign firm and a judge who understood the importance of democratic control.

The plunge into private ownership of public services is not something new. Rather, it is the product of decades of propaganda by Corporate America, that government can do nothing right and that giving the work to private corporations is the answer. The question is: Why should citizens give up control of their government and their public services to companies whose only charge is to make money, profit, for their shareholders? Citizens and their health and welfare, under any circumstances, are far more important than shareholders. Yet, the propaganda keeps flowing outward from the public relations firms and the think tanks of the rich and powerful. The people haven’t heard the other side. In Coatesville and Montana, they are hearing the other side.

When local officials and the people demanded to know why water rates increased so sharply in Coatesville, the PAWC official blamed the community, itself, for failing to maintain the system over several decades. The alternative story, however, is that there was no thought about the economic forces (the shutdown of the steel mill was a corporate decision, not one over which the community had any control) that impoverished the small city years ago. What’s left is a majority-minority city with few prospects, even though it is located in Chester County, one of the richest in Pennsylvania, possibly in the Northeast.

Water at reasonable rates may be just one of the problems of Coatesville, but it is one that should be addressed at the county and state levels. The problem of corporate ownership of vital elements of life (water and food) should be addressed at the highest level of government and Congress has a responsibility to hold hearings to find out just how much of our government at all levels is controlled by corporations. Let’s start with water.


BlackCommentator.com Columnist, John Funiciello, is a long-time former newspaper reporter and labor organizer, who lives in the Mohawk Valley of New York State. In addition to labor work, he is organizing family farmers as they struggle to stay on the land under enormous pressure from factory food producers and land developers. Contact Mr. Funiciello and BC.


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