Privitization efforts by the City of Chicago

[NorthSideSox72]

As all of the Chicago residents know, the city sold the parking meters to a private company. Prices went up, and much consternation ensued. The city got a billion dollars for it.

 

Now, the city is renewing efforts to privatize Midway Airport, which may net them over $2B.

 

I am apparently in the minority, but I like these decisions. The city is just not going to be efficient at it, and it gives them a serious boost of cash when they most need it. I don't really care about increases in parking prices, because I think it puts the cost on par with what private industry (parking lots and garages) are charging, and it helps discourage unnecessary driving.

 

What do others think?

 

[HuskyCaucasian]

Chicago is using Privitization to fill budget holes. So, instead of fixing the holes, they are just plugging them. you cant privatize everything... or eventually you run out of things that are worth enough money to privatize. So, in 10 years when we continue to have budget issues because of chronyism and sweetheart deals, what's left to sell?

[NorthSideSox72]

Chicago is using Privitization to fill budget holes. So, instead of fixing the holes, they are just plugging them. you cant privatize everything... or eventually you run out of things that are worth enough money to privatize. So, in 10 years when we continue to have budget issues because of chronyism and sweetheart deals, what's left to sell?

That isn't an argument for not doing it. That's an argument for getting their overall budgeting better, which I agree with. But why on earth would you not want to ALSO do this?

 

[Rex Kickass]

By privatizing, you also reduce overall expenditures. Although these may be one time plugs, doesn't it also by definition make the hole left to fill slightly smaller?

[NorthSideSox72]

By privatizing, you also reduce overall expenditures. Although these may be one time plugs, doesn't it also by definition make the hole left to fill slightly smaller?

Yes.

 

[Balta1701]

That isn't an argument for not doing it. That's an argument for getting their overall budgeting better, which I agree with. But why on earth would you not want to ALSO do this?

Because, as you noted with the parking meters...the efforts to improve efficiency by privatizing these things have this odd habit of making prices go up and not down.

[mr_genius]

Because, as you noted with the parking meters...the efforts to improve efficiency by privatizing these things have this odd habit of making prices go up and not down.

 

also, how the f*** is that not a monopoly? You can buy ALL the meters? No meters from a potentially cheaper competitor?

Edited January 6, 2010 by mr_genius

[NorthSideSox72]

Because, as you noted with the parking meters...the efforts to improve efficiency by privatizing these things have this odd habit of making prices go up and not down.

 

The prices went up, and the money ultimately, in part, goes to the city. They basically got an advance on future cash flows, that was MORE than the sum of what they would have been. Hard to pass that up. And honestly, I have no issue with the meter rates going up, but in that case I can see arguing otherwise.

 

also, how the f*** is that not a monopoly? You can buy ALL the meters? No meters from a potentially cheaper competitor?

 

They used a bidding process to get the most dollars from it. So there was competition. But are you saying that individual meters should be sold seperately? Wouldn't that be a logistical nightmare?

 

[kapkomet]

The prices went up, and the money ultimately, in part, goes to the city. They basically got an advance on future cash flows, that was MORE than the sum of what they would have been. Hard to pass that up. And honestly, I have no issue with the meter rates going up, but in that case I can see arguing otherwise.

 

 

 

They used a bidding process to get the most dollars from it. So there was competition. But are you saying that individual meters should be sold seperately? Wouldn't that be a logistical nightmare?

 

 

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[NorthSideSox72]

This parking meter brought to you by soxtalk.com. Get your sox fix here. Pay up!

We're getting paid now? I'm going to have to have a talk with Jas. Where is my check?

 

[kapkomet]

We're getting paid now? I'm going to have to have a talk with Jas. Where is my check?

 

 

We need to buy those parking meters first.

[Jenksismyhero]

I'm for any kind of privitization that would kick out unnecessary spending. Case in point: the worthless idiots from the department of transportation that stand at the corner of every intersection of the city. I enjoy the ones who stand at the corner of a four lane, one way road and tell me to go in the direction everyone else is traveling in (thanks!). Or when I'm in a turn lane, they help me by waiving their hand in the direction I'm turning (thanks again!). Or especially the ones that don't do anything but just stand on a corner (a real life saver!)

 

Maybe a private company would, I dunno, rely on those big ass street lights we have at every intersection.

 

 

[mr_genius]

They used a bidding process to get the most dollars from it. So there was competition.

 

ah, so the highest bidder gets to hold a monopoly? lol

 

there is a reason they are illegal. anyways, this is literally text book

 

http://dictionary.reference.com/browse/monopoly

 

1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. Compare duopoly, oligopoly.

2. an exclusive privilege to carry on a business, traffic, or service, granted by a government.

3. the exclusive possession or control of something.

4. something that is the subject of such control, as a commodity or service.

5. a company or group that has such control.

6. the market condition that exists when there is only one seller

[NorthSideSox72]

ah, so the highest bidder gets to hold a monopoly? lol

 

there is a reason they are illegal. anyways, this is literally text book

 

http://dictionary.reference.com/browse/monopoly

 

1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. Compare duopoly, oligopoly.

2. an exclusive privilege to carry on a business, traffic, or service, granted by a government.

3. the exclusive possession or control of something.

4. something that is the subject of such control, as a commodity or service.

5. a company or group that has such control.

6. the market condition that exists when there is only one seller

First, they went from a government-run monopoly, to a private one, where there is actual competition at the national level. Second, what exactly would you suggest they did instead? And third, in most cities, its a gov't controlled thing.

 

 

[jasonxctf]

this should be a republicans dream. smaller government. more private investment.

 

i hate to say, but the monopoly idea is somewhat correct. but to argue, how is it different from Comcast being the only cable provider in some area. You counter that with... you don't have to buy cable. You can do over the air or satellite instead. You don't have to park at the meters. You can park in a garage or not own a car.

 

As for the budget holes, I think selling off of assets is an outstanding idea that we should look at the national level as well. We hear so much about budget deficits but you never really see the other side of the financial picture. The balance sheet.

 

Maybe the US government should look at selling Guam to Japan, who knows? We spent plenty of time during our National History acquiring more and more property. Maybe we need to have a liquidation sale?

[NorthSideSox72]

this should be a republicans dream. smaller government. more private investment.

 

i hate to say, but the monopoly idea is somewhat correct. but to argue, how is it different from Comcast being the only cable provider in some area. You counter that with... you don't have to buy cable. You can do over the air or satellite instead. You don't have to park at the meters. You can park in a garage or not own a car.

 

As for the budget holes, I think selling off of assets is an outstanding idea that we should look at the national level as well. We hear so much about budget deficits but you never really see the other side of the financial picture. The balance sheet.

 

Maybe the US government should look at selling Guam to Japan, who knows? We spent plenty of time during our National History acquiring more and more property. Maybe we need to have a liquidation sale?

I remember, shortly after the Berlin Wall fell, and Russia was just dying for cash, Japan swooped in and made an offer - sell us back Sakhalin and the Kuril Islands, which were Japan's not that long ago. It gives Japan timber and mining resources they desperately need, and tons of cash for Russia. Ultimately, Russia declined, I think because they saw that as blockading in their Pacific naval bases, effectively.

 

[lostfan]

You know, I parked in one of these things not too long ago (by the Giordano's on 53rd in Hyde Park) and the prices weren't all that bad like I thought they were going to be. It was like 2 dollars for 2 hours, something like that, and being able to use my credit card instead of digging for coins was really convenient.

[bmags]

You know, I parked in one of these things not too long ago (by the Giordano's on 53rd in Hyde Park) and the prices weren't all that bad like I thought they were going to be. It was like 2 dollars for 2 hours, something like that, and being able to use my credit card instead of digging for coins was really convenient.

 

this. Frankly parking meters are just an economics 101 textbook example in terms of supply and demand/tragedy of the commons, etc. And in the liberal perspective the fact that higher prices could help move people into public transportation and off cars is a good thing.

[DukeNukeEm]

Parking meters are probably the least overpriced good/service in the City of Chicago. I've dropped $12 for a pack of cigarettes. Twelve. f***ing. Doll. Ar. S.

 

I know for a fact that isnt the work of the cigarette companies or 7/11 either.

 

 

 

 

[DukeNukeEm]

i hate to say, but the monopoly idea is somewhat correct. but to argue, how is it different from Comcast being the only cable provider in some area. You counter that with... you don't have to buy cable. You can do over the air or satellite instead. You don't have to park at the meters. You can park in a garage or not own a car.

I prefer the Commonwealth Edison example (even though they're actually regulated). Sick of dealing with those bastards? Ok! Enjoy a wonderful six month winter without utilities!

[Y2HH]

Let's just keep in mind that they've already spent the billion dollars they made on the meters, and they still have big budget gaps.

 

The issue I have is simple. Selling off all of these things should reduce the price of running Chicago for the taxpayer, hence the taxpayers burden...however, I'll bet any of you right now that despite all of these privatization sales, our income/house/sales/liquor/soda/water/grocery and gasoline taxes will continue to rise.

 

So in other words, they're selling off everything we are paying to support, getting paid big dollars for it on a one time basis, and our burden will remain the same (or increase), despite us having less control as taxpayers to decide who runs the show. If they sell Midway and Midway ups the price of everything 80%, we can't "vote them out"...so now we end up with higher costs on everything we've sold, no control over voting them out for doing so...and our tax burden remains the same, or higher? Laughable that people accept this.

 

Nice try. And don't tell me I can always go to O'Hare if Midway was to do something like that, because O'Hare would increase their prices knowing the only viable alternative already did the same. In the end, we'd lose, just like we lost on the way more expensive meters...yet our taxes didn't fall one bit -- as a matter of fact, they went up despite the City no longer having the meter overhead.

 

I used to park downtown at meters for WAY less than the cost I have to pay now. 25 cents = 6 minutes. 25 cents USED to = 15 minutes.

 

Edited January 12, 2010 by Y2HH

[NorthSideSox72]

Let's just keep in mind that they've already spent the billion dollars they made on the meters, and they still have big budget gaps.

 

The issue I have is simple. Selling off all of these things should reduce the price of running Chicago for the taxpayer, hence the taxpayers burden...however, I'll bet any of you right now that despite all of these privatization sales, our income/house/sales/liquor/soda/water/grocery and gasoline taxes will continue to rise.

 

So in other words, they're selling off everything we are paying to support, getting paid big dollars for it on a one time basis, and our burden will remain the same (or increase), despite us having less control as taxpayers to decide who runs the show. If they sell Midway and Midway ups the price of everything 80%, we can't "vote them out"...so now we end up with higher costs on everything we've sold, no control over voting them out for doing so...and our tax burden remains the same, or higher? Laughable that people accept this.

 

Nice try. And don't tell me I can always go to O'Hare if Midway was to do something like that, because O'Hare would increase their prices knowing the only viable alternative already did the same. In the end, we'd lose, just like we lost on the way more expensive meters...yet our taxes didn't fall one bit -- as a matter of fact, they went up despite the City no longer having the meter overhead.

 

I used to park downtown at meters for WAY less than the cost I have to pay now. 25 cents = 6 minutes. 25 cents USED to = 15 minutes.

 

Just to add some reality here... they haven't spent the $1B, in fact, the mayor was pushing to spend a percentage of it for budget gaps (which he should), that equates to something like 20% of it. The rest is still there. Its basically an emergency fund.

 

[Y2HH]

Just to add some reality here... they haven't spent the $1B, in fact, the mayor was pushing to spend a percentage of it for budget gaps (which he should), that equates to something like 20% of it. The rest is still there. Its basically an emergency fund.

 

Last I heard, it was almost all gone already.

[jasonxctf]

I would think that it would be wise to "spend" that money instead of keeping it aside for simple economics.

 

There is a budget shortfall. So either...

 

(1) You borrow money at 4-5% to cover that shortfall

or

(2) You use the money from the sale, that otherwise would be sitting in money market accounts earning 1-2% interest.

 

So do you forgo earning 1-2% to save spending 4-5%, absolutely.

[southsider2k5]

I would think that it would be wise to "spend" that money instead of keeping it aside for simple economics.

 

There is a budget shortfall. So either...

 

(1) You borrow money at 4-5% to cover that shortfall

or

(2) You use the money from the sale, that otherwise would be sitting in money market accounts earning 1-2% interest.

 

So do you forgo earning 1-2% to save spending 4-5%, absolutely.

 

Or (3) You cut government budgets to meet what you are taking from taxpayers and keep the money stashed away for later needs.