Privatization is typically a very costly and wasteful way to deal with public services. Usually it is little more than a transfer of public wealth to well-connected people in the private sector, done in spite of the fact that that it's usually unnecessary and forces the public to spend more money than they would have before the privatization.

That scenario is likely to repeat itself in the upcoming privatization of 11 state office buildings:

California has put up the "for sale" sign on 11 state office buildings, including the San Francisco Civic Center and Ronald Reagan building in Los Angeles.

Real estate firm CB Richard Ellis began marketing the buildings Friday on behalf of the state.

Vice chairman Kevin Shannon says the firm is pitching the sale worldwide as a low-risk investment because the state is planning to lease the space back, giving the new owners a steady stream of income.

The sale was adopted as part of last year's budget agreement between Gov. Arnold Schwarzenegger and lawmakers to raise money for the state. California is facing a $20 billion shortfall through the middle of next year.

The sale is expected raise more than $2 billion.

Read that again. The sale is pitched as "low risk" because you and I will give the new owners a steady stream of income. We're going to rent these buildings indefinitely, ultimately at much greater cost than $2 billion.

Public ownership of office buildings is a much cheaper way to operate government. We pay back the construction loan and the ongoing maintenance, and that's usually more affordable than leasing from a landlord who seeks profit in the arrangement. The costs come out of our pockets, especially if we're cutting other services down the road to pay the privatization cost.

We can expect much more of this if Meg Whitman becomes governor. In fact, I would expect she will make mass privatization a core element of her plans to "solve" the state's budget mess. California Closed indeed.

Cross posted at Calitics

There's a protest from 3-5pm today at Blackwater's new Otay Mesa facility, and tomorrow Jeremy Scahill will be doing a special Courage Campaign Conversation tomorrow afternoon at 4pm.

In a little noticed vote yesterday, the Merida Initiative passed easily through the House of Representatives 311-106. It provides $1.6 billion with an emphasis on training and equipment to fight drug cartels in Mexico, the Caribbean and Central America, because as Rep. Brian Bilbray explained:

"Either we can go after these cartels in Ensenada, or we can fight them in Escondido," said Rep. Brian Bilbray (R-Carlsbad), who voted for the plan. "I'd prefer that we move now and take care of this problem south of the border. The drug wars in Mexico and in other regions have grown horrendously violent, and their destructive ways must be quashed."

It's tough to directly take issue with any of that, but where does it lead? Potentially to some unpleasant places. In September, the Defense Department opened up five year contracts in support of counter-narcoterrorism efforts to five private companies, including Blackwater USA. "The indefinite-delivery, indefinite-quantity contract could be worth up to $15 billion for the awardees." The Army Times analyzed the content of the contracts, describing:   Read More »