EDITORIAL
Public Works Handed over to Speculators

May 15, 2023

Workers have adopted a saying for finding the short way of getting to the bottom of a situation called “Follow the money.” Today, huge amounts of money to the tune of 370 billion U.S. dollars are changing hands as investors gear up to claim federal subsidies for development of a new, nationwide power grid as mandated by the Biden Inflation Reduction Act of 2022. There is no question that capitalism has created a climate disaster that is causing huge disruptions today and an unthinkable future tomorrow. The transition of current systems away from fossil fuels is a huge endeavor.

The problem is, those charged with “following the money” are politicians and capitalists, the so-called professional money handlers of a for-profit system. The Biden administration’s proposals for future energy systems are harnessing the U.S. Treasury, our tax dollars, to this very system of profit-making at the public’s expense.

After having depleted the treasuries of cities, towns and municipalities decade after decade by running budgets on bare bones while transferring tax dollars to subsidize private corporations, now the plan put forward is to harness the entire power grid we depend on for day-to-day life to giant, global asset managers. These asset managers are completely removed from any day-to-day consequences of production and distribution. Their sole role is to increase profits to the highest possible rates for their Wall Street investors.

The New York Times gives an example of a government agreement to contract with Brookfield Renewable Partners, an investment entity under Brookfield Asset Management, to invest around two billion dollars in Scout Clean Energy and Standard Solar.

These huge asset managers, in this case carrying over 800 billion dollars of accumulated capital assets, are being allowed to buy up companies entrusted with building and developing wind and solar power generating plants.

These huge capitalist enterprises are not being asked to work for the government while being overseen by them. They are being allowed to take over the public sector, like utilities and infrastructure that are currently publicly owned.

They will be financed to the tune of minimally 370 billion dollars. Like most deals under capitalism, the capitalists are being entrusted with billions of dollars of tax money, on the promise of the creation of new products. As the saying goes, based “on a wish and a prayer.”

The strategy is not new. Using the excuse that the public administrations are unable to finance or oversee these major transformations, the money is given to the private sector. Of course, they have the money, having stolen it from the U.S. working population for decades!

We have seen the results of allowing private equity investment in large systems vital to society, like water, housing and transportation already. And they are not good.

For example, a private equity company was able to take over water distribution in Bayonne, New Jersey. They installed new piping and equipment that delivered clean water, but increased the cost, for starters, by 50%, after promising a four year freeze on rates!

Or, the financing of housing on the west coast and famously, in Los Angeles. After buying up the housing industry, the privates are charging astronomical assessments and rents that are totally unaffordable, which is why we see such high levels of homelessness. If you can’t pay the rent, you are evicted.

Worldwide, this strategy of harnessing government spending to financial giants has had crippling effects on British care facilities, schools, and water supply. In South Korea, private equity companies agreed to run subway systems, hiked rates by 50%, then flipped the systems in a trade, leaving commuters more than just stranded.

While these strategies are not new, the scale of the problem posed by the Inflation Reduction Act takes them to an unprecedented level. If the private asset speculators are allowed this level of control over the very energy grids we depend on for life, these systems could become even more unstable and subject to disruption, even to the point of collapse. We workers built the current infrastructure, paid for it over and over across the decades. Now, existing power systems on a large scale will be taken over, not for improved service, but solely for profit.

It is long past time that these huge systems were taken out of the hands of capitalists and their apologist mouthpieces in local and federal government. Obviously, neither Democrats nor Republicans nor any existing political powers will do it for us. A future of real planet-saving, green energy depends on the working class finding the way to take power back from the capitalists strangling us all.