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Wednesday, April 22, 2015

Privateering and Multifarious other Swindles

Max Keiser has been documenting the subtle and not so subtle ways that British Economic Royalists steal from their citizens. I was watching this program [] and I recognized the game. I don't know if the Brits are imitating the USA or if the USA imitated the Brits, or it's just that the same international firms are driving corruption in the USA and around the world. When I was working in DC I noticed some strange things in government contracting, but it wasn't until recently that I realized that I was witnessing the perfectly legal swindles by which the 1% con the rest of us into supporting them. I suggest you listen to him describe how the Tories and Labor party swindled the British Medical System out of millions.


A clever DA could probably find a way to charge these people with committing fraud, but probably not. One the DA would be arrested himself. And Two, it's not even on the radar. Keiser is showing some of the manifold ways the "monied men" take public money, entrusted to their care, give it to themselves, loan it back to the public and then pretend that they are doing the public a favor. Sadly all that is not only legal, but people who are supposed to be on our side will betray us for some "trickle down" from the fraudsters!

There is no transcript for the Keiser report so I looked up some articles to explain how "Private Finance Initiatives" work. They gave me some information such as the following:

"[W]hy did hospitals at Barking, which has had to find £50m on its private finance initiative (PFI) deal and is heading for a £50m loss, be allowed to go on despite years of red ink?" []

Essentially the British Government contracted these "Private Finance Initiatives" to build hospitals, schools and other institutions and lease them back to the Government. The Government would pay them back for their costs, including the private finance costs through these 'mortgages'. But here's the rub. If a Central Government borrows money it can borrow at very low interest (almost no interest if it uses sovereign notes) and thus it's finance costs are minimal and the investment is virtually all capital investment. But when done through private financing, the PFI's borrow at interests and those interests are built into the costs of their construction and into the eventual "mortgages" (really rent) they charge the government for having built the Hospitals, Schools, etc... This is a great deal for investors. They can create a company. Pay themselves a fee for running it. Loan it money at high interest. Pay themselves rents and "pay back" the loans, and get the General public to pick up the tab.

The reality is that the Brits aren't the only one doing this.

Privatization works by building in costs to a project, hiding those costs to the public. Pretending the costs will be lower while selling the project. Kicking back advertizing to reporters and "donations" to politicians. And thus filling pockets all over the place with taxpayer money. All the while setting the stage for the failure of the public projects and public good associated with them.

And the beauty is that all this theft can be blamed on "Socialism"

I worked in Government buildings that had private owners when I worked in DC. I saw how contracting was used to both hide and pad expenses all around me. There are other schemes besides Private Financing Initiatives. But we all should learn to beware of the power of privateers to steal from government. And beware of people working in Government preaching the evils of Government. They can only know those things from experience or intention.

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