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Blank's avatar

My wife asked me what I was reading, then came over and proceeded to read this heading out loud, sigh, and walk away: "Secrets of bum power"

DLR's avatar

Privatizing Cities.

Little bit off topic, but maybe not. You've said multiple times that 'the time is not now' to replace USGov. That is obviously true-- at the federal level. But what about at the city level? It seems like the time is more than ripe for making the attempt on a US city or two. There are dozens of cities in the US that qualify as 'failed cities', any way you define it, any one of which represents millions, or hundreds of millions, of dollars of depressed value, just waiting to be 'liberated'.

There are probably 100 cities across the US, that have massively depressed property values, all because of incompetent/corrupt city governance. By which I mean, mostly, lack of safety, and messed up city services— everything from failure to pick up the trash to artificial scarcity in taxis. So, fixing the governments of any of those cities by privatizing their governments, would certainly pay. Even if the privatizers didn't own any property in the city themselves, they would realize great profits simply through the increased taxes on the property as it increased in value. If they went in ahead of time and bought many city blocks of the worst slum areas they would be able to buy for a pittance, and make out like bandits. So, why isn't someone doing this already? We've probably got a billion dollars profit opportunity here. I'm guessing the reason is because innovators are rare on the ground. It's 'old news' to go in and takeover a badly run company and replace its management and fix its problems, but no one has ever yet gone in and taken over a badly run city and done the same. If that's true, if one person/company, successfully privatized a city, and really cashed in, others would follow, in a massive cascade. Or am I missing something basic? People running for mayor are always promising to clean the city up, but, instead it is always more of the same. That may be because politicians have no real incentive to really fix the problems, unlike someone who really is going to cash in if the city property values recover to what they ought to be. Or it might be, that with the current set of city laws, and current set of city employees, it can't be fixed.

But someone going in to privatize a city wouldn't be doing the equivalent of running for mayor, or city manager, he would be presenting a referendum to the voters, with a new city charter, involving rules and laws similar to something like a planned retirement community— with sale of stock to private investors. The privatizers, of course, hold back a good healthy chunk of shares for themselves, for future sales, etc. The money raised by the sale of the stock will be used for repairing infrastructure—roads and bridges, cleaning up graffiti, etc; forcing landlords to repair their properties, or condemning them and forcing their sale; and improving city services, most especially law and order. That might require hiring a lot of additional cops, who arrest anyone who break even the smallest law, (broken window policing) and 'throw the book at them' judges, who hand out jail time to anyone who breaks the laws. That will clear out your troublemakers PDQ—they will all depart to someplace where they can break the law in peace. A safe place to live means rents will rise, of course, which means property values will rise. There will be a turnover of population of course, 'gentrification', and a virtuous cycle that just keeps increases the value of city property.

Possible problem areas would include: legal problems associated with discharging useless employees, and massive liabilities in the form of retirement benefits for existing city employees. A plan like this would probably only work for cities without a massive pension liability overhang.

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