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2007-08-03

Following Minnesota Bridge Collapse, New Scrutiny for Nation’s Ever-Privatizing Roads

Guests

James Ridgeway and Daniel Schulman, Earlier this year they co-wrote an article titled "The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads."

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In the wake of Wednesday’s fatal bridge collapse over the Mississippi River in Minneapolis, the condition of the nation’s highway system is coming under increased scrutiny. The American Society of Civil Engineers estimates it would take nearly $190 billion to fix more than 70,000 bridges deemed "structurally deficient." Declining public funding has raised concerns governent officials are preparing for the privatization of roads. We speak with James Ridgeway and Daniel Schulman, authors of the Mother Jones article, "The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads." [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: In the wake of Wednesday’s fatal bridge collapse over the Mississippi River in Minneapolis, the condition of the nation’s highway system is coming under increased scrutiny. In 1990 the U.S. government rated the Minneapolis Bridge as structurally deficient and possibly in need of replacement. That rating was contained in the Department of Transportation’s National Bridge Inventory database. More than 70,000 bridges across the country have also been rated structurally deficient. The American Society of Civil Engineers estimates it would take nearly $190 billion to fix these bridges over the next two decades.

In Minnesota, many residents have begun questioning the spending priorities of the state and the nation. Nick Coleman of the Star Tribune wrote a column yesterday entitled "Public Anger Will Follow Our Sorrow." He points out the motto of Governor Tim Pawlenty has been "No New Taxes." Last spring, Pawlenty vetoed a five-cent gas tax increase, the first in 20 years, that would have produced millions of dollars in revenue to help fix roads. Nick Coleman wrote, "At the federal level, the parsimony is worse, and so is the negligence. A trillion spent in Iraq, while schools crumble, there aren’t enough cops on the street and bridges decay while our leaders cross their fingers and ignore the rising chances of disaster."

On the national level, the highway trust fund is about to go broke. When President Bush took office the fund had a $23 billion surplus, but it’s expected to be running a deficit by next year, in part because Bush killed an increase in gas taxes two years ago.

The columnist Jim Hightower recently accused the government of deliberately defunding these vital infrastructure projects in an effort to open the door to privatization. Investment firms including Goldman Sachs, the Carlyle Group, Merrill Lynch and Morgan Stanley are forming large funds to purchase publicly owned infrastructure projects.

And the privatization of the nation’s roads has already begun. In Indiana, Governor Mitch Daniels has leased the 157-mile Indiana Toll Road to a foreign consortium from Spain and Australia for $3.85 billion over the next 75 years. By one calculation, the Toll Road will generate $11 billion over the life of the lease. Indiana’s Governor Mitch Daniels has been nicknamed "Mr. Privatize" by some for his willingness to sell off public assets. Before coming to Indiana, Daniels served as the President Bush’s White House budget director. And Indiana is not alone. In Illinois, officials signed a 99-year, $1.8 billion lease to hand over the Chicago Skyway.

To talk more about the privatization of the nation’s highways, we’re joined by two reporters from Mothers Jones magazine: James Ridgeway and Daniel Schulman. Earlier this year they co-wrote an article entitled "The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads."

We welcome you both to Democracy Now! And I want to begin with Daniel Schulman. Why don’t you start off by giving us the background on the privatization — or the building of U.S. highways. You talk about President Eisenhower.

DANIEL SCHULMAN: Right. Well, he signed into law the Federal Aid Highway Act in 1956, which really brought the federal interstate highway system that we know now, and it was supposed to be free, and it was supposed to be accessible to everyone, and it was supposed to interconnect the communities in this country. It was really one of the major initiatives of his administration.

AMY GOODMAN: And so, what happened from there?

DANIEL SCHULMAN: Well, over time, there hasn’t been very much commitment at the federal or state level to funding infrastructure projects. As you see in Minnesota, people are very afraid to raise the gas tax. They’re afraid that this is going to impact — I’m talking about elected officials — this is going to impact their re-election chances. So, over time, it’s just become a lot easier for them to look to get a big upfront payment. They can use that in the interim to pay down debt or, in the case of Indiana, to put towards other infrastructure projects. And down the road, you know, people are going to have to bear the costs of that, because this asset is not going to be under their control anymore.

AMY GOODMAN: Jim Ridgeway, the piece is called "The Highwaymen: Why You [Could Soon] Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads." Explain who the players are right now. Who’s taking over U.S. highways?

JAMES RIDGEWAY: Well, you know, it’s all in process. I mean, the thing is that the major Wall Street investment companies are trying to link up with various international partners in Australia, in Spain, elsewhere, to essentially buy this sort of decaying — or infrastructure that is in need of repair. And this is — you know, it’s appealing, as Dan, I think, mentioned. It’s appealing to the local politicians, because it looks like they’re getting some cash from these guys on Wall Street, and they’re not going to have to raise taxes to fix the roads, and there’s the illusion that sooner or later these roads will get fixed. Now, you know, whether that happens or not is like anybody’s guess, because when this actually takes place, when the actual improvement of the roads is done, it’s going to be when all these politicians are dead and gone.

AMY GOODMAN: Daniel Schulman, in the piece, you write, "Fifty years to the day after Ike put his pen to the Highway Act, another Republican signed off on another historic highway project. On June 29, 2006, Mitch Daniels, the former Bush administration official turned governor of Indiana, was greeted with a round of applause as he stepped into a conference room packed with reporters and state lawmakers. The last of eight wire transfers had landed in the state’s account, making it official: Indiana had received $3.8 billion from a foreign consortium made up of the Spanish construction firm Cintra and the Macquarie Infrastructure Group (mig) of Australia, and in exchange the state would hand over operation of the 157-mile Indiana Toll Road for the next 75 years." And it goes on from there.

Talk about the political climate. How did people in Indiana, how did Hoosiers feel about this?

DANIEL SCHULMAN: People were absolutely — I went to Indiana shortly after that, and people were absolutely outraged. If you travel that toll road even now, I think, and talk to people, they still don’t understand why this road that really is part of their, you know, cultural — it’s just like the rest of the roads in this country, we really feel a deep affinity for them — why this is in the hands of a foreign consortium. And some of it is xenophobia. Some of it, they don’t want foreigners running their roads. But some of it is also, they’ve got — you know, they’ve asked really hard questions about this. "Are we getting a good deal?" And, you know, frankly, a lot of people are saying no.

You cited the figure before that some say that Indiana — over the life of this contract, the road could have generated $11 billion. So that’s a $7 billion net loss for the taxpayers of Indiana. No, people in Indiana are outraged, and elsewhere, too. You’ve seen in New Jersey recently, there was a backlash against the potential plan to privatize the New Jersey Turnpike, which some said could bring in as much as $20 billion. I was driving that road recently, and there was a big sign, a big billboard, you know, against this privatization plan, and the plan has been pulled at this point.

AMY GOODMAN: You write, "In fact, Daniels argued in a paper he wrote for the Reason Foundation last spring, 'any businessperson will recognize our decision here as the freeing of trapped value from an underperforming asset, to be redeployed into a better use with higher returns,'" Daniel.

DANIEL SCHULMAN: Yeah, well, that’s kind of the euphemisms that they’re using right now, but there are other ways to do this. If a state wanted to — if the state needed to generate more money, they could try to refinance the road, and they could get their $3.8 billion, put it into infrastructure, and still keep control of the road. So, yes, you’ll hear Daniels, and you’ll hear the investment bankers say it. I just don’t know if it’s completely true.

AMY GOODMAN: We’re going to continue our discussion and talk about what Minneapolis has to do with this with Jim Ridgeway, Washington bureau chief for Mother Jones, and Daniel Schulman, associate editor of Mother Jones. And then we’re going to go on to talk about Oklahoma City with Jim Ridgeway, and why talk about that more than a decade later? Stay with us.

[break]

AMY GOODMAN: We’re talking to Jim Ridgeway and Daniel Schulman. They have written the piece for Mother Jones magazine called "The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads."

I want to take this back to Minneapolis and the horror that they’ve experienced now after the Interstate 35W bridge collapsed on Wednesday evening. Nick Coleman, in this very moving piece, "Public Anger Will Follow Our Sorrow," says, "Minneapolis suffered a perfect storm of nightmares Wednesday evening, as anyone who couldn’t sleep [last night can] tell you. Including the parents who clench their jaws and tighten their hands on the wheel every time they drive a carload of strapped-in kids across a steep chasm or a rushing river. Don’t panic, you tell yourself. The people in charge of this know what they are doing. They make sure that the bridges stay standing. And if there were a problem, they would tell us. Wouldn’t they?

"What if they didn’t?"

He goes on to write, "The death bridge was 'structurally deficient,' we now learn, and had a rating of just 50 percent, the threshold for replacement. But no one appears to have erred on the side of public safety. The errors were all the other way.

"Would you drive your kids or let your spouse drive over a bridge that had a sign saying, 'CAUTION: Fifty-Percent Bridge Ahead'?"

Jim Ridgeway, can you put what happened in Minneapolis, as they’re still trying to dredge the bodies out, into context of this larger story, the larger story of highway and infrastructure privatization?

JAMES RIDGEWAY: Well, yeah. It’s absolutely horrible. I mean, what’s going on here is this horrible disaster is going to be used as yet one more reason to privatize all this stuff. They’ll say, "Well, you know, we didn’t have the money. These Wall Street guys will give us some money, and we’ll fix this decaying infrastructure."

But, look, what’s going on in Minneapolis is exactly the same thing that happened with Katrina. What happened in Katrina is that after this storm, Bush goes down there and does his meet-and-greet, and then, under a plan devised by Rove, they start blaming it on the states.

So, what happens here in Minneapolis yesterday? You know, we find out that this bridge was basically marked as deficient years ago, beginning 17 years ago. This is a bridge that’s under the control — a highway system that’s under control of the federal government, the Department of Transportation. This is a navigable river, interstate river, which is dominated by the Army Corps of Engineers. It is policed and regulated by the U.S. Coast Guard. And what happens? The president’s press secretary gets up, and he says, "Well, we told the state what to do, and it’s their problem." That’s exactly what they did in New Orleans. That’s exactly the problem here.

These federal officials get away with murder, and it remains to be seen whether the members of Congress — and I’m talking about the Democratic members of Congress — have the guts, you know, to call the secretary of transportation and the other appropriate officials before committees in Congress and in a public session ask them what in the world they were doing.

AMY GOODMAN: How much difference, Daniel Schulman, how much effect do you think this bridge collapse in Minneapolis is going to have on this trend right now? Talk about the major forces that could be held to account around the country.

DANIEL SCHULMAN: It’s very hard to say what type of impact this is going to have on this trend, but it’s definitely picking up pace. And what I think this horrible accident did is it really highlights the fact that the nation’s transportation infrastructure is crumbling, and something needs to be done. And as Jim says, hopefully this forces members of Congress to take a better look at this, because right now — you mentioned the federal highway trust fund earlier. It’s going to run out of money in 2009, and not very much is being done about that. And if it does run out of money, then you’re going to see this privatization trend pick up, because we’re going to no longer be able to afford to keep up these interstate highways, and they will have to go into the hands of multinationals and investment banks.

AMY GOODMAN: Finally, Jim, before we go on to your story on Oklahoma City, what does the infrastructure of this country have to do with war, have to do with the war in Iraq?

JAMES RIDGEWAY: Well, it has everything to do with the war in Iraq. I mean, first of all, I mean, we’re spending all the money in Iraq we ought to be spending on infrastructure. This infrastructure has been going down the slope since 1970s. There’s nothing new about any of this. We’ve been told since the 1970s — it’s been on and on and on — and no one’s done anything about it or have done very little about it.

The second thing is, that Eisenhower knew, that the infrastructure of the United States is absolutely crucial if you’re going to defend yourself in a war. And we’re supposedly in this war on terrorism. You know, I mean, the terrorists could attack any number of these, you know, susceptible targets, which are scattered around the infrastructure, on railways, bridges, tunnels, etc. So it’s in our own, you know, very best interest to make sure that this infrastructure of ours, which is a public endeavor, after all — it’s not an endeavor of Wall Street, it’s something that the citizenry owns — that this is, you know, kept up to snuff.

AMY GOODMAN: Well, I want to thank Daniel Schulman for joining us, editor for Mother Jones, D.C. bureau, co-wrote the article with Jim Ridgeway of "The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads."

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