Since his appointment in 2011, Chicago Mayor Rahm Emanuel has consistently transferred ownership of public assets, such as infrastructure and education, to companies that seek to turn them into a profit, a trend called privatization. A former investment banker, Emanuel is drawing criticism for brokering many of these billion-dollar deals with his hedge-fund comrades, big names such as William Downe and Larry Fink.

Many supporters claim privatization has advantages, theoretically bypassing inefficient government bureaucracies and giving business to privately owned corporations. However, critics claim that extreme privatization of major cities does more harm than good because companies often get paid no matter what quality of services they deliver. Prices of public services are often driven up, and the government and citizens lose money while large corporations score big.

Chicago itself has seen the pitfalls of privatization. Rick Perlstein’s reports for In These Times uses a number of studies on the economic impacts of privatization in Chicago to support these critiques. For example, Emanuel’s predecessor Richard Daley negotiated the now-infamous parking meter contract of 2008, where large companies such as Morgan Stanley scored a deal worth over 10 billion dollars, while a 2009 estimate from the inspector general claims the city sold the meters for about half of what they were worth, and was underpaid by a factor of 10. Other major US cities, such as Philadelphia and Atlanta, have publically rejected privatizing essential services after experiencing the drawbacks, yet Emanuel’s Chicago pushes forward.

As of March 10th 2015, there has been no corporate news coverage of this story. This is interesting considering the nature of the situation. Large corporations score big in these privatization deals, and the large media corporations are the ones ignoring it. This validated independent news story is definitely in strong opposition to the privatization, and an article produced by a corporate institution on the topic would perhaps shed more light on the situation.

Source: Rick Perlstein, “How To Sell Off a City: Welcome to Rahm Emanuel’s Chicago, the privatized metropolis of the future.” In These Times, January 21, 2015, http://inthesetimes.com/article/17533/how_to_sell_off_a_city.

Student Researcher: Danika Bethune (Pomona College)

Faculty Evaluator: Andy Lee Roth (Pomona College)

Review Article with Credder