Based in DC, Dan covers politics and national security. His work has appeared in the Boston Globe Magazine, the Village Voice, the Columbia Journalism Review, and other publications. Email him at dschulman (at) motherjones.com.
"It was the best deal since Manhattan was sold for beads." That's what Indiana's Republican governor, Mitch Daniels, toldBarron's recently, referring to the privatization of the 157-mile Indiana Toll Road—a deal that netted the state $3.8 billion. Back when Jim Ridgeway and I wrote about this deal, and the larger infrastructure privatization trend that was being pushed along by the Bush administration and Wall Street (Goldman Sachs in particular), there was some question as to whether Hoosiers were getting a good deal. One local economist had estimated that the value of the road, under the terms of the state's 75-year lease agreement with the Spanish construction firm Cintra and Australia-based Macquarie Infrastructure Group, could be as much as $11 billion. Surely he didn't anticiapte a major spike in gas prices and an economic meltdown, factors that took a serious toll on toll revenues.
According to Barron's, which declared the infrastructure privatization boom all but dead, the MIG-Cintra investment is not panning out so well.
Indiana is looking particularly smart because toll-road revenue now seems less dependable than it appeared to be just a few years ago. "Toll-road traffic declines in this recession have been more severe than in any other post-war recession," says Peter Samuel, editor of TollRoadNews, an online transportation Website. He says toll-road traffic is down 6% this year and revenue has been hit by recession-reduced usage by trucks, which often account for 50% or more of tolls.
To throw off Rep. Henry Waxman's ambitious plan to deliver a final climate change bill by Memorial Day, the House GOP suggested they might attempt a procedural stall tactic. If Waxman had the audacity to fast-track the controversial legislation through his energy and commerce committee, then committee Republicans said they might force the 900-plus page bill, along with several hundred pages of amendments, to be read aloud. But Waxman wasn't about to let some GOP obstructionism slow down the landmark legislation. Just in case his Republican colleagues attempted this ploy, Waxman hired a speed reader, according to the Wall Street Journal.
A committee spokeswoman said the speed reader—a young man who was on door duty at the hearing as he awaited a call to the microphone—was hired to help staffers. After years of practice, the panel's clerks can read at a good clip. But the speed reader is a lot faster, she said.
"Judging by the size of the amendments, I can read a page about every 34 seconds," said the newly hired staff assistant, who declined to give his name. Based on that estimate, it would take him about nine hours.
This doesn't mean Waxman will meet his self-imposed deadline. Committee Republicans, determined to hold the bill up as long as they can, have snowed the legislation under with hundreds of amendments—only a handful of which the committee was able to tackle after hours of debate on Tuesday. "We might as well plan on being here all next week,” said Rep. Joe Barton (R-Texas), the committee's ranking Republican member and a notorious climate change skeptic. “Bring your sleeping bags.”
The American taxpayers are suckers. That's essentially what Mark Patterson, chairman of the private equity firm MatlinPatterson Global Advisors, told his fellow finance industry bigwigs in a moment of perhaps too much candor at the Qatar Global Investment Forum, held this week in Doha. “The taxpayers ought to know that we are in effect receiving a subsidy," he said. "They put in 40 percent of the money but get little of the equity upside.”
Patterson is in a good position to know just how sweet a deal Wall Street is getting courtesy of our tax dollars. In January, his New York-based firm closed a deal to buy a controlling interest in Michigan's Flagstar Bancorp using $250 million in its own capital and $267 million in matching bailout funds from the Treasury Department.
Does Alaska's first dude hold a grudge against Mother Jones for doing some toughreporting on his wife, Sarah Palin? Attending Tammy Haddad's White House Correspondents' Dinner pre-party on Saturday, our Washington bureau chief, David Corn, thought he might be in for an earful (maybe even a fistful) when John Coale, husband of Fox's Greta Van Susteren, told him that Todd Palin wanted to meet him.
"Please don't hit me," Corn joked as he shook hands with the champion snowmobiler and all around bad-ass-looking guy. Palin laughed, and, steering clear of politics, they went on to have a pleasant discussion about having 8-year-old daughters and about commercial fishing. (Palin is gearing up for salmon season in Bristol Bay. This morning I asked Corn what the heck he knows about fishing, commercial or otherwise. He responded, "I know the difference between a gill net and a slip net, don't you?" Umm, no.)
The sight of Corn and Palin engrossed in conversation was sufficiently unusual that it warranted mentions in not one, but two papers.
Who's responsible for damaging AIG's brand? No, it's not a trick question. I ask because the insurance company's latest SEC filings (h/t Footnoted) suggest that the press, along with government officials and members of the public at large, is sullying the firm's good name, which is in turn impacting AIG's business prospects. Like me, you probably thought that AIG wrecked its own rep, by, you know, engaging in the irresponsible transactions that ultimately led to its near collapse and subsequent taxpayer funded rescue. Wrong. As the company explains in its latest 10-Q:
Adverse publicity and public reaction to events concerning AIG has had and may continue to have a material adverse effect on AIG. Since September 2008, AIG has been the subject of intense scrutiny and extensive comment by global news media, officials of governments and regulatory authorities around the world and segments of the public at large in the communities that AIG serves. At times, there has been strong criticism of actions taken by AIG, its management and its employees and of transactions in which AIG has engaged. In a few instances, such as the public reaction in March 2009 over the payment of retention awards to AIGFP employees, this criticism has included harassment of individual AIG employees or public protest affecting AIG facilities.
To date, this scrutiny and extensive commentary has adversely affected AIG by damaging AIG’s business, reputation and brand among current and potential customers, agents and other distributors of AIG products and services, thereby reducing sales of AIG products and services, and resulting in an increase in AIG policyholder surrenders and non-renewals of AIG policies. This scrutiny and commentary has also undermined employee morale and AIG’s ability to motivate and retain its employees. If this level of scrutiny and criticism continues or increases, AIG’s business may be further adversely affected and its ability to retain and motivate employees further harmed.