Treasury Secretary Tim Geithner testified before the Joint Economic Committee. The topic was supposed to be financial regulatory reform. Congressional big dogs took many rabbit trails.
I tuned in to hear Tim push leveraging taxpayer money with private funds for America's significant infrastructure needs. Nearly every private equity underwriter (PEU) has an infrastructure fund, ready to participate in public-private partnerships (PPP's).
Consider Pennsylvania's consideration of privatizing interstate highways. One consultant, formerly of The Carlyle Group, criticized another consultant, Provident Capital Advisers, LLC. Transportation Secretary Ray LaHood extolled the virtue of PPP's. At his confirmation hearings, LaHood opposed tolls on existing roads. In September he changed his mind:
Obama loves PPP's and PEU's, standing ready with billions in cash. However, there is mixed record between private equity and the investing public. When PEU's go public during a bubble, the public takes it on the chin. Privates win, the public loses. WSJ reported:
Other possibilities include tolled 'hot lanes' running alongside existing roads, as well as more public-private partnerships and even imposing tolls on existing roads."That's going to be a wildly debated topic," LaHood said of any scheme to toll existing roads.
Moving from private to public is an old investment game and a lucrative one. The enticements to the private partners and investment banks represent some of the easiest money on Wall Street.
Smirking Tim greased the skids for more PEU government sponsored business. For acronym overload, when will PEU PPP's go public? By the way, did Geithner ever talk about PEU regulation?