Wednesday, January 21, 2009

Transparency of PEU Profits from Public-Private Infrastructure

The big money boys have hundreds of billions to invest in America's infrastructure, primed by President Obama's economic stimulus package. The Wall Street Journal reported:

In a report due out Wednesday, a group including Morgan Stanley, Credit Suisse and the Carlyle Group says $180 billion of private capital is available for investment in highways, airports and other transportation infrastructure. The report says this money could help create millions of jobs, boost economic growth, reduce travel congestion and free up government dollars for other priorities.

Such deals offer the prospect of steady, predictable profits for investors.

Business lobbyists also note that Mr. Obama supports the creation of a National Infrastructure Bank, which could leverage federal funds by pairing them with private investments.

How big are those steady, predictable profits? Carlyle Group co-founder David Rubenstein bragged of their historical 30% annual return. The private equity underwriter (PEU) indicated a willingness to take less, but how much?

Citizens will give up long term government revenue streams. Frequently, deals include legal guarantees minimizing any competition. I don't want Carlyle & Co. to garner a 25% annual infrastructure return on my back.

Greed and leverage imploded Wall Street. The big money boys haven't changed. They're looking for new suckers. The taxpayer is it. How bad can and will it get? A clue may come when the President's transparent government makes projected infrastructure profits public.