Rick Perlstein: On Privatization's Cutting Edge

Last week, for the opening of the school year, I wrote about my interview with Tom Geoghegan about his (so-far) failed suit to stop Mayor Rahm Emanuel’s morally and educationally disastrous crusade to close fifty schools in Chicago. But that’s not all I talked about with Tom. “I don’t want this just to be a Mayor Emanuel–bashing session,” I said. “Because we have to bash Mayor Daley.”

Everyone, I suppose, dislikes parking meters. Chicagoans hate them even more. That’s because Mayor Richard M. Daley in 2008 struck a deal with the investment consortium Chicago Parking Meters LLC, or CPM, that included Morgan Stanley, Allianz Capital Partners and, yes, the Sovereign Wealth Fund of Abu Dhabi, to privatize our meters. The price of parking—and the intensity of enforcement—skyrocketed. The terms were negotiated in secret. City Council members got two days to study the billion-dollar, seventy-five-year contract before signing off on it. An early estimate from the Chicago inspector general was that the city had sold off its property for about half of what it was worth. Then an alderman said it was worth about four times what the city had been paid. Finally, in 2010, Forbes reported that in fact the city had been underpaid by a factor of ten.