P3s: Let's Not Party Like It's 1929

09/19/2009 05:12 am ET | Updated May 25, 2011

Our elected officials, TARP bankers in tow, are painting public-private partnerships (P3s) with the warm glow of progressivism -- a win-win for government, labor, business and the people.

At the US Hispanic Chamber of Commerce, President Obama conjured the Great Emancipator, reminding us that Lincoln helped lay down the P3 Transcontinental Railroad. Not so long ago, we heard from a prominent member of Congress about how Homer Plessy had been freed from the long arm of Southern slavery by the railroads. Nineteenth century railroads are fast becoming more progressive than FDR's Tennessee Valley Authority -- only labor light.

It all makes you want to bailout the banks again like it's 1929 and to bring the Money Trust back together for a reunion tour.

If we want to have the Larry Summers Brain Trust partner with the TARP Trust, let's just say it, debate it, and get on with our recovery.

This revisionism isn't right.

The railroad P3s were made profitable by massive poorly-crafted government subsidies including land give aways, loans, and public guarantees. They called on the government to violently break strikes in 1877. The Robber Barons didn't bequeath A. Philip Randolph and the Brotherhood of Sleeping Car Porters their rights. Farmers in the Midwest had to fight to stop rate discrimination.

P3 railroads exploited emigres and forcibly dispossessed landholders without adequate compensation.

Our New Deal State, our social contract, emerged from our struggles to assert control over a vast Gilded Age network of P3s.

We have now recapitalized our investment banks and major insurer in order to finance P3s. That money belongs in our real economy. However, we must take the public interest more seriously when we talk about P3s.