Ed Rendell, Privatization and the Fiscal Cliff: A Case Study of Why Money in Politics is Harmful for the Working Class

Earlier this week, Governor Corbett once again laid down the gauntlet for next year’s budget stating that raising revenue  is off the table, which means more privatization schemes and more gutting of public education. But behind the scenes, no one is talking about the banking firm that is handling the consulting work for Governor Corbett’s privatization attempts.  The link between Governor Corbett and Greenhill and Company – the bank responsible for profiting from consulting work for the state – is former Pennsylvania Governor, Ed Rendell. The former governor’s corporate shilling as a consultant – which is just a pretty name for a “lobbyist” – doesn’t end with privatizing state-owned entities, it has taken a national level with the “Fix the Debt Campaign” – which comprises of over 100 CEO’s who are lobbying for more government contracts, more tax cuts and entitlement austerity as a means to settle the “Fiscal Cliff” talks.

Ed Rendell and Greenhill and Co.

Ed Rendell’s relationship with Greenhill and Co. – a Chicago based private equity bank – dates back to 2008 when Rendell hired Morgan Stanley to broker a $12.8 billion deal to privatize the Pennsylvania Turnpike.  The effort ultimately failed to pass the Pennsylvania Assembly.  The banker that Morgan Stanley assigned to the job was Robert Collins,  a current banker for Greenhill and Co., and thus Governor Rendell’s future job as a “government consultant” for the firm was set in stone.

Other than acting as a contemporary for the Natural Gas Industry since 2010, two of Tom Corbett’s main policy agendas are imposing a moratorium on increasing tax revenues for Pennsylvania’s wealthiest coupled with the wholesale destruction of state-owned entities.  These two policy agendas have opened up a privatization vacuum where some of the country’s best run state institutions are open for privatization.  In late 2011, Governor Corbett hired Greenhill and Co. as a consulting partner to draw up privatization plans.  A few months later, Greenhill and Company received a $4 million dollar contract for the privatization of the Pennsylvania Lottery System, but the contract was broken down into a $1 million dollar up front cost with a $3 million contract if the state was to go through with the plans to privatize the system.  But the company Rendell “consults” – or lobbies – for may also have some money interests in the destruction that Hurricane Sandy reaped across New York, New Jersey and Pennsylvania.  According to David Dayen of Firedog Lake, Greenhill and Co. is heavily supportive of “P-3’s” – or private-public partnerships, just another fancy term for privatization.  The article quotes the Philadelphia Inquirer that Sandy hit “just in time” for Rendell’s new firm, but the My FDL writer makes the correct assumption that governors such as Corbett, Cuomo and Christie may embrace these “P-3’s” which would mean more money for Greenhill and Co.

Ed Rendell and the “Fix the Debt” Campaign

Rendell’s lobbying efforts doesn’t stop on a state or regional level, he has taken his pro-austerity shilling efforts to the airwaves as a regular guest on MSNBC’s Morning Joe or CNBC’s Squawk Box.  The group he is lobbying with gained prominent notoriety when Goldman Sachs CEO Lloyd Blankfein went on a crusade against Social Security, Medicare, Medicade, and the expiration of the George Bush Tax Cuts.  The prick claimed that members of the working class only work for 25 years and want 30 years entitlement benefits, and then later had the audacity to compare the expiration of the tax cuts to World War II.

The rhetoric that the former governor is using is dangerous for progressives around the country, because his rhetoric on avoiding the “Fiscal Cliff” mirrors that of the Romney and Ryan campaign, where the president should try to “raise revenues through tax reform and loophole deductions.”  An example of the Governor using this rhetoric came a couple of weeks ago when he was on the Squawk Box with his partner Judd Greg – former Republican governor of New Hampshire and current “consultant” for Goldman Sachs.  On Rendell’s November 11th Squawk Box appearance, he had some advice for President Obama:

Look, we needed x amount of new revenue. we got it. Don’t you worry about where we got it from. And by tax reform, the rich are going to pay more. So don’t worry.”

My message to them, Joe, would be, ‘Look, let’s do what’s right for the country, and if we do tax reform, there’s going to be additional revenue and that additional revenue will come from people who are well off. So, don’t worry about raising the rates.’

Then later in the segment Judd Greg, backed up Rendell’s argument on tax reform, and went one step further, claiming that:

“But [the fiscal cliff talks] also has to be coupled with major ‘entitlement reform,’ it has to be     structured off of basically the outline of the original Simpson-Bowles, which had significant savings on the   spending side, revenues driven by tax reform agreement that basically reduced rates by eliminating deductions and exemptions, and reduced the debt by $4 trillion.”

The rhetoric that Rendell is spewing on the airwaves along with others has been used and is being used by David Plouffe and other Obama advisers.  Last week, Plouffe stated that things are going to get “hairy” in the fiscal cliff debates, and that the people who voted for Obama should expect entitlement reform.  When talking about extending the tax cuts for the lower 98% of American’s, Plouffe went on to say “[w]hat we also want is to engage in the process of tax reform” which will ultimately produce lower rates for the wealthiest.  What Rendell and other “New Democrats” campaigning for this organization is pushing the “Fiscal Cliff” talks into a classic “Lakoff Moment,” which claims that when one side starts using the same rhetoric of their opponents – in this case the Democrats using the “tax reform” debate – you have already lost the fight before it even begins.

In my opinion, Governor Rendell should be kicked off of the pedestal Pennsylvania Democrats have erected for the man because his political connections are allowing him to profit off of Governor Corbett’s privatization crusade and on a larger level, his shilling for a hundred plus CEO’s can have devastating effects for tens of millions of Americans across the country.  Rendell won’t be the last politician to become a lobbyist, but he is just a case study of what politicians have to look forward too when they leave public service.

Sean Kitchen is an Assistant Editor and Social Media Organizer for Raging Chicken Press. He is student at Kutztown University.



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About Sean Kitchen 681 Articles
Contributor and Assistant Editor for the Raging Chicken Press. Stationed in Harrisburg covering politics in the capitol. You can send tips to sean@rcpress.org or reach me on twitter at @RCPress_Sean!
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4 Comments on Ed Rendell, Privatization and the Fiscal Cliff: A Case Study of Why Money in Politics is Harmful for the Working Class

  1. Excellent article on the privatizer-in-chief, Rendell, and our current Governor, who will certainly be a one termer. ALEC controls Corbett, but maybe Kathleen Kane will begin to take him down for his cover up of the Sandusky atrocity.

    I just sent Sean Kitchen’s excellent report out to 3 of my email groups, including the PA Dem Party’s “Progressive Caucus”……as a member of the state Dem Party, I like to call out the turncoats within—those privatizers, corporatizers, voucher/charter school types like Sen. Anthony Williams, and especially the real big enemy of working people and democracy—–Ed Rendell. I expect a neoliberal (ultra conservative, ALEC inspired) agenda from Corbett, but I am especially offended by neoliberal members of the Dem Party—a party that is perceived to be on the side of the 98%. Well, some of us know the game some Dems play and we will be calling the phony ones out and working to spread info such as http://www.CommonDreams.org and of course, the raging chicken, to the public.

    • Indeed, Ron. Good post. Ed Rendell is neo-liberal: corporate, free trade, fiscally austere, soft on welfare for the truly needy, anti-union, etc. The names, aka “wine bottles,” have changed over the years: DLC (Democratic Leadership Council), Corporate Ds, Pro-Business Ds, New Democrats, Neo-Liberals, and more. But the content, aka “wine,” is exactly the same. Rank and file Ds are confused because former Governor Rendell, Congresswoman Schwartz, Mayor Nutter, President Obama, et al., posture as liberals on some non-economic social issues (e.g., abortion, same-sex marriage, gun control), they are assumed to be “liberal” on all issues – something that the corporate/mainstream/lamestream media, and the party establishment, promote and perpetuate. Moreover, Ds are, typically, trapped in the mythical frame that all Democrats are champions of the poor, the working class, and the middle class. This is, of course, patently false. The key is to follow these politicians’ deeds, and not their words.

      • So glad that Chuck is outing Schwartz, her hubby worked with a bank back when she first began her climb to the top of the New Democrats by fooling women in the feminist closet. I tried to tell people about his hiring of HB workers from India, since I worked for a Temp Agency, I got to do the recheck of Pa Revenue Returns without signing any keep your mouth shut forms. All of his workers had their returns sent to India and that was why they were part of the recheck program. NO ONE TOLD and I was not believed even though I was always saying it at Democratic county and state meetings. Rendell was never a Democrat, he was slightly better for unions and women’s rights than the idiots the Republicons ran against him so we all voted for the least worst rat as the late Rev. Shuttlesworth advised us.

  2. excellent article on our ex Gov. What a tragedy that both Corbett and Rendell are doing the bidding of the hedge fund operators trying to dismantle government and privatizing our best assets in order enrich a few. He is an embarrassment to the state. This once beautiful state is going to hell in a handbasket quickly.

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