Privatizing U.S. Assets

"The person who has ideas and carries out reforms will find himself embattled by those whose profits and privileges will be threatened by those reforms. But those who will stand to gain (most) from those reforms quite often do nothing ... and this is the greatest impediment to change." Niccolo Machiavelli The Prince (paraphrased, published 1515)

There are billions of dollars in wealth owned by the United States government. This includes the mineral rights to billions of dollars of oil and gas that is located within a 12 mile limit off the United States coasts, or to a depth of 650 feet, whichever is the farthest offshore. The States own the rights extending to 3 miles offshore. The federal government also owns the fishing rights for 200 miles from shore. These assets should be owned by the citizens, not the government.

Other valuable assets include the national parks and the millions of acres of National Forest. There are millions of acres of federal land that has coal, gas, oil shale, and grazing land. All of these assets are managed by government employees of the Minerals Management Service, a branch of the Department of Interior. This allows opportunity for the people of this agency to be bribed because there is no profit incentive for them.

(Here’s a better idea: The BLM manages nearly 260 million acres of land, largely concentrated in a dozen Western states. But the Constitution says that (leaving aside the District of Columbia) within the several states, the federal government shall have plenary authority over only such lands as shall be needed to construct “Forts, Magazines, dock-Yards and other needful Buildings,” and which shall have been “purchased by the consent of the Legislature of the State in which the Same shall be.”

The BLM can show no bills of sale for the vast majority of these lands. They have never purchased these lands, nor even sought state legislative approval to do so. They do not own them. Let them turn over those 260 million acres – a whopping 85 percent of the state, in Nevada’s case – to the governments of the respective states in which they lie, and go home to Washington City. Vin Suprynowicz, assistant editorial page editor of the daily Las Vegas Review-Journal and author of The Black Arrow. Visit his blog.)


There are thousands of miles of interstate highways that could be privatized into a corporation collecting tolls, owned by the American citizens. All of these assets can produce a profit if privately managed.

Each of these asset classes should be turned into a private corporation. The corporation would issue an equal amount of shares to each citizen of the United States. Half the shares issued would be available for public trading, which will show the free market efficiency of the managers. The non trading shares would be in a private retirement account for each holder. The holder cannot sell or transfer the shares, nor can they be inherited. The executives and employees should be paid from a percentage of the profits only.

The dividends earned from the different corporations will go to fund a person's retirement. When a new citizen is born, that citizen will own shares in the National Parks Corporation, The U.S. Oil, Coal, and Gas Corporation, The Salt Fish Corporation, The National Forest Corporation, and The National Highway Corporation, and any other profit producing asset owned by the U.S. Government.

Privatizing all these assets would increase their profit, which would go to each citizen's retirement. This would eliminate the need for Social Security.

Bilbo Baggins
Update, September 11, 2008

Reuters
11 Sep 2008 05:08 AM ET
U.S. Interior Department employees who oversaw oil drilling on federal lands had sex and used illegal drugs with workers at energy companies where they were conducting official business, an internal government report said Wednesday.
Employees at the department's Minerals Management Service "socialized with, and received a wide array of gifts and gratuities from, oil and gas companies," according to the department's inspector general, Earl Devaney.

"When confronted by our investigators, none of the employees involved displayed remorse," Devaney said.

The alleged activities occurred between 2002 and 2006 and involved 19 former and current workers at the Minerals Management Service's offices in Denver and Washington.
Devaney recommended that those still on the job be fired.
The workers were involved in the "royalty-in-kind" program that collects and sells oil and gas turned over by energy companies as royalties for drilling on federal lands.
About $4 billion a year in royalty-in-kind oil and gas is collected and sold by the department.

The oil companies named in the report were Chevron , Shell Oil, Hess and Gary Williams Energy.

The findings came as Congress considers legislation to expand offshore oil drilling, a priority of the Bush administration, which has been criticized for having close ties to the oil industry.

Drilling opponents are likely to use the report as fodder to try to stop such legislation.

"It just underlies the fact that we shouldn't be putting the future of our coasts and beaches in the hands of people who obviously care nothing about the public," said Anna Aurilio, Washington office director for Environment America.
"American taxpayers deserve to have confidence that their interests are being protected when it comes to collecting royalties from the production of public oil and gas resources, especially given the potential for expanded domestic drilling," Democratic Sen. Jeff Bingaman, chairman of the Senate Energy Committee, said of the inspector general's report.
'Culture of Promiscuity'

Devaney said he discovered "a culture of substance abuse and promiscuity" among workers in the royalty-in-kind program.

He said one supervisor engaged in illegal drug use and had sex with subordinates.

Several staff admitted to illegal drug use and "illicit sexual encounters," he added.

There was also alcohol abuse among government workers when they socialized with employees at regulated oil companies, he said.

For example, Minerals Management Service staff accepted lodging from energy companies "after industry events because they were too intoxicated to drive home or to their hotel."

Devaney said the same government workers "engaged in brief sexual relationships with industry contacts."

He said many of the employees did not believe federal government ethics standards and department policies applied to them because of their "unique" role.

"Employees said they felt that in order to effectively perform their official duties, they needed to interact in social settings with industry representatives to obtain 'market intelligence'," he said.

One agency worker went so far as to say that a goal of the royalty-in-kind program was to be "part of the industry," Devaney said.

Rep. Nick Rahall, chairman of the House Natural Resources Committee, said the activities of the Minerals Management Service staff "are so outlandish that this whole IG report reads like a script from a television miniseries -- and one that cannot air during family viewing time."

Rahall, a West Virginia Democrat, said it was no wonder the Minerals Management Service was doing a poor job of overseeing the government's oil royalty program.
"Clearly the employees had 'other' priorities in that office," he said.
URL: http://www.cnbc.com/id/26654653/