San Francisco, Third World country

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The model is pretty well established, and has proven exceptionally lucrative  for big US corporations like Bechtel and big US banks -- and has been an utter disaster for dozens of developing countries: US banks loan money to countries that need infrastructure development -- and that money comes right back to US corporations that charge phenomenal prices to build roads, dams, mining operations, whatever, with a nice cut off the top to whatever powerful people need to be bribed (all tax-deductable, of course). And the country that could never afford the loan to begin with impoverishes its people paying the note.

That's how economic development worked for decades, with the International Monetary Fund and the World Bank leading the way.

Now the world has flipped -- and the Chinese national development bank is loaning the money for a project in San Francisco, that will be constructed by China's equivalent of Bechtel.

Yes, the Chinese Railway Construction Co. will have to adhere to San Francisco's local-hire law and some of the construction jobs will go to San Franciscans. Obviously, the company will be under immense pressure to hire union workers and pay unions scale. But the profits will go right out of the country -- and I bet the contractor will try to pre-fab as much as possible in China, where labor costs are far lower, and use Chinese nationals at deflated wages for as much of the construction as legally allowable.

What does all of this say? On a macro level, it says that the US is slipping as an economic power, which is no big news. But it also suggests that the Treasure Island and Bayview Hutners Point development projects are screwed up enough (and Lennar Corp. is screwed up enough) that no US lending institution wants anything to do with them. The only way these projects work for an investor is if the money comes right back as profits from a builder with close ties to the investor.

Doesn't give you a whole lot of confidence.

 

Comments

outsourced to China.

As for US bank not wanting to lend to San Francisco projects, that is true. But it's people like you who are to blame for that, for making SF so business-unfriendly.

Anyway, if it weren't for these arrangements, many major projects would never get built at all. and in case you missed it, Bechtel is a San Francisco business, so historically those profits came not just to the US, but to our local economy.

Bechtel built the Hoover Dam. He was a dustbowl victim who built his eponymous company from scratch. Oh and they also built the England-France Channel Tunnel without any of the "deals" you are describing.

Posted by Guest on Dec. 12, 2012 @ 5:44 pm

The Chinese are better capitalists than the American banksters are and they see SF as a manageable risk. Apparently the hallucinations of San Francisco and California's business hostility are only seen by those on the right.

Posted by marcos on Dec. 12, 2012 @ 7:19 pm

they are not capitalists. They are socialists. You cannot do any business in China without the government getting a piece of the action directly (as in ownership). China is using its all powerful central government to direct investments at home and abroad. The reason they have money is because the worker's paradise has now become the world's sweatshop, and we outsourced our industries to them. Then we borrowed money from them too. Seriously, they are just a giant Singapore, and they also won't put up with shit like CEQA or a pack of progressives pissing on their plans - they'll just use their local talent (Willie, Rose, Ed Lee and associated consultants and thugs) to push their way through. Hey can we get Willie and Eddie some Chairman Mao hats?

Posted by Guest on Jan. 04, 2013 @ 5:32 am

The arrangement provides for the China Railways to be one of the general contractors. And Lennar has been in deep financial trouble for some time. It has much more to do with their creditworthiness than San Francisco. It's just that we are the streewalkers for Lennar pimping us off.

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Or does he have any at all? It's easy to be against everything but rarely do Tim and The Guardian propose an alternative other than "do nothing."

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First will come the executions of all who post under false names.

Posted by marcos on Dec. 12, 2012 @ 9:45 pm
Posted by Lucretia Snapples on Dec. 12, 2012 @ 10:05 pm

I always thought that Tim has a bit of Robbespierre in him.

Posted by marcos on Dec. 13, 2012 @ 3:05 pm
Posted by matlock on Dec. 13, 2012 @ 11:22 pm

Is it really working out for Tim and the SFBG?

Posted by marcos on Dec. 14, 2012 @ 7:24 am

I always Marc had more than a bit of Robespierre in him. Tim, he's a teddy bear by comparison.

Posted by Guest on Dec. 14, 2012 @ 12:03 pm

for his "activism" while Marc has to persistently goof off work to get his 15 minutes of mediocrity.

Posted by Guest on Dec. 14, 2012 @ 12:09 pm

To the tumbrils!

Posted by marcos on Dec. 14, 2012 @ 12:22 pm

Aren't there radiation issues at Treasure Island and Bayview?

There are stories out there from the actual personnel who conducted the radiological surveys, people digging, then really really quickly jumping out of trenches like the three stooges and filling them back up again ASAP.

Posted by Guest on Dec. 13, 2012 @ 8:14 am

No radiation issue on Treasure Island.

http://www.baycitizen.org/housing/story/judges-ruling-win-treasure-island/

Judge's ruling a win for Treasure Island development
Condominium project moves forward despite radiation cleanup concerns

Posted by Guest on Dec. 19, 2012 @ 7:41 pm

Where does Rose come in with this?

Posted by Richard on Dec. 13, 2012 @ 9:26 am

"Third-world country" is exactly the phrase that comes to mind whenever I visit the SOMALoin of an evening. And since it's apparently déclassé to be anti-squalor, I for one welcome our new Chinese overlords.

Posted by Guest on Dec. 19, 2012 @ 11:57 am

This is funny ha ha from 2009.

"resident Barack Obama has shot down a little-known provision in a massive Pentagon policy bill that would have greatly benefited House Speaker Nancy Pelosi’s district.

Pelosi (D-Calif.) is among dozens of lawmakers pressing for language in the House version of the 2010 defense authorization bill that would transfer closed military bases, at no cost, to local authorities for economic development.

But the White House is opposed to the provision, saying it would provide “potential windfalls” for private developers...."

http://thehill.com/homenews/administration/59697-president-maroons-speak...

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