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The great sell-off: Chicago auctions city assets

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"It's fraud; it's extortion," says Sam Wolfson, owner of String-A-Strand, a crafts-supply store in the Lincoln Square neighborhood, where meter rates have jumped from one quarter to four quarters for one hour. Signs in his shop window register his protest, and "100 percent" of neighbors who have read them agree, he says.

Debate over privatization of public services is as old as the trend itself. The practice caught on in US cities during the early 1980s. Supporters argue that private firms are more efficient than government and can deliver better service and value to residents. Revenue from privatization contracts also boosts city coffers, they argue, preventing the need for tax hikes or service cuts. Critics counter that selling off public assets represents short-term thinking, is prone to cronyism and graft, and introduces a profit motive that leads firms to cut corners and underpay workers.

"Most public policymakers don't think long-term because there's a rule in the long term: We all die," says Ralph Marteri of the Center for Tax and Budget Accountability, a Chicago-based bipartisan think tank. "They are willing to lose future benefits because it doesn't hurt them [in the present]. It's a real problem."

Chicago's privatization trend has had its stumbling blocks: A $2.52 billion sale of Midway Airport fell through in April when the buyers couldn't get financing. The Daley administration, however, says the ongoing meter flap won't deter it from courting private buyers for certain city assets, or from contracting out for management of services including parking at O'Hare Airport, vehicle towing, janitorial maintenance, and street resurfacing.

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