Asymmetrical Information

Finally! A mass market that might actually want a Segueway! Perhaps Kamen and Co. should set up a kiosk in Times Square next to all the fake watch sellers and rent the damn things for $250/day during the strike.

Aren't there laws prohibiting public sector employees from striking? WFB mentions this in his National Review column today, but doesn't specify what law would apply.

And if there are indeed laws prohibiting public sector unions from striking, will Bloomberg enforce them?

I think the obvious solution to the length of contract problem is to extend the current contract for a year. Presumably the city and state will be in better shape by the end of 2003, and at that point the MTA and the union can agree on another 3 year deal.

Fredrik, the NYS Taylor Law prohibits strikes by certain public employees. What usually happens is that the strike settlement includes a deal not to prosecute strikers. The real problem is that throwing striking workers in jail is not going to make the subways and buses run. Though I guess if most of NYC is sitting in traffic, having the striking workers sitting in jail does have a ring of justice to it...

- PJ/Maryland

P.S. I'm supposed to be finishing a project in lower Manhattan over the next week or two, but I think I'll be postponing it...

P.P.S. Would now be a good time to argue for installing slidewalks in Manhattan?

I like the idea of the unemployed working out thier frustrations on Transit Workers.

How can we arrange that?

I don't know, but I know a lot of unemployed people with rather a lot of aggression to work out. . .

There is a Taylor Law. But it's hard to enforce, for the reasons Pataki mentioned, plus Pataki is, er, extremely close to the public sector unons.

As was said many ages ago, "there you go again". You have much to say about the impending NY transit strike which I am sure is useful to non-locals, but somehow fell it is necessary and useful, way up high, to take a shot a liberals. Who are these liberals who wax? Can you provide an instance? A link? A quote? I have a nickel here says you can't. Even if you can (oh, please try), "liberals" is plural. Give me the list.

Your knee-jerk desire to find a liberal (or make one up) on the "wrong" side of an issue makes you otherwise unreliable. You claim to be independent-minded, to take on the left and right equally when they disagree with you. You fail that test. It is hard to find you taking on the right, pretty easy to find you putting views in lefties months (as in the censorship/de-linking piece some time back). At very least, if you have a hard time finding fault with the right, stop pretending there is a boneheaded "left" devoted to every cause that you find ridiculous. Name names. Cite instances. In the absence of sufficient time to check your facts, I am growing less prone to trust what you have to say. You run the web log so you can build all the straw men you like, make any group you want into a punching bag, but boy, is it tedious. A little more Sgt Friday and a little less creative bashing, please.

By the way, in picking among Krugman reviews, you cite Drezner, but not Confessore. You need to give Confessore a good close reading. Not the part about Krugman. The part about the right-wing campaign to grab a lot of journalistic turf while (shrilly) asserting "liberal media bias" whenever a journalist disagrees with anything from the right. You are them, but second generation. You've internalized the "liberal bad" slant without, apparently, considering whence it comes. Sucker.

Then, there is this business of encouraging violence against unionists. Interesting historical precedents. Of course, you were only kidding, of course.

k-

If you'd been following long enough, you'd know that I'm very familiar with Krugman's columns, and I'm not impressed. He's a partisan snore who rarely has anything interesting to say -- a fate that I wouldn't find so regrettable except that in the 90's he proved himself to be one of the foremost popularizers of economics, a reputation he is slowly squandering with his relentless Bush bashing. I read the Confessore article and he says the same thing I've said, and Drezner said, less acidly -- Krugman was wonderful when he was writing about something he understood, and he's been in decline since.

Furthermore, I have had extended arguments on this blog and others about public transportation and public sector unions with liberal interlocutors, including (I seem to recall, but could well be mistaken) yourself. It was to them that I was referring.

OK, I have a question: Who negotiated a union contract in the first place that expires just before Christmas? This seems like quite a coup for the unions, given that the holiday season is perhaps the most critical time for the city's infrastructure to be up & running properly, providing the unions with maximum leverage.

Someone above suggested a 12-month extension to the current contract in an effort to ride out the economic storm. Might I suggest an 18-month extension, so we can deal with this in June, not December?

right to work!

and grow some backbone.. if they're going to strike and extort rent from their position in violation of the law, they should be thrown in jail, damn the consequences.

fire the lot of them, and rehire them at $6/hour... no raises ever...

the only proper response to a union negotiator: listen to him rant, offer minimum wage with no bennie and throw him out, as you lock out the bastards... see how long they can last

>> Now, New York City is facing a $6 billion budget deficit. New York State, which provides the other half of the MTA's subsidy, is facing an even bigger deficit.

If NYC is such a good idea, how come it can't pay for the services that make it possible?

Look at the bright side, the contracts no longer expire at midnight on December 31st. On of the joys of the New Year was traditionally whether or not you staggered to the train or had to stumble all the way home. At least this year the service will be up and running and happy to take a $2 a ride metro card or token. The legacy of Mike Quill and his beloved Mayor “Linsley” lives.

The city's fiscal year ends December 31st; hence contracts are negotiated then.

Whoa...whoever took K Harris's lollipop away, give it back. Fast.

This sort of thing is always a problem in situations of bilateral monopoly. The problem here isn't the union per-se; *if* you create one with a monopoly over something important, and you expect it act rationally in its own interest, well, this is exactly what you expect.

The union is likely to be able to commit itself much more firmly to its position than the city might commit to stand firm. So the union will win.

In the medium run, the solution is to do something to remove the monopoly from one side or the other. Then one side or the other can extract rents, but it need not shut down the system to force things. Practically speaking, the easier side to remove the monopoly from is the union.

In the long run, the best solution is to remove the monopoly on both sides. But that is hardly likely for a huge socialist endeavor like the NY transit system.

I doubt very much either solution will happen. Which will result in the same sort of rent-seeking N years from now when the contract that they will agree on, runs out.

Incidentally, I find the call for violence, even in jest, unworthy.

The only part of your argument I want to quibble with is your assertion that public sector union strikes are particularly bad, because of the havoc they can induce in a city. I've had a hard time trying to judge those effects to be better/worse than the potential havoc caused by a major private sector union striking. I seem to remember quite a bit of sturm and drang over the longshoreman strike earlier this year and the economic implications it could have had. The media reports at the time indicated those effects could have been profound. Is there really such a difference between the two? If one is wrong, isn't the other?

Personally, since I'm not wearing my buttplug at the moment, I found the "pound some sense into them" comment to be deliberately absurd and humorous in its construct -- and therefore I laughed.

One other gripe. The notion that "the city can't pay" is poppycock. Oh yes, it will take tax increases. (Or in theory, reduced spending - yeah right.) But NYC can do that. Does anyone think the physical and human capital that NYC might tax are insufficient? Perhaps there is a tax rate that would be ruled unconstitutional, but thus far, there has not been.

Probably, but that's a negative feedback cycle as was discussed in a thread last week (?).

As the tax rate increases, more people (private businesses especially) will find that the cost of moving elsewhere, i.e. to a region with a lower taxation rate, becomes more attractive than not moving and tolerating the higher rate. Consequently, the tax base shrinks.

As the tax base shrinks, the city's net revenue base slowly decreases but the current structural inefficiencies prevent the city's costs from decreasing at a corresponding rate, and the budget again falls short.

Wash, rinse, repeat...until hair loss is complete.

The city doesn't have a statutory limit, but business taxes and personal income taxes are already high, on top of high state levels. They can't run a deficit, and they've got a 12.5% deficit this year to close already, which is projected to grow next year to over 15% of the current budget. If you give the transit workers what they want, the cops and firemen and everyone else are going to wave the flag and demand equal treatment. If the city raises taxes another couple percentage points, the businesses currently deciding whether to renew their leases will leave, or at least hollow out their staff the way the banks have been doing for years.

Also, the city requires the state legislature to approve many of its tax increases, which the legislature is unlikely to do unless a significant portion fall on companies and residents. Remember, a company that moves to the burbs is another company in Sheldon Silver's district.

A modest raise of $3500 a year, which is less than they're asking, would be an extra $1.2 billion increase a year to come from budgets already in severe deficit, for a total cost of $7.2 billion dollars, almost the size of the deficit they're trying to close. I repeat, the city can't raise taxes to give them what they want.

>> As the tax base shrinks, the city's net revenue base slowly decreases but the current structural inefficiencies prevent the city's costs from decreasing at a corresponding rate, and the budget again falls short.

>> Wash, rinse, repeat...until hair loss is complete.

Until the city declares bankrupcy and reboots at a self-sustainable size.

An article in today's NY Times (click here - registration required) says the NYS Taylor Law requires that strikers be fined two days pay for every one day out on strike. So I guess throwing strikers in jail was never an option.

In 1999, when the last strike threatened, then-Mayor Guliani got a court order threatening multi-million dollar fines against the union if it went on strike. I don't believe that Bloomberg has gotten an equivalent court order yet.

On Leonard's point, of course the city can afford to pay a TWU a raise. The real problem, as Jane says, is that when the TWU gets a raise, that becomes the new base negotiating raise for the cops, firemen, teachers, etc. ("Aren't safe streets worth than transit workers?")

I think there's some irony that the TWU has been running ads in the subway opposing a transit fare hike. These have been based on some bogus math that a "fair share" NY State's aid to public transportation doesn't go to NYC. (This ignores the regional MTA sales tax of 1/4%, and anyway involves chump change, a few hundred million dollars.) The real message is, "We expect the fare to go up, but don't blame us. _We_ wanted our raise to come from Albany!")

PJ/Maryland (currently in NYC)

Hmm. I just trotted over to John Ellis's place; it seems the "war profiteering" label hath been thtuck. I can't decide if that's valid or not...

Can you imagine how you guys would scream if a liberal called for the unemployed to beat up stockbrokers and CEOs to avenge the dotcom recession?

I thought you folks thought promoting envy was the Democrats stock in trade. But of course you didn't mean it. You conservatives play divide and conquer. Make the poor whites resent the blacks over affirmative action. Call for chopping down workers who stand up and unionize.

You all love it-- treating working folks like scorpions in the bottle climbing on top of each other to push the others down, all as the wealthy laugh and get richer and richer.

And conservatives like Galt act like these transit workers are somehow living high off the hog. As these wage rates show, a station agent makes only $20.01 per hour, hardly amazing money in a city like New York where housing costs can run to $1600 for a single room. Better paid train operators make only $24.35 per hour-- about $50,000 per year.

Under the proposed wage freeze (a cut in real terms with inflation) plus benefit cuts, a transit worker making $50,000 per year would lose $9,975 over the three year contract compared to the present one. That's a pretty serious sacrifice to demand of working folks when the wealthy aren't stepping up to cut their income through increased taxes.

More at my blog here.

Nathan: Actually, if a liberal could make the reference in a witty way, I would enjoy the intended chuckle.

Second, "you" (singular) may wish to back off the speaking of "you" (plural) to address a pretty broad class of people. I never presume to claim knowledge of what liberals broadly believe, even if some of my fellow conservatives do so to their own discredit.

Third, I don't recall anyone discussing living high off the hog; that's just a diversionary argument you (singular) seem to be using to get around the fact that the money isn't there, and cannot be obtained from taxes without the snake eating its own tail, nes pas?

Well, Nathan, I've called for pounding the snot out of more than a few of them, so I'd probably sympathize.

Your main argument makes no sense, because there is no inflation; if you followed the economic news you'd know that inflation is so negligible that we're now worried about deflation, which in New York City we've already got because the collapse of the bubble has punctured prices. I don't know where you got your numbers (though or course I suspect), but losing 20% of your salary's purchasing power over the course of three years would require inflation rates not seen since the 1980's.

Transit workers do not live in Manhattan studios; they live in the suburbs or the boroughs, where housing costs are much lower.

I am one of those working stiffs you're yabbering about, and there's not much sympathy here. I have no job. I have to bust my ass to scrape up work that pays much less than $20 an hour at this point, and finding precious few takers because of the city's devastating recession. And these guys want to raise the taxes to push out the companies to make sure I don't find a job any time soon? Where's all that worker's solidarity now?

Who's going to be hurt most next week? The hourly employees (like me) who won't be getting paid because they can't get to work. Are you going to cover my rent and food, Nathan? Are the transit workers? This strike doesn't hurt the folks at the MTA; they've got a guaranteed job and a cushy pension -- just like the strikers. It hurts those of us who are trying to get by in a city that's very hard to make it in.

I understand why they are striking (though it's not because they're poor; it's because Pataki handed the health care workers a cushy deal in order to get elected, and now all the other unions want to get theirs), but they're going to cost the city $30 million a day in tax revenue and spending increases, in order to try to get a raise the city can't afford to pay. What they make is irrelevant. There is no money to give them a raise.

>>As the tax rate increases, more people (private businesses especially) will find that the cost of moving elsewhere, i.e. to a region with a lower taxation rate, becomes more attractive than not moving and tolerating the higher rate. Consequently, the tax base shrinks.

I have a similar proof to the effect that nobody lives in London these days because the price of housing is so high. This cannot be a general equilibrium argument; if the businesses would rather move than pay the rate of tax which is needed to maintain the services of the city, then it is a *good* thing that they go away.

Nathan Newman is always so utterly thorough that I tend to trust him on the numbers. Inflation is low but positive at around 2.4% annualised in the New York and New Jersey area according to http://www.bls.gov/ro2/cpinynj.htm; I don't understand why Jane is claiming that this is "negligible". Also the claim "not to know the source" for Nathan's numbers must surely be tongue in cheek, as he gives a link to the union local which supplied them.

A quick look at that site reveals that the Teamsters have used an inflation rate of 2.5% pa for the next three years, which cannot be considered wholly nonsensical since it is within ten basis points of the October CPI number. This gives a loss of $3,844 in 2002 dollars by the third year, and withdrawals of pension and housing benefits cost $1,950 by 2005.

I don't like the tendentious way the Teamsters have designed their chart, and I think that the way in which they've arrived at the $9975 figure is frankly stupid; they've added the purchasing power loss for each year to the benefit loss, then cumulated them over time without discounting. I also think that it's misleading to calculate the inflation loss by graphing the "rise needed to maintain the 2003 level". But they provide the raw data, and the broad picture is not misleading.

I would calculate the loss as follows; convert the 2005 wage into 2002 dollars at a rate of 2.4%; this is 50,000 * [(1-2.4%)^3] = $46486. Then I'd deflate the $1950 benefits withdrawal: 1950 * [(1-2.4%)^3] = 1813 and subtract it to give $44,673, the purchasing power in 2002 dollars of a transport worker's salary in 2005 if they were on $50k today.

That's a "loss" of $5327, or a pay cut of 10.6% over three years (annualised cut of 3.7%). You could do the same exercise for 2004 and 2003 if you were so minded, and if you added them together, you'd get a number not far off $9975.

I think that where Jane went wrong was in immediately jumping to

>>but losing 20% of your salary's purchasing power over the course of three years would require inflation rates not seen since the 1980's.

Which is true (the cube root of 1.2 is round about 1.06), but you need to take into account that the withdrawal of benefits is a cut from the nominal. If you take $1950 of benefits away, then that's 4% of your cut right there and that 6% inflation rate starts getting into the 2% region right away.

All of this is by the by; I disagree with Nathan's fundamental willingness to debate this matter in terms of whether the union demands are "reasonable" or "deserved". The fact is that if you're not getting into the politics of envy, the only factor that matters is that the workers *want* more money, and they're in a position to get it. I can show you a million Forbes, WSJ, Economist and McKinsey Quarterly articles about how you have to pay top dollar for "scarce talent", and if New York can't hire subway drivers right now, then they are "scarce talent". The market doesn't care whether that scarcity comes through an Ivy League degree, or through comradeship, solidarity and horse sense. Good luck to 'em, I say, and if you don't like it, join your own union.

>>Who's going to be hurt most next week? The hourly employees (like me) who won't be getting paid because they can't get to work. Are you going to cover my rent and food, Nathan?

Call it tough love. You're learning a valuable lesson; unionise.

Of course, the other place where Jane missed out was that she presumably didn't think that the Teamsters would be so bloody shady as to add three years' worth of "loss" together and then present it without comment as if it was all coming up in one year! The more I think about that presentation, the more offended I get by it; you really ought to give these guys a bit of a talking to, Nathan.

By the way, you misread my post-- the $10,000 loss in income is over 3 years, mostly from losses in benefits. Whether inflation stays in check is an open question admittedly, but the losses in benefits proposed by the MTA were real in any terms.

And hey, I sympathize on the work issue-- my unemployment check runs out on Dec 31st, thanks to your buddies in Congress who didn't reauthorize it. So I'm scraping by as well.

But I don't take it out on those who have jobs.

I don't think it's very open. Staple inflation is still low, but the main costs of living, housing and services, are falling steeply, while energy prices are rising. The transit workers, who mostly I believe live in the boroughs, probably do not consume much gasoline, and modest increases in heating cost borne by their building are going to be swallowed by the estimated .25-.35 deflation in housing costs I saw in the Real Estate News last month. If they own, they will be benefitting from lower interest rates. With housing costs running much higher than the 1/3 average in the rest of the country, this is a larger part of their income than any other item except the taxes they want to raise to pay themselves higher salaries. The price of milk going up a few cents is a trivial cost compared the the gain in deflationary items.

They also -- oops! -- left out the benefit hikes they're proposing.

Now, the majority of that tragic loss comes from an undiscounted loss of benefits. The problem is, the only benefit cuts I'm aware of are trivial from the union's perspective (although helpful to the city as an aggregate gain). This is a black box number for which they provide no explanation. I think you've worked on enough of these campaigns, Nathan, to know that if we saw how they arrived at it, this would not be a number any accountant took seriously; it would be a figure generated by everyone in the meeting straining to think of as many things as they could to tack on, and then inflating the number by 20% or so to make it more compelling. Or made up out of whole cloth by the guy who made the flyer. Something you could use in a press conference but not a courtroom.

I'm just doing back of the envelope calculations from the other side, but at least I can show my work. Average salary for union professionals in this city is higher than the numbers I'll use, but let's assume that these guys, on average, make between 40-50,000 a year. Those starting out will make less, the senior guys will make more. (The overall number is probably higher because unlike non-union work, union jobs are biased towards senior staff, the exact opposite of what you see in the open work force.)

They want a raise of 8% a year. There are 34,000 of them.

In the first year, 3200-4000: 1.08 bb to 1.36 bb
In teh second year, 6400-8000: 2.18 bb to 2.72 bb
In the third year, 9600-12000: 3.26 bb to 4.1 bb

I'm not discounting the numbers because those are the losses in each year. To be weighed against a budget shortfall that's projected to grow for each of those three years. The two lifebloods of New York are tourism and financial services. Tourism is off (and the transit strike is going to severely hurt it), and financial services is laying off ever more people -- people who will be getting taxes back this year, not paying them. The state is in no better shape, since New York is pretty much its major revenue generator -- I don't think the Rochester area is suddenly going to take off and start picking up the slack.

If you have some idea how to pay them, Nathan, either than the amusing Bus Rapid Transit (which one study, not-quite-tongue-in-cheek, allegedly estimated would save the city more money by killing off its slower senior citizens than by any improvement in bus service) I'd like to hear it.

As for you D-Squared, your analogy just "proved" that the hollowing out of American cities never happened. I suggest you go talk to the mayors of Detroit, Newark, and Philadelphia before you assert that raising taxes won't have a deleterious affect on the business tax base. Or that chasing those greedy bastards out will be an unalloyed good for the city.

Regardless of anything else, the businesses have no money to pay. Checked out the investment banks' balance sheets lately? Or the retail and restaurant community that serves them? There's a lot of losses going around, and no one's yet figured out a way to tax those.

>>Checked out the investment banks' balance sheets lately? Or the retail and restaurant community that serves them? There's a lot of losses going around, and no one's yet figured out a way to tax those.

Investment banking firms which made a loss this year? Name one.

I got to say, your numbers on the cost seem odd. If we assume $60K per member, an 8% increase is $4800 per member per year. Multiply that by 34,000 folks and you get $163 million.

Serious money but not the billions of dollars per year you are talking about.

I am very curious how you came up with your figures?

Jane Galt:
"Nathan, you need to check your facts. You can't just regurgitate the talking points memo from the transit workers union, any more than I can post the MTA's press releases and expect anyone to take me seriously."

"For one thing, the main thrust of my post was that there is simply no money to pay the unions. It is irrelevant what they make, because the city is facing a 12.5% budget shortfall this year, scheduled to balloon to 15% next year."

Fact checker, check thyself -- and on the most basic of facts.

Transit workers do not work for and are not paid by New York City, and the fiscal woes of the city are pretty much immaterial to the issue of whether their employer -- the Metropolitan Transit Authority -- can afford to pay them more. The MTA is claiming a huge deficit this year, after a huge surplus last year, and with no loss in ridership. Moreover, despite being a public entity, it is refusing to open its books, so its claims can be verified. What does it have to hide? Aside from false claims about an inability to pay, a very top heavy, very overpaid management structure.

So maybe you should do a little research on these matters before you set the pontification gears into motion...

Nathan -- clearly I transposed a decimal. Since I was doing the calculations in decimals, when I grossed up the first one I made the error, and repeated it by accident when I grossed up the others. Nathan is correct. The numbers are less horrifying, though still horrifying enough.

Leo: where do you think the money for the MTA comes from -- the transit fairy? The MTA had a surplus on state and city funds, which are now being cut as part of the city's austerity package. The system doesn't pay for its operating costs, much less its cost of capital. And its surpluses seem to be largely earmarked for capital projects, although of course you're right that they won't open their books. However, I'm unaware of any surplus: the reported figures show a small operating loss and larger capital loss, with those deficits projected to widen even before the current cris. You can see the figures here. Their cash position is extremely weak and getting weaker. You will also note from these figures that the City and State provide a combined subsidy of $300 mm dollars.

As you can see, wages and salary make up the bulk of the agency's cost, and were slated to drive the budget farther into deficit even before this contretemps. A little more than half of those employees belong to this union. Probably another large number are civil service rated in AFSME. It's unlikely that a large portion of their labor costs represent political appointees, a.k.a. The Evil Bastards in Management, who generally max out their salary in the $150,000 range, and rarely form more than very a small percentage of an agency's overall staff.

Now, while the labor costs are at least somewhat malleable, other costs are not. They can't stop paying their debt, nor reduce their fuel and electricity payments, which form the bulk of non-labor expenses. Nor realistically increase ridership in a down economy. I don't know where you got the information that ridership hasn't fallen, but anecdotal evidence suggests that the subways are awfully empty as the banks lay off. Some of that is probably being masked by metrocard purchases that will expire within a month. But since the MTA doesn't provide monthly ridership information to the public, I couldn't find the document you drew that assertion from.

In other words, they don't have any money either. Nor any way of getting any except from the city and state. Which don't have any money. The negotiation is ultimately taking place under the supervision of George Pataki, who has final authority, with Bloomberg involved on the city financial side. I'm currently sitting in an office full of people monitoring the negotiation from the City side, so it's foolish to tell me that the city's not involved.

I haven't look, D. But businesses that cater to the carriage trade are shutting up shop all over town. I hear it's the same in London, as a matter of fact.

Jane:

Your suggestion that the MTA receives funds from the city budget is, indeed, something from fairyland. It does not. The MTA's sources of income are: (a) rider's fares, which you conveniently forget to mention, despite the MTA management's proposal to raise them rather dramatically and despite the fact that increased ridership has significantly increased the income of the MTA in recent years; (b) income from bridge and tunnel tolls in New York City from the Triborough Tunnel and Bridge Authority [the same folks that owned the WTC]; and (c) state funds. Indeed, the MTA is a creature of the state government, and the governor is the key actor -- as anyone who has carefully read NYC newspapers this last week would know. The mayor is a sideshow, and a not very entertaining one at that. The city can monitor the negotiations all it likes, and it even has legal standing, as a potentially injured party, to seek injunction against a strike, but not a cent of city money goes into the MTA budget.

Since I am doing your research for you, I might as well point out that the NYC mass transit system started out as private operations [thus, the trains that run on the old IRT tracks, the number trains, can not run on the old BMT and IND tracks, as they are of a different gauge], and only became a publicly owned venture after the private owners ran them into the ground, forcing their purchase and operation as a public service. The next time one of your hoity-toity conservative pals tells you about how privatization is a solution to poorly run public services, you can mention the NYC public transit system as a counter-example, thanks to me. [No credit need be given; I debunk shallow arguments on the behalf of laissez-faire markets for the sheer pleasure of it.]

Ignorant of this background, you make much of the fact that the state government provides a portion of the MTA's operating budget. What a horror -- and I am certain that it also bothers you beyond belief that the state government subsidizes [at much higher rates] commuter railroads from the suburbs, airport improvements, and, best of all, roads and highways. Of course, that is all economic infrastructure, which government should subsidize, unlike the primary means of transportation for working people, which is by definition a welfare handout, right?

I am curious about one thing. Since we have here a public entity, supported by public funds [through fares, tolls and taxes], the management of which is not, as you admit, prepared to open its books to public scrutiny, then how do you know that any of the figures they supply and you quote are accurate? A leap of faith in the irreproachable honesty of management? And might you also explain to me what conceivable reason a public corporation, with an economic monopoly on the service it provides, has for refusing to open its books?

Not all the rats in NYC live in the subways. There are quite a few in the penthouses.

Leo:

If you were paying any attention you would have learned that I grew up in the New York City transportation community; my father is in the heavy construction industry and was heavily involved with the 2nd Avenue subway project. I grew up listening to stories about infrastructure spending and operating budgets at Daddy's knee. You're not going to tell me anything I don't know about subways unless you do your reading outside of Robert Caro biographies.

For example, if you knew anything more than you'd gotten from your superficial reading, you would also know that the reason the city took the subways over was that the city's fare fixing starved the system of capital and ultimately operating funds, precipitating a crisis which required the city to either raise the fare, or take over the subway. Lacking the political will to raise the fare, they chose the indirect taxation route instead. Your example shows, not the failure of private industry, but the failure of government price fixing. Indeed, 90 years later the system is still perpetually starved of capital because of the city's reluctance to raise fares, which makes it difficult to issue bonds since their payment must be taxpayer subsidized.

Of course, I haven't made any arguments about privatizing the system. But I just thought you should know, before you go to spread this story elsewhere, that there are many people out there who will be happy to publicly make you look like a fool for advancing it. If you want to be a debunker, Leo, it's best to argue with people who know less about the matter at hand than you do, not more. You will certainly not want to make grandiose claims about educating people and debunking their arguments unless you have a better understanding of the subject you are debating than you have so far evinced.

You would also not make incorrect assertions about the source of funding of the MTA, which gets $159 mm of direct assistance from the City each year, according to the IBO.

I haven't said anything about state funding, other than that there is no money to pay for it. You're inferring statements that weren't made. Go back and read what I said, not what you want me to say so you can rant at me.

As for your last question, the MTA doesn't never release their budget, as you'd know if you paid attention. It's just not opening their current books. They get audited and have to disclose their finances just like every other agency. That publication is from the independant budget office of New York City, which has, you may be sure, spent a lot of time with the MTA's figures.

Now, you may admit that you are wrong, or you may go away. I'm not continuing any arguments with people who flail around with stupid assertions they picked up in 3 minutes of web browsing and refuse to have their ideas challenged. I know more about this than you do, as far as I can tell, and I have neither the patience nor the time for battering against an ineffable wall of willful ignorance.

Have been following the debate between Jane and Nathan. All I have to say is, "Jane, you suck."

How devastating.

Leo, the Triborough Bridge and Tunnel Authority -- TBTA -- has nothing to do with the Port Authority of New York and New Jersey, which is the owner of the World Trade Center past and presumably future. The TBTA is in fact a constituent agency of the MTA alongside the NYCTA, Metro-North, LIRR, and LI Bus. The confusion is somewhat understandable as the PA also owns tunnels and bridges (Holland, Lincoln, and GWB, among others) as well as the PATH and PA Bus Terminal. But the TBTA and PA are entirely separate.

The key difference, of course, is that the PA is an interstate agency; the crossings it controls are the ones that go to Jersey.

Go ahead Leo -- educate us some more!

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