You are currently browsing the Harder World weblog archives for March, 2009.
29. March 2009 by admin.
Last week, the Metropolitan Transportation Authority (MTA), our local mass transit agency, voted to raise fares and cut service. The price of a monthly MetroCard for the buses and subways will go from $81 to $103 per month, and fares and tolls for other MTA facilities (they’re also in charge of the commuter railroads, and toll bridges and tunnels) will similarly go up.
That, in and of itself, wouldn’t be too bad: public transportation in New York works pretty well, and would be a good value even with the fare increase. But the plan also includes a series of service cuts, including dropping two subway lines and about 30 bus routes, and reducing late-night subway service by one-third.
In good times, financing the MTA is not a critical problem: the agency is financed with transfer taxes on real estate and other similar transations. But since the economy went kablooie, tax revenues are way down.
Historically, New York State has subsidized the MTA to some extent, but that’s difficult right now because the state is broke. It’s not as if we couldn’t see the problem coming: Richard Ravitch, who ran the MTA years ago, was tasked last year with coming up with a plan to help finance the MTA under the current circumstances. However, none of his recommendations have gotten through the New York State Legislature. The Ravitch report included a plan to charge tolls on the East and Harlem River bridges that are currently free, but somehow the Legislature first decided that the toll could only be $2 (not the $5 proposed in the Ravitch report) and then couldn’t be done at all.
The only thing that the Legislature has apparently done, and isn’t specific to the MTA, is to crank up the income tax on higher brackets (above $250,000/yr). While such a tax increase is a necessary component of dealing with the problem, it can’t be the entire solution: raise the taxes enough, and the people who pay them will go elsewhere.
But then the Legislature seems to be on its own little planet, where there’s a shortage of funds, but never any need to do anything about it, and the Governor is on his own little satellite, apparently sucking his thumb while the whole mess unfolds.
The thought is that the Legislature will get off its rump and ‘do something’ to help fund the MTA. The newspapers have been suggesting that we should all call the Governor and our legislators to get them to do something.
It seems pointless: I’ll save my breath to cool my porridge.
But watch: sometime late in May they’ll put something together, and the fares will only go up by 10%.
They always do stuff like that.
They’ll come through.
Won’t they?
Posted in New York State, Dysfunctional Government, Money | No Comments »
27. March 2009 by admin.
Today’s morning newspapers were full of righteous indignation that the Port Authority would henceforth call the tallest building on the former World Trade Center site ‘One World Trade Center,’ instead of ‘Freedom Tower.’ The editorial writers were in high dudgeon: how dare they strip the building of its proper patriotic name in the interest of… marketing?
For my part, it seems the most sensible decision the Port Authority has made about the site in years. The name ‘Freedom Tower’ reeks of Orwellian doublespeak and pointless politically correct posturing.
Now, if they can just get the damned thing built….
Posted in World Trade Center | No Comments »
22. March 2009 by admin.
The big news last week was that failing insurance company AIG, despite receiving $180 billion in bailouts from the government, spent $165 million on employee bonuses, including some of the people who were responsible for AIG imploding. There was an uproar in the press, and the House passed a 90% penalty tax in an effort to recover the bonus money.
But then it came out that our leadership knew about the bonuses and lad let them stand in earlier bailout legislation. Moreover, the Constitution prohibits retroactive law.
I’d like to think that a prudent management, in writing contracts for employee bonuses, would include provisions for cancelling the bonus if the employee runs the company into the ground. But then a prudent management would not have let itself be run into the ground.
In the end, even though it feels good to give in to the populist rage and try to take the bonuses back through one means or another, it’s probably better to let them stand. We’re supposed to be a nation of laws and not of mob rule. Moreover, some of the employees receiving bonuses might actually deserve them.
The bigger questions are:
Posted in Dysfunctional Government, Things Falling Apart, Money | No Comments »
21. March 2009 by admin.
There was some encouraging news this week: Citigroup reported that it had turned a profit. Yes, they receved billions in bailout money, but it’s still encouraging. And the Dow Jones average was up for the week, for the second straight week.
Has the market found its bottom? In another time, the answer might be ‘yes:’ we would reasonably expect the market to take its time to recover, for the parties to take their losses and lick their wounds, and then forge on.
But yesterday, the Congressional Budget Office quantified ‘trillion-dollar deficits as far as the eye can see’ to anticipate a cumulative deficit of $9.3T over the next ten years.
Who will pay for it?
For years, our deficits have been funded from overseas: from China and Saudi Arabia. But they’re beginning to get worried. Our own economy is now so oriented toward credit and consumption that we can’t finance it ourselves.
The only plausible alternative is inflation: the government watering down the money to make it go farther.
And the deficits aren’t just to fix the economy: they’re also for President Obama’s programs to remake the country in his own image.
And so what could have been the bottom almost certainly won’t be.
Posted in Money | No Comments »
8. March 2009 by admin.
For the last few weeks, I’ve been trying to resolve the disconnect between Barack Obama’s speech on the economy a couple of weeks ago, in which he reassured us that we’d get through it together, stronger than we were before, and the facts on the ground.
Last Friday, the Labor Department announced the unemployment figures for February: a new loss of 651,000 jobs, and a current unemployment rate of 8.1%. I remember the last time we had an unemployment rate of 8.1%, back in 1983. Somehow we got through that in one piece; indeed, before that, in the 1970s, we had worse.
And everything in our society still seems to work: there’s gas at the pumps and power at the socket and food in the stores. Yes, times are tough: my son, who is finishing college this year, is looking for work without success. But the world does not seem to be coming to an end: in my work, I booked a new project this week, and the stream of business still appears to be flowing.
From those observations, I would expect continued unemployment, perhaps an increase in crime, and probably higher taxes, but the overall economy would start to improve in a couple of years and we’d get out of this morass.
So why did Our Fearless Leader address us that night as if our cities were in ruins and the end of the world was at hand? Have we really become a nation of crybabies?
Maybe, but I don’t think Obama is really the crybaby type.
My current explanation is rather more worrisome.
Our recent Presidents, Clinton and Bush, were masters of dissimulation. They would happily tell us what they wanted us to hear, and disregard, gloss over, or simply lie about the inconvenient truths in conflict with their agendas.
Barack Obama is a politician, to be sure, but he does not have the talent of his predecessors. Or perhaps he simply believes that it’s better to at least try to be aboveboard with the electorate.
In any case, I’m sure that he has been briefed on the dimensions of the economic situation rather more thoroughly than what we’ve been able to read in the newspapers.
He has said for the record that things will get worse before they get better, but he hasn’t said how much worse they will get.
He knows how close we are to a state of emergency.
And I suspect that it’s closer than we think.
Perhaps he believes that the stimulus package, and similar deficit spending, is our last, best effort to pull ourselves out of the whirlpool; perhaps he believes that the primal forces of our downfall have been set in motion, and can no longer be stopped.
In either case, he recognizes that to discuss this matter forthrightly would ignite a panic, and bring about precisely the emergency he is seeking to avoid, or at least postpone.
So he addressed us two weeks ago as if the havoc, chaos, and destruction had already been released, while things still seem relatively normal.
This does not look good….
Posted in Dysfunctional Government, Money, Barack Obama | No Comments »
7. March 2009 by admin.
This week, the prime minister of Britain, Gordon Brown, arrived here on a state visit. There was a minor flap when our relationship with the UK was referred to as a ’special partnership’ when it should be ’special relationship.’ Whatever.
But the gifts that were exchanged between the President and the Prime Minster were telling:
Doubtless, if the Obamas were buying gifts for friends of the family, their choices would have been reasonable. But Barack is the President now, on the world stage, and needs to do better.
Meanwhile, Secretary of State Clinton presented the Russian foreign minister with a yellow box with a red pushbutton to symbolize the President’s wish to ‘push the restart button’ on relations with the Russians.
The box was labeled with ‘Reset’ (in English) and ‘Peregruzka,’ which someone at the State Department thought meant ‘reset,’ but actually means ‘overcharge.’
Moreover, whoever made up the box did a rotten job: the Russian word is rendered in the Roman alphabet, and the labels on the box were written on tape (proper industrial control panels are engraved). I’m astonished that with all the resources of the State Department at hand, our Secretary of State could field such a piece of crap.
A while back in my career, when I worked for a really large organization, we were all sent off for two days training about how to maintain a non-hostile working environment. One of the points discussed in the training was to be mindful of cultural differences between yourself and the people around you.
This would seem obvious, not just in the context of a workplace, but especially in the context of our leaders, who are dealing with people from around the world.
We like to believe that former President Bush shunned diplomacy, and was inept in dealing with the world, but he got details like this right, which helped assure that even though the people we dealt with might disagree with us, they took us seriously. In contrast, the Obama administration comes off as a gaggle of buffoons. It won’t matter if they agree with us or not if they think we’re a bunch of clowns.
Surely we can do better….
Posted in Dysfunctional Government | No Comments »
2. March 2009 by admin.
Posted in New York City, Television, Money | No Comments »
1. March 2009 by admin.
A former colleague recently sent me a New York Times article from 1999 discussing how Fannie Mae was easing requirements for the mortgages that it would purchase from banks, in an effort to increase home ownership among minorities.
As far as I know, my correspondent is correct: the root cause of our current economic woes was the decision in the 1990s, in terms of government policy, to make it easier to get a mortgage, ostensibly to encourage home ownership.
Yet last Monday, in a series on the economic crisis, the NBC Nightly News overlooked this detail. According to the report, the origin of our difficulties came after 11 September 2001, when, in an effort to prop up the economy, interest rates were held low, and mortgages were issued to anyone who was breathing. No mention was made of what led to the easy mortgages.
Yes, it’s a case of biased reporting.
The editors at Nightly News probably anticipated that if they traced the origins of our problems to government policy in the 1990s, they would be deemed ‘offensive:’ how dare you accuse innocent minorities of ruining the economy!
But the New York Post, which points to the easy-mortgage policies of the 1990s and neglects what happened afterward, is also biased. It strains their world view to consider that businessmen might be motivated by greed, to the exclusion of common sense.
Ultimately, it is the responsibility of each of us to review the news and decide for ourselves.
Everyone has their own particular axe to grind.
Even me.
Posted in Media, Dysfunctional Government, Money | No Comments »