Single-Party Rule: the NYC MTA

The article, Why I am a Green, not a Democrat by Mitchel Cohen (Informed Comment), wasn’t exactly about finance, but it did involve this interesting question that the author wanted to ask of the exceedingly smarmy Senator Chuck Schumer. It’s about a slated fare increase on NYC transit from the current $2.00 to $3.00 per ride. The fare increase is “to raise $1.2 billion claimed by the MTA as its deficit”. Naturally, the MTA is not allowed to run a deficit, so it has to make up the difference. Since bailing out a transportation organization that provides service to millions of mostly lower- and middle-class people is completely out of the question[1], the MTA has to come up with cash on its own. So, a fare raise it is. Naturally, this should have no nasty side-effects on the locals, since it’s only $40 extra per month. C’mon, who can’t come up with that kind of cash? What are you, poor?

Anyway, the kicker is why the MTA needs the money. It’s to pay down “the interest on the MTA’s capital expenditures (NOT operations) – that is, the building of the 2nd Ave. subway, etc. – [which amount to] $1.5 billion for this year.” So, the fare increase will go directly to the bank to pay the interest on a monstrous loan. That interest bill of $1.5 billion will likely remain the same as the odds that the MTA will be able to actual pay down any of their debt in this economy are slim to none.

For those following along at home, that means that, when banks need money to stay afloat, they get billions free from the government. When a state/city agency needs money, it gets bupkis and has to shaft its riders to make ends meet. Witness the majesty of a Democratic government, finally ready to stand up for the little guy. Let’s answer the author’s question below:

“Why haven’t the Democrats earmarked the funds they’re paying for bailing out the billionaire shareholders to paying off the bank loans, so that no fare increases and no layoffs would be needed?”

Because the Democrats[2] like the billionaire shareholders better than the poor because the shareholders give Congress better stuff. Layoffs and fare increases are New York State’s—and New York City’s—problem. What is the difference between a Democrat and Republican? Only fringe issues; they are both equally happy with the basic class divisions as they stand, as long as the legislature stands firmly on the far more opulent side.