Here is another comment that New Yorkers will not want to hear: Move your businesses out of New York to other parts of the country.

“That word is “privatization.”"

An important and necessary point, but I worry that too many people don’t understand that privatization is only a good thing if it’s done correctly. The taxpayers of New York have been fleeced by the MTA too many times to simply declare it “private,” as if their debt to the taxpayers could simply be absolved.

My preferred solution has always been to transform it into a joint stock company, held by the New York City taxpayers, where each person would own a share relative to taxes payed and time spent living in the city (in order to approximate sales taxes payed). I think a similar solution could be used for privatization of road and utilities. Any thoughts?

“Given the failure of the financial industry in the current downturn, I am not convinced of your implication that private efforts are superior to public efforts.”

Uh oh.

The financial industry is hardly private. How can an industry characterized by interest rates that have been intentionally and aggressively been pushed far below free market levels be considered private? How can an industry whose largest firms have been bailed out and directly subsidized multiple times over the past decades be considered private? The financial industry as we know it depends entirely upon legal tender laws to prevent people from rejecting their product despite its continued debasement through fractional reserve banking backed by increasingly shifty assets. If businesses were allowed to reject payment in dollars, firms in the financial sector would not be able to continue their profligacy.

The common plutocracy we see in action every day in the financial and other sectors has nothing to do with free markets. Thus, nobody can reasonably use the current financial crisis to claim a moral victory for government management… even on the subway.

It is good to laugh. Humor is good for you. With all the fleecing that went on for the same thing it is clear that those New Yorkers that voted for this each time after the first failure are not nearly as smart as they think they are. That is why NY is such a regulated state and the taxes are oppressive. No one gets the message.

I hate to say it but I think that some rube from the country would have smelled this a mile away and said no thanks.

I know there are many other similar situations that point out the lack of government’s ability to produce anything or to run any service profitably.

There is another “Heads Up” ad that baffles me on the subways. It says something about how in some year, like 25 years back, a single ride cost $1.86, but today a 30 day unlimited pass brings the fair to $1.17 (in that year’s dollars). What kind of mathematical hijinks is that? The first fair is for a single ride, with no discount, being compared with an unlimited card…how is infinity being used to calculate a cost per ride comparison? And what price index are they using? And what CPI are they using? Pre-Clinton or the most recent “enhanced” version? If someone can explain it, I’d love to hear it.

To add to what Robert C said, banks are required by law to allocate a certain percentage of their capital. In fact, I read somewhere that the banks that failed were BASEL II compliant. In any case, the financial industry is more restricted than the airline industry and for a good reason: central banking requires that the government has some degree of control over banks. Of course, the banks do get something in return in the form of preferential treatment whenever in trouble, high entry barrier, and limited innovation. But that doesn’t hide the fact that the financial industry is regulated.

While it is fair to complain about sluggishness and inefficiency of the government-run projects, it is not completely fair to assume that such enormously expensive pieces of infrastructure, if privatized, would better serve the public, or would be better built or operated…

The private sector operates on profit, and it undoubtedly performs much better where cost versus benefit ratio satisfy certain limits… In this case I seriously doubt that one can make money on running a mass transit system of such magnitude, unless by charging much higher fares and making sure that the consumers have no other alternatives…

I do not know any large transit company anywhere in the world that entirely relies on private investments… All of them are subsidized one way or another (e.g. European mass transit systems – even though they are run by private operators, they all rely on government subsidies and share the same public infrastructure to stay profitable)…

My conclusion is that no clear-cut verdict can be made in this case…

to pbergn:
the major railway networks of argentina were built by private british investors, attracted by the liberal economic policies that prevailed in the second half of the nineteenth century.

massive infrastructive projects are perfectly able to be undertaken by the private sector, subject to freedom on pricing and minimal regulatory burden (see eurotunnel for an object lesson in how government control over safety, environmental and engineering can bankrupt a private infrastructure deal).

A few of your “facts” are a bit off.

You claim that “fewer and fewer people over the last 60 years rode the wretched subways,” but in 2007, ridership was the highest for any full year except for a couple of outlier years during World War 2 (when the numbers were inflated by large numbers of troops moving through the city). Ridership did decline as the system declined through the 70s into the 80s, but it has rebounded to all time high levels.

The other bit you seem to have missed is the origin of the locked in 5 cent fare. When private companies built the IRT and BMT, they got the city to agree to lock in the 5 cent fare because they were worried about deflation. That is, if they were forced to lower the fare to 4 cents, which they worried the city might press for if prices went down, they wouldn’t be able to pay off their construction debt. They were caught by surprise by inflation, and the city would not allow them to raise their fares to cover operating costs, which drove them into bankruptcy, forcing the city to take over all the lines, at which point they immediately raised the fares.