CTA Tattler

The weekend service changes links are broken (two leading "http://"s).

Link fixed. Thanks Bill.

Shifting capital to the operating budget, shorting the pensions...it's deja vu all over again!

Shorting the pension funds is a very risky move, especially since our state government has a history of kicking the proverbial can down the road. There's another option that we've discussed before, but it's worth mentioning again in light of the new details - repealing the seniors ride free boondoggle attached to the previous doomsday bailout. I recall that the CTA lost about $40 or so in revenue from this program, and can imagine that, with the economy in such bad shape, even more seniors are likely opting in, further straining the CTA's budget.

I realize Pat Quinn has publicly come out against it, but that was before he proposed increasing a number of fees tied to driving and vehicle ownership, not to mention income taxes. There's nothing progressive about seniors riding free, especially when the old fogies were previously provided a generous discount on their fares.

Let's do it, and do it now, state legislature.

A little shifting from capital to operating is not a bad thing if it happens during economic catastrophes. The problem is when it happens routinely due to chronic underfunding of the operating budget. The new operating funding last year, while not enough to compensate for the present economic situation, probably did address a good deal of the chronic underfunding. Just hard to notice in a quasi-depression.

No more free rides for seniors should be added to that plan. It isn't for Carol to propose that since it is the law. Instead we need the politicians to do what is right for the region/state.(fat chance)

Let's just drop the pension altogether. Put a freeze on new accounts.

Pensions are a relic of the 60's-80's and should be dealt with as such. Just think of how many companies don't offer a pension anymore. Let the employees deal with the market the way the rest of us do.

Phase out pensions and get rid of the free rides for seniors, and even some of the other free riders if necessary.

Do you really think they'd have a hard time hiring without offering a pension in this economy? I think not...

Pensions holidays are a terrible idea. Even in the worse economic situations this is a penny wise pound foolish thing to do. And in the CTA's case it's a disaster considering how it is poorly funded.

I'm not sure what the best way to find the money, but some combination of eliminating senior fares, fare increases and service cuts should all be on the table. It would also be smart if the CTA thought about eliminating or switching to a 2 tier system when the contract comes up soon (2010?). I know they keep trying to get rid of the pension, but I think this financial disaster might be the best environment for this change in a long time.

Reform of CTA's pension was part of HB656, which would not have passed without it. New hires come in under different vesting rules and with a different contribution structure than current employees.

"Phasing out" pensions is a lose-lose idea. Pensions are a common type of compensation in unionized workplaces because employees like them. (They are uncommon in non-unionized workplaces because employers can get away with more when employees do not pool their bargaining strength.)

And in any event it wouldn't save any money in the long haul because presumably the overall compensation received by the bulk of CTA employees is a function of bargaining leverage. If you decide that the employees shouldn't receive one type of compensation, it stands to reason some other form of compensation will simply increase to keep the overall value of the compensation package at the level that the employees' leverage can command.

You can always save money by proposing that people simply want less or by proposing that economic reality be suspended or that the CTA be given the authority to mint currency. But I wouldn't hold your breath on any of those ideas coming to pass.

The CTA is underfunded because its not given enough funding. It's no more complicated than that. Either people who use it or otherwise benefit from it will force government to bite the bullet and fund public transit adequately, or else we'll all suffer in various ways in the short and long term.

No amount of cleverness or gimmickry or wishful thinking is going to cause the CTA to be properly funded. More money will. The question is simply whether there's the political will to raise more money and, if so, from what source.

[... fare increases and service cuts should all be on the table]

Why is it that so many people, when confronted by a recession, reflexively lobby for measures that will make it worse?

Why is the CTA shying away from service cuts. Recession=fewer riders and so it should result in a decrease in service and fewer employees on the payroll. Everyone else cuts down employees in light of lower demand, why should the CTA be immune. Oh that's right the unions, nature's counter-balance to economic reality.

[Recession=fewer riders...]

This is simply not true. In fact, this very blog noted the increase in ridership just a couple weeks ago:

http://www.ctatattler.com/2009/03/cta-ridership-growth-continues.html

Slightly off-topic, but interesting: the MTA board just approved service cuts and fare increases for New York City Transit, but did not eliminate the bonus for using pre-paid fare media.

"Asked why the transportation authority did not simply do away with the bonus and charge everyone the same amount, Aaron Donovan, a spokesman, said, 'As a policy matter, we offer the bonus instruments because we believe they encourage New Yorkers to use the system regularly.'"

I guess there's no elastic in NYC. :P

Food for thought;

http://www.cnn.com/2009/POLITICS/03/27/st.louis.no.bus/index.html

Yeah...just cut out the pensions. Over my f'ing dead body, you will. Your 401k has been stolen from you. My pension is guaranteed. (Granted it could all go to hell anyway)

So, since it was said we can't get rid of pensions cause salaries would subsequently increase, then why not get rid of unions. That would fix a lot of issues at the CTA, considering the percentage of expenses they are. Being held captive by a union will only hurt us again at some point with a strike threat. Let them threaten a strike in this atmosphere... That sure would be interesting.

" The CTA is underfunded because its not given enough funding. It's no more complicated than that."

That is just ridiculous. If that is the case then why did even the democratically controlled state legislature find it neccessary to reform the pension system during the last doomsday fight? I don't see how anybody can argue that "oh, the CTA is just a victim and the answer is always, always, always begging governments for more money". Take a look at this: http://www.chitowndailynews.org/Chicago_news/Exclusive_CTA_plagued_by_selfinflicted_fiscal_problems,10358 You are increadibly naive if you believe that the collective bargaining that has occured at the CTA is just this terrific process that comes to the fair conclusion. The reality is, of course, it has and to some extent likely still is a complete sham. The CTA leadership serves at the pleasure of politicians. And the politicians in this state serve at the pleasure of the unions. So the negotiations take place between people who want basically the same result.

And if you actually believe that pensions in the private sector would be a good thing than I don't know what to say. Companies would be collapsing every day and throwing people out of work. This is 2009. We shouldn't have pensions in the private or the public arena.

[So, since it was said we can't get rid of pensions cause salaries would subsequently increase, then why not get rid of unions.]

Hey, great idea. Along these lines, I have some other can't-miss ideas:

--One of the problems is that new train cars and buses cost a lot of money. So why not just get new train cars and buses for free?

--Let's face it, labor will be a big expense even after we smoke the unions like the greedy swine they are. Why not just get rid of paid labor completely and put local orphans to work?

--Maintenance is a big problem. Why not just play "The Sorcerer's Apprentice" in all the garages and rail yards and see if the local rodent populations take care of things for us?

[And if you actually believe that pensions in the private sector would be a good thing than I don't know what to say. Companies would be collapsing every day and throwing people out of work.]

Gosh, yeah, it's amazing how immune the private sector has been to the current recession. You'd think we'd have heard all about failed business and job losses on a daily basis, but no. Must be the lack of pensions!

The worse the economy is the more people would use mass transit as opposed to cars/cabs. It is cheaper. I understand the argument regarding lost jobs and therefore less commuters but people are not just gonna sit at home. Economically it is considered an inferior good therefore the worse the economy the more demand. Though I personally think mass transit is always a better option than driving and I do not own a car.

It really drives me crazy when I hear the argument "the suggestion that certain factors would have adverse effects doesn't make sense because negative things occur now". Come on, Strannix. I know you can do better than that. Businesses need a certain amount of flexibility in order to operate. That is just a fact. Ask any business expert and they will tell you that. A pension fund substantially increases and creates uncertainty of the costs to operate which means that they can't do as much. And that, of course, means fewer people are employed and there is less economic activity. When the economy goes into a recession (or if the company hits hard times for other reasons) it is much more vulnerable to a bankruptcy. What businesses still give out pensions? The auto industry and the airlines. How has that worked out?

"Let the employees deal with the market the way the rest of us do."

Nice. When it comes to health care and retirement options, one of the things that amazes me is that we Americans have really lousy options for both -- and yet we insist on clinging to them as if they were the best in the world. Unions are 'evil' and 'greedy' and 'outdated.'

When big business puts all of us back on a six-day work week, I anticipate the same sort of jealous attitude. "Screw them! I work six ddays a week and get 5 vacation days a year -- so should they!" Your ability to have a pension was taken away from you (and me) because we do not collectively bargain and we work in a country where workers are completely on their own. Just because we lost the ability to have pensions doesn't mean they became "relics." It just means the we, collectively, have gotten screwed. The middle class is shrinking. Many of us who think we're middle class will realize we're poor when we get old or get sick. Our health care security is tied directly to employment, which can disappear. We have no safety net other than what we earn, invest and hopefully do not lose entirely when the same bastards who did away with pensions and gave themselves bonuses wreck the economy again.

http://www.pensions-r-us.org/latest_news/enron_robs.htm

Fred,

I don't understand this "us vs. them" argument. Many businesses (in fact, most businesses) are, at least to some extent, struggling right now. Many have shut down. Why are you calling them "bastards"? In most cases, profit is a very small portion of a companies revenue (if it is lucky enough to be profitable). They cannot just give benefits out like candy. They need to pay very close attention to their financies to survive and to insure that they are able provide all the goods or services that they do. Yes, some corporations, just like some employees, have behaved like bastards. That doesn't mean that it makes sense to paint a broad brush and call all corporations that name, especially considering that they are the people who provide the jobs that allow this country to function.

JC,

First of all, if you paid attention in your economics class you would know the correct definition of an "inferior good". An inferior good is something that people are less likely to use when THEIR incomes rise. That does not neccessarally mean that in the aggregate there is less demand in the whole economy when times are good, or vice versa. In fact, in most cases the demand for inferior goods rise during periods of expansion and fall during recessions, just like everything else (although to a lesser extent). There are people who may be more likely to purchase inferior goods or services in bad times but this is usually outweighed by the fact that those who would be purchasing them anyway are doing so less often.

Secondly, you are wrong that mass transit in Chicago is an inferior good (or service). It isn't. In the suburbs, Pace normally is. But in Chicago, the amount of transit passengers who have a more convenient trip vs. driving is huge compared to the amount for whom it is less convenient. Those people who use it to work downtown (the biggest demographic who rides the system) certainly have an easier time than they would if they went through the trouble of going to their garage to get their car, wait in traffic, spend almost ten minutes parking in a garage downtown, and then spend $30 or $40 to do so. People who are going to a restuarant or are shopping in a congested area are going to normally find it more convenient to use transit than to circle all over the place looking for a parking space. So it is not an inferior good for most people. And the statistics over the years have shown that ridership decreases (or doesn't increase as much) during recessions. I don't think there is much of a doubt that there would be a higher ridership increase if the economy was good. There has, after all, been an increase nearly every year for the past couple decades. Most of those years, of course, were when the economy was expanding.

I'm just shocked at the political naivety of those running the City and CTA, and now, Carol Brown. To take off the table service cuts or a fare increases is just outrageous. I'm not saying the fares should go to $3 or service levels should get hacked by a quarter. But to not at least use this moment to at least ask the Bus Operators for a pay freeze or something, is nuts.

To not pay into the pension is another way of borrowing from tomorrow to pay for today. To argue that 84% funded is fine is to miss the point that you still need to fill-in 16%! All of these ideas coming from RTA and CTA are to put the problem off until tomorrow.

For both those camps on this thread who are for pensions or against them, BOTH of you should be against what Ms. Brown is proposing. She's keeping the system on life-support, only to beg another day.

One way to solve your pension problem is to 1) decrease the future pay-outs by decreasing today's wages and salaries (a negotiated wage freeze); or 2) have less people in the pension--that is: hire less bus drivers.

Both of them come ONLY if you either 1) threaten service cuts and bring the union to the table; or 2) actually do service cuts.

Ms. Brown isn't even threatening cuts. As far as it looks to me, she's not even remotely trying to get something from the CTA unions. You have to keep the threat on the table!

CTA Should:
- ask Unions (and Salaried employees, as well) for a wage increase freeze for 1 year.
- ask the public for small, strategic fare increases (base fare up another quarter; maybe 7-day pass up a dollar; keep 30-days the same, bring back surcharges on lakefront express bus routes; ask U-Pass riders to pay some more, etc.).
- ask Legislature to bite-the-bullet and ask seniors to pay a fare, maybe exempting low income like they did with disabled.
- cut some unproductive bus services, bringing its bus work force inline with what it can pay today and tomorrow into the pensions, as well as the reasonable fleet size that it can afford to maintain and replace with future capital requests.

I don't know if that solves all of the problems, but the CTA needs to get into a fiscally sustainable mode and it needs the help of everyone--you the riders, the workers, the pols.

My fear is that we'll get worse solutions the later these decisions are made. But, there has to be aggressive actions, and much smarter strategies, happening NOW. RTA and CTA are just putting it off until another day.

I can't believe the pass that the Chairman and her board get from riders and the press. CTA made progress with the pension by eliminating the pension for new employees and increasing employees pension participation. Leave the pension alone. How about job cuts starting with the board? $25,000/year, pension and lifetime health care coverage for going to 12 meetings a year and voting for what they are told to vote for???

[It really drives me crazy when I hear the argument "the suggestion that certain factors would have adverse effects doesn't make sense because negative things occur now".]

Why? You're the one saying that there's a cause-and-effect between the existence of pensions and massive job losses. Pointing out that massive job losses are happening anyway is merely my way of pointing out that the relationship is probably not as strong as you assume.

[What businesses still give out pensions? The auto industry and the airlines. How has that worked out?]

Along similar lines, I'd merely point out that this is very lazy thinking. Correlation does not prove causation; if GM and Chrysler didn't have to deal with pensions, they'd have exactly as hard of a time getting people to buy their cars as they are now.

[I don't know if that solves all of the problems, but the CTA needs to get into a fiscally sustainable mode and it needs the help of everyone--you the riders, the workers, the pols.]

I don't know how many times this needs to be pointed out, but the CTA was in pretty good shape until there was a historically significant recession. Once the economy regains its footing, the CTA's financial problems will be far less daunting.

"if GM and Chrysler didn't have to deal with pensions, they'd have exactly as hard of a time getting people to buy their cars as they are now."

I don't know if I would say "exactly", because they would be able to sell them at a lower price and would have more flexibility in terms of offering financing. But you are definetely correct that there would still have been a very sharp decrease in sales. Maybe it would have been 40 to 45% instead of the 50 to 55% decline that has occured during the last few months. But that is still a major drop. However, you are forgetting (or not mentioning) one important point. They would almost certainly not be on the verge of bankruptcy and wouldn't need the federal government's help. And they also wouldn't have to lay off as many people as they currently are. Remember, a HUGE portion of the three automakers' cost is to retirees. That is truly unbelievable. A company should not be in a position where it has to fight (and receive government help) to avoid a bankruptcy because of the need to pay people who no longer work for them. The foreign automakers have also had a major drop in sales. But none of them are on the verge of bankrupcy. Why do you think that is?

By the way, many of the arguments against pensions can also be made against health care benefits. They cause inefficiancies and reduced flexibility in how businesses can operate. And since they don't have to provide healthcare anywhere else in the world, U.S. workers are at a disadvantage with regards to this. So I tend to think that private companies probably shouldn't be in the business of providing healthcare to their employees. Healthcare should be funded in some other manner, perhaps the federal government. That is something that is generally thought of as a liberal position. But since I am ideologically consistant it is my view even though I am no liberal.

"You're the one saying that there's a cause-and-effect between the existence of pensions and massive job losses. Pointing out that massive job losses are happening anyway is merely my way of pointing out that the relationship is probably not as strong as you assume."

That is like saying that the laws against bank robbery do not have an effect on this crime because bank robberies occur anyway. Or it is like arguing that because people have problems with drugs that it seems clear that substance abuse programs do not work. Or it would be like someone making the case that since many people find it difficult to get around the city then the CTA is worthless. Come on. I'm pretty sure that deep down you don't really believe that the job losses that have occured prove that pensions do not have a negative effect on the ecomony.

"I don't know how many times this needs to be pointed out, but the CTA was in pretty good shape until there was a historically significant recession. Once the economy regains its footing, the CTA's financial problems will be far less daunting."

I don't get to post that often, but I've been trying to point out that it isn't true: the CTA was in bad shape before the recession. Go look at their's and RTA's budget books online and look at their out years 2010, 2011, etc. Huge debt to basically pay-off the bonds CTA had to sell to get up to the 84% Ms. Brown brags about.

Yes, this recession is historic, which is why they need to use THIS moment to fix those longer-range structural problems. They try it next year and no one will care, in fact, they may want their heads. Hence my main point that they're being short-sighted and politically naive.

As people's income rises MK they will take more cabs. Cab's are obviously more expensive so in a bad economy when people's incomes are decreasing they will take less cabs. Mass transit and cabs compete directly for the same business. You can take both the the airports but if you are trying to save money b/c your income is lower which would you take Mk. If you were not worried about money because your income was higher- cab,car, limo might be your preference.

anyone notice the new seating arrangement on the new 1,000 series new flyers- the seats are in facing as to make more room for standees. I believe there are about 32 seats.

"Businesses need a certain amount of flexibility in order to operate. That is just a fact. Ask any business expert and they will tell you that. A pension fund substantially increases and creates uncertainty of the costs to operate which means that they can't do as much. And that, of course, means fewer people are employed and there is less economic activity. When the economy goes into a recession (or if the company hits hard times for other reasons) it is much more vulnerable to a bankruptcy."

Since the above is apparently very persuasive, the following will be, too:

People need a certain amount of economic security in order to live. That is just a fact. Ask anyone who pays bills and they will tell you that. A pension fund substantially increases and creates certainty of the income during retirement which means that recipients can do more than they otherwise would. And that, of course, means more dollars spent in the economy and there is more economic activity. When the economy experiences increased activity (or if a person has financial security for other reasons) she is much less vulnerable to a personal bankruptcy.

The real reason pensions have fallen away is that they didn't work well for employers or employees. Employers had an uncertain future cost, and the temptation to underfund the burden. And employees became slaves to the job because pensions weren't portable.

401K's give both sides much more stability.

Those who think you can just slash CTA pensions to cut costs, you're living in a dream world. CTA payroll expenses won't change much in the short term. The unions are powerful. And they're powerful for several reasons - local political realities, the fact that many of them are skilled workers, the general cohesiveness of government workers which means that the skilled people in the unions will stand up for the less skilled, the faithlessness of local politicians, which means that employees feel more loyalty to a union that protects bad apples (who they all know and hate) and are unwilling to forego it's protection.

To drop the pension today would simply mean exchanging it for other forms of payroll compensation. There's little hope of exchanging the pension for any substantial budget gain.

I think governments should get rid of pensions because they create too much of an incentive for employees to stick around. While it's always useful to have experienced employees, most government offices have no shortage of experience. They're lacking energy.

The other thing is that voters aren't great at understanding accounting, so it's more tempting for governments to promise benefits in the distant future and underfund them today, leaving us all on the hook for them down the road. Eliminating pensions in favor of 401K contributions and other non-pension retirement considerations is part of pay-as-you-go principles that work better for government budgeting.

[The foreign automakers have also had a major drop in sales. But none of them are on the verge of bankrupcy. Why do you think that is?]

Well, actually, I would ask why you think this is. Here's an article I found that talks about these problems in some detail:

http://www.nytimes.com/2006/05/19/automobiles/19auto.html?pagewanted=2

The main points are:

1) Toyota and Honda simply have fewer retirees to worry about.

2) Health care costs account for a huge amount of the Big Three's current legacy pension problems.

3) Things wouldn't be bad now had things been better managed in the past.

4) Another benefit for Japanese firms - and this leads into your next point, which I address below - is that the Japanese government covers more of companies' pension and health care costs.

Anyhow, you'll notice that Honda and Toyota do have pension costs, so your entire premise is unsurprisingly wrong in the first place.

[Healthcare should be funded in some other manner, perhaps the federal government. That is something that is generally thought of as a liberal position. But since I am ideologically consistant it is my view even though I am no liberal.]

Sounds good to me; in fact this is significant common ground between us. As we all know, the biggest problem caused by pensions today stem from runaway health care costs. I agree that if the federal government covered more of these costs it would remove a significant burden for businesses.

And, by the way, this isn't something that is "generally thought of as a liberal position" - it's the backbone of liberalism in the US, that the government has an obligation to provide basic services to its citizens.

During the early postwar era, big businesses such as GM shot themselves in the foot by insisting on handling all pensions and health insurance themselves rather than having a government system.

Every pension scheme in existence is based on the model of present workers paying in to finance current retirees' benefits (like Social Security). This works fine as long as you assume that every individual company will continue to grow or at least stay the same size for all eternity. When they start shrinking, then it becomes the huge burden we're familiar with now.

If it had been a nationwide, government-run system, then the number of people paying in would be based on the growth of the US economy as a whole instead of just each individual firm. Instead, we have the mess we have now. (The CTA is a government agency, but its pension scheme is modelled on a private company's -- as is each individual state's pension scheme.)

Confronted with the huge problems that came about with our messed-up pension system based on individual companies, what did we do in response? Naturally, we encouraged everyone to give a lot of money to stock brokers that would magically provide them with a secure retirement. And now that *that's* collapsing before our eyes? Naturally, we decide that the very idea of a pension or secure retirement is stupid. We should just work our entire lives and then be content with penury once we're too old to work -- because businesses have to make money, you know!

"And, by the way, this isn't something that is "generally thought of as a liberal position" - it's the backbone of liberalism in the US, that the government has an obligation to provide basic services to its citizens."

But that is not why I support government funded healthcare. I very rarely choose sides on issues based on moral arguments. In my experience, whenever policy decisions result from moral arguments it is almost always the case that unintended negative consequences will end up overwhelming anything good that may actually occur. The reason I think it might make sense for the government to take over funding of (but not providing) health insurance is because there is strong evidence that it would cause the ecomony to work more efficiantly. It is something very significant that employers don't have to worry about. And this should cause a higher level of employment, especially in industries where there is competition between U.S. and foreign workers. For similar reasons, I also support the elimanation of the overtime rules. If employers want someone to work more than 40 hours a week they shouldn't have to pay them more than their usual wage.

JC,

I would suggest you brush up on your economic terminology and learn what an inferior good is: http://www.answers.com/inferior%20good

There are people who purchase less of just about every good or service when their incomes rise. That certainly doesn't mean that, on the whole, every good is an inferior good. Do you think that commercial airplane travel is an inferior good? By your logic, it has to be. Some people purchase private planes when they have enough money to do so. Afterwards, they may rarely use the airlines. But very few people would consider the airlines to fit within the economic defintion of an inferior good. People who become very rich may purchase an article of clothing from one of the most expensive boutiques in the county. And they may do so instead of buying something from Saks Fifth Avenue. But very few people would say that the products sold in Saks Fifth Avenue are inferior goods. They are not generally consumed less when people's incomes rise.

The majority of CTA rides are trips to and from work. The difference in expense of a cab ride vs. the CTA is so huge that almost nobody would consider using a cab to commute every day they go to work. And in many cases it is actually quicker to travel by transit than by cab, especially during rush hour when there is very high traffic. So the amount of CTA passengers for which this is a close call is rather small. And therefore the people who use the CTA more vs. taxicabs when their incomes reduce doesn't have a very large effect on the CTA's budget compared to other factors caused by an economic slowdows. So your analysis is incorrect. T

axicabs are good for two purposes. These are short trips to places such as restuarants in dense areas of the city with expensive parking and trips to the airport. But while the CTA provides plenty of these trips they are small compared to people going to work. And when there is fewer people going to work their will be fewer people going to work on the CTA. Not to mention that there also will be fewer people going to restuarants and the airport in total in a bad economy. And this would offset, to a large degree if not completely, the increase of people using transit because they don't want to spend the money for a cab ride.

[I very rarely choose sides on issues based on moral arguments.]

You say stuff like this with some frequency, but it must be pointed out that this makes little sense. Choosing to duck moral decisions is a moral decision in itself.

When you put a priority on an "efficient" economy over the welfare of the people you are making a moral judgment. In fact, this is precisely the moral judgment that is the backbone of economic conservatism in the US.

What you may mean is that you don't choose sides based on sentimental arguments. However, based on your general tendency to fulminate on things you know nothing about and make up statistics to support your causes, I highly doubt you're the dogged empiricist you make yourself out to be.

"When you put a priority on an "efficient" economy over the welfare of the people you are making a moral judgment."

Since we are talking about what are and are not backbones of different ideologies I'll point out that what you stated is the backbone of how liberals misunderstand nonliberal positions. The people who believe that an efficiant and vibrant economy is the top priority are not putting the priority "over the welfere of the people". They believe that an efficiant economy CAUSES the welfere of the people to improve. It is unfortunate you have this misunderstanding of non-leftist postitions. It drives me crazy when I see people who do. I think if fewer people didn't actually think, for whatever reason, that those of us who believe foremost in the importance of a good economy were against "the welfere of the people" then it would be much easier to get things done. We wouldn't be demonized by people like you for such things as not caring about the poor.

"The people who believe that an efficiant [sic] and vibrant economy is the top priority are not putting the priority [sic] "over the welfere [sic] of the people". They believe that an efficiant [sic] economy CAUSES [sic] the welfere [sic] of the people to improve. It is unfortunate you have this misunderstanding of non-leftist postitions."

This "misunderstanding" might come from the fact that there is no evidence to support the idea that strengthening the power of the market mechanism at the expense of democratically determined regulations and economic goals produces higher general welfare.

European countries enjoy better health, less work, lower poverty rates, and suffer less during economic downturns. In contrast, thirty years of neoliberal reform in the US and Latin America have produced high rates of unemployment (disguised in the US by the extraordinarily high rates of incarceration), stagnant wages, massive inequality, shocking poverty, and considerable social violence. In order to sustain these contradictions, government and business have colluded for decades to create asset bubbles and a massive expansion of debt - an unsustainable course that has led directly to the global depression.

Even growth rates, which capitalist apologists generally celebrate uncritically, were higher *before* the market reforms started in the '70s, when unions and pensions were strong and regulations closely bound the market. Demonizing you for supporting policies like this is actually giving you the benefit of the doubt, because the only other reason for supporting them would be overwhelming ignorance.

MK is hilarious! Comic relief. I love the internet.

What jake said, with the caveat that I am of course not giving MK the benefit of the doubt in the way jake suggests.

"European countries enjoy better health, less work, lower poverty rates, and suffer less during economic downturns."

That is because their governments subsidize those things. So there is very little money for any innovation to grow the economy. Yet it grows anyway over time. Why is that, you may ask. It is because we provide the overwhelming majority of entraprenurship activity that provides progress. And since multinational companies need to get their product out and employ people accross the globe, Europeon countries piggyback off of this. If it weren't for us, they would be in horrible shape. Compare the amount of major companies headquartered and founded in the U.S. with those in Europeon countries. It isn't remotely close despite the fact that we are a much younger country. The reasons for this, it seems to me are, are obvious.

I'm glad, Mike, that you find my posts hilarious. Just a reminder, though, that someone else in this thread has stated that everybody in the country should be paid exactly the same. So it is interesting that I am the one you find funny.

[It is because we provide the overwhelming majority of entraprenurship activity that provides progress.]

There are so many things that don't make sense in this single sentence that it's hard to know where to start.

But I guess the heart of the matter is what you would define as entrepreneurship. For example, I'm guessing that it will come as a surprise to you that, according to the OECD, Sweden, Germany, and France all have a higher rate of self-employment among their respective workforces than does the US. Here's a fun webpage that you can use to make graphs for yourself:

http://tinyurl.com/selfemploy

Certainly, self-employment isn't the only measure of "entrepreneurship," but it's hard to argue the point because I have no idea what you mean by the word. I get the feeling, however, that the number of large, multi-national corporations is the way you measure such things. Otherwise, you wouldn't say things like this:

[Compare the amount of major companies headquartered and founded in the U.S. with those in Europeon countries. It isn't remotely close despite the fact that we are a much younger country. The reasons for this, it seems to me are, are obvious.]

I cannot be the only one who doubts that you've done any kind of rigorous comparison yourself.

At any rate, I have no idea what this is supposed to prove, even if the numbers work out the way you assume. What would such a measure have to do with entrepreneurship?

It has seemed to me for a long time that our system, in which health insurance is mostly a privately-funded privilege of employment rather than a publicly-funded right of citizenship, must logically be a barrier to self-employment and a burden on small business. To my mind, this:

"... according to the OECD, Sweden, Germany, and France all have a higher rate of self-employment among their respective workforces than does the US."

... is a bit of empirical confirmation of my suspicions.

"Certainly, self-employment isn't the only measure of "entrepreneurship," but it's hard to argue the point because I have no idea what you mean by the word."

My definition of the word is pretty much what it is genrally thought to mean. A good place for you to look would be the dictionary definition of it:
http://dictionary.reference.com/browse/entrepreneurship

Inventing, creating, and innovating of products, services and the processes that create them is what drives the economy. If you look around you right now you will notice that the overwhelming majority of things you see were invented and later refined upon primarally here in the U.S. And the companies that make them are based here. So that is where most of their employees are located. This is not an accident. It results from the unique American culture of risk taking and innovation and a generally lax regulatory climate that allows this to happen (And that does not mean that there are not instances where too little regulation results in negative effects. So there will no point in mentioning that there are. It proves nothing. The world does not work in a black-and-white all-or-nothing manner with regard to policy. What is important is that, generally, fewer government restrictions are more beneficial than many.).

The amount of self-employment is certainly not a strong measure of the level of entrapreunership. A major factor in our lower self-employment rate may be that people are less likely to need to venture out for themselves because our corporations are stronger than in other countries. What Quandom El Rat mentions probably is correct as well. And like I said, I support reforming healthcare to take the burdon off of the employer. But a higher measure of self-employment is not neccessarally good or bad. It can be either. The perfect level of efficiancy in the U.S. would likely cause a self employment rate that is higher than it is now but lower than in Europeon countries.

I like how you actually link to the dictionary listing for the word and still can't spell it right. You really ought to invest a few minutes before each post to look over what you've written. It may help you to avoid looking like a total crank (or a seven-year-old).

We can all be sloppy at times, but in your case I think your poor spelling is sypmtomatic of a deeper problem. Simply put, your sloppy spelling is indicative of sloppy thinking. You don't bother to look up words that you don't know, like most people who want to be taken seriously - it's not like I know how to spell by magic, you know - and similarly, you don't bother to look up any facts about what it is you're talking about.

You either don't care about whether a word is spelled correctly, or you are assuming that you're smart enough to know. So it is with your "reasoning" on any number of subjects. You just make stuff up, and you either assume you're right, or you don't care whether you're right or not.

But if you want to know why people are laughing at you ... well, there you go. You don't give us much reason to take you seriously. After all, as your dictionary links proves, when you're on the internet these things are easy to get right if you put forth even modest effort. Perhaps you think that spelling is a trivial consideration, but maybe you should give some thought as to what this says about you.

[A major factor in our lower self-employment rate may be that people are less likely to need to venture out for themselves because our corporations are stronger than in other countries.]

Isn't this actually antithetical to entrepreneurship? Don't conditions like these result in a higher barrier to entry for industries with strong corporations, which in turn would lead over the long run to less competition? And wouldn't less competition eventually result in inferior products and/or higher prices?

I think strong corporations are of questionable value in a capitalist economy for just this reason. There's simply no basis to assume, as you apparently do, that they're "efficient" at all, either individually or as part of the system.

Additionally, if what Quondam El Rat says is "probably true," than I think that most reasonable people would agree that this reflects poorly on the level of entrepreneurship in the US.

If there's one thing I think we can all agree on, it's that you can't have a high level of entrepreneurship in an environment with high barriers to entry. Yet by your own explanation it doesn't sound like the US is doing well on this score at all.

Anyway, I'll repeat that your support of health care reform is quite welcome. It seems we both agree that this would solve some of the major problems with the US economic system.

I didn't say anything about barriers to entry. What you seem to be assuming is that self-employment is always to most efficiant and ideal situation. That simply is not the case. Sometimes it is the best career path for a person and sometimes it isn't. There are people who are getting laid off right now who will, as a result of not having a place to work, decide to start their own business if they have the money to do so. For some of them this will end up working out real well and will result in a better income than if they continued to work for the company. But others will have a more difficult time and their business will either not be successful or it will but they still would have rather stayed in their previous job. You are incorrect to automatically assume self-employment equals entraprenership. Some self-employed people make very little money and struggle severly. So the high level of self-employment doesn't suggest anything that a coutnry has a high level of innovation nor certainly does it say that there are low barriers to entry.

I think the leap you are making in concluding that low self-employment means less competition is flawed for the reasons I stated. What you stated, of course, is correct that more competition is generally good for the market and the consumer, all other things equal. However, it is also the case that the level of a firm's economy of scale is vitally important as well. If a firm has a higher economy of scale it has more leverage to purchase and/or produce goods at lower prices. So there is a balancing act between these two things, more competition or greater economies of scale, as to which is better for the market. A good example is pharmacies. A few decades ago there were far more of these firms competing for your business. In any given area there generally were several independant pharmacies as well as a number of regional chains. Now there are essentually six or seven firms that provide pharmacies in any given metro area. There are two stand alone pharmancy chains as well as a few big box and grocery store chains. You can see that despite less competition most people would likely say it is better for the consumer now than before. That is because the firms have greater scale and are thus able to purchase the products at cheaper prices. And this is passed along to the consumer.

Oh. I almost forgot to reply to your complaints about my spelling. This may come as a shock to you, but most people don't really take all that much time to make sure everything is spelled correctly when they do things such as make comments on blogs. If I had my own blog, I would take more time to proofread. But in less formal situations on the internet it is generally not expected that everyone will not occassionally make spelling errors. The fact that you feel the need to point out my errors suggests you are desperate.

So do any of you anti-pension fools have relatives, friends or family trying to live on a 401k type plan right now? My parents are having to sell their home of thirty years because their retirement income has gone down 80% in the past year. And I might add, they are not high income to start with - if they had a true pension they wouldn't have to leave their modest place for a dump.