Sources (all mbta.com):
About the T
Budget History
Historical Headcount

Needless to say, neither subsidies from the sales tax nor fare revenues have kept up with that growth in employee costs. So the next time you hear an MBTA spokesperson on the radio saying it's all about debt service and new services, keep those numbers in mind, okay?

Alas, what the MBTA doesn't publish is median numbers, nor have I been able to find a breakdown of headcount between exempt and non-exempt employees. My guess is that all too much of that extra money is going to people who drive desks rather than those that drive buses, drive trains, sell tickets and perform the day-to-day tasks that keep the system limping along.

Over the same period of time, Materials, Supplies and Services have risen almost as fast as fringe benefits. No shock there, Mass Transit is an energy intensive service.

So I get it. There's no magic. The MBTA can't cover increasing costs with near-constant revenue. So I'm not going to be joining Occupy Boston in protesting the upcoming fare hikes and service cuts. Yet. But unless the MBTA can show me that they are at least trying to shift the burden towards those who can better afford it, I may well be out there next time.

Wednesday, I did my own miniscule bit for the SOPA and PIPA blackout by not posting anywhere.  SOPA and PIPA were bad bills and would have been (or will be) awful laws.  The credits for this drama will list Disney, MPAA, and RIAA as the villains, but let’s not forget Capitol Hill.  I guess Congresscritters are too busy planning their reelection strategy, stoking their campaign coffers, and trying to win points off the opposition party to actually do the job we elect them to do – craft reasonable, thought-out legislation when it makes sense to do so.

Instead, Sen. Patrick Leahy claims “No Provision in the PROTECT IP Act Will Shut Off Access to Any Site That Has Any Non-Infringing Use.” (Emphasis his.)  He’s either lying or hasn’t read his own bill.  In his blog, Paul Hortenstine of the MPAA uses the word “Rogue” so often that you’d think he worked for Nissan.  The term “rogue,” of course, isn’t defined in the legislation, so the MPAA’s position works out to “if we don’t like a site, we’ll call it rogue and move to seize it.”

I respectfully disagree with those people who think the term “intellectual property” is an oxymoron.  I wouldn’t shed a tear if every offer of counterfeit goods disappeared off of the internet.  Nor would I mind if every upload without even a pretense of fair use also went away.  I admit to being a bit of a hypocrite on the last point, I have downloaded foreign TV shows to watch them in their original format earlier than I could on, say BBC America.  But so far, I’ve yet to see a solution whose cost is less than its benefit, and SOPA and PIPA don’t even come close.  At best, they would start the same sort of “Whack-A-Mole” game that goes on with spam sites.

Then again, I’m not going to call commercial websites blameless, either.  In this so-called Web 2.0 era, all too many sites, both liberal and conservative, think it’s perfectly OK to profit from user-contributed content but don’t believe that right comes with any responsibilities at all.  But that’s a different rant, which I hope to post Real Soon Now.

Kodak now seems certain to follow Polaroid into the ranks of the undead.  The name “Kodak” will adorn consumer products for a while longer, but the company itself will pass into the history books.  Thanks largely to the finance and automobile industries, the passing of a capital-letter American Icon isn’t quite as shocking as it used to be.  But as a hack photographer who still occasionally shoots film, I’d still like to give Kodak’s failure a few moments of exposure time.

Most of Kodak’s autopsies will point to Kodak’s failure to embrace digital photography as the cause of death, but I think that snapshot call lacks a bit of depth of field.  As with firms like General Motors and Lehman Brothers , trying to blame the downfall on one person or one bad decision is spurious.  In each case, the death blow could not have landed but for years of bad decision making.  Kodak’s missteps go back to at least the 1960’s, but their effective monopoly on U.S. film sales made such gaffs easy to forgive and forget.   Still, when digital photography came into its own, technologically Kodak was in as good a position as any country in the world.  In my opinion, they squandered this opportunity due to short-term thinking.

Of course, “in the long run we all are dead.”  That phrase was made famous by another “K” – John Maynard Keynes.  Keynes wrote that line in a 1924 tract calling for currency stabilization.  George Eastman was also an advocate of currency stabilization in the 1920’s, but I can find no evidence that the two ever met or corresponded.  Still, I find many parallels between Kodak’s long slide and the modern application of Keynesian Economics.

Keynes advocated economic intervention by governments to address immediate problems, and he was perfectly OK with “spend now, recover later deficits.”  But I think the Keynes of the 1920’s would have been horrified at the application of his theories in the 1960’s, and even more horrified by the inflation which followed. 

Here’s another famous quote from Keynes:

If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), , there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is.

If you read the section of “General Theory of Employment, Interest and Money” in which Keynes makes this claim, he makes this assertion for times of “involuntary unemployment,” and that he believed that such periods were the infrequent but inevitable result of economic lags and cycles.  Although he uses “scare” quotation marks, he even acknowledges that such behavior is wasteful of resources.

Primarily during the boom years, Kodak racked up an unfunded pension liability of over $2.5 billion dollars.  Underfunding pensions is nothing less than deficit spending – it’s a big business “spend now and pay later” policy worthy of the most liberal Democrat.  I’m sure some people from the other end of the political spectrum will find some way to blame this underfunding on government regulation, but I’m equally sure that even the most fiscally conservative Kodak pensioner isn’t going to buy such rationalization.

What people including Keynesians too often forget is that what we call the “long run” is nothing more than a series of short-term decisions.  Deficit spending, be it due to increased social programs or tax cuts, is a viable tool for short-term economic stimulus.  Modern Keynesians seem to believe that a country can use deficits to grow faster than the accumulating debt, and plans like Social Security depend on it.  But as both Kodak and the recent collapse shows, with the illusion of wealth created by deficit spending comes complacency.  Those short-term bad decisions add up, and then when it comes time to solve a real crisis, the tool chest is bare.

In the long run, like Kodak, we all are dead.  But that’s no excuse for a constant stream of short-term benefit, long-term loss decisions.

First things first. Congratulations to both the Occupy Boston protesters and the Boston Police.

As far as I can tell, both sides did everything right. The Police gave everyone who wanted to leave the time to do so.  They made a strong show of force and then, from all reports, used little or no force in arresting those people who chose to stay.  Those protesters who did elect to get arrested also spurned the use of force. In short, everyone acted with respect to their adversaries.  Many people in politics could take lessons.  So could and should police departments in other cities.

I respect the choice of the occupiers who decided that leaving voluntarily would not diminish their cause. I respect the choice of those decided to stay as well. My prediction is that most of them will see their misdemeanor charges continued without a finding and then dropped after successful completion of some community service.

I also want to give my thanks to those who pitched in, either with time or money, to clean up and help restore the park.  If you wish to help, there are at least a couple of ways to give online.  I gave directly to the Rose Fitzgerald Kennedy Greenway Conservancy.

But it's now time to ask "what's next," and I'm prepared to offer some totally unsolicited suggestions. Some of you may feel I'm unqualified to comment, since a) I've already said I'm not part of the 99% nor part of the 1%, and b) I've spent a fair amount of my career working for financial services related companies, and have made business trips to Wall Street itself. Feel free to stop reading now.

The suggestion I've heard to occupy foreclosed homes, is, to my mind, a poor strategy.  First, it surrenders the moral high ground, since unlike a park there's no legal right to be on the property.  Second, it gets the note holders a greater incentive to accelerate proceedings on the targeted properties, resulting in faster evictions.  Third, for those loans which went into default due to fraud, there aren't too many "perps" who still have an interest in such properties.  The real estate agent, the mortgage broker, the "bundling firm," the rating company, the person selling the derivative securities -- they've all taken their cut and moved on.  The people who are left are the mortgagor and whatever sucker who got stuck with the bad paper, and the mortgagor may not be blameless either.  The "robosigning" firms are a far better target, but the place to fight them is in the courts, not the streets.

My first suggestion is to tighten the focus of the group. The Occupy Boston website shows over 50 "working committees." That's something I'd expect to see from a big Wall Street business trying to retain the status quo, not a protest organization trying to change it. The best way to waste momentum is to spend in too many directions, Instead spend your time on crafting ideas and choosing a few tactics rather than debating what goes on business cards.

Speaking of Citizens United, the time for symbolic demonstrations is long over.  The places to "overturn" the Citizen's United Ruling are not in front of Federal Court houses, nor in front of a big company like BoA or BP.  Instead, it's by changing incorporation laws at the state level by passing laws to make any significant political contribution require a shareholder vote.  This avoids the constitutional issue entirely.  Start with "easier" legislatures like Massachusetts if you will, but the real battlegrounds will be in Dover, Delaware and Trenton, New Jersey.

My other suggestion is to fight with money with money.  There are two proverbial sides to Wall Street, the buy side and the sell side.  The sell side needs the buy side -- after all, someone had to _buy_ and insure those toxic mortgage derivatives.  The buy side in turn depends on other people's money.  Guess who those "other people" are?  If you have an IRA, a 401k, 403b, a 529 plan or even an insurance policy, you need only look in the mirror.  Not surprisingly, not all "buy side" companies are equal when it comes to executive compensation.  Give people the information on which "buy side" firms reveal executive salaries and what those salaries are, so they can make their own choices of firms to use or to create new ones.

Citizen Watch Company of America, Inc. ("COA"), with U.S. Service Headquarters at 1000 W. 190th street, Torrance, CA 90502 warrants this watch (except the power cell, case and its components [including crystal, stem, crown], bracelet and its components [including clasp, links, pins, screws], strap and its components or any accessories) to be free of defects...

[	mood	|	cranky	]
[	music	|	Broken (Lifehouse)	]

As the countdown to a potential fiscal and/or constitutional crisis continues to wind down, one thing is becoming more and more clear.  The current system for managing the USA's finances is fundamentally broken.  One can make good arguments that it was broken by the adoption of fiat money, or that it's simply broken by human nature, but broken it is, and for at least 50 years Congress hasn't even come close to fixing it.

In a very limited way, I agree with some Republicans.  Fixing things may well require a constitutional amendment.  But the GOP's so-called Balanced Budget Amendment is one of the worst and most dishonest proposals I've seen in a very long time.  By only requiring a simple majority to spend money but a super-majority to raise or borrow it, it repeats the mistakes of California.  Even worse, since it doesn't have any enforcement provisions against Congress at all, it virtually ensures a Constitutional Crisis every year.

Instead, I offer the following modest amendment.  I call it the "Failed Legislator Balanced Budget Amendment."

1.  The Federal Government's fiscal year shall begin on October 1st and end on the subsequent September 30th.

2.  Each December, the President shall report to Congress on the total outlays of the U.S. Federal Government, the total receipts of the U.S. Federal Government, and the GDP of the country as a whole.

3.  A fiscal year shall be considered a "Deficit Year" if:
     a.  Total outlays exceed total receipts by more than 1%.
     b.  The GDP of that fiscal year was at least 1% higher than the previous fiscal year.
     c.  Fewer than 1000 U.S. Citizens have died in declared wars against nation-states.

4.  Anyone serving as a Representative or Senator for the whole or any part of four (4) "Deficit Years"  shall be considered a "failed legislator."

5.  "Failed Legislators" may continue to serve out their existing term of office.

6.  "Failed Legislators" are ineligible to serve as Representatives or Senators after their current term.  They are also ineligible for appointment to any position requiring Senate approval.

7.  "Failed Legislators" may not receive remuneration or income as an employee, consultant or independent contractor to the United States.

8.  "Failed Legislators" may not receive remuneration or income as an employee, consultant, director, partner, or independent contractor of any Federally Chartered Corporation or Organization.

9.  "Failed Legislators" may not receive remuneration or income as an employee, consultant, director, partner, or independent contractor of any corporation or organization which has received 25% or more of its revenue from the Federal Government in any of the previous 5 fiscal years.

10.  All States shall have jurisdiction in Federal Courts to claim that an individual is or is not a "Failed Legislator."

In short, the amendment requires Congresscritters to do the damned job they promised to do.  It doesn't prevent the Government from dealing with a recession, or occasionally having to deal with a war or disaster.  But if the Congresscritters can't get the job done, they can go back to State government or (*gasp*) the private sector and work along side the rest of us.