Now Adjust for Illegal Immigration and Healthy Young People Who Choose Not to Have Health Insurance

I would also surmise a lot more people could afford health insurance if 15% wasn't taken out of their paycheck for social security and another 6% for Medicare.

The Captain's New Stock Pick

Again, time for... (drum roll)

ANOTHER STOCK YOU ARE 100% SURE TO LOSE ALL YOUR MONEY IN!!!!

Yes, another stock that if you are so stupid to invest in it, then you deserve to lose all you money.

Instead of boring legal disclaimers that tell you that you can't sue me if you invest in any company I discuss, I figure it's best just to tell you NOT to invest in the stock because it's insanely risky and you're most likely going to lose your money. Actually, scratch that, you are CERTAIN to lose money. Even if you short it, you'll lose money. And if we were to be legally technical about it, if you (for some unknown reason) MAKE money on this stock, then I can sue you!

Glad we got the legal stuff out of the way. Let's move on.

So I would have liked to invest in this stock long ago (because I love to lose money).

Unfortunately there's some damn SEC rule that you can't buy a stock if it goes public in foreign markets for 45 days. Bastards. For this is what's happened to the stock price;



Now what you'll notice is that it's listed on the Hong Kong market and their ticker symbols consist of numbers, not letters.

The only problem is that if you have a standard online US brokerage account, you can't trade in foreign exchanges.

So after much research and inquiry I finally found its counterpart traded on the OTC.



What is most interesting is the drastic difference in volume. On the HK market volume is consistently in the multiple millions, whereas here in the US it's only a mere fraction, very low volume.

Another tidbit of information is that this is the Industrial and Commercial Bank of China. Now the 2nd largest bank by market capitalization (I think) AND it was the largest IPO ever.

This behooves the question why volume isn't higher for its US counterpart on the OTC.

And I have a simple, but hard to believe conclusion, unless some of you traders could perhaps provide a little more insight;

A US equivalent to trade in is so damn hard to find that ultimately would be investors become discouraged, give up look, thereby denying this stock additional liquidity. I theorize how much the stock price would go up based on additional liquidity hitting the market if it wasn't such an expedition to find the darn ticker symbol.

Once Bitten...

I saw this in The Economist.



Yeah, right. After all the hell you people put Bush through for going into a country to fight radical Islam, like he's going to do that again. Indeed, no good deed goes unpunished.

No More Condos

The party's over!

Every guy has had the experience at least once during his earlier days at college of sticking around till the party is all but completely dead, the good looking people hooked up long ago and in a half-drunken daze you wander aimlessly thinking that some babe is going to pop up out of nowhere.

The hosts of the party give you subtle hints to leave and are somewhat wary of your presence. But there you are, ignorantly blissful and optimistic that you're still going to get some play that night hoping the party continues on and re-ignites itself.

Such is the situation with our beloved real estate developers in this beloved nation in this beloved housing bubble, ESPECIALLY CONDOS

Good Christ, half my day is spent explaining to middle aged men, who should know better that "no, starting another condo development is not worth the while."

And that, "no, we are not going to refinance or look at funding alternatives."

And that, "no, I don't care how "luxurious" or "unique" it is, "Westcreekwillowpalmheightsoakdaleway" is not anything special and is no different than the other of billions of condo developments out there."

I’m surprised I haven’t seen any proposals to build condos on the now-frozen lakes in Minnesota.

But no, they still keep coming. Like freaking zombies. Developers who all they've known is
construction and real estate. Hammer whacking, framing and landscaping. For 15 glorious and uninterrupted years, they don't realize that the chart has precipitously dropped on them and that the capital markets have dried up on them. They think the party is still going on.



So, for all you analysts, researchers, bankers, and economists, particularly in the Twin Cities market, mayhaps I can interest you in some spiffy charts I’ve found. Some charts that will repel the horrid condo-zombie horde by showing them that not only is the market flooded, but that they would lose their shirt if they tried to squeeze another condo in.

One, the market is saturated.



All that pent up demand by empty nesters and "cool hip Gen-Xer’s" looking to live in the "cool hip murderous town."

Yep, plum ran out of them, everybody who wants a condo has one. Because in the past 3 years YOU FLOODED THE MARKET WILL 11,000 CONDOS!!!!! Whereas historically about 100 or so hit the market each year.

Two, when ONE IN FIVE UNITS BEING CONSTRUCTED IN THE ENTIRE TWIN CITIES REGION IS A FREAKING CONDO YOU MIGHT JUST HAVE AN OVERSUPPLY ISSUE HUH!!!!????



And this data doesn’t even include the full spectacularly horrible year of 2006!
Regardless, there is a lesson to learn here in the condo market and the overall housing market. And that lesson is the importance of teaching EVERYBODY the basics of economics.

Imagine that if instead of wood shop, all these developers and contractors would have taken basic economics. Imagine the LITERALLY HUNDREDS OF BILLIONS OF DOLLARS THAT WOULD HAVE BEEN SAVED! But I kid you not when I say that of all the real estate deals I’ve looked at in the past 3 years ONLY 2 HAVE HAD ABSORPTION studies done. Ie-only two developers bothered to gauge how well their housing would sell.

Scores, arguably a hundred real estate deals passed through my hands the majority of which didn’t even bother to calculate whether they’d actually be able to sell their inventory of houses. Heck, I remember one a couple years back where this developer added 220 housing units to a town with a population of 2,800. Assuming 3 people per unit, that’s 660 new people that have to fill those houses. In other words, the population of this town is going to grow by 24% OVERNIGHT????

But what really gets me is how these people think nothing of asking to borrow millions of dollars of other people’s money and then are so irresponsible, or it just plain doesn’t occur to them, that they don’t even bother to find out whether they’d be able to pay it back or not.

2007 and we’re making mistakes that are as stupid and as egregious as Holland Tulip Bulbs, Dotcoms and electing Hugo Chavez into power.

The people will pay for their ignorance, oh yes, the people will pay.

Our Friendly Foreign Financiers

And So the Two Great Evils Combine

You always knew socialism and radical islam would join forces.

A Long Overdue Post on Australian Economics

Good lord am I sorry to all you Aussies out there. I promised Frank that I'd do a post on Australia, but then I got the "Captain Capitalism" signal up in the sky and had to respond to what is now coming up on a 6 month, non-stop drive of contribution to GDP. 4 months straight of 90-100 hour work weeks, then the holidays and then moving to the burbs.

So while I was going to do a bit more in depth analysis, I'm sorry, I just don't have the time. But I will say this;

When I pulled these figures from the OECD I was amazed just how similar Australia and the US were. I'm kind of amazed how countries that were once under the British Empire do markedly better than any other empire, HK, US, Australia, etc.

Anyway, here are the charts.






And of course, what professional, full scale, in-depth macro-economic analysis is complete without the manditory analysis of a country's Miss Universe contestant? Besides, the Gods of Bachelortude demand it!

What I Don't Get About the Brits

Wallace and Gromit I can completely endorse.

Black Adder I can completely understand.

The British Spitfire is something I envy only second to the P-51 Mustang.

But there are two things I don't understand about Britain and that is the Royal Family and the BBC.

I surmise the former is some kind of obsession that we here in the US have with Britney Spears and Paris Hilton, but the second is a bit of a creature I'm sure I won't understand since I didn't grow up in the UK.

Thus, having no knowledge or understanding why the BBC is so key to British culture, I shall post a chart from another jewel of British culture, The Economist, in the hopes of boosting British readership.

And hopefully somebody from across the pond can explain to me why this is relevant.

Why I'm Reminded of Denzel Washington

Man on Fire, or as I like to say "Hombre En Fuego" because it sounds cooler.

especially the fahWAY in the word "Fuego."

Good quote from Denzel Washington;

"You want a wish?"

"Yes, please."

"I wish you had more time."

wish I had more time.

So here's the quick little chart I saw in The Economist which proves something we all know, but adds to my theory that it isn't just low taxes that matter, but an uncorrupt and mature/responsible society in order to enjoy economic growth and high standards of living.



Back to work. Joy.

Mass Transit My Ass

We're always told that mass transit, ie- buses, car pool, vans, trains, etc. makes our transportation system more efficient. Of course, those who are doing the telling are typically leftists that want you to ignore what your eyes and empirical evidence tells you and instead heed the "facts" "experts" tell you.

Then I saw this picture from China.



Please do not tell me those large-assed, slow moving monstrosities known as "buses" are the SOLUTION to our traffic troubles.

Wait Till the Baby Boomers Retire

It is a not commonly pointed out fact that America is not the only country with Baby Boomers. Practically the entire developed world has a plurality of 50+ somethings that are on the verge of retirement...or in the case of Italy, they've already retired about a decade ago.

What also isn't commonly pointed out is that these Baby Boomers will start retiring pretty much now, and if they haven't already, they'll be switching their investments from risky stocks, to less risky bonds.

This selling will put downward pressure on equity prices leaving future stock prices in the hands of future generations to make those companies more profitable than ever so that their stock prices continue to increase.

But, being forever the cynic, when I look at the French students protesting to my Gen X breatheren opining whether Britney Spears is wearing panties, somehow I don't think this



will continue.

From the Ghettos to the Greatland

During my college days I managed to live here; Riverside Plaza, better known as "Ghettos in the Sky" or the "Crack Stacks"



And even then I shared a one bedroom with a buddy to cut down on rent.

Since that time I've slowly progressed upward in my living quarters going from a friend's basement to a studio apartment to living in my own basement (whilst I rented out the upstairs units) and so forth an so on.

But as of today, after saving my pennies and nickels, and after 14 years of living in the city, I am now officially a citizen of suburbia. I finally got the hell out.

Would have liked to made more posts as of recent but was busy moving my ass out of the deteriorating city. And not a moment too late and a spat of crime has taken Minneapolis and their "rolling stop ticket"-issuing police by storm. And I shan't stick around to see the outcome.

Now city pushers are going to claim that the city is waaaay superior to the suburbs. Typically leftists who envy the wealth and income generating potential of those that live in the burbs, and thereby not only try to marginalize the suburbs (to rationalize why they live in the filth-hole city), but also criminalize them (so as to provide a rationale to extort money from the burbs to pay for a bevy of socialist programs) . But let me point out several things;

1. I lived in a very nice part of Minneapolis
2. I had my house burglarized.
3. I had one car broken into
4. I had one stolen
5. I had yard signs stolen off my property
6. Crime in Minneapolis just shot up 20% this past year.
7. In this "great" neighborhood of Minneapolis, 3 people were killed no more than 1 mile from my joint.
8. I pay $15,000 per student to attend the utter waste of money known as the Minneapolis Public Schools.
9. and for the "honor" of living in this crap hole I got to have my property taxes increase 350% in only 7 years of living there.

I now live in an area where

1. there have been no murders in the past 7 years.
2. Police reports show "stolen bikes" as the number one crime
3. Nobody is going to steal my yard sign or spit on my Coleman bumper sticker
4. I don't have to pay for parking every 30 freaking feet.
5. My property taxes for a similarly value property ARE ONE THIRD that of the craphole known as Minneapolis.
6. And instead of shelling out $15,000 per student per year to essentially have them baby sat, I'm shelling out only $8,700 per year to have the kids in my neighborhood EDUCATED.

Anyway, just wanted explain why the absence of posts. Still have yet to unpack...and truthfully, I just wanted to rile up a friend of mine who has been giving me guff for moving out to the burbs and "swore" he was going to write a post.

Now he'll have to.

So Long Nifong

You piece of sh!t!

Thanks to Dave - Women's Labor Force Participation

OK, so many thanks to Dave at the beloved US Postal Service he found a chart that shows the bump in the labor force participation of women in WWII.

Previous to this, Mollie tendered an excellent argument that the origins of women entering the labor force was due to Rosie the Rivetter, not the women's liberation movement. But it seems labor force participation dropped back to normal levels after the conclusion of WWII.



Regardless, Dave is now officially donned a junior deputy economist for the speed in which he got the chart!

ALL HAIL DAVE!

This One's for Mollie

Mollie brought up a good point, that the transition of women into the labor force had its origins in WWII, not the women's liberation movement. I can't disagree or agree because I haven't seen any data. This is the best data I could find, labor force participation rate for women. It only goes back to 1948.



Anybody else got older data?

The Women's Liberation Movement Felled by the Division of Labor

The largest single factor in US economics, as well as the economics of the developed world in the past 50 years has been hands down the migration of women into the labor force.

No argument about it. Cannot be debated. Cannot be questioned. Just go and look at the data yourself.

It shouldn’t be surprising since allowing the better half of society to enter college, work, establish careers, etc., effectively doubles your labor force, doubles your intellectual capital, and therefore doubles your ability to produce wealth. Therefore the majority, or at least the plurality of increases in standards of living in the past 50 years can be contributed to women working.

It may also go a long way in explaining why Islamic countries or just countries in general that have their women subservient to men suffer such low standards of living, since they effectively bar half their potential labor force from working, severely handicapping their country’s ability to produce wealth.

Regardless, for all the economic benefits to women entering the labor force there are some drawbacks.

Notably with women out of the house, the responsibility of child rearing has not been outsourced to the father (oh, no, we’re too proud for that), but rather outsourced to the state. It is no coincidence that spending on public education has not only exploded, but expanded to cover things like feeding kids (lunch boxes are antiques now with taxpayer-financed breakfast and lunch served to the students), pre-school, after school programs, tutoring, counseling, teenage pregnancy programs, sex education, etc., as more and more women have entered the labor force, effectively turning the Department of Education to the Department of Baby Sitting and Child Rearing.

Also, the explosion in the use of day care facilities. A fact that I particularly detest for, again, it would seem to me that if you had the child and loved the child, you would want to spend those precious few moments with them in childhood. Alas, I must be too damn idealistic or old school for it seems to me children are now no different than an SUV, a huge diamond ring, a flat panel TV etc., ie- a “status” symbol, an “item” to have that goes well with the drapes, and sadly something that is no more loved than one’s granite kitchen counter tops. Ergo, it’s like a dog, you can leave “it” at the kennel. I can think of no other explanation why somebody would use day care.

An additional drawback to women’s entrance into the labor market, though I have not scientific evidence for it, is that I would speculate a lot of the “social” problems children have where they’re walking into schools, shooting their peers, doing drugs, putting “bodily fluids” in cafeteria salad dressing, waving gang signs at each and just in general acting like immature, disrespectful feral youth comes from the fact there is not a stable traditional “nuclear” family around. And as these kids age and become “adults” no doubt the crime rate will increase as these “Lord of the Flies” adults enter society, as it has.


Now fingers are typically pointed to the “women’s liberation movement” as the main culprit for women’s migration to the labor force and therefore these social costs (and the rarely mentioned economic benefits). However, I had an epiphany recently that points to a different culprit/hero (depending on your take).

It was Fall and I was too busy to rake my own yard. Ye, the city of Minneapolis demands that it be raked so, despite it hurting my blue collar soul, I actually decided to drop the money on having somebody else rake my yard for me.

There was an element of lost pride there as I always fathomed myself raking my own yard for “such a thing would never be beneath me.”

But with 90-100 hour work weeks it had to be.

Fortunately I had a female friend of mine rake my yard for the low low price of dinner. This permitted me, in the classical Adam Smith’s Division of Labor way, to work up more money than I would have had to pay for dinner, benefiting not just me, but my female friend as well.

But the interesting thing was my female friend is an accountant and by no means has a lot of free time on her hands either. She’s just a very charitable person and was only working 50 hours a week. But I thought, she could have just as well outsourced the job to some neighborhood kid, paid him $10 and got a $40 out of me.

And then the epiphany hit.

Raking is a chore. Cleaning is a chore. Preparing food is a chore.

All of which we outsource because it is more efficient to do so.

Child rearing is also a chore.

Child rearing is also being outsourced.

And thus my theory was born. It is not so much because of the women’s liberation movement that women entered the work force as much as it may be just the natural progression of economics and a further specialization of labor.

One cannot argue that this isn’t effectively is happening anyway. We are effectively outsourcing the upbringing of our children to third parties, either be it nannies, the government, or day care facilities. And the reason I surmise isn’t so much because women swallowed whole the ideology of the women’s liberation movement about “being independent” and “having a career just as a guy,” but rather because it makes complete economic sense.

In outsourcing your child to be reared by somebody else not only do you free up your own time to go and pursue a career, but (in most cases) you make more money. Both husband and wife can pull down $50,000 each, cumulatively $100,000 together, pay the schools $10,000 a year per pupil to take care of their children, netting them $90,000 in income (assuming one kid). Whereas if a wife (or husband) has to stay at home and rear the child, $50,000 of income is lost and the family must do with $50,000. It only makes ECONOMIC sense to then farm out your kids to child-farms (read, day care centers).

Of course the quality of the rearing may be called into question. The utter deteriorating in decorum, respect, civility and so forth demonstrated by today’s youth and even Gen X’ers my age show the social costs we now get to deal with.

Instead of gossip about Sophia Loren and Cary Grant being an item, we gossip about whether Britney Spears has panties on.

Instead of men singing eloquies about the beauty of women such as Frank Sintara we have a bevy of degenerates singing about pimps and hoes and how women are meat.

Chivalry is shot. So are women that like upstanding men. If you want to keep a girl now, you just treat her like crap. Dare you show any chivalry or Cary Grantedness or (as a policy I’ve recently discontinued) buy your date a corsage, you are a stalker, or at least at minimum, weird.

No, now we have SENIORS IN HIGH SCHOOL putting their semen into salad dressing.

Brilliant. Grand.

Throwing the fabric of society down the toilet because it’s more efficient to outsource the upbringing of our children.

I’m sure there’s no longer term consequences for this.

Better Than a Diamond Ring at Least

IN READING THIS POST YOU WAIVE ALL RIGHTS TO SUE ME, WHINE, COMPLAIN, BITCH AND/OR OTHERWISE MOAN AND GRIPE

Understand? Good.

Well I said I was going to give you a gift and here it is;

GWLLF.

Yep, that's it. It's my latest stock investment.

You see, Bradman a while ago was complaining because I didn't tell him about my stock pick of Northwest Airlines when it was trading at 60 cents a share. Now it's at $5 a share or something and I made a tidy profit on it.

And how did I manage this amazing return?

I

Got

LUCKY!!!!!

Skill had nothing to do with it.

Talent had nothing to do with it.

I didn't even bother looking at the financials.

IT WAS ALL LUCK!

I figured it was trading a pennies per share, and thought, "eh, what the heck, I'll gamble $1,000 on it" and by LUCK, it paid off.

The same thing with GWLLF.

YOU ARE PRACTICALLY GUARANTEED TO LOSE ALL YOUR MONEY ON THIS INVESTMENT!!!!

It's a horrible investment.

Only fools would invest in it.

A pox upon you and your family if you are foolish enough to invest in it.

Woe upon the man or woman that parts with their money and invest it in this company.

So don't tell me I didn't warn you.

You are an idiot for investing in GWLLF.

However, there are much worse investments in my opinion than GWLLF. Like Beanie Babies. Children. A degree in philosophy. And a diamond ring. And despite GWLLF practically GUARANTEEING A NEGATIVE RETURN, I'd still rather invest in GWLLF than a diamond ring for a bevy of reasons.

1. From The Economist



GWLLF can make a brand new car for $6,500. GOD BLESS CHEAP CHINESE LABOR. If you thought Toyota was going to give GM and Ford a run for their money, wait till you see what non-unionized Chinese labor can do! Of course the quality of the cars are incredibly poor, but so too was the quality of Daewoo and Hyundai. Now they produce decent quality cars.

2. From Wikipedia.

http://en.wikipedia.org/wiki/Great_Wall_Motors

That's right, it's the only privately held auto manufacturer in China right now.

Now, even though the Chinese government at any time could reposses the assets of this firm. At any time the local provincial governors or the town's politcal boss could hit it up on trumped up charges. At any time Great Wall Motors may decide to do something EVEN WORSE and replace their Chinese labor with labor from the UAW, thus guaranteeing their demise. Despite all these possibilities, it is still better than a diamond ring.

For at least with Great Wall Motors there is hope.

There is hope, albeit very little, it will become the next Toyota.

There is hope, albeit very little, that they will increase the quality of their cars putting them on par with Honda, GM, Ford and BMW.

There is hope, albeit very little, that it will turn a profit and cash flow.

However, with a diamond ring there is no hope of a return. There's only the chance the girl you give it to will divorce your ass anyway.

So men, knights, economists and heroes, lend me your ears.

Don't buy your beloved a diamond ring or jewelry of any kind this holiday season.

Buy her hope.

Buy her GWLLF.

Lot's O' Charts

Merry Christmas all Junior, Deputy, Aspiring and Official Economists!

Busy as we all are during Christmas season, but I've happened upon a lot of charts whilst reading my favorite periodical, The Economist. Would like to discuss them at length but I've only time to address them briefly.

Besides which I will be presenting to all of you your Christmas gift here in a couple days!

Anyway, here we go;

First off the bat I found this chart amazing. The non-stop optimistic blathering I hear from the real estate industry about how this "housing bubble" is just a minor blip and things are going to be just hunky dory. They immediately cite construction, mortgages, sales, etc. and how they've recovered or at least stabalized.



That's nice and all, but I'm a little more concerned about the housing "burst" spilling over into the rest of the economy. And it doesn't seem residential construction has woken up to reality yet. Right now we're flirting with high 1.X% RGDP growth. Will be curious to see what happened when they start laying people off in construction.

Second, we all know Frank. Well looks like those Aussies are following their American capitalist counterparts in the pursuit of managing hedge funds. The more I study Australia, the more eerie I find out how alike it is to the US economically. The day may come the Australians become the raiders of capital.



A third chart I found interesting in that it shows how corporate China is financing its expansion and growth. It shouldn't be a surprise the majority of financing comes from banks, no doubt the majority of which are state owned. But notice the increase in the stock market and corporate bond market. I predict 5 years from now when The Economist runs this chart again, Chinese companies will get at least HALF their money from private sources, if not more. Get ready to speak Mandarin.



And then a place I wouldn't mind investing in, once I finish investing in all the other places I'd like; the former Soviet Bloc. Particularly the Baltics.



Isn't it interesting how countries that were under communism, remember it so starkly, that they are now the most ardent supporters of capitalism? Doesn't it make you spoiled brat "fair weather" socialists ask questions?

It's the All Canada Show!

Many thanks to SDA and Brad I have a disproportionately high readership in Canada, which is good.

So it made me very happy to hear that my radio station AM 1500 KSTP is endorsing (drum roll and fanfare...)

THE ALL CANADA SHOW!!!!!

"Who doesn't want to go to The All Canada Show?" I ask!

You can go here to see if the All Canada Show is coming to your town!

Minneapolis Monorail Morons

Two years ago the Twin Cities metro was sold a bill of goods by the supra-county government called the “Met Council.” It was billed as a necessary public service, but I can’t think of it anything different than the “Monorail” episode from the Simpsons. Yes, we now have had a light rail mass transit line in the beloved Twin Cities for 2 years and if memory serves me correctly we’ve had 3 deaths arise from the light rail (whereas our carry conceal permit has resulted in only ONE death).

Regardless, the whole sales pitch we were given was that this light rail system that ran from DT Minneapolis to the Mall of America was necessary. For not only would it alleviate traffic on the stretch of 35W, but there was this massive pent up demand for light rail which would no doubt finance its costs.

Really?

I’m always skeptical of government types because, by definition they’re in government. They don’t have to answer to the market, they don’t have to make ends meet, they don’t have to turn a profit. My skepticism turns into full blown cynicism when you have political interests afoot;

Environmentalists who have no real purpose or meaning in life that would thinking nothing of forcing a $713 million project upon the tax payers, just as long as it makes them feel good about themselves, even if there is no tangible results.

Outright communists and leftists that envy the suburb people for all their wealth and income and their nice houses. No, don’t become one of them and get a degree in something that matters or establish a career or work hard. No, best to bitch, whine, gripe, moan and complain and criminalize the suburbs and force your socially engineered dream of public transit, East-Germany-Communist era, 1970’s minimalist architectural crap public housing, and making everybody equal (read – equally poor and miserable as you).

And then there’s the politicians. Ah yes, politicians. Parasites worse than lawyers who are willing to sacrifice the integrity of their country as long as they get a life-long political career and don’t have to work for a living. Politicians who can always be counted on to bribe the poorer half of society with worthless public projects to make it look like they’re doing something, when in reality they’re just pissing away hard earned tax money that would probably be better spent on the poor in any number of ways.

So, with the all the aforementioned parties all with a vested psychological, psychotic or political interest in the game, you can see why I was so cynical about such a project.

Anecdotally, my cynicism was vindicated as I could see what a farce it was within the first 6 months of operation since I live near the damn thing. They put the transit line right next to a major artery out of Minneapolis. This just furthered congestion and made stop lights last that much longer. Punishing those of us rugged individualists, capitalists, self-supporters and in general non-parasites who financed our own method of transportation;

The car.

And, was it any shock that the spin the left would put on this is a self-fulfilling prophecy was that we needed MORE light rail lines?

“Look at all of the congestion! And traffic is just as bad as ever on 35W! Which (while sane minds would say, “the light rail is a failure,” brainwashed leftist minds with an agenda would say) shows that “we need MORE mass transit to alleviate congestion.”

Right.

Regardless, my point isn’t about the hypocrisy of all this light rail transit BS. It’s about the economics of it all.

Presumably there was all this “pent up demand” for a light rail. That people were bursting at the seams to have a light rail.

Did they want the disposable income to afford a PS3?

No

Did they want the extra money to mayhaps afford their children attendance at a private school?

No.

Did they want an LCD projector or flat screen TV?

No.

They wanted the light rail. Of course, what kid doesn’t want light rail for Christmas. Glad we had the communists and suburb haters at the Met Council to tell us that.

So, presumably, this “venture” would turn a profit with all this demand and necessity for it, right?

I mean, if the government could make money on the deal, maybe even a hefty profit, then I’m all for it. That would lower and subsidize my tax bill if the light rail produced millions in profits like a normal everyday company.

Of course, the government is not a “normal everyday company.” It’s a political entity. It doesn’t respond to the market forces. It is not scared of losses (for it can always force the taxpayer to pay for its incompetence). And it’s goal is not to make money or be efficient or even deliver good public service. It is first and foremost an agent of wealth redistribution so that it can secure future election and a life-time career in politics to its current politicians, then you bitches (affectionately and euphemistically called “the constituents”) come a distant second.

Now, I know, I know. I’m cynical.

I’m sure those good people at the Met Council would never ever think about forcing people who don’t use the light rail to subsidize it just to either bribe schmucks to vote for them or to masturbate their egos so they call feel like they’ve done something for the community and give meaning to their meaningless lives. They would put first and foremost you ahead of their personal interests because you are a hard working tax payer forfeiting precious minutes of your finite life to convert your time into the life-blood of money so you can make the mortgage and put food on the table. And if you’re not going to use the light rail, that’s OK, because this was such a great idea that it was bound to make a buck and wouldn’t need your subsidy.
Well here’s the latest projected income statement from the Met Council on the light rail for 2006.

At first it seems like the light rail is making a tidy profit of $1.3 million.

But let’s put on our “auditor” hat and assume we’re auditors looking at the details of the income statement.

If you look at total revenues from passengers and advertising the light rail took in $8.7 million.

Then there is a bevy of government “revenue” sources. This manifest themselves in the form of various county, state and federal government agencies putting up the money. Of course it really isn’t the GOVERNMENT putting up the money. It’s not like the elected representatives on Met Council, the Hennepin county commissioner at the congressional representatives in Washington are dipping into their own pockets to give us their money.

No.

There is no such thing as “government money.” It’s all TAXPAYER’S MONEY.

Yes, you, me, and just about everybody else I know who hasn’t ever taken one stinking ride on that little toy of socialism are still paying for it. And we’re paying on the order of $11 million (and without our subsidy, if the light rail were to be treated like an adult, ie- private sector firm, it would be losing $10 million per year).

Per working man and woman in Minnesota this translates into about $4 per person to help some spoiled brat, gray haired, trust fund baby boomer that’s on an environmental crusade boost their ego and deal with the fact they’ve never achieved anything in their lives.

That’s $4 per working Minnesotan to ensure a politician gets re-elected by the 12 people that ride the thing regularly and the thousands of Volvo drivers that will never use it (see previous paragraph for more detailed description).

That’s $4 per working Minnesotan to help make the enemies of freedom force their utopian idea of equal misery on the rest of us.

And while you may say $4 per working person is nothing and so what, that doesn’t include the negative externalities or opportunity costs. The light rail corridor is backed up. DT Minneapolis is shot on 3rd street. And let’s not forget that in providing public transportation for people who, frankly, do not produce much wealth going to the “Mall of America” to shop, we forego the opportunity to open up the arteries (read roads) in the suburbs where the real wealth producers are, thus bottlenecking our economic growth.

The real issue though is that public transportation is once again, nothing more than an elaborate scheme of wealth redistribution. The majority of people who are paying for the light rail, not to mention its needed perpetual bailout by the taxpayer, are people who do not use it. The majority of people who pay for it are by default people who drive and live in the suburbs or the rural areas and are in the upper half of income earners. The majority of people who use it are city folk that do not produce the majority of wealth, therefore do not pay the taxes to finance the light rail, not to mention a bevy of kids and shoppers who are just going to the freaking Mall of America to shop. It is nothing more than providing subsidized transportation to the inner city at cost to the suburbs, not to mention the opportunity cost of better roads. It is the most convoluted and complex way to orchestrate an income transfer. Heck, I would have probably voted for a tax break to poor folks for transportation purposes. It just behooves the question why so much sugar was required to make this horrible tasting medicine to go down.

But expect more medicine folks. A new light rail line is going to be rammed down your throats along University Avenue. I just wonder how much sugar they’re going to use this time.

“I've sold monorails to Brockway, Ogdenville, North Haverbrook, AND MINNEAPOLIS and by gum, it put them on the map!”