MTA by the Numbers (Or At Least Those Few Available to Us)


MtaWhen NYC's cabs caught up with the 21st century and started accepting plastic for fare payments…

[Side Note: I always found it fascinating that the habitual check-out question, "Paper or plastic?" is technically applicable not only to the packaging choices but also to the forms of payment – cash (paper) or credit (plastic).] 

Anyway, when it happened I was ecstactic: one less reason to touch dirty bills, no more listening to a driver's bullshit how he just started his shift and doesn't have any small bills for change, etc. – many reasons, really.  Unfortunately,  there was a downside: all Credit Card Systems came with PIM's (Passenger Information Monitors). 

It could be just my personal experience, but I have not been bombarded by images and sounds in any other plastic-accepting cabs: not in London, or Tokyo, or Amsterdam…  But NYC's TLC (no, not "tender loving care" or T-Boz+Left Eye+Chilli, but the formidable Taxi and Limousine Commission) has swallowed Mad Men's lure long time ago - Inspiria Media has been brokering taxi-top ads' revenues into the agency's pockets for years.  They couldn't possibly pass on this incredible opportunity to make money by letting ABC, NBC, and random ass commercial advertisement to jump at you  as soon as the meter is on.

And I fucking hate it!  I really don't want all that noise and bullshit to exacerbate any further my already unpleasant experience of  an overpriced ride in a shitty car with a bad driver.  Yes, you can turn it off (assuming the touch screen still retains some capacity for response), but not right away.  Thus, if you are like me, you spend the first few moments of the trip tensely waiting for this thing to come alive, so that you can shut it up as soon as possible.

Sometimes you get distracted, though: the driver doesn't understand your instructions or he/she doesn't know how to get there - whatever the reason, but you don't get into the combat with the blaring device right away and you catch things, for better or worse. 

It happened to me several weeks ago and what my eyes didn't want to see my brain registered anyway.  The screen flashed at me the familiar MTA logo, the words "Budget Proposal," and then three bits of information in large and bold letters:

$14.2 billion annual budget

4% fare and tolls hike

$20 million service enhancements

I turned it off and tried to read my magazine, but the incongruity of these numbers kept eating at me.  I couldn't stopped myself from doing a bit of analysis.

$14.2 billion seems like a humongous number to a layman, but considering the scope of operations (Subway, LIRR, Metro-North, 341 bus routes, 7 bridges, 2 tunnels), it's not really such a big deal.  I mean, the stupid facebook spends $5.1 billion to keep their operations going and it doesn't own and maintain 15 thousand vehicles, nor it employs 70,000 people.  In fact, the entire staff of facebook is exactly 10 times less – 7,000.  So, no, the total number doesn't sound too overwhelming to me.

However, there are a couple of aspects that make this number into a bothersome issue:

First of all, where the fuck they are planning on getting this kind of money?  What appears to the general public as mountains of cash being shoveled by MTA out of ever increasing fares and tolls is not really all that bountiful.  The agency claims around 8.5 million riders per day.  Let's be generous and assume that it's like that 7 days a week, 52 weeks a year.  At the current fare rate this yields $7.735 billion a year.  The Bridges and Tunnels arm collects measly $600 million.  That brings us to $8.335 billion.  Well, okay, they will hike it up by 4%, squeezing another  $333.4 million out of the Metropolitan area residents.  Still that's less than $8.7 billion altogether.

Before we go any further let me explain something, in case you don't know:  As an entity, MTA is that weird creature called Public Benefit Corporation. Without going into too many obscure details let me just point out that this beast is essentially a Chimera – a combination of a private entity with rights to contract debt independently of the State (the Lion), a municipal agency (the Snake), and a non-profit organization (the Goat).  One must keep these bizarre characteristics in mind when faced with the wild and weird facts swirling around this organization. 

For example, as a public benefit corporation and a non-profit, MTA should not be making any profits or have excess cash.  How could they anyway, if they constantly claim that they don't have enough money to cover their budget?  Yet, during the audit of 2013 fiscal year ordered by the City Comptroller state auditors found an absolutely unanticipated $1.9 billion (!) surplus.  Nobody is explaining to us how it could possibly happen: nearly $2 billion of unused cash have been discovered within the fiscal system of this "always-struggling" agency and let's leave it at that. 

Well, say they put this extra money back into operations (as they must) – that still brings them to only $10.6 billion against the $14 billion needed.  So, where the $3.4 billion will come from?  We know: from the loans MTA is authorized to take independently! Wow, $3.4 billion of debt!  Can you imagine the financial cost on that?  Even in the most preferable situation, i.e. institutional (big banks) secured (all those fixed assets to pledge) loans at 2.5% – that's $85 million in an annual interest expense! And if they cannot obtain a sensible deal like that because their creditability has gone down the shitter, we are talking 5%, 7.5%, 10% or more – you do the multiplying. 

However, that's actually mere peanuts.  If you are wondering where the majority of MTA's current budget actually goes, I can tell you - to keep those 70,000 employees well compensated.  Around 60% of the authority's current budget ($7 billion) is used to pay labor costs including payroll, pensions, and overtime.  And the Chairman's salary of $350K a year plus his $3,500 per month housing allowance are not an issue here.  I mean, it's really not a big deal for a head of such a huge organization.  However, they have some bus drivers and train operators making over $100K, with averages around $56K.  And guess what? MTA estimates that the increase in labor costs will amount to $260 million during this current fiscal year.  

This makes that third number, the $20 million in service enhancements, sound like a bad fucking joke.  That's all that will be spent on improving our public transportation experience, 0.14% of the budget?  Common people, it's 13 times less than you plan to spend on raises! 

You know how small this number is for the system that transports 8.5 million people a day?  Let me give you a reference point.  You can buy precisely ONE used private jet with the same sum of money.  CEOs of Coca Cola, Goldman Sachs and GE each made that much in 2013 annual compensation.  Moreover, they were nearly at the bottom of the top 100 highest-paid CEOs list.  And Robert Downey Jr. made 4 times more the same year.  This means that, if he felt generous, he could've made our commute at least two times (after taxes, of course) better, than MTA will.                   

Quote of the Week: Anthony Bourdain, Let’s Be Friends!


“You know, I look at popular music, the stuff that’s selling millions of records in America, and it makes me angry, actually…  If I see Nickelback I want to kill myself.  Okay, I want to kill them and then I want to kill myself, and then I want to kill everybody who listens to them.”

            Anthony Bourdain

            Parts Unknown, Tokyo

The Frustrated CFO’s comment:

Oh, my God!  My sentiment exactly!  Nickelback, and fun., and MAGIC! (what’s up with all that stylizing, anyway?!), and the rest of them.  And by the way, I love QOTSA and see them every time I have a chance!  And I can outeat any Japanese person at a conveyor sushi restaurants in Tokyo!  And I LOVE uni!!!  Let’s be friends!

Economic Newsflash: You May Never Have a Chance to See the Mona Lisa Again


Old_695So, apparently France got themselves into a $2.6 trillion debt hole.  This translates into $42,623 of national obligations per each of 66 million French têtes.  Of course, the number is staggering.  However, I feel obligated to state that this is not as bad as what we have here, in our own beloved country with our very own $17.8 trillion burden pressing hard on 319 million of us with a weight of $55,684 per capita.

Still, someone just asked me the other day, how the hell France got itself so fucked.  It's not like the country pays $42 billion into IMF every year; or covers 22% of the UN budget; or sticks its nose into every hot spot in the world, bankrolling military and whatever-else aid campaigns.  And it definitely doesn't spend billions on artificially fueling the US stock market, even though if it crumbles the economies world-wide, including the French,  will be doomed.  It's our government that borrows funds for all that. 

I'm no expert on French economy and I'm not about to embark on researching their problems in detail (God knows, I have more pressing things to do).  However, basic knowledge of European affairs is sufficient for a logical person to form some general ideas. 

This is what happens with the formerly wealthy, but already shaky (who isn't now?), national economies when they decide to build an opposition to USA by combining as many European countries as they can into some utopian economic union: they start breaking their financial backs by carrying on their shoulders weaker (like, ahem… Greece) nations.  And, of course, the state needs resources to support domestic  industries (solely in the name of protectionism).  Add to that immigration policies driven by "special interests," which result in a population seriously skewed toward multi-children families with idle heads of households, who don't pay taxes but draw extensively on social programs.  And why not?  The majority of French population don't want to work too hard anyway: shorter hours, exuberantly long vacations, early retirement (at 60!).  And again, why not when there is the Mandatory State Pension Provision in place?    

What the poor France to do?  Well, the French government came up with this brilliant idea: They are going to sell national treasures, starting with… Da Vinci's Mona Lisa (!), which, thanks to king Francis I, has been in France's possession since Leonardo's death, i.e. nearly 500 years. 

Don't tell me that this doesn't sound like the end of the world:  Through ages of political rioting and religious massacres, twenty three wars, three full-blown revolutions, multiple colonial rebellions, and Nazi occupation France managed to hold on to Mona Lisa.  It's the perverted foreign policies and socialistic interior governing of our foolish times that led to the total socio-economic bankruptcy of the formerly powerful country.

You and I may think that La Gioconda is priceless, but the French have already assessed its market price, i.e. how much money someone may be willing to shed for it.  During the 60s the best guess of the art-dealing community was around $100 million.  Now, 50 years later, the time-adjusted equivalent of that sum is $2.6 billion.  Never mind that this would cover only 0.1% of the debt in question.  As they used to say in pre-Euro France, every centime counts.

One can't help but marvel at the utter stupidity and nearsightedness of the government that can entertain the idea of  eliminating one of the main reasons for the international tourism to the infamously snooty, unreasonably expensive, and ethnically unstable City of Lights (the Louvre is still #1 visited museum in the world).  Can these people see anything beyond their service terms?  I can clearly visualize the snowball of layoffs and business closures, which will unavoidably lead to the further drain on the state's treasury.  But those are French problems.  So, fuck them!

What the rest of the world, especially those of us who care for the arts, should be concerned about is the distinct possibility that we may never ever have a chance to stand in front of the Mona Lisa and attempt to absorb (it's really not that easy in the room full of tourists holding up their video and photo devices) Da Vinci's masterpiece in person.  And this is especially heart-breaking because it is one of only 23 surviving major works that are either universally or generally attributed to Leonardo.

It's dreamy to imagine one of the world's major museums trying to acquire the painting.  However, it is unlikely that any such institution will be able to come up with a $2.6 billion check.  The third-ranked museum in the world, The Metropolitan Museum of Art, is America's richest cultural institution with $2.7 - $3 billion annual endowment.  However, the $300 million operating budget and constant structural updates apparently eat away the majority of the funds – during the fiscal year of 2012 the Met spent only $39 million on new acquisitions.  Of course, there is an aggressive deaccessioning, which allows the museum to sell off "minor" pieces in pursuit of the "major works,"  but even with an average of $1 million per item, the institution will need to liquidate 2600 (!) works to collect the required amount.  Highly doubtful!

So, if the transaction does materialize, it most likely will be funded by private wealth.  You can pack a large ballroom with people from different corners of the world whose wealth amounts to multiples of the asking price.  For the sake of my personal amusement we can entertain another beautiful fantasy:  How grand would it be if one of our openly super-rich individuals with strong philanthropic inclinations shelled out a chunk of his wealth for La Gioconda and then gave it away to the Met, so that the grateful general public could continue enjoying it (only now in my own backyard)!     

It would take only 4.4% of Warren Buffett's worth or 3.2% of Bill Gates's.   But both of them are too preoccupied with keeping the world healthy and the US technologically comfortable (don't ask me why) to bother with art gifts like that.  And by the way, the Codex Leicester, the most famous of Da Vinci's scientific journals, which Gates bought in 1994 for $31 million, is kept in the MS mogul's own private vault.  It is considered a great generosity that the Codex is let for display once a year in different cities around the world.  Yes, it is hard to imagine that anyone would give away the Mona Lisa as a gift to an institution or a nation.

The way I see it, the buyer will probably be someone whose immeasurable wealth you can't find on some Forbes list, because it is not valued in the ephemeral public-stock prices.  This multi-billionaire is someone who keeps a low profile and his name would mean nothing to the majority of the world even if he walked into the Louvre in person.  But such an individual will transact through multiple proxies, and when all is done the Mona Lisa will disappear from the public eye into a secret stronghold.  We will be left with reproductions and copies, while a handful of people will enjoy the privilege of up-close peering into the delicate strokes of oil paints applied by the genius's hand to a piece of poplar wood. 

Global Economics Newsflash: You May Never Have a Chance to See the Mona Lisa Again


So, apparently France got themselves into a $2.6 trillion debt hole.  This translates into $42,623 of national obligations per each of 66 million French têtes.  Of course, the number is staggering.  However, I feel obligated to state that this is not as bad as what we have here, in our own beloved country with our very own $17.8 trillion burden pressing hard on 319 million of us with a weight of $55,684 per capita.

Still, someone just asked me the other day, how the hell France got itself so fucked.  It’s not like the country pays $42 billion into IMF every year; or covers 22% of the UN budget; or sticks its nose into every hot spot in the world, bankrolling military and whatever-else aid campaigns.  And it definitely doesn’t spend billions on artificially fueling the US stock market, even though if it crumbles the economies world-wide, including the French,  will be doomed.  It’s our government that borrows funds for all that. 

I’m no expert on French economy and I’m not about to embark on researching their problems in detail (God knows, I have more pressing things to do).  However, basic knowledge of European affairs is sufficient for a logical person to form some general ideas. 

This is what happens with the formerly wealthy, but already shaky (who isn’t now?), national economies when they decide to build an opposition to USA by combining as many European countries as they can into some utopian economic union: they start breaking their financial backs by carrying on their shoulders weaker (like, ahem… Greece) nations.  And, of course, the state needs resources to support domestic  industries (solely in the name of protectionism).  Add to that immigration policies driven by “special interests,” which result in a population seriously skewed toward multi-children families with idle heads of households, who don’t pay taxes but draw extensively on social programs.  And why not?  The majority of French population don’t want to work too hard anyway: shorter hours, exuberantly long vacations, early retirement (at 60!).  And again, why not when there is the Mandatory State Pension Provision in place?    

What the poor France to do?  Well, the French government came up with this brilliant idea: They are going to sell national treasures, starting with… Da Vinci’s Mona Lisa (!), which, thanks to king Francis I, has been in France’s possession since Leonardo’s death, i.e. nearly 500 years. 

Don’t tell me that this doesn’t sound like the end of the world:  Through ages of political rioting and religious massacres, twenty three wars, three full-blown revolutions, multiple colonial rebellions, and Nazi occupation France managed to hold on to Mona Lisa.  It’s the perverted foreign policies and socialistic interior governing of our foolish times that led to the total socio-economic bankruptcy of the formerly powerful country.

You and I may think that La Gioconda is priceless, but the French have already assessed its market price, i.e. how much money someone may be willing to shed for it.  During the 60s the best guess of the art-dealing community was around $100 million.  Now, 50 years later, the time-adjusted equivalent of that sum is $2.6 billion.  Never mind that this would cover only 0.1% of the debt in question.  As they used to say in pre-Euro France, every centime counts.

One can’t help but marvel at the utter stupidity and nearsightedness of the government that can entertain the idea of  eliminating one of the main reasons for the international tourism to the infamously snooty, unreasonably expensive, and ethnically unstable City of Lights (the Louvre is still #1 visited museum in the world).  Can these people see anything beyond their service terms?  I can clearly visualize the snowball of layoffs and business closures, which will unavoidably lead to the further drain on the state’s treasury.  But those are French problems.  So, fuck them!

What the rest of the world, especially those of us who care for the arts, should be concerned about is the distinct possibility that we may never ever have a chance to stand in front of the Mona Lisa and attempt to absorb (it’s really not that easy in the room full of tourists holding up their video and photo devices) Da Vinci’s masterpiece in person.  And this is especially heart-breaking because it is one of only 23 surviving major works that are either universally or generally attributed to Leonardo.

It’s dreamy to imagine one of the world’s major museums trying to acquire the painting.  However, it is unlikely that any such institution will be able to come up with a $2.6 billion check.  The third-ranked museum in the world, The Metropolitan Museum of Art, is America’s richest cultural institution with $2.7 – $3 billion annual endowment.  However, the $300 million operating budget and constant structural updates apparently eat away the majority of the funds – during the fiscal year of 2012 the Met spent only $39 million on new acquisitions.  Of course, there is an aggressive deaccessioning, which allows the museum to sell off “minor” pieces in pursuit of the “major works,”  but even with an average of $1 million per item, the institution will need to liquidate 2600 (!) works to collect the required amount.  Highly doubtful!

So, if the transaction does materialize, it most likely will be funded by private wealth.  You can pack a large ballroom with people from different corners of the world whose wealth amounts to multiples of the asking price.  For the sake of my personal amusement we can entertain another beautiful fantasy:  How grand would it be if one of our openly super-rich individuals with strong philanthropic inclinations shelled out a chunk of his wealth for La Gioconda and then gave it away to the Met, so that the grateful general public could continue enjoying it (only now in my own backyard)!     

It would take only 4.4% of Warren Buffett’s worth or 3.2% of Bill Gates’s.   But both of them are too preoccupied with keeping the world healthy and the US technologically comfortable (don’t ask me why) to bother with art gifts like that.  And by the way, the Codex Leicester, the most famous of Da Vinci’s scientific journals, which Gates bought in 1994 for $31 million, is kept in the MS mogul’s own private vault.  It is considered a great generosity that the Codex is let for display once a year in different cities around the world.  Yes, it is hard to imagine that anyone would give away the Mona Lisa as a gift to an institution or a nation.

The way I see it, the buyer will probably be someone whose immeasurable wealth you can’t find on some Forbes list, because it is not valued in the ephemeral public-stock prices.  This multi-billionaire is someone who keeps a low profile and his name would mean nothing to the majority of the world even if he walked into the Louvre in person.  But such an individual will transact through multiple proxies, and when all is done the Mona Lisa will disappear from the public eye into a secret stronghold.  We will be left with reproductions and copies, while a handful of people will enjoy the privilege of up-close peering into the delicate strokes of oil paints applied by the genius’s hand to a piece of poplar wood. 

Fable of the Week: You Say Pessimism, I Say Realism


Kroshka RooOnce upon a time (but not very long ago), Kroshka Roo, the quick-witted sidekick of the mighty goddess Shiny Crow, was making a protein potion for himself – to keep his strength and virility at the level tantamount to the demands of his arduous life.  The brew, prepared in accordance with a recently unearthed ancient recipe, looked like a swamp in South-Eastern Asia after an especially long winter season of inexhaustible rains: It was muddy-green and thick, with a texture that gave an appearance of something heavy and hairy swimming right under the surface. 

Kroshka Roo took a sip.

"Does it taste vile?" asked Shiny Crow, testing her partner's commitment to the noble cause of survival in the Crumbling World.

Kroshka Roo didn't skip a bit.  "I looked at the liquid," he replied, "And just knew exactly what it would taste like.  My expectations were completely met and I am at peace with the potion."  He then proceeded to consume the brew in its entirety.