Eventually, Math Wins
- Posted by Jeff Carter
- on November 23rd, 2012
While standing in line at my local Treasure Island I overheard a conversation between the cashier and the bagger. The cashier said, “Did you see how much they raised the cost of a monthly CTA bus pass?”. The bagger said, “Uh-huh, $100.”.
The CTA did hike fares. For a monthly pass, it went from $86 to $100. That’s a 16.28% rise in price. For the unfortunate travelers coming in from O’Hare, the cost of a ride went from $2.25 to $5, a 122.22% increase! No surprise, but the politically protected class that rides the elevated train from Midway to the city got no fare increase.
Why did they hike fares?
First, pensions. The CTA has pension liabilities it can’t afford to pay. Second, the cost of fuel has increased. Third, because the cost of electricity has gone up as well, it has cost more to operate rapid transit.
The response of the bagger-“Well, they will have to hike minimum wage so I can afford it.” I responded, “If they hike the minimum wage, it will create more unemployment and make it tougher to find work.”. The checkout clerk agreed with me.
I didn’t want to point out that it was public pensions that were putting financial duress on us all. Nor did I want to point out that EPA‘s reluctance to allow the oil companies to find new sources of oil and gas were hurting the supply chain for energy, artificially driving up prices. I didn’t want to mention that coal plants all over the US were being shut down because of the regulations coming out of Washington.
The checkout clerk said many of her friends were leaving the state. Interesting, I have heard that from a lot of the wealthy citizens too. Microeconomics theories work. Math eventually catches up with the chattering class.
Thanks for the link Instapundit.
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Jeffrey Carter is an angel investor and independent trader. He specializes in turning concepts into profits. He co-founded Hyde Park Angels one of the most active angel groups in the United States in April of 2007. He previously served on the Chicago Mercantile Exchange Board of Directors. He has done market commentary for (More...)