Do You Want a Free Lunch?

                                                                                           

I went to Giant/Jet stadium yesterday.It was my first time since the 50's that I saw the Giants play in person. Things are a lot flashier now with relay screens and loud rock- R/B music before kickoffs and during T.V. commercials. All the fans wore blue with different names on their backs.Young and old watched as the Giants played poorly and the coaching staff(all thirty of them) yelled and debated what to do to bring victory. I had a lot of fun before the game when everyone brings food and drink to share.Tables are set up between parked cars ..we played dominoes while we ate and drank beers.The stadium is big and beautiful land I believe a few bucks were used to fulfill the owners dream($1.6 billion cost).It was an nice break from my work as an underbelly writer for the ill represented taxpayers.I've been reading "Free Lunch" by Dave Cay Johnson and I would like to bring you some facts about how some of our money is being spent helping business grow and prosper.

According to Johnson, our annual income has been on the decline for more than three decades.The latest tax data showed the vast majority's average income(bottom 90%) peaked in 1973 at $31,248.By 2006 it had fallen to $30,659.Even with three decades of economic expansion,the vast majority has to get by on $11 less each week than it did a generation ago.An astonishing fact from government tax data has the top tenth of 1%(300,000 people) had nearly as much income as all 150 million Americans that make up the lower half of our population.Executives free lunch(subsidies,writing tax laws,hiding money in tax havens,etc.)is a major factor in America's growing inequality and why our economy is closest to those of Brazil,Mexico and Russia in how it distributes resources.

Nearly three decades after Mr.Reagan's revolution(starve the beast),the single biggest piece of our economy, a third of it ,is still government.From raking leaves in city parks to buy stealth bombers that cost $1.2 billion a copy,government takes the same share.But money for the basics that make society work is growing scarce.From leaves in the park to textbooks to highway bridge maintenance to food safety inspections,money is dwindling because so much has been diverted to the already rich through giveaways,tax breaks,and a host of subsides that range from the explicit to the deeply hidden.

The " Trust and Consequences" chapter reviewed a tragedy that took place when a switch broke at a crossing and 77 people were injured and 8 were dead while traveling on an Amtrak train.The company CSX were in charge of maintenance of the railroad crossing.The National Transportation Safety Board examined the crash and found CSX had covered up a wobbly switch mechanism with ballast. CSX was cutting costs ($2.4 billion) on maintenance throughout their rail system so they could increase revenue and stock prices.From the perspective of CSX, the economics of shortchanging safety made sense. The maximum fine was $20,000 for safety violations(average$1,600).One family did sue and eventually received $56 million as compensation from CSX.The other families received a fraction of this settlement because they didn't have the patience and determination.CSX didn't pay a dime to any party in the accident even if they were at fault.They sent the bill to Amtrak.Under federal law all claims arising from Amtrak(government owned) passengers,even in cases where Amtrak was not at fault,must be paid by Amtrak.CSX took advantage of this law to reduce maintenance costs for profit.Economists call someone who gets rewards but has little risk:moral hazard. It is obvious that CSX engaged in morally hazardous conduct and the American taxpayer paid for this behavior that has lead to numerous deaths and accidents.Only four of 3,000 accidents have been investigated since 2000.The government agencies that oversee safety are limited due to a lack of resources and number of inspectors.

More to come from"Free Lunch".