Handout City: Why Can't We All Be "Too Big To Fail"?
The rich get...their hands out.
The latest: A NYC taxi mogul contends that he, like the banks, is "too big to fail."
Used to be that NYC taxi medallions went for serious coin -- more than a million dollars. It was an artificially high price caused by government limits on the number of taxis they could be issued for.
Josh Barro writes for The New York Times:
One of New York City's largest taxi fleet owners is asking for a bailout.Evgeny Freidman, known as Gene, said in an interview Thursday that the taxi industry, like the financial industry, was too big to fail. He would like the city to guarantee taxi medallion loans, which would induce banks to extend more credit to fleet owners like him, and he compares this approach to the federal government's actions to save large banks and insurers in 2008.
"I still see Bernanke saying, 'I hate A.I.G.; I don't want to give them any more money, but I have to,' " he said, referring to the former Federal Reserve chairman Ben Bernanke and the large insurer that was bailed out in 2008.
Mr. Freidman's problem is not unlike that of any homeowner who bought real estate in the early part of the century thinking prices could only go up. In New York, medallions, the license that is required to operate a yellow taxi, are fixed in number, and their price rose for decades because of increased demand and restricted supply.
Oopsy. Or rather, Ubersy!
As a NYT commenter "another view" writes:
Privatize profits and socialize risks, huh Gene.
via @adamkissell
Of course theyre failing... if you make some taxi companies pay a million for a medallion but let other companies do it for free... either charge everyone a medallion, or no one.
Is there a good reason for the medallion, like without it there'd be too many taxis clogging the streets or something?
But either livery needs to be taxed or it doesn't, no fair treating companies differently based on advertising methods.
NicoleK at April 11, 2015 12:58 AM
Too late, mate. Google Signs Agreement with NYC Mayor to Replace NYC Taxis With Driverless Google Cabs
April 2015
http://inhabitat.com/nyc/google-signs-agreement-with-nyc-mayor-to-replace-nyc-taxis-with-driverless-google-cabs/
Canvasback at April 11, 2015 5:59 AM
The "Everybody gets a trophy" generation has grown up.
Wfjag at April 11, 2015 7:46 AM
Unusual, business operators usually claim that whatever governmental entitlement they are asking for is for the good of the public.
Bill O Rights at April 11, 2015 7:55 AM
Likely, the medallion system started out with the best of intentions. Ensure that cars were safe, restrict the number of cabs in narrow street, whatever it originally was. The price started at $10 in 1937, which would be around $170 today.
The problem came with scarcity, which bid the price up to ridiculous levels (everything over a few thousand dollars would be ridiculous, for what is really just a professional license). However, once people started paying those prices, there would have been huge resistance to seeing their "investment" lose value. In fact, that is exactly what NY taxi medallions turned into: investments. How stupid is that?
Now they stand on the threshold of losing their value. In fact, if New York had the guts, it would just rip the bandaid off, and abolish them from one day to the next. Get some popcorn and watch the vested interests defend the status quo.
a_random_guy at April 11, 2015 10:42 AM
Gene's complaint is the same as every crony of government when their manipulation fails due to competition.
- I paid for my monopoly fair and square. Now, make up my losses. I want a rebate.
Andrew_M_Garland at April 11, 2015 1:21 PM
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