Fly me to the moon (by bus)

The above are prepaid cards of the kind used by urban buses in Rosario, worth 6 trips each. The one on the left shows the price of the bus ticket until yesterday (AR$1.20, discounted to 1.15 in 6-trip cards); the one on the right has the current price today, December 26 (AR$1.40, discounted to AR$1.35).

The reasons for the increase are (again) easily summarized: 1) inflation, affecting fuel, other supplies and general maintenance of the buses, as well as administrative expenses, etc.; 2) the mob that passes for a bus driver union got them a salary that rivals that of a well-established doctor, lawyer or architect; 3) the national government sends most fuel oil subsidies (keeping fuel oil cheap for public transportation) to Buenos Aires and its metropolitan area. Reason #1 finds the government simply in denial; reason #2 is fait accompli time and time again; reason #3 is a result of a federal republic that is such only on paper.

Just after Maurice the Menace was elected Chief of Government of BA, Néstor Kirchner ordered AR$600 million in subsidies to public transportation taken away from the capital district, but not in order to redistribute them among the provinces. Buenos Aires City, holding the highest standard of living in Argentina, and amid a shortage of fuel and energy everywhere, somehow continues to enjoy ridiculous cheap bus, train and subway fees.

Be careful what you ask for

Some of the items that are not, repeat, not becoming more and more expensive every day.

(picture by johannrela)

Rounding up the economics news... Cristina K says she'll do the same as her husband, though undoubtedly she says it with many and much more sophisticated words... (That's more or less the official party line, if we're to trust those ads of the Rafael Bielsa campaign where the people didn't complain but only, happily, cried "More! More!".)

In the meantime, inflation in Kirchnerland was 0.7% in June. It was only 0.4% in No-Thinking-Men's-Land (Filmus dixit), double that in Santa Fe, and 6 times as much in Mendoza. I have to check the rest of the data, but I believe there's a definite correlation between the inflation rate of a given place and its distance to Economy Minister Miguel Peirano, quite possibly with fluctuations here and there due to the presence of Evil Neoliberals, unexpected polar airmasses, and political transvestites.

Now seriously, La Nación complains that the national government is trying to make things complicated for Macri. You know Buenos Aires has always lived off the national state. Telerman, since before his lame duck stage, and now Macri as well, have repeatedly demanded that the national state transfer the control of the part of the Federal Police that patrols Buenos Aires City to the City, something that was included in the conversion of Buenos Aires from a Federal District to an Autonomous City. Macri, in particular, wants the police to follow his orders, something quite understandable when you based your campaign on the issue of security (or rather, how to protect the middle and upper class from the lower class). The national government ignored the demand, until now. Now they want to talk about it, but it seems they only intend to give the police to Macri — not the money needed to pay for it. That's 900 million pesos, almost US$300 million, 10% of the city's budget. As Petinato would say, chan!

And that's not all. K's folks are also perfectly willing to let Macri control the subte (i.e. the underground, tube, métro), which is the preferred method of transportation for millions of porteños every day — safe, fast, environmentally clean, and extremely cheap. But don't hang on to that last adjective. The subte companies receive 250 million pesos a year in subsidies. National subsidies for a system supervised by the national government. Guess what will happen when the system is transferred to the city. Chan!

You're probably thinking I strayed off my usual territory, since this doesn't have anything to do with Rosario. Wrong! Do you know how much a passenger pays for a trip on the Buenos Aires subte? 70 cents! That's less than one-fourth the price of a cup of black coffee in any café in BA. Do you know how much a passenger pays for a (much slower, much dirtier, and usually shorter) trip on a bus in Rosario? 1.20 pesos. That's half the price of a cup of a coffee in most cafés here. And that's because the subsidies granted by the state to make gas oil cheaper for public transportation throughout the country, which were already very biased in favour of the capital and its metropolitan area, were decreased even more some months ago.

Now I don't have the tiniest bit of hope that the Kirchner administration will take funds from BA just to give them to us. But the funds should never have been granted to BA in the first place. The unsubsidized subte ticket will probably cost about AR$1.60, more than twice what it does now, but certainly not unpayable. I don't see the problem — that should be nice to Macri's associates and ideological supporters, who surely don't like such populist, leftist devices as subsidies, especially if they make it easier for the poor to move about cheaply in the city. And it should also be nice to the national government — with higher fees, the subte will be used less, thus saving energy (not that's there's in any way an energy crisis!) that the country needs to produce the value-added industrial goods that are fueling our economy, such as soybeans and sunflower seeds.

Alas, what Macri asked for, he will get. Is there not a lesson to learn from this?


PS: I've just added a link to an article in today's La Capital. The Santa Fe Province and the national Ombudsman offices are considering an accusation of discrimination against the national government due to the unequal distribution of the subsidies to public transport. The metropolitan area of Buenos Aires gets 86% of the country's total subsidies; Santa Fe gets 2.42%. Each bus that runs in BA gets between 9,000 and 12,000 pesos/month, while in Santa Fe they get about 3,000.

Rosario bus fee raised

I guess that's enough with Mendoza already... There are news over here too!

This is not exactly news, though it was unexpected. The municipality just raised the urban bus fee from 0.95 to 1.20 pesos; the 6-trip prepaid card rose from 5.40 (each trip for AR$0.90) to 6.90 (AR$1.15/trip); all in all it's over 25%, quite a brutal hack to one's pockets. The political cost is going to be high. The executive branch (mayor Miguel Lifschitz) asked the Socialist-dominated legislature of Rosario to grant it the power to raise the fee. The Deliberative Council complied at once, eager to shift the political cost to the mayor, who has kept a low profile and a high approval rate. Lifschitz conditioned the fee increase to the results of a study of the costs of public transportation, but it was obvious that the fee was going to go up regardless. The opposition was quick to point out that the delegation of legislative powers was done too fast, during the holiday season (everybody knows nobody pays attention to the news during the summer holidays!), and denounced a previous secret agreement between the mayor and the companies that own the bus line concessions (and that will participate in the re-designed public transportation scheme to be implemented a few months from now). Basic knowledge of realpolitik tells me this is probably true; the companies will not invest in a system that doesn't give them enough profit.

The root of the problem, however, is the combination of last year's huge salary raise for bus drivers (that was presented to the media as the resolution of a conflict between the drivers' union and the companies, but was rather clearly, except for the most naïve, a mis-en-scene to appease the drivers and to get the companies an argument to push for a fee increase) and the national parliament's preference for Buenos Aires City in the issue of subsidies to fuel for public transport — which is why bus tickets in Buenos Aires remain at around 80 cents while the big cities in the rest of the country (Córdoba, Mendoza, and now Rosario) have had to raise them to over AR$1.10, from previous values around 90 cents.

Buses in BA carry a lot of passengers from the impoverished metropolitan area, to be sure, but the cost of living in that area is considerably higher than that of the rest of the country (I'm told a cup of coffee can be around 4 pesos in BA — you can get a medium cup of coffee with milk plus two medialunas for less than 3 pesos in Rosario). Why is the bus fee kept artificially low in BA? BA has trains and a subway, and of course people there have many more cars and many more taxis available in proportion (BA has a taxi per 80 people — Rosario has about 1 per 350 people). Moreover, with a national government that constantly pressures private companies and interferes with the market to keep the prices of basic products depressed, what sense does it make to let public transportation become so expensive? An average worker in Rosario may now spend between 6 and 8% of his or her monthly salary just to get to and back from work.

I use the bus a lot (maybe 90 bus trips a month when I'm going to Japanese class); despite my willingness to exercise, I just can't go to work on foot or by bicycle; it's too far away and I can't possibly wake up even earlier than I do now. I can pay for the difference, but I shouldn't. My bike got out of repairs just yesterday and I think I'm going to start putting it to use...

Meanwhile, the transport officials of the municipality say the bus system is working fine and will be even better, the everyday bus users are complaining about the quality and frequency of the service, the taxi drivers want their own fee to be increased even more to compensate, and at least one person is attempting to block the fee increase by a judicial interdiction. The taxi owners are also complaining that they will have lots of work because the bus won't be advantageously cheap enough (what do you call a businessman who complains because his product has a large demand?).