That man took out a loan for a medallion, with the idea that he should be able to sell it once he retires. The medallion is now worthless. If Chicago cares about the cabbies, individual owners should be paid dollar for dollar the value of those medallions, even if no one else will buy them in the future.
(Does Chicago buy back the medallions, or do you have to have to sell them to someone else? Is the 300,000 the market value he paid to someone else, or is that what the city charges?)
The US government bailed out the banks in 2008, and all those people at the top got to keep their millions while so many people lost their homes (mostly due to fraud). These people watched their industry change while being locked into a sinking ship .. unable to do anything about it. These people need a bailout.
> If Chicago cares about the cabbies, individual owners should be paid dollar for dollar the value of those medallions, even if no one else will buy them in the future.
These kinds of markets have some interesting dynamics - carbon credits have similar issues. Basically, the government can set the initial price (because they artificially create the entire supply) but then the market takes over. It's very difficult for the government to set the initial price correctly (i.e., close to the eventual market price)
I seriously doubt that there's an easy mechanism for cabbies to get the city to pay the pre-uber market price for their medallions. They would probably have to sue, claiming that the medallion gave them a guaranteed monopoly that the government failed to uphold. That will turn on exactly what rights the medallion is supposed to entail.
He gambled that the cities artificial monopoly would last so he could continue to gouge consumers until retirement. In fact, he gambled the monopoly would stay strong so medallion prices would increase so he could reap a secondary monopoly profit by selling his medallions.
The fact that medallions, which originally cost far less than $300,000, shot up to that price is solely because of the money they allowed you to grift from chicagos citizens. Now you think those citizens should be punished again to pay more taxes in order to redeem the speculators medallions at their highest historical price?
My guess is that if medallions changed hands at $300K, that meant that they could be leased out to cabbies for over $30K a year. That's the monopoly profits the system created for them.
We never should have bailed out the banks without much harsher terms. But politicians were worried about financial collapse. There is no worry about that here, this is objectively good for the economy and the country.
That's the thing though, they don't. And why would they? These cabbies made a bet that the medallion would not lose value until they sold it, and they lost that bet. How is this different from any other small-time business going bankrupt?
Sure. Next thing, the Treasury immediately stops honoring $20 bills. Hey, what chumps we were, accepting cash!
The analogy holds: A city government had a system where a good had artificial scarcity and intrinsic value from stable government policy. Then, it suddenly changed. I'm all for ride-hailing changing our public transit dynamic, but I can't fault the players of the old system too much for saying "What the hell about my retirement, my end of life?"
I don't think the city stopped honoring anything or changed any rules. The medallion buyers were just speculating and didn't see the future well. No different from people who buy property for retirement then there's a recession and the surrounding population declines and it becomes worthless. Investment is gambling. Everyone knows that. You're supposed to diversify. Humble wage earners don't have that problem. Drivers who rent medallions don't have that problem. Only the risk taking ones who took loans for something that might lose value do.
not a ton of medallian owner/taxi operators. IIRC most are owned by banks, PE firms, etc. They're definitely more of a leveraged financial product than a certificate that allows someone to operate a small business.
He gambled that the cities artificial monopoly would last so he could continue to gouge consumers until retirement. In fact, he gambled the monopoly would stay strong so medallion prices would increase so he could reap a secondary monopoly profit by selling his medallions.
The fact that medallions, which originally cost far less than $300,000, shot up to that price is solely because of the money they allowed you to grift from chicagos citizens. Now you think those citizens should be punished again to pay more taxes in order to redeem the speculators medallions at their highest historical price?
My guess is that if medallions changed hands at $300K, that meant that they could be leased out to cabbies for over $30K a year. That's the monopoly profits the system created for them.
We never should have bailed out the banks without much harsher terms. But politicians were worried about financial collapse. There is no worry about that here, this is objectively good for the economy and the country.
(Does Chicago buy back the medallions, or do you have to have to sell them to someone else? Is the 300,000 the market value he paid to someone else, or is that what the city charges?)
The US government bailed out the banks in 2008, and all those people at the top got to keep their millions while so many people lost their homes (mostly due to fraud). These people watched their industry change while being locked into a sinking ship .. unable to do anything about it. These people need a bailout.