Counterparties: The true cost of Amtrak’s burgers

By Ben Walsh
August 3, 2012

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Over the last decade, Amtrak has lost $834 million selling food and drinks, its president and CEO admitted Thursday in front of the House Transportation and Infrastructure Committee. The NYT reports that those losses were “largely because of waste, employee theft and lack of proper oversight”.

All of this comes on top of Amtrak’s complex status as perennial political football, anecdote fodder for pundits aiming to outdo their own previous attempts at self-parody, and of course vital national infrastructure. But never mind that: losing more than $80 million on food an beverage service a year is offensive to “anybody who’s ever boarded a train hungry and been forced to cough up the better part of $20 for a burger and a beer”.

Meanwhile, burgers have hidden costs of their own, among them greenhouse gas emissions, overuse of land, water and energy, environmental contamination, and health impacts. Consumers are protected from directly paying those costs by a myriad of agriculture, energy and health policies and subsidies. As a result, a quarter pounder at a fast food joint costs almost nothing, and in any case far less than its true cost to society.

An industrialized hamburger is a cruel combination of subsidies and externalities. By increasing the price to the individual and adding to the cost paid by society, Amtrak has remarkably managed to turn the hamburger into an even worse deal for us all. – Ben Walsh

On to today’s links:

Knightmare
Goldman unwinds Knight’s trades for $440 million – Knight is “scrambling for extra cash” to settle by Wednesday – CNBC
Knight is in talks to sell its futures brokerage unit with potential buyers – DealBook

Crisis Retro
US selling $4.5 billion in AIG stock… and AIG plans to buy $3 billion of it – Bloomberg

Primary Sources
US economy adds 163,000 jobs in July, beating expectations; unemployment “essentially unchanged” at 8.3% – BLS

New Normal
The scary depth and duration of the current jobs crisis in one, updated chart – Calculated Risk
“It was like we were in a funeral home”: unemployment workers get pink slips of their own – Huffington Post
“The true backdrop for Friday’s jobs report: an epic, decade-long stall in the national Jobs Machine.” – National Journal

Your Daily Outrage
“The existence of mass unemployment has stopped being something the economic powers that be even pretend to regard as a crisis.” – Jonathan Chait

JPMorgan
Bruno Iksil was pushed by the CIO’s head of credit trading to inflate the value of his positions – WSJ

Politicking
Ezra Klein: “I can describe Mitt Romney’s tax policy promises in two words: mathematically impossible”.  – Bloomberg

Banks
Iceland, pioneer in banking reform – Bloomberg

Data Points
Pimco’s Mohamed El-Erian literally (figuratively) wears the same thing after every (three) good jobs reports – Business Insider

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