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The Public Policy
Welcome to Nowhere
Ray LaHood will be happy to take you there, fast, all expenses taxpayer paid.
California’s Central Valley is huge — 450 miles from North to South. North of the capital, it is called the Sacramento Valley; south of it, the San Joaquin. It is in the southern part that the California High Speed Rail Authority plans to build a 54-mile-long railroad between two small towns, Borden and Corcoran (collectively known as Nowhere).
Train zealots, such as Ray LaHood, U.S. Secretary of Transportation, want us all out of our cars and riding trains, buses, or walking. LaHood see this as the first segment of a glorious system that will link California’s largest cities. Its cost: $4.3 billion.
In 2008, California voters unwisely passed a ballot initiative to fund $10 billion of the total of $42.6 billion for a statewide system that would be completed by 2020. The $10 billion would come from the sale of bonds. Californians have a distressing habit of thinking such proposals are “progressive” and thus good, without paying attention to the fact that the state is already over-burdened with bonded indebtedness which adds many millions of interest payments to its budget every year.
There is no assurance this project will not end up as a pig-in-a-poke. No rapid transit system in the United States has yet come in on budget. This one will rely heavily on federal funding. Roelef van Ark, executive director of the CHSRA, was quoted the other day as saying, “It’s without any doubt that we need funding from the federal government.” That may be a thin reed on which to lean. Despite LaHood’s obsession with rail, it is unlikely the new Congress will give a sympathetic ear to the administration’s requests for new money — given the history of such projects (Amtrak, after 40 years, still runs in the red.)
The ostensible reason for the first high-speed link between two obscure towns is that it will provide a testing ground for high-speed locomotives. It is true that if the entire project were to fail, such rails could become part of the existing freight lines in the valley. The real reason to get started, however, may be to create inexorable pressure on state and federal governments to keep funding LaHood’s dream.
While California’s high-speed rail enthusiasts continue to whistle in the dark, their project will get a $624 million federal windfall, thanks to LaHood’s obsession. The source is funding he had allocated to Ohio and Wisconsin for high speed lines linking Cleveland, Columbus and Cincinnati, and Milwaukee and Madison, respectively. The incoming Republican governors of those states campaigned against those projects and the voters agreed with them.
Neither of those projects could charitably called high speed. Cato Institute scholar Randal O’Toole estimates the Ohio line would average 38.5 miles per hour and the Wisconsin line 59 mph. Dizzying speeds.
Wisconsin’s Governor-elect, Scott Walker, asked the Obama Administration to let them use the allocated $810 million to make badly needed bridge and road improvements. Ohio’s Governor-elect, John Kasich, said “no” to the federal “gift” of $385 million and asked that the funds go into the U.S. Treasury to help reduce the deficit.
No, said LaHood. He said he was sure other states would be happy to divvy up the nearly $1.2 billon in federal funds. Sure enough, California stepped to the head of the line. The Weekly Standard’s Stephen Hayes said LaHood’s message, in effect, was: “If you don’t want to waste our money, we’ll find someone who will.”
What the Messrs. Walker and Kasich know and California’s officials either don’t know or don’t care is that once such a system is built — if it ever is — operating losses (and they will be large and persistent) must be paid by the states. When that happens, the sound of tin cups rattling on Capitol Hill will be deafening.
About the Author
Peter Hannaford was closely associated for a number of years with the late President Reagan, beginning in the California Governor’s office. His latest book is Presidential Retreats.
Letter to the Editor View all comments (42) | Leave a comment
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Career Soldier| 12.21.10 @ 7:44AM
This reminds me of the loving parents who give in to their 16 year olds pleas and give him a car. The fact that he has no job, and no income with which to fuel and maintain a car soon becomes all to obvious, but how do you "take back" the car once it's givin and crush your childs spirit? So you just keep giving and giving and giving.......
I like my father's child rearing style better, God bless him: "Get a job. When you've saved the money to afford a car, I'll help you choose a good one. So California, here's my advice: When you've saved the money for high speed rail, I'll help you choose a good one.
Le Cracquere| 12.21.10 @ 8:09AM
Seems fair enough. Long as we treat Californian public roads the same way.
Le Cracquere| 12.21.10 @ 8:14AM
I'm afraid the article may have a typo or mixup between a sentence in the first paragraph and the names in another. Shouldn't it be "Car zealots, such as Randal O'Toole of the Cato Institute, want us all out of trains & buses, off our feet, and riding autos"?
Ol Will| 12.21.10 @ 5:46PM
Gad! These liberals are sooo cute with their cutting-wit irony/sarcasm.
And French, too.
Le Cracquere| 12.21.10 @ 10:57PM
Sort of sad when an honest objection to these big-government titty-baby highway porkers can get interpreted as "liberal." Or does it magically cease to be big government when it gets spent on asphalt?
And as for "French"?! Only orthographiquement, mon cher.
Willie Green| 12.21.10 @ 8:37AM
During the coming decade, global oil consumption will shift fossil fuel production to increasingly more expensive "unconventional" sources such as shale oils and tar sands. Whether we like it or not, this will make highway and airline travel much less affordable than what we currently enjoy.
The automotive industry is responding to this trend with the introduction of hybrid and electric vehicles. However, the alternative to wasteful, short-hop airline travel is regional passenger rail which is fiercely opposed by the Petroleum and Airline lobbies.
Mr. Hannaford does our nation a grave disservice by backing the myopic demands of these well funded special interests. The broader business community requires energy efficient regional transportation to be competitive in the 21st Century global economy.
Rather than obstructing efforts to develop this infrastructure, Mr. Hannaford should be making constructive suggestions as to how we can best achieve this transition, with a long term goal of eventually privatizing regional passenger rail service.
Dan Hirsch| 12.21.10 @ 9:01AM
Willie;
Malthus told us all in the 1800's that the world would run out of food by the late 1820's. We didn't.
In the early 1970's 'everyone' said that the world would run out of fossil fuels by the early 1990's. We didn't.
The scarcity of anything is reflected in its price, once you peel away all the noise like taxes, tariffs, special limitations on production and processing. The noise-free price will drive consumers of oil to the correct economic decision. If you are truly interested in the proper utilization of "scarce" or "dwindling" resources, you would wisely argue for "noiseless" pricing. Should you counter that this would encourage excess short term thinking, don't worry, the producers of the quantity know far better than the consumers how much there is available. If its going to run out, their sale price will reflect the imminent shortage. Look at what Genius Obama's stopping of US offshore production has done to gasoline prices. Remember they were about $1.80 per gallon when he took office.
Oh yeah, privatize passenger rail service and it will probably go away. You and I should not have our personal wealth taken to pay for somebody else's train ride, should we?
Le Cracquere| 12.21.10 @ 9:06AM
Nor for someone else's road trip.
Sam| 12.21.10 @ 9:19AM
how witty art thou oh LE Cracquere - Vous êtes un âne ingnorant de la ville!
Le Cracquere| 12.21.10 @ 9:50AM
De BEAUCOUP de villes, mon ami! (J'ai une franchise.)
L. Ross| 12.21.10 @ 11:34AM
Of course you are.
Willie Green| 12.21.10 @ 2:30PM
When Amtrak was formed in 1971, nobody was claiming that the world was running out of oil, Dan. We were importing "cheap" OPEC oil at $3.60/bbl ($19.38 adjusted for inflation) and had not yet suffered the Energy Crisis of the Arab Oil Embargo of '73~74.
Forty years later, Oil is over $90/bbl... 4½ times the '71 cost adjusted for inflation: a direct reflection of the depletion of "easy" oil and shift to sources that are more difficult to extract and convert to usable fuel.
The era of Cheap Oil is over, Dan.
We have to adapt to that FACT, not mutter a bunch of pseudo-intellectual gobbledegook about Malthus.
kiltmaker| 12.21.10 @ 4:38PM
Actually, Willie, there is plenty of oil around. We just aren't allowed to drill for it. The whole premise is to force up the price of fossil fuels by what ever means is necessary. If drilling bans don't do it, use global climate change, if that doesn't do it, blame BP, if that doesn't drive up the price, inflate the dollar.
There is oil. What do think Brazil is doing off its coast?
LaHood and his cronies are enamored with rail. I guess they imagine they are pulling into Berlin's station, pulling down the window, poking their head out and seeing the crush of people board the train.
America was born with a different idea. Freedom of movement. The ships brought over the first settlers and we have been on the move ever since. By foot, horse, donkey, mule, wagon, rail, car, truck or plane, we move and are free to do so. I think that freedom is what really gets to powers that be. Make it too expensive to travel freely and we can control where they go, where they live and where they work. That has been the dream since the dawn of city/regional planning.
dc| 12.21.10 @ 9:42AM
So, eco-communist idiot, the only reason rail hasn't been privatized is because of the greedy, rapacious oil companies? What concoction of drugs do you ingest on a regular basis?
If there were a private market for rail service in the U.S., the federal government wouldn't have to pour billions of our tax dollars into the pockets of its allies and cronies in order to build something that is (by definition) completely unmarketable. If your own investment advisor told you to invest in this Central Valley spur railway, would you give him more or less of your money? But it's ok, I guess, that the federal government pisses away other people's money (which it has already run out of, long ago).
We pay taxes (a lot of taxes) for roads and gasoline, and we'd pay a lot less if hippies like you would allow us to obtain the enormous amounts of energy (oil, gas, uranium) just in the lower 48 and offshore of it (entirely apart from Alaska). But you tax and regulate these industries to death, and then hop up on your demagogue pedestal and bitch about how these "special interests" are killing your market-less rail lines. These "special interests" produce goods/services that private citizens gladly pay for--the government produces nothing, and pisses away the taxes that private citizens are forced to pay on top of these goods/services.
You're an ignorant totalitarian ass--much like Ray LaHood, who's perfectly at home in the rotting home state of his Dear Leader. I fervently hope they both are sent back there ASAP.
JP| 12.21.10 @ 11:09AM
Willie,
You need to get your facts straight. Here are a few:
1)Hybrids are not cost effective. The Volt costs upwards of $40,000. Even with the fed's $7000 subsidies, it still costs over $30,000. I can buy a 4 year old Ford Expedition for less than that.
2)The cost of fuel today is more an product of a devalued dollar than higher consumption. We are still below 2006 consumption levels.
3)In the US and surrouding waters there are known oil and gas reserves large than Saudi Arabia's. In North Dakota itself are untapped reserves of some 100 billion gallons of oil.
4)The alternative fuels market cannot survive without large public subsidies. If we are at "peak oil", the markets would drive the price of oil over $250 barrel. That is not the case.
You old talking points are as stale as they are incorrect.
L. Ross| 12.21.10 @ 11:40AM
JP.
The Baaken formation centered in North Dakota is indeed a fine site for oil exploitation. And the US does have a great deal of natural gas and coal. Additionally, we have more fossil fuel energy than the rest of the world combined in our oil shale but don't kid yourself. When it comes to high grade, easily cracked oil which is inexpensive to get out of the earth, the Saudi peninsula is the place to be. Disregarding the Deepwater Horizon tempest in a teapot, offshore drilling is very expensive, very difficult, and very slow compared to onshore drilling. I'm not saying we shouldn't go after our own oil, but I am saying it won't be cheap or easy.
Willie Green| 12.21.10 @ 3:00PM
If the automobile industry agreed with your "facts", they wouldn't be manufacturing hybrid vehicles.
Despite the vast quantity of oil shales in North Dakota, they are an "unconventional" source of fossil fuel and will always remain more economically expensive to extract and convert to usuable form than the traditional crude oil that we are accustomed to.
Ol Will| 12.21.10 @ 5:56PM
My father told me that during his whole life (born in 1903) about every five to ten years someone serious would sound the alarm of the imminent demise of the supply of petroleum ("We only have X years of proven reserves left", "All the easy oil has been found", etc). I am pleased to report that this sport has continued throughout my lifetime, also.
If we could eat the liberal Chicken Littles, we'd never run out of chicken, that's for sure. They just keep coming.
Raphael Hythloday| 12.21.10 @ 9:02AM
"It's without any doubt that we need funding from the federal government."
Translated: we think that this is such a nifty idea, and so important that, rather than pay for the whole thing ourselves, we want you suckers in the other 49 states to bear the (by far) largest part of the cost of this pig in a poke.
GavInTucson| 12.21.10 @ 11:47PM
Another translation: we know that there's no market out there to sustain this on its own so we need federal funding to that we can feel good about caring for the planet.
Case in point... AmTrac.
American Flyer| 12.21.10 @ 9:13AM
When I was a kid I often rode Lionel Lines. Here inCt we made Gilbert and Erector. Will these High Speed trains be O HO or TT? Walt Disney ran a RR on his front lawn. Of course if the Govt. does it It will be the Little Engine That Couldn't.
Sam| 12.21.10 @ 9:22AM
when it comes time, I'd like to see all the so-called proponents and power-brokers on a train instead of private jets, government vehicles and donors yachts. oh yeh, they'll pplay by the same rules as the rest of us when pigs fly...
GavInTucson| 12.21.10 @ 11:48PM
Class envy, Sam?
Steve A| 12.21.10 @ 9:28AM
What is it about liberals & their choo choo trains? You mix the 2 & you get double the economic insanity typically on display.
Richard Baker| 12.21.10 @ 9:51AM
Liberals have been to Europe and have seen the train systems there such as Deutsche Bahn and the French SCNF. They forget that America developed differently and is much larger than Europe. Plus, the extreme taxation of benzene, as I knew it in Germany, forces people to use the trains. But true to form, their motto is "Don't confuse me with the facts, I know what I know." Their model is not those European train systems but Amtrak, the Pork Line.
JP| 12.21.10 @ 11:02AM
Even with gas at $7 a gallon, the rails in Europe are not cost effective. A commute from a village 60 miles outside of Frankfurt Germany to downtown Frankfurt still cost $40 round trip ($800 month). It still is less expensive to drive a compact Volkswagen Gulf than it is to take the train.
I've taken the train in Europe for many trips, and most of the time they were 75% empty. I wonder why?
Petronius| 12.21.10 @ 11:14AM
Most Europeans use trains for commuting to the centers of large cities which have almost no parking.
They can't afford more than 1 or 2 excursions a year.
The only advantages are senior discount tickets and government passes.
Finbarr Moran| 12.21.10 @ 11:17AM
You nailed it right on the head, Richard.
P. J. O’Rourke once quipped that, in Europe, you cannot swing a cat by the tail without sending it through customs (please, no complaints from the PETA wackos). The European land mass is much smaller than the US. Hence, European transportation solutions are simply not feasible in America.
If you did not know better, you’d swear that the progressives want to transform the country into a European urban proletariat like Huxley’s Brave New World.
What’s next, we stop using soap, deodorant and toothpaste?
Dave| 12.21.10 @ 10:45AM
Your editor missed a redundancy. In the sentence below:
"In 2008, California voters unwisely passed a ballot initiative to fund $10 billion of the total of $42.6 billion for a statewide system that would be completed by 2020."
the word "unwisely" is not needed when referring to the actions of California voters. I say this sadly as a lifelong Californian. (Perhaps "sadly" is also redundant.)
There is one simple response to anyone pitching high-speed rail. Do you know why the U.S. has without a doubt the worst passenger rail system in the developed world? It's because without a doubt we have the best FREIGHT rail system in the developed world. That was a conscious decision by the rail industry after World War II, who saw that in a country without the density (both within cities and between them) of Europe or Japan, rail would never be able to compete with aviation. Our freight system is the envy of the world and incredibly efficient and environmentally friendly. One train can take 1,000 trucks off the road. Dumping HSR on our freight rail corridors (which is what is being proposed in every instance) screws that up.
We already have high-speed travel in this country. It's called an airplane.
Motown Mike| 12.22.10 @ 9:14AM
Railroads did not make a conscious decision to focus on freight after World War II. Although it is questionable if passenger trains ever really made money while under private operation, postwar railroads invested heavily in sleek new streamlined passenger equipment. They did it for several reasons: 1) the old school rail managers loved their trains and they were enamored with shiny new ones; 2) superior passenger service provided a calling card to shippers and their families who rode the trains, and 3) World War II and Depression idleness had taken their tolls on antiquated rail rolling stock which needed replacing. However, passenger trains couldn't compete with postwar wealth resulting in purchases of automobiles coupled with a new interstate highway system and advances in air travel, including the jet plane. So railroads struggled against government regulation to get out of the passenger business. When the Enron of its day, the Penn Central, went bankrupt in 1970 partly because of money-losing passenger trains, government itself took over passenger service and formed Amtrak. Meanwhile, railroads struggled to provide freight service but could not compete due to irrelevant regulation. It was only deregulation occuring in 1980 that allowed railroads to apply market principles to transportation and to win new business and to upgrade their infrastructure. As a result of deregulation we currently have an excellent rail freight system.
JP| 12.21.10 @ 10:57AM
Historian, farmer, and NRO contributor, Victor Davis Hansen, wrote a column about the Central Valley last week. He took an extended bike trip through some of the most fertile farmland in the world. For decades California was the national garden. It provided the US with a majority of its vegtables, fruits, nuts, and vineyards. His trip, however, was a sobering one.
The Progressives in California decades ago declared war on California farmers. Hansen provides depressing details of abandoned homes, empty fields, trash strewn highways, and idle farms. The Progressives have cut the main water supplies to many farms; illegals now squat on foreclosed homes and have created an insular community for themselves, which bureaucrats take little interest in. Welfare, broken families, drunkeness, crime, and the drug trade have invaded much of California's farmland.
And all the while, Progressives in both parties dream dreams of mono-rails, green fuels, and of fascists utopia. Only in California is carbon trading still on the book. When carbon brokers long ago closed down thier offices in Chicago and New York, California is still pushing for cap and trade.
What a mess. When and how will it end?
tippy| 12.21.10 @ 11:09AM
It's amazing to me that Keynesian economics - which is essentially saying you need to spend way more than you have to run your household (an idea most would, on it's face, find absurd) - is still alive and well among Democrats.
I just read a book I must recommend to you all - Gut Feeling by Jon Friesch (available here - http://tinyurl.com/2d6mefv). He explains a lot of the tenets of conservatism, like taking a holistic view of the economy (as opposed to seeing only spending this money in California with no awareness of the effect on the country) in a way I've never heard our elected conservatives explain it.
If you want to see excerpts, check out gutfeelingbook.com.
Sorry for the promotional post, but I think this is the kind of book we must pass on to others - especially those who think they're liberal only because they don't understand conservatism (you all know some, I'm sure).
GavInTucson| 12.21.10 @ 11:56PM
If I'm not mistaken, this is the same book that points out that most self-proclaimed liberals are in fact very conservative when they are honest with themselves.
Appleby| 12.21.10 @ 11:35AM
I take the train back and forth to visit Mama; its a five hour trip each way, where it would take 3 hours by car -- but I can't drive (due to eyesight problems). The train is never on time or close to it, because it has to stop for freight traffic. When I get to the stop before mine, roughly an hour away, I call my sister and tell her that I am expected to arrive within an hour or so. The train is not something you take if you want to get there at a particular time.
I also take the train from Orlando to Sebring for the 12 Hours race, because I can't fly into Sebring and it costs $3o to take the train and $80 to take a limo. This year I may take the train from home to Sebring because I won't have to go through the nekkid scanner that way. I have taken the train across Australia (took 3 days) and many European trains as well, and for someone who doesn't care when she arrives, I recommend them.
But my point is that if I have a schedule to keep, I do not take the train. And neither would anybody else.
P.S. What about earthquakes? Wouldn't even small ones shift the track of a high speed train enough to throw it off the rails?
PattyMor| 12.21.10 @ 12:26PM
I read an article awhile back saying that Europe and American took separate paths with rail traffic. Europe devoted a large share of theirs to passengers and America to freight. All the centrally planned choos choos will do is mess up the freight traffic. But hey, that is what central planning does.
Ray LaHood is the best example of useful idiot that I can think of.
Richard| 12.21.10 @ 12:36PM
Building passenger trains has been a leftist fantasy ever since I can remember. It is an irrational bias that is part of their world view and is accepted without examination.
Ken| 12.21.10 @ 1:25PM
I'm a Californian who was deeply disappointed when the voters approved the bonds for HSR.
Through the years, one thing I've noticed is that for large scale projects such as HSR, the costs usually end up being 4x - 5x the original estimate (think "Big Dig"), and the project ridership is generally a fraction of what was predicted.
In all of the discussion about HSR, I have yet to read about what is going to be done to protect what I perceive to be a very visible and vulnerable transportation system from terrorists. The costs associated with providing sufficient security will likely make HSR even more expensive than what is currently estimated.
James Claypool| 12.21.10 @ 5:35PM
The irony is that if private HSR were profitable, leftists would be railing against it. :-)
GavInTucson| 12.21.10 @ 11:58PM
Pun intended?
Richard Baker| 12.21.10 @ 7:34PM
James:
Good point.