The American Spectator : Stop Trying to Pick Winners and Losers, Mr. President

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Stop Trying to Pick Winners and Losers, Mr. President

Riding on high-speed rail to an empty future in Nowheresville.

The recurring theme in President Obama’s State-of-the-Union address was “winning the future.” It’s a worthy theme — focusing attention on the need for U.S. workers and businesses to be up to the challenge of competing in world markets. We are no longer living in a world, as the president pointed out, where “your competition” in seeking a job is “pretty much limited to your neighbors.”

Unfortunately, the president stood his “winning the future” theme on its head through a misplaced belief in the ability of government to do a better job of picking winners and losers than the free enterprise system is able to do on its own.

Obama cited high-speed rail as one of the primary would-be winners. Said the president: “Within 25 years, our goal is to give (emphasis added) 80 percent of all Americans access to high-speed rail. This could allow you to go places in half the time it takes to travel by car. For some trips, it will be faster than flying.”

Show-Me Institute scholars have conducted detailed cost/benefit studies of high-speed rail and found that it would be an egregious waste of money. It is not just that 200-mph bullet trains and the infrastructure needed to support them are extraordinarily expensive. There is also the fact that it may not be practical to run even 110-mph passengers trains on the same tracks as freight trains.

Other would-be winners identified by Mr. Obama included:

• Construction: “Over the last two years, we’ve begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. And tonight I’m proposing that we redouble those efforts.”

• Wireless technology: “Within the next five years, we’ll make it possible for businesses to deploy the next generation of high-speed wireless coverage for 98 percent of all Americans.”

• Clean energy: “Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling (emphasis added). So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources.”

Let us leave aside the staggering pick-a-number-out-of-the-sky presumption of that last statement, which suggests that in two-plus decades our nation will reduce coal from more than 50 percent of total electricity generation to no more than 20 percent.

It seems that the President is prepared to use a two-edged sword to make that happen: First, hitting up taxpayers in order to lavish billions of dollars in subsidies on wind, solar and other producers of politically favored forms of alternate energy; and second, forcing utilities to buy at inflated prices from the same subsidized producers which — by federal fiat — would be guaranteed the lion’s share of power industry’s demand for energy. That, in turn, would force the utilities to jack up their rates on homeowners and businesses.

There is an overwhelming body of scholarly evidence (to which the Show-Me Institute has contributed) which supports the conclusion that whenever governments intervene in the marketplace in order to try to pick winners and losers, they almost always wind up picking losers and compounding failure.

If, as the President suggests, there is a bright future for high-speed rail, high-speed wireless, or wind and solar energy, there is no reason to suppose that private companies would not support such enterprises, lured by the prospect of future growth and earnings.

Finally, Mr. Obama talks of giving Americans access to high-speed rail and other projects built at taxpayers’ expense. In doing so, he neglects to consider the deadening effect upon the economy as a whole that has come from ramping up public expenditures. Now or in the future, that can only mean higher taxes on individuals and businesses.

During the past two years, the federal government spending has increased from just over 20 percent of GDP to nearly 25 percent. That is 4 percent of GDP that almost certainly would have been put to better use in the private sector. It is one reason that may be cited for the painfully slow pace of the economic recovery.

On November 2 of last year, voters in Missouri and most other states indicated a strong desire for smaller and less intrusive government. Our President does not yet seem to have gotten the message.

About the Author

Andrew B. Wilson, a frequent contributor to The American Spectator, writes from St. Louis.

Letter to the Editor View all comments (62) | Leave a comment Leave a comment

Appleby| 1.28.11 @ 6:23AM

I take the train regularly between my home and Mamas home in the States. This train takes five hours, or about the same time as driving, at least on paper. Last time I travelled -- at Christmas -- the train was delayed four hours at the border by a large extended family attempting to enter the States without papers; and on the way home it was delayed 3 hours due to the massive snowstorm in New York City, where that train begins. The train is comfortable (compared to the bus) and is convenient for me because I cannot drive; however, if I could drive, I would do so. It takes five minutes to cross the border in a car, assuming one is not sneaking in ones extended family, and my car would not have to pull into a siding to allow freight traffic to pass by.

Plus my car would not be manned by union employees whose outrageous salaries cause the price of the ticket (which fluctuates wildly from trip to trip) to be well above the price of a tank of gas.

The average car-driving North American, and that includes the Obama family, will not pay the outrageous prices for the inconvenience of a train, even if it actually happened to BE high speed. America (and Canada) are simply too big to make trains practical for people with schedules to keep.

Intelligent Design| 1.28.11 @ 6:46AM

When the king decides who has to obey the law and who doesn't, there is no need for a legislature.

Melvin| 1.28.11 @ 7:23AM

I do love to ride the train. It is the kid in me still. Dad and Mom used to take us kids from Portland Oregon to Seattle Washington along the Columbia Rive and boy was it a ride. Sitting up in the Sky Car was truly a memorable experience for a kid.
The reality of adulthood is that AMTRAK has not operated in the black as long a I can remember.
I'm not sure of the economics of operating a railroad, but one would think that by now, AMTRAK could be operating without government subsidies.
Now with this high speed rail, that some have noted will be built by the Chinese is going to be a bottomless boondoggle that would make Boston Big Dig fiasco look like mere pocket change.
We do need a up to date rail system here., but not built by the government.
But like anything else, a private company couldn't just build the thing, first it would have to deal with decades of fighting environmentalists, acquiring permits, fighting environmentalists over the permits and costing a company millions of dollars before even foot of track is laid.
Government over-regulation, and unions would be another very expensive hurdle for a private company to overcome.
If a consortium of companies could just build the damn thing and be left alone without some damn tree-hugger or union goon demanding kickbacks, a high speed rail system could conceivably be build, and operate at a profit.
If the railroad that operated in the 1800's had to deal with all the crap that private companies have to deal with now. The transcontinental rail line from the East to West Coast would have never been built.
That is why Asia is beating the pants off us now, because they don't even have a sixteenth of the horse squeeze to deal with like American companies do.
Maybe the Tunisians and Egyptians don't have such a bad idea after-all. Maybe we need to do a little house cleaning of our own.
The bottom line is people, we can't keep going down the path we are on. Theres too much crap in the way now. We either clear out the crap or we make a new trail bypassing the crap. But we can't keep doing what we're doing and expect to flourish as a nation.

Ned| 1.28.11 @ 10:59AM

The Coast Starlighter still runs daily... try taking it south to LA... that's an interesting ride, although places like Davis, California don't look very nice from the back... but that only works if *travel* is the purpose of the trip... if you actually have to go somewhere to DO something, 24 hours to LA is too damn long, even if the Club car is open most of the way...

Bill Hussein O'Stalin| 1.28.11 @ 7:33AM

The people who believe in big government are the same people who abused animals as children. Other citizens are simply a means to an end and you can bet Obama looks down his nose at the average citizen, hence the community organizer mind set.

Obama and his ilk look upon the human race as inanimate objects, simply chattel to be herded along and they the herders.

They have no respect for individuals or individualism. To Obama and his brethen the individual is to be feared. To the statist an individual is a Nazi army comprised of one person and therefore when that individual raises their head, the acolytes in the state run media must attack.

Melvin| 1.28.11 @ 7:59AM

Yup, but even the Nazi's eventually came to the realization that they were lied to, as they stood amongst the rubble of failure.

Frisbee| 1.28.11 @ 9:02PM

Yes Melvin, but after how many dead and how much war effort. God have mercy on us.

michigander_sandusky| 1.28.11 @ 8:02AM

If a project cannot stand on its own through private sector funding it is a boondoggle waiting to happen. Can anyone say "Amtrak"! Get the government out of the way and private enterprise will produce the innovation of which the POTUS speaks. The only thing the government can produce is a bureauracy and waste.

Brad| 1.28.11 @ 12:42PM

... and the USPS, no? What an "efficient and profitable" institution that is.

Red Bubba| 1.28.11 @ 8:30AM

Follow the money - high speed rail is going to be built by Chinese companies.

Curly Smith| 1.28.11 @ 8:30AM

Yeah, "Winning the Future" by doing the things that didn't work in the past and don't work in the present. Why it's just like "climate change"... the solution to global warming is higher taxes and more regulation and the solution to global cooling is higher taxes and more regulation. It's a universal solution to whatever ails you but it can't cure the common cold; not to worry, we have nice cyanide capsule for that.

Ken (Old Texican)| 1.28.11 @ 8:45AM

Folks,
trains are a non-issue if the House of Reps won't fund it.
It is a fairy tale.

Steve A| 1.28.11 @ 8:56AM

Right on Ken. It does not have to make any sense, just sound good. It's liberalism after all....

Ken (Old Texican)| 1.28.11 @ 8:47AM

OH, PS: Check out the Win The Future, (WTF) video by Sarah Palin over at NRO today. It is hilarious.

Louis Jenkins| 1.28.11 @ 8:56AM

Wireless technology: "Within the next five years, we'll make it possible for businesses to deploy the next generation of high-speed wireless coverage for 98 percent of all Americans."

And then he can shut it down on a whim.

Ridin' that train
High on cocaine
Casey Jones ya'd better
watch your speed

Impeach Don't Wait| 1.28.11 @ 10:11PM

"Within the next five years, we'll make it possible for businesses to deploy the next generation of high-speed wireless coverage for 98 percent of all Americans."

I'm thinkin' this type of thing is all done quite well be private enterprise, no?

Steve A| 1.28.11 @ 8:58AM

If Progressives loved the country the way they do their choo choos, we would all be in good shape.

skedaddle| 1.28.11 @ 9:12AM

"This could allow you to go places in half the time it takes to travel by car. For some trips, it will be faster than flying." True stories: a friend had to make so many plane and train transfers that she could have driven from St. Louis to New York City in the time she spent on trains and planes. I spent 5 hours total flying from St. Louis to KC when the drive is 3-4 hours. You might get somewhere faster on mass transit but then you might win the lottery, too.

dvb| 1.28.11 @ 9:47AM

First get rid of those rail subsidies. Then get rid of those road subsidies.

George S| 1.28.11 @ 10:42AM

The response to Obama's pie in the sky rhetoric is very simple:

High speed trains: why didn't work on them start two years ago with a down payment using the 787 billion stimulus?

Wireless technology: why didn't work on them start two years ago with a down payment using the 787 billion stimulus?

Construction: why didn't work on them start two years ago with a down payment using the 787 billion stimulus?

Clean Energy: why didn't work on them start two years ago with a down payment using the 787 billion stimulus?

Just what did we get for that money that our kids will owe?

Ned| 1.28.11 @ 11:02AM

"nothing"?

Ned| 1.28.11 @ 11:03AM

NO! NO! Wait... I know... I know what we got...!!

"SCREWED!"

Spoonman| 1.28.11 @ 12:02PM

And a private esector economy that is struggling to grow!

Pete| 1.28.11 @ 12:29PM

Hey, man, stop harshing on the big O. That stimulus "saved or created"...oh, never mind.

You are absolutely correct. That colossal waste of our money should be hammered on day after day, if for no other reason than to force them to repeat their weak lies to the public.

Frisbee| 1.28.11 @ 8:51PM

A lot of it went to re-paving highways that nobody uses. Like Hwy 9 near Santa Cruz CA.

HSmith| 1.28.11 @ 7:27PM

Why didn't we not pass the stimulus in the first place?

Dixie Pixie| 1.28.11 @ 11:22AM

????Winning the Future????
............!!!!!WTF!!!!!...........

The "Future" is a literary description of event or conditions that may occur.
The "Future" is not a contest, battle,game or wager.
The "Future" can not be "Won" or "Lost" as time does not have an opponent.
It takes real insanity to confuse a temporal reference frame for a physical object that can be fought.

The White House staff and Obama must have come completely unhinged from reality to come up with that theme.
Or the Obama Drones are simply stringing pretty words together to "Rebrand" the same old failed FDR / Keynesian policies.

Either way, Obama looks like he is going back to the 2007 campaign strategy of spewing out a fog of beautiful sounding rhetorical gibberish to conceal the actual reality.
It is going to be a long two years of fractured logic and hallucinogenic language.

Richard| 1.28.11 @ 12:31PM

Here is an idea: Remove the regulations preventing nuclear power; Allow oil, oil shale, and natural gas production offshore and in non-wilderness and NPS lands; quit subsidizing "high speed" rail only Europhile liberal enviros want; and repeal the ban on incandescent lightbulbs while we are at it. There--a Republican energy proposal that will help all Americans.

VBMax| 1.28.11 @ 12:34PM

Actually, "Winning the Future" is the title of a book written by Newt in 2005.

Larry| 1.28.11 @ 12:37PM

Leave it to an affirmative action twit such as Comrade Golfer to tout "high speed rail service". If he'd spend less time playing golf and vacationing on the tax-paying suckers' dime, he might know that for the most part, Americans do not want to ride trains. When was the last time that Amtrak showed a profit? When was the last time that it was not a beneficairy of taxpayer welfare?

Leave it to the government in general and the birth certificate-less one in particular to tout the benefits of investing in something that's already been shown to be a loser.

rhnoda| 1.28.11 @ 1:30PM

He needs to reward those who will give him the most money for his campaign.

Wayne | 1.28.11 @ 1:36PM

High Speed trains is just a vision of the US becoming India and the USSR. People can get herded like cattle, perhaps even sit on top of century old cars. In fact I think the hobos of the Depression used high speed rail.

Frisbee| 1.28.11 @ 8:53PM

When I first moved to California 11 years ago, I was AMAZED at how awfully slow the traffic lights were. It drove me nuts. I realized that this was one way the government uses to train people into becoming like cattle.

Now as the years have gone by, I've.. realized ..that... mooo.

adultskeptic| 1.30.11 @ 9:49AM

GREAT POST!!!!

Al Adab| 1.28.11 @ 2:36PM

The issue is not the issue. It is all about the perceived superiority of Central planning to free markets. The Left will happily explain why central planners make better choices for the ignorant public than free markets can. Translation, power and control. Too many companies ie GE, Ethanol are totally in line with being picked as winners.

John Bailo | 1.28.11 @ 2:43PM

What about Warren Buffet -- he bought BNSF in what he described as an "all in bet on America". With ownership of the right of ways, and as an elite businessman, if HSR were at all worthwhile, wouldn't he be raising capital to build it? As it is, all Obama is doing is handing over tax money to fix up aging track gratis for trains to go from 45 mph to 80 mph but with the main beneficiaries being private freight lines.

Blackwatch| 1.28.11 @ 2:47PM

Only a complete moron would get on a high speed train in America. How easy would it be for a jihadi to kill the conductors and crash the train? pretty damn easy. Or easier yet rent 3 dump trucks, buy a load of gravel for each and park them on the tracks 10 seconds before the train arrives at 250 miles per hour. No smuggled weapons or explosives needed to do that. A driver's license and a load of rocks in a rented dump truck thats pretty low tech.

The real Democrat Party reason for high speed rail: The new TSA--Train Division will need to hire about 10,000 federal union workers to provide security for this financial Titanic. Those folks vote for the D party in exchange for great benefits and pay.

Pat| 1.28.11 @ 3:21PM

Blackwatch, you saw straight through the “we’ll try to distract you” rhetoric to the underlying truth. And in addition to terrorists stopping trains, other pundits are questioning whether electric cars can handle cold weather, especially massive traffic jams due to major snowstorms which can drain an electric car battery faster than “earmarks” passing through a Democratic Party budget committee. But Obama also desires to see one million electric cars on the road, your tax money should subsidize the purchase cost for future battery car owners and, as a further insult, we’re given only 4 years to realize his goal. The United Auto Workers union naturally sees that as a realistic but modest goal – and why not – their campaign contributions should buy something from their loyal lobbyist occupying the Oval Office.

But even as Americans like you realize the sole purpose of Big Government is to serve Big Special Interests, many other citizens actually take this high speed rail/battery powered car suggestion seriously and then want to argue “green” versus “mean”. The First Amendment was intended to protect free speech but, in this present era of Big Government activism, every speech emanating from our overpaid politicians becomes anything but free to the American taxpayer.

Impeach Don't Wait| 1.28.11 @ 10:27PM

We already know that most auto makers have developed and are perfecting electric (and alternative fuel) cars just as a matter of business. They're constantly working to perfect them and as research rewards them with technological advances, the market for these will open up--and the product will be ready for mass appeal in due time--if it's truly destined to be. If the government dives in and forces them on the market before they're ready, it's gonna waste corporate resources, taxpayers' money, and consumer spending. But what do I know...

adultskeptic| 1.30.11 @ 9:48AM

You realize of course, that electric cars actually run on the electricity provided by your nearby coal operated electricity generator? When electric power is provided by windmills and solar panels, I will consider an electric car. Until then, they pollute the environment worse than gasoline powered autos.

Osamas Pajamas| 1.28.11 @ 3:31PM

There's no reason whatever why even one penny of taxpayer money should be spent on high-speed rail or even regular rail service. The bloody unions bled the rail companies dry as prelude to sucking money out of the taxpayers. These should be profit-making private enterprises, the unions should be SMASHED and if there is not sufficient market demand for rail service, these enterprises should be allowed to go out of business at no cost to the taxpayers.

GW| 1.28.11 @ 5:19PM

Trains work well in condensed cities and urbanized areas like the Northeast, but most of the country will never have a use for them. For instance, I would like to never fly because it is a pain to get a rental car, take public transportation, etc. when arriving at my destination. However, flying is much quicker when traveling halfway across the country. If my trip is shorter, taking a train would save only a little time, and I wouldn't have a good way to get around when I did arrive at my destination.

The automobile is quintessentially American. It allows us to have freedom, independence, and be self-reliant. Only Euro-socialists feel a form of collectivism (a train, i.e.) is superior to hittin' the open road in a Chevy.

Lois C| 1.28.11 @ 6:44PM

High speed rail, the liberal nirvana! What a freakin' joke it's nothing more than a plan to pay off the unions, all the train employees will be union, and to China Obozo's new bestest friend, China will build it. And who will pay for it? The American taxpayer will be robbed by higher taxes and more debt to build it and then robbed again in when we have to support it forever because it will NEVER be profitable IF it is ever finished.

The Socialists have to go, look at Egypt today this is proof that big O needs to look at. This is what happens when you have your boot on the neck of the people too long. Take heed Obozo, the people will revolt...

Yosemeti Sam| 1.28.11 @ 10:55PM

" ... So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America's electricity will come from clean energy sources."...."

Yo, BHO, I challenge you to walk down a Chicago South Side street anytime after sunset - to marvel at your spin-off achievements of community organization.

skeptik| 1.29.11 @ 12:44PM

how can a government that can't manage low-speed rail (amtrak) ever hope to do better with high-speed rail?

shipley130| 1.29.11 @ 4:03PM

When Obama is picking losers of 2012, he should put his name at the top of the list.

Kingofthenet| 1.29.11 @ 4:58PM

When Republicans say 'Free markets' this is what they mean. They want to be FREE to sell dangerous products with no accountability. They want to be FREE to pollute our air and water and land and 'walk' away without footing the cleanup bill. They want to be FREE to abuse workers in unsafe conditions for little pay. They want to employ CHILDREN in their factories and NOT even have to pay them a minimum wage. They want to be FREE to create TOXIC ASSETS on Wall Street, that this time will DESTROY the nations banking System. They want to be FREE to be Robber barons with Private armies to break up organized labor.Can you SMELL the FREEDOM, Smells like CRAP to me...

adultskeptic| 1.30.11 @ 9:45AM

Typical lib post. Name calling, accusations, and no logic.

Wayne | 1.30.11 @ 2:07PM

This is the 21st Century, not the 19th century. Robber Baron? Come on you can do better than that.

Stan | 1.29.11 @ 9:00PM

Construction: What about that declaration regarding stimulus money that it must not go to "White construction workers"? Is that still policy, or is it supposed to have been swept away and forgotten?

Will| 1.30.11 @ 6:38AM

I loved taking the train years ago, but like so much of travel or anything these days it's very hit or miss. Incredibly rude and aggressive people seem to be the norm, and those that are charged with maintaining order are either the same breed of cat or intimidated by them. Flying was once a real pleasure, now it's akin to riding Greyhound. Bullet trains are complete fantasy. No one is going to stand by while entire neighborhoods and parts of cities are razed to make accomodation for the necessary construction, hell, the Northeast Corridor is a perfect example. It ain't the trains, it's the railbeds. You'll never be able to straighten those tracks out enough to allow the diesels to haul, let alone some high tech rig...and what are you going to do about the workforce? I never could get over my aggravation on walking into South Station and seeing that my train to Penn Station was delayed three hours, three hours for a four hour trip, on a sunny day? Who will man these things? the same sullen, hostile goons that dominate every big city transportation authority? Please, let's get serious.

Paul Thiel| 1.30.11 @ 8:58AM

And what does freedom look like to you, "king of the net?"

Paul Thiel| 1.30.11 @ 9:02AM

I'd like to see Mr. Obama practice what he preaches.

- Take the train everywhere he travels in the US and Use Air Force One only for international destinations.

- Power the White House completely with a windmill. In DC, finding a steady source of hot air should not be a problem.

- Operate all White House communications, as well as his precious blackberry using only government internet providers.

adultskeptic| 1.30.11 @ 9:42AM

High speed rail will never happen on a large scale in the US, simply because the existing environmental regulations will not permit the massive appropriation of land and the construction of new rails. We spent over 7 billion on the Yucca Mountain nuclear storage facility, and environmentalists and cowardly politicians killed that project. The same would happen to high speed rail. I repeat - it will never happen.

Jay Dee| 1.30.11 @ 7:27PM

I nominate you 'skeptic to get back the billions already going to CA and FL for their HSR debacle. When WI and OH refused to buy into the farce, their money went to CA and FL.

Let us know when you get it back from Reid's tightly clinched fist.

weddingdress | 7.1.11 @ 1:05AM

I'd like to see Mr. Obama practice what he preaches.

- Take the train everywhere he travels in the US and Use Air Force One only for international destinations.

- Power the White House completely with a windmill. In DC, finding a steady source of hot air should not be a problem.

- Operate all White House communications, as well as his precious blackberry using only government internet providers.

Adidas | 8.11.11 @ 4:31AM

is good

العاب | 4.11.12 @ 3:18PM

First get rid of those rail subsidies. Then get rid of those road subsidies

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