Saturday, April 23, 2011

Another Academic Speaks to High-Speed Rail's Inappropriateness With Well Chosen Words.

The New York Times has been entirely too friendly toward High-Speed Rail lately, so this op-ed piece by Stanford History Professor Richard White is a welcome reconciliation with the "paper of record."   As an ex-history professor, I wish White had gone into greater detail about the corruption that fueled the Transcontinental Railroad, which the high-speed rail promoters love to cite as the paragon of what they are also seeking to create in California.  

It is entirely appropriate for Prof. White to interpret those 19th century events with a revisionist spin regarding this first cross-country train which made Leland Stanford, founder of the eponymous university that employs White, stinking rich.

White begins by confessing to the same strong ideological conflicts I've experienced as a Liberal who opposes high-speed rail. Our numbers are far too small. Have Democrats totally lost their critical faculties (their crap detectors) in this ideological war?

Most high-speed rail promoters, Obama the most prominent, love to cite the 19th century Transcontinental Railroad as the exemplar of transportation infrastructure development that endured much opposition, but survived hardships and political conflicts to become a great achievement that "opened up the West" and brought civilization to California. Or so the bedtime story has been told.

Actually, at least in my mind, the single achievement that came from this highly corrupt project was to institute the movement of freight, which even today gives America the status of world leader in freight rail usage.  Passenger rail, whatever its benefits, was consequential to the degree that we had no better passenger transit technology that was as cost-effective until the development of mass production of automobiles, and later, commercially reliable aircraft.  

The history of technology is the record of such evolutions, revolutions and transitions. Historically speaking, bringing back rail by speeding it up is doomed to be a short-lived effort. If pursued, this HSR ambition, by the time it is fully realized in the US, will confront far more cost-effective and technologically advanced passenger transit modalities, probably realized in other countries if not our own.  

When White states that "a compelling case can be made for high-speed rail between Boston and Washington" he indicates that he is open to the concept of the right tool for the right job and that there is a place, albeit limited, for passenger rail. I would reiterate that the movement of freight by rail, and it can be improved and expanded significantly, is a highly appropriate use for this rail modality. 

Also, rail can be incorporated within multi-modal urban and regional public mass transit systems; we have talked about this frequently.  But inter-city travel is a train of a different color.   

It should be noted with more attention that the decline of passenger rail in the US came with the advances of auto and air travel, the former for shorter distances, the latter for longer distances in a country that is several thousand miles or more wide. Speeding up trains becomes, for HSR advocates, an opportunity to revitalize a nearly defunct industry, but it comes too late.

The rest of the world that seeks HSR is either, like China or Brazil, in its 19th century Industrial phase, seeking to expand into under-developed regions, or like Europe and Japan, bestowing the "icing on the cake" of their existing and extensive railroad system in countries highly amenable to group-think and collective behavior. That "icing" serves the growing upper middle classes. It is not, practically speaking, practical or public transit. 

The US is in neither cultural condition, having had its Industrial revolution a century ago.  We are now post-Industrial, demonstrated by our persistent expropriation of manufacturing capacity overseas.  And, we continue to think of ourselves as a highly individualistic, independent, autonomous people, using public mass transit of any kind, near or far, with some reluctance. Yes, rail ridership numbers are increasing.  However, at their greatest these are still a miniscule fraction of the traveling public.

If California's high-speed rail project were taken seriously by the investment community, they would, early on, have demanded the creation of a truly profitable rail system, which this is certainly not going to be.  It cannot be called profitable if profits are based on tax-based subsidies, transferred from state and federal treasuries into the hands of private investors.  Pof. White illustrates the folly of that.  So do the lengthy writings of William Grindley and his team.  The claims of the CHSRA that investors are knocking on their doors indicates either their deafness or their duplicity.  Those knocks are from vendors, contractors and consultants seeking to get a piece of the federal largesse as it becomes bestowed on this god-forsaken project.

The bottom line is that instead of emulating it, we should learn the harsh lessons from the 19th century.

Those who don't learn the lessons of the past are doomed to repeat them.  

Thanks, Professor White, for your thoughtful analysis with your use of this powerful historical analog.

April 23, 2011

Fast Train to Nowhere
Stanford, Calif.

IT is hard for liberals like me to find good news in the latest agreement to cut the federal budget, but there is at least one silver lining: subsidies for high-speed rail have been sharply reduced. Why is this good news?

In his State of the Union address, President Obama compared high-speed rail to the 19th-century transcontinental railroads as parallel examples of American innovation. I fear he may be right.

For the country as a whole, the Pacific Railway Act of 1864 and subsequent legislation subsidizing the transcontinental railroads — the lines that crossed the continent from the 98th meridian to the Pacific Coast — were the worst laws money could buy. By encouraging dumb growth, those laws sacrificed public good for private gain, and Americans came to regret it.

It is not that either transcontinental railroads or high-speed railroads are always bad ideas. A compelling case can be made for high-speed rail between Boston and Washington, for example, but the administration proposes building high-speed lines in places where there is no demonstrated demand. In California, construction of the new high-speed rail line from San Francisco to San Diego will begin with a line from Borden to Corcoran in California’s Central Valley. It is already being derided as the train to nowhere. The reduction of federal subsidies has not stopped the project, which now threatens to become a forlorn monument to hubris.

Proponents of the transcontinental railroads promised all kinds of benefits they did not deliver. They claimed that the railroads were needed to save the Union, but the Union was already saved before the first line was completed. The best Western farmlands would have been settled without the railroads; their impact on other lands was often environmentally disastrous. For three decades California commodities could move more cheaply, and virtually as quickly, by sea. The subsidies the railroads received enriched contractors and financiers, but nearly all the railroads went into receivership, some multiple times; the government rescued others.

As more astute members of Congress came to recognize, the subsidies were a mistake. One described the major drawback of a proposal for the government to guarantee bonds: “If there be profit, the corporations may take it; if there be loss, the government must bear it.”

After 1872, the country turned against the subsidizing of large corporations. It was a little late. Fraud and failure left a legacy that would lead to four decades of government attempts to get back what had so carelessly been given away. In the 1890s, Congress was still trying to recover money from the Pacific Railway.

Yet here we are again. The Obama administration proposed a substantial subsidy, $53 billion over six years, to induce investors to take on risk that they are otherwise unwilling to assume. Such subsidies create what the economist Robert Fogel has called “hothouse capitalism”: government assumes much of the risk, while private contractors and financiers take the profit.

As before, California has become the heartland for railroad dreams. California in the 1860s and 1870s needed a regional railway feeding the ports on San Francisco Bay, and today it needs better urban rail and improved freight systems. Instead, in the 1860s it got the Pacific Railway, and today it gets high-speed rail. And, as it did in the 1860s, California has sweetened the pot with subsidies of its own: a $9 billion bond issue. State law stipulates that the California High-Speed Rail Authority, which is planning, contracting for, and, eventually operating the system, will not get operational subsidies. It, not taxpayers, will pay its operating costs and its debts.

Those assurances are based on rosy and widely ridiculed ridership projections. Critics, the most trenchant of whom are part of the Community Coalition on High-Speed Rail, say that only two high-speed rail routes run without operating subsidies: Paris to Lyon and Osaka to Tokyo.

Without bond guarantees, private investors, which so far seem more prone to due diligence than the California High-Speed Rail Authority, have yet to put up money. The most astonishing thing is that even as financial problems force California to dismantle its social safety net, eviscerate its educational system, and watch its roads crumble, it has agreed on a plan for high-speed rail that demands substantial local subsidies and certainly will involve further concessions by the state to attract private investment.

It is as if a family, with one spouse out of work, unable to meet mortgage payments or school tuition, eagerly takes out a loan to buy an electric car after an uncle offers to share the cost. The catch is that there is no upper limit on the price, and the neighbors have to chip in. Nineteenth-century Americans would have grasped the analogy.
Richard White, a professor of history at Stanford, is the author of the forthcoming “Railroaded: The Transcontinentals and the Making of Modern America.”