Saturday, April 30, 2011

High-Speed Rail Turns the Spanish Economy Around; NOT!

A quickie about Spain.  That country, as you know, has a high-speed rail system (AVE) that whips the well to do and professionals from Madrid to Barcelona.  The high-speed rail supporters love to tell you what a dazzling success that is, how it is obliging people to no longer fly that route (the government has cut back on short haul flights to build rail traffic), and how it is bestowing all the anticipated benefits on the Spanish people.

Here is some description from a NYT article in 2010:  "AVE tickets cost as much as plane tickets — from about €120 to €200 one way, or $160 to $300, though cheaper advance fares can be found. The train offers assigned reclining seats, computer outlets, movies, headsets, good food, even gloved attendants…
Spain’s high-speed train sector seems well positioned to expand. All AVE lines turn a profit and have easily survived price wars waged by airlines, Mr. Valls said. What is more, trains require fewer employees and far less costly infrastructure than do planes."
How's that for raising expectations? Especially the comment about profitability. Sorry. That's not reality.
Can you imagine, with those fares, what a class sorting mechanism this train is? Spain is still, compared to the rest of Europe, a poor country. However, the rich now have a fancy fast train to ride on, paid for with money Spain doesn't have.  I make this point because we will be seeing the same thing here, in California if the HSR project continues.
The  Spanish economy is struggling like never before. Their debts are higher thanks in part to vast cost overruns for their multi-billion dollar HSR construction and operation, and the European Community is struggling to help them out.

AND, as the article, below, from CNN points out, their unemployment rate is a spectacular 21%.   Thanks, high-speed rail, for being the panacea we are being promised here, in California.

We are seeing this in China as well as Spain.  High-Speed Rail does none of the many promised things; such as job creation or boosting the economy.  It just doesn't.  It is a luxury and much faster train ride than regular trains.  Doubtlessly a delight to ride for those who can afford it.  And, European nations have been rail dependent for centuries. The US is different and far less appropriate as a high-speed rail host. We have no extended passenger rail system in place that high-speed rail, especially 200+mph trains, can enhance.  High-speed rail will come to the US travel industries as if from another planet.

Here's another analogy.  For air travel, a dedicated first class, premium, scheduled commercial flight, like the Concorde used to provide.  Very fancy and much faster than normal commercial air travel.  Highly subsidized by the government but nonetheless the most expensive air travel there is.  Does that sound like something that will turn a state or nation's economy around? Will that create jobs (especially in the huge numbers promised by the HSR promoters)? Of course not. In retrospect, the Concorde "experiment" was a dismal failure.
Spain's jobless rate tops 21% as all major sectors lose jobs
By Al Goodman, CNN
April 29, 2011 5:09 a.m. EDT

Madrid, Spain (CNN) -- Spain's unemployment rate rose nearly a point to 21.29%, with 4.9 million jobless for the first quarter of 2011, the government reported Friday, as the prolonged economic crisis continues to squeeze the nation.

Some analysts had predicted the number of jobless might surpass 5 million. But while that didn't happen, the latest statistics were another blow to the economy and to the embattled socialist government.

The numbers for the fourth quarter of 2010 -- 20.33% unemployment and almost 4.7 million jobless --- already represented the highest joblessness rate in 13 years.

The latest numbers, for the first quarter of this year, added more somber news. The number of unemployed increased by 213,000, pushing the overall number to 4.9 million.

All major sectors --- industry, construction, services and agriculture --- shed jobs during the quarter. 

The number of Spanish households in which no adult had a job increased by 58,000, to a new total of 1.38 million, the government said.

Earlier this month, embattled Socialist Prime Minister Jose Luis Rodriguez Zapatero announced he would not seek a third term. Elections are due by March 2012.

For months, Zapatero's Socialists have trailed in opinion polls behind the main opposition conservative Popular Party.

In announcing his decision on April 2 to Socialist Party leaders, Zapatero said, "We have made mistakes."

He added that "recent months have been very difficult for the work of the government" because even after enacting a budget austerity plan to reduce the public deficit that put Spain under pressure from international financial markets, the destruction of jobs continued.

Local elections in all Spanish cities and for 13 of its 17 regional parliaments will be held May 22. They are widely seen as a bellwether of voter sentiment for the general elections to follow.