Friday, September 23, 2011

If you needed high-speed rail investment advice, who would you turn to?

Investors Business Daily is no friend of high-speed rail, which, you might argue, is strange.  Why not?  Why aren't they? Won't high-speed rail construction get lots of businesses new business? Won't they be profitable?  The rail authority tells us that there will be billions in surplus revenues.  Doesn't that justify investment?

The whole question of which Party is supporting high-speed rail and what Party isn't, is a puzzle in many ways.  Why are the business-friendly, wealth-creating Republicans against a project that promises the creation of wealth, and certainly a better economy?  

And why are the Democrats, friends of the common man and blue-collar worker so in favor of building a luxury train that will carry only those affluent few (mostly Republicans??) who can afford those expensive tickets?

Anyhow, here's an article from with the standard question that isn't asked frequently enough: Who will ride?

So far, my discussion here lacks the key question, however, which is --  what is, or isn't Investors Business Daily saying in this article to any possible private investors in high-speed rail; what they are calling a "pipe-dream"?  

The short answer appears to be: Don't invest ! Note that not one word about private investment is even suggested.  Their understanding appears to be that if the federal government doesn't come up with all the necessary cash, no one else will.  That's also my understanding. And, without their saying so, that's a very clear message.

Fast Trains Sound Nice, But Who Will Ride?

Posted 06:47 PM ET

Boondoggles: How can we tell if Congress is serious about reining in spending? A clear-cut, permanent defunding of high-speed rail would be one sign. But the pipe dream won't quite die.

Sometime soon — or so we'd like to think — the fast-train fad will fizzle out, the victim of fiscal sanity and critical thinking.

Just this week, a Senate Appropriations subcommittee controlled by Democrats actually voted to give high-speed rail nothing at all in the new fiscal year.

That got our hopes up. Then the full Appropriations Committee mixed the message by approving $100 million for the program, which is a far cry from the $8 billion sought by President Obama.

That pittance was a symbolic victory for the rail fans. It was a rebuke to the Republican-controlled House, which is trying to kill Obama's high-speed rail scheme once and for all. For those who think that sleek trains will somehow revolutionize transportation in America, it keeps the dream alive.

It also continues to dangle the temptation of federal funds — if not in 2012, maybe later — in front of states that should not be taking the bait. California, especially, would spare itself enormous future pain if it were to ditch its ambitious high-speed rail plan now, before starting to build lines that almost no one will use.

A clear sign from the feds that no further money is coming for that purpose, now or ever, would make the state's decision easy. Voters have authorized $9 billion in bonds to build the system, but these don't come close to meeting construction costs, which the state's non-partisan Legislative Analyst office has pegged at $67 billion for just the first phase, from Orange County through Los Angeles to San Francisco.

With governors in Florida, Wisconsin and Ohio having turned down high-speed rail funds, California is (by default) where most of the federal money will likely be spent.

The state already has been promised $3.5 billion if it starts construction next year.

But the only way it can meet that deadline is to begin building a stub line in the San Joaquin Valley, where the land is available and the local opposition is light.

The site is nowhere near the state's major metropolitan areas, so ridership would be practically nil.

It would be a start, true. But a start toward what?

This is the question that everyone, in and outside California, needs to ask about high-speed rail.

The thought of riding trains that zip through the countryside at 220 mph has a certain theme-park appeal.

That may be why the voters approved those bonds in 2008. And there will always be the intellectual advocates of intercity rail — a group long driven by envy of Europe and now enamored of China.

But all it takes to burst their bubble is a little reflection on the realities of cost, speed and convenience.

As to the first of these, even boosters of high-speed rail have given up trying to argue that it would be much cheaper than airlines. And "high speed" is a relative term. The new trains would be faster than current ones, but nothing close to their competition — midrange jets such as the Boeing 737, which cruises at 485 mph.

As for convenience, high-speed trains are no different from airlines. You have to get to the station, just as you have to get to the airport.

The big difference between the two modes is that, by air, you'll reach your destination in less than half the time. And don't expect free food on the train.

High-speed rail has plenty of fans, but don't expect many riders. Californians should get a chance to rescind their bond-issue vote, for their own sake and that of the country. After all, California high-speed rail could soak up tens of billions of federal tax dollars if it goes forward.

But until they act, Congress can do its part by stopping the train boondoggle before it starts costing real money.

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