Tuesday, January 31, 2012

Get ready to take the High-Speed Rail 'Cap-and-Trade' Quiz


As you may already know if you are a high-speed rail naysayer, denier, objector, NIMBY, apostate, 'rich landowner', or otherwise trouble-maker, (or "rotten apple" as Rod Diridon called us), Jerry Brown has a number of divine revelations of the truth that have escaped just about everybody else.

Even the High-Speed Rail Authority Board, even the newly-appointed-by-Jerry-Brown Dan Richard, even all the contractors and consultants, even everybody else on the planet, didn't know what Jerry Brown knows.  And that is, "It will cost a lot less." That means, the agreed upon cost forecast the the CHSRA of around $100 billion for HSR in California is simply wrong. WRONG, I TELL YOU! Jerry knows.

And, there will be money. Yes, lots of money. The Governor proposes to use "cap and trade," a policy extensively promoted over the years to reduce CO2 production from power generation and manufacturing.  It is a form of tax for generating "dirty" air.

The Governor intends to peel off $1 billion annually from this tax and pour it into the development of high-speed rail. Not that long ago, the train project used to cost $100 billion to build it, in which case it would have taken 100 years at $1 billion per year.  But, now we know it will cost ever so much less, so it may only take one or two years to make it operational the way the Governor understands it. 

Unfortunately, as it happens, the state does not have a cap-and-trade program in place to make this simple solution possible. And if we did, it's not at all clear that it would produce as much as $1 billion in taxes annually.  But, never mind.

Which leads us to the next question. If, hypothetically, we had a cap-and-trade program, and if it were to produce $1 billion annually in a state still limping with a huge deficit and debt, how should we deploy these funds? On a high-speed train for which there certainly won't be any other funding sources? While at the same time we starve the schools, and therefore our children from an education critical to their survival? 

I don't want to get into the politics of cap-and-trade, since each Party has a very different take on how good or evil it is.  And, I don't intend to schlep the red herring of stem-cell research into this discussion either.  On this blog, we care about high-speed rail, why it's such a disaster and why the Governor can't stop himself from making such a fool out of himself.

One final point, alluding to the Governor's comment about not wishing to become a third world country (or state). 

Under what circumstances, realistically, could California become a "third world country?" Pick one:

A. Terminating the high-speed rail project and diverting any available funds into education, or
B.  Cutting education even further (for HSR) and reducing the quality of education for future generations of kids, thereby constraining their employability and earning potential.

You have one second.  You picked B.   Good job.

Want a bonus question for extra points?  Which of the following will be better for California? Again, pick one:

A. Investing in education so that our K-12 schools become as good as the ones in Finland or Taiwan.
B. Building a highly subsidized high-speed train like the one in Spain, a country with a 25% unemployment rate and on the verge of government default. (The train's success has now shut down one of their airlines. Is that a definition of success?)

Take your time.  Did you guess A?  Congratulations.  

Your pair of high-speed rail tickets is in the mail.  Please go to Chowchilla to pick them up. 
================================================

NEW: Cap and ‘Train’ Leaves the Station
JAN. 31, 2012
By WAYNE LUSVARDI

Gov. Jerry Brown just proposed a new idea for financing California’s $100 billion high-speed rail project: Use the fees from the state’s Cap and Trade emission taxation program to fund it.

This new hybrid between Cap and Trade and High-Speed Rail is likely to be dubbed “Cap ‘N Train.”

What this new proposal would do is transfer billions of dollars in higher costs for everything in California that has to be manufactured or trucked anywhere, thus creating air emissions. In turn, these higher costs will be transferred to an unproductive train project that will take riders away from commercial airlines serving the Bay Area and Los Angeles.

High-Speed Rail is Redevelopment in Another Guise

Brown has recently gotten some respect from political conservatives and school-funding advocates for shutting down redevelopment agencies because they rob schools of property taxes.  But it is apparently OK to create yet another redevelopment project because it won’t drain the state budget needed for public schools.  What Jerry Brown’s right hand takes away, his left hand re-creates in another form.  This proves the principle of California bureaucracy: “Problems can’t be solved — just shifted around.”

Brown is reportedly trying to sell his High-Speed Rail project to the skeptical Legislature. Earlier this month, Brown floated an idea to use $1 billion in Cap and Trade taxes to plug his state budget deficit.  But $1 billion yearly at today’s bond interest rates would only finance about $20 billion of the estimated $100 billion needed for the High-Speed Rail project.  Rider fees on the new train would not come anywhere near paying for the system.

Brown said that if the Legislature didn’t approve his proposal there “always would be the ballot initiative” route to financing the High-Speed Rail.  Brown was apparently referring to Proposition 71, which financed $3 billion in redundant stem-cell research. The cost to pay back those bonds, with interest, is $6 billion.

Using Ballot Initiative to Grow Stem Cells and Fast Trains

The state’s stem cell agency — with the private sounding title of the California Institute for Regenerative Medicine — is soliciting public comments for the idea to come back to the voters to ask for another $3 billion in bond financing in 2014 when their current funds run out.  As reported by Wesley J. Smith at the “Secondhand Smoke” blog, thus far only those who have received grants for stem-cell research have been added to the list of witnesses.

The way things are going, we could call all those proponents of using Cap and Trade taxes for High-Speed Rail the “High-Speed Freeriders”: those enjoying the benefits from a collective effort but contributing little or nothing to it.



Monday, January 30, 2012

Now let's see. What can we learn from this about High-Speed Rail?


BART is having its rolling stock manufactured overseas.  Those of us who are high-speed rail watchers, are not surprised.

Never mind BART's problem here. It will be peanuts compared to high-speed rail.  We have zero HSR manufacturing capacity here in this country.  Attention Washington and Sacramento: we make airplanes and automobiles. Also freight trains.  We don't make high-speed passenger rail.

Oh, wait. Isn't Siemens building a HSR assembly plant in Sacramento? I wonder what that's for.  Do they already have a contract we don't know about? 

As it is, among the major contractors for the CHSRA, Parsons Brinckerhoff is already shipping its profits to the UK, where it is home-based. Where do you suppose US dollars will go if Siemens gets the contract?  What we are watching is US tax dollars being sent overseas, and we'll be seeing a great deal more of that, unless it's stopped.

The issue becomes even more outrageous when we realize that our ARRA Stimulus funds are heading overseas.  Weren't these intended to benefit unemployed American workers?  Whatever happened to that critical criterion, "Shovel Ready" so that American workers will be immediately put to work? Isn't there a federal regulation about  "Buying American?"

Everyone knows that we in California have been high-speed rail "shopping" for years in both Europe and Asia.  Our hard-working CHSRA Board has had many opportunities to relax on foreign corporate paid junkets to many countries in the high-speed rail construction and manufacturing business to ride their trains, schmooz, be wined and dined and be offered the deal of a lifetime. 

(We've never discussed the "perks" available to the Board members of the CHSRA.)

This is just one more log on the fire that should burn this California high-speed rail project to the ground.

When you get a chance, ask our Governor about how he will block any US dollars from going overseas to build his high-speed rail project.
=======================================

CA: Building BART Railcars Overseas Adds Insult to Cost
BY PHILLIP MATIER AND ANDREW ROSS, CHRONICLE COLUMNISTS, THE SAN FRANCISCO CHRONICLE (CALIFORNIA)
BART is buying a sleek new fleet of 775 cars - with the first 200 costing about $5.1 million a piece when all is said and done.
Created: January 30, 2012
BART is buying a sleek new fleet of 775 cars - with the first 200 costing about $5.1 million a piece when all is said and done.

The sky-high price for what amounts to a 70-foot-long railway car is sending some folks into sticker shock - especially because the cars are coming from outside the country.

"Taxpayers from the San Francisco Bay Area are paying for these railcars, and they should be built in the Bay Area," said Scott Haggerty, an Alameda County supervisor and member of the Metropolitan Transportation Commission.

The base price for each car is about $3.7 million - but that doesn't count the $850,000 apiece that BART will spend on a list of extras that includes sending inspectors to oversee the manufacturing and assembly of the cars.

"That's a waste of taxpayer money," Haggerty said.

But BART officials insist their hands are tied.

None of the five companies that bid for the job is located in the United States.

And although bidders are required to use at least 60 percent U.S. materials and parts, federal law prohibits BART from specifying where in the country the final assembly work will be done. So it can't demand that the cars be put together in the Bay Area, or even in California.

That means BART staffers will first be traveling to Canada, France or South Korea to oversee the work, then possibly to the East Coast, where each of the three finalists has an assembly plant.

"It's a big number," Paul Oversier, the transit agency's assistant general manager for operations, said of the BART buy. "But when you consider the magnitude of the contract - the years of engineering that goes into it, the testing, the safety certification - all these things are important to ensuring we get a car that is reliable when it goes into service."

Copyright 2012 San Francisco ChronicleAll Rights Reserved

The Business Investor's Daily thinks HSR is a lousy investment.


Why would the Investors' Business Daily run an article like the one below if it thought that the California High-Speed Rail project was a good investment?

Draw your own conclusions.

Sowell points out what we said in our comparison of the Spanish AVE HSR system in this blog. It's expensive to ride, it's running half empty and it's a financial sink hole for a country in deep financial doo-doo.  That seems like a fair comparison to me. The difference is that Spain is stuck with theirs.  

Should we be listening to our Governor who wants to create exactly the same damn thing?
==================================

PERSPECTIVE
California's High-Speed Rail: Going Nowhere, Very Fast
By THOMAS SOWELL 
Posted 07:06 PM ET


California has a huge state debt and Washington has a huge national debt. But that does not discourage either Gov. Jerry Brown or President Barack Obama from wanting to launch a very costly high-speed rail system.

Most of us might be a little skittish about spending money if we were teetering on the brink of bankruptcy. But the beauty of politics is that it is all other people's money, including among those other people generations yet-to-be born.

The high-speed rail system proposed for California has been envisioned as a model for similar systems elsewhere in the United States. A recent story in the San Francisco Chronicle used the high-speed rail system in Spain as an analogy for California.

Spain is about the same size as California, and has a similar population density — and population density is the key to the economic viability of mass transportation, from subways to high-speed rail.

It so happens that I have ridden on Spain's high-speed rail system. It was very nice, especially since I did not have to pay the full costs, which were subsidized by the Spanish taxpayers.

While the Spanish government has been subsidizing the passengers on its high-speed rail system, the European Union has been subsidizing the Spanish government. Someone once said that government is the illusion that we can all live off somebody else. Spain's high-speed rail system is not even covering its operating costs, never mind the enormous costs of setting up the system in the first place. One reason is that half the seats are empty in the high-speed trains in Spain.

That is what happens when you don't have the population density required for passengers to cover the operating costs. You would need the hordes of Genghis Khan riding the high-speed rail system to cover the additional costs of the rails and the trains.

An economics professor at the University of Barcelona says that Spain "has not recovered one single euro from the infrastructure investment."

The most famous high-speed rail system is that in Japan, one of the most densely populated countries in the world. The "bullet train" between Tokyo and Osaka has 130 million riders a year. Tokyo alone has more than three times the population of San Francisco and Los Angeles put together.

In California, an element of farce has been added to the impending economic tragedy, if the envisioned high-speed rail system actually materializes.

The first leg of the system is planned to run between Fresno and Bakersfield. If those names don't ring a bell with you, there is a reason. They are modest-sized communities out in the agricultural San Joaquin Valley, well removed from San Francisco or Los Angeles.

You can bet the rent money that high-speed rail traffic between Fresno and Bakersfield will never come within shouting distance of covering the operating costs. Some people have analogized putting such a rail line between these two towns to the infamous "bridge to nowhere" in Alaska.

Why are they doing it? Because they can.

If they began this project where they want it to go—between San Francisco and Los Angeles, they would run into so much opposition from the environmentalists, and from local politicians influenced by the environmentalists, that the delays could take the high-speed rail advocates beyond the time limit for using the federal subsidy money. But the green fanatics have not yet taken over politically out in the San Joaquin Valley.

The only reason for even thinking about building a high-speed rail line between Fresno and Bakersfield is just to get the project under way with federal money, making it politically more difficult to stop the larger project for a similar rail line between San Francisco and Los Angeles.

In other words, they are going to start wasting money out in the valley, so that they will be able to waste more money later on, along the coast. This may not make any sense economically, but it can make sense politically for Jerry Brown and Barack Obama.

An old song ended, "You've been running around in circles, getting nowhere — getting nowhere very fast." On high-speed rail.

The Peoples' Republic of California's Chairman Jerry Mao's Little Red Handbook on HIgh-Speed Rail



"We're not going to be a Third World country if I have anything to do with it," 

1. You have nothing to do with it, Governor. 

2. Whether California ever becomes a third world country or not has nothing to do with high-speed rail.

3. Hyperbole is standard in political rhetoric. Over-dramatization is necessary when there is no substance behind the statement.  The arrogance of power puts the first person singular at the heart of the action; that is, the Governor will personally prevent California from becoming central Africa. Thanks, Governor.

"This thing is going to be a lot less than some of the critics have said," "this will transform Central California."

1. Governor Brown's bag-man, Dan Richard, has set $117 billion for the HSR costs. Is he a liar or a fool, Governor Brown? You have called him so, by your claim which sharply contradicts his business plan. 

2. The Governor is right; this project will transform Central California, but not in a good way.  It will severely damage its productivity. Is that irrelevant to you for the sake of your grandiose vision, Governor?

"Just like Lincoln can built the transcontinental railroad during the Civil War ... you've got to think big," 

1. Thinking big and thinking smart are two different things.  With this HSR project, you have to choose, Governor. 

2. Governor, you are not Lincoln (and it's presumptuous to compare yourself with him), there is no Civil War, and we have outgrown/moved beyond our needs to open the Western frontier for business interests and for inter-city rail travel. That's why, even with record-breaking ridership, the numbers remain so fractional.

######


"It's not going to be $100 billion,"  "That's way off."

1. How do you know that Governor? 

2. What doe you mean by "way off?"  Ten billion dollars, fifty billion dollars? Where will you find the rest of it -- the part that you believe it will cost?

"Phase 1, I'm trying to redesign it in a way that in and of itself will be justified by the state investment,"  "We do have other sources of money: For example, cap-and-trade, which is this measure where you make people who produce greenhouse gasses pay certain fees - that will be a source of funding going forward for the high speed rail."

1. When you say  "I'm trying to redesign it. . ." what do you mean?  Are you using CAD/CAM technologies? Or is that just an arrogant rhetorical flourish?

2. How come no one else has mentioned cap-and-trade as a funding source? Has it been a well-kept secret? 

3. What would be the actual process for that to happen, Governor? Would you by-pass the legislative process?

4. How much do you suppose that will generate? Enough to pay for the train's construction? And if not, where will you get the rest of it?

"It's going to be a lot cheaper than people are saying."

1. "Cheaper" is not a word I would use in any way regarding this project.  To use that term reflects a profound ignorance of the dimensions of the economics of this project.

2. Who are those "people" stating those costs which you know to be less ("cheaper")?  Aren't they "your" people? And what is the basis for your claim? What do you know, Governor, that the rail authority, the expert peer review group, and all the opposers don't know?

"Further detail on specific program areas will be developed when there is more certainty of fees received from the Cap and Trade Program."

1. Governor, that's a conditional statement. Are you saying that there will be no further program-specific details without the certainty of cap-and-trade fees?

2. Does this mean that you will shut this program down -- inasmuch as it can't be developed without further program specifics -- if there is no certainty of fees from cap-and-trade?

3. Or, Governor, do you mean something entirely different than what you are saying here?

"It isn't all, you know, going to football games and buying clothes and cars and gasoline and all the things people want to do in their private life," Brown said. "We also have a public investment, and that's part of the balance of a civilization."

1. Now we get to the heart of the problem as you see it, Governor, with your moralizing about our decadent, self-indulgent lives. Are you suggesting that we have a moral obligation to invest in the public good, essential for the balance of a civilization?  With that, I agree.

2. But, then why are you pushing a luxury train for the affluent down our throats? Isn't HSR just another materialistic version of our wastefulness and extravagance?  Why should the rich get to go faster, paid for by the rest of us?

3. I'm hearing some hypocrisy here. Which is it, Governor, frugality and going slower, or lavish recklessness and going faster for more money?

"One way or the other, if we can't get it through the Legislature," "then there's always the initiative route at some point."

1. Is this a threat? Your point, if I read your words correctly, Governor, is that if the Legislature -- that represents the people of California -- won't indulge you in your determination to spend billions and billions of tax dollars that you don't have, you will be forced to pursue the ballot initiative? 

Because the ballot initiative is exactly what the high-speed rail authority wishes to avoid. The reason for that is that the people of California have changed their minds about this project and now reject it. Bring on your initiative, Governor!

2. Is it your wish to have the HSR project terminated by the people of California via the initiative process? Aren't you already going to the people by way of the initiative for tax increases, even as you intend to tie California to this high-speed economic anvil to throw overboard?

Let's face it, Governor, you have no substantive answers for any of these questions.  The reason for that is simple. Your goal is the FRA's promise of the $3.5 billion for California. You really have little interest in this project beyond that. 

You get what you pay for; though often much less. See High-Speed Rail.


This is a really neat article and fits very well into the current high-speed rail discussions that are filling the blogosphere.

HSR is for an elite population.  If built, the state (federal or state) must subsidize this transit mode at great cost.  Public mass transit is by nature a deficit operation because it is understood to be a public good. 

Operating costs exceed the willingness of riders to use such transit beyond a certain price point. That is to say, if ticket costs were to cover operating and maintenance expenses, we all would be priced out of using this service.  In high density population regions, I support the use of my taxes for providing the most cost effective mobility for the most people, especially for commuter purposes. I reject the use of public dollars to subsidize business inter-city travel.

If anything, I would level a transit tax on those corporations with transiting/commuting employees since those employees directly benefit the corporation's bottom line. This should be particularly the case for inter-city rail transit.

What these authors here are describing is precisely what we can see happening around us, both with regional transit or the HSR project. Either for the dreaded high-speed rail system, or for Caltrain or BART,  the demand for ever greater subsidies, whether there there is a rising or declining passenger load curve, suggests some fundamental flaws in the transit system's business plan. Fares go up whether ridership goes up or down. Services and maintenance is cut due to the increasing gap between fare-box receipts and tax based subsidies.

A plumber would say that there's a significant leak somewhere.  Or, it's very badly designed plumbing.  If you see what I mean. And, there are fundamental differences between the two Parties in what the appropriate fix would be.

I suppose we have to ask this question about railroads, especially inter-city passenger rail; if drivers pay gas taxes to sustain and expand highway infrastructure, and flyers pay a tax with their air-fare that pays for airport usage and expansion, what do train riders pay?
====================================
Randal O’Toole: On Transit, Choose Mobility Over Image
by DAVID BIER on JANUARY 30, 2012
in BLOG

In Gridlock: Why We’re Stuck in Traffic and What to Do About It, 2009, Randal O’Toole (known as the Antiplanner over on his blog) describes how government funds are wasted on public transportation projects built in the environment’s name.
Instead of efficiently serving the public by providing cost-effective transportation for those who cannot or do not want to drive, transit agencies have developed insatiable demands for more tax revenues. Is there an economic boom leading to higher ridership? Then transit agencies demand higher taxes to accommodate the new riders. Is there a recession reducing the tax revenues that support transit? Then transit agencies demand a larger share of taxes to make up the difference. Does a rise in gas prices lead to record ridership? Then transit agencies need more taxes because they too must pay higher fuel prices.

Transit systems that depend on taxes to cover three-fourths of their costs are not sustainable. Ironically, transit only seems to work at all because hardly anyone uses it. To operate transit systems carrying a much higher fraction of personal travel would bankrupt the nation.

Consider the problems in the New York urban area. New York’s transit system carries more than 40 percent of the nation’s transit riders and more than twice the share of regional travel of any other transit system in the nation. Fares cover a third of transit costs, which is higher than the national average. But the region’s transit system is in a perpetual fiscal crisis; one reason costs are only three times revenues, instead of four, is that maintenance has been deferred on many of the region’s rail lines. Even before the current financial crisis, New York’s Metropolitan Transportation Authority projected a $17 billion deficit over the next five years. Recent debates over so-called congestion pricing in Manhattan have really been about finding new sources of money to keep the transit system going.

While it is wonderful to think that we are rich enough to afford expensive but little-used monuments like high-speed trains and urban rail systems in cities like Charlotte and Honolulu, the current recession shows we are not. What these things really mean is that a small group of rail contractors and riders get to sponge off the taxes collected from nearly everyone else.

The Obama administration justifies its support of high-speed rail and rail transit on the supposed environmental benefits. But the nation’s automobile and airline fleets have historically improved their energy efficiencies by 1 to 3 percent per year, and technologies now under development offer every reason to believe that the trend will continue. Given that record, virtually no passenger rail projects being considered today will save any energy over their lifetimes when compared with driving or flying. Further, rail lines power by diesel or by electricity generated from burning fossil fuels will typically produce more greenhouse gases per passenger mile than driving or flying. As we develop more sources of renewable electricity, applying that electricity to plug-in hybrids or other electric autos will do more for mobility and reducing emissions than building passenger rail lines.

A major part of the problem here is the mental disconnect between user fees and taxes. When people learn that the government has spent more than $400 billion building interstate highways and only about $200 billion building urban rail transit and intercity high-speed rail, they think it is only fair to spend more on rail. Most will ignore the fact that the highways carry 35 times as many passenger miles as all rail lines put together. The real difference is that the interstates were entirely paid for out of user fees while rail fares have failed to cover the operating costs, much less the capital costs, of any rail line. The glee that high-speed rail advocates feel when subsidized trains put profitable airlines out of business is similarly misplaced.

The distinction between user fees and subsidies is far more important than the difference in costs between different modes of travel. Rail transit’s and Amtrak’s high costs would not be an issue if passengers found train travel valuable enough to pay those costs, but they don’t. To attract passengers, both Amtrak and urban transit agencies set fare prices roughly competitive with the cost of driving and expect taxpayers to pick up the difference….

Americans have a choice. We can spend tens or hundreds of billions of taxpayer dollars on transportation projects that sound good but really serve only a small elite. Or we can restore a user-fee driven system that will continue to improve personal mobility and reduce transportation costs for generations to come. The former may fit Europe’s and Japan’s aristocratic heritage. To best serve our way of life, America must choose mobility over image.

Saturday, January 28, 2012

California's Governor: Why is he saving his High-Speed White Elephant? What does that mean?



I just re-read this article. It's very good.  You should read it if you already haven't. 

The issue is, why is Governor Jerry Brown supporting HSR (not in any particular order)?

1. For the free $3.5 billion from the FRA. 

2. To get out from under his father's shadow. (The way George Bush went back into Iraq, which his father 'abandoned'.) To be as good as, or better than his father, Governor Pat Brown.

3. To obtain a legacy/vanity project:  "The Governor Jerry Brown Memorial High-Speed Train."

4. To not piss-off the Obama White House.

5. Because it's politically correct for the Democrats to support it. He's being a "team player." (Three Republican Governors dumped it.)

6. Democrats love very large public works projects. Brown may very well believe the "jobs" myth.

7. He is sucking up to the Unions that believe HSR is a "jobs" creator. They will pay back that favor in numerous ways. Quid Pro Quo. 

8. He thinks of himself as a "visionary," in the mode of his father and President Obama. He wishes to overcome the pejorative "Moonbeam" nickname.

9. He was in on the ground floor of this project thirty years ago, when this HSR "vision" was cooked up by some back-room politicians.  He feels some "ownership." He considers it a revenue generator and money magnet.

10. If he doesn't support it, and it dies, it will "kill" high-speed rail in the US for generations, a burden and permanent scar he does not want to bear. 

And, what is Governor Jerry Brown impacting with this support, intentionally or not (not in any particular order)?

1. He is committing California to a project costing way north of $100 billion dollars, which nobody has. It will be a financial debacle for both State and Nation for generations.  Cost forecasts can only go up.

2. He is ignoring the down-side of this project; that is, the adverse financial impact on the state, and all the affected communities. He is ignoring the horrendous consequences of the construction and the eternal cost burden on the state.

3. He is starting something he can't finish and won't be around to finish.

4. He is depriving other, and highly critical areas of state investment, such as education, from tax funds to be consumed by HSR.

5. He is seeking funds contributed by the taxpayers of the rest of the US for a project of no value to the rest of the US.

6. He is failing to invest or even to promote the "public mass transportation" he claims to support by focusing HSR instead.

7. He is thereby not supporting the far more critical repair of deteriorating existing infrastructure and upgrading existing public mass transit in the population centers of the state.

Some thoughts about High-Speed Rail from the Conservative side of the aisle


We recently met RIchard Geddes' writings in a New York Times high-speed rail debate, and we quoted some comments from him.  Here are these comments for the American Enterprise Institute, a conservative Washington think-tank, about high-speed rail.

Basically, his point is, Northeast Corridor yes, California no. Geddes suggests that $50 million per mile is a lot of money. However, if the train cost forecast is $100 billion and that's not even for the entire two phases (which include Sacramento to San Diego), it will actually be $125 million per mile.  (One hundred billion divided by 800 miles.) 

And, the most recent cost analysis, which we presented on this blog, suggests over $200 billion total costs and that raises the per mile costs to over $250 million per mile.  If true, those numbers are preposterous, and there should indeed be a constitutional amendment in California to prohibit this.

One has to wonder, if the total costs for HSR exceed $200 billion, will that not make the train actually more expensive than building all those dreaded highways and runways, the cost for which was last pegged at $171 billion?  It looks more and more like high-speed rail is regular passenger rail, only entirely 18-karat gold-plated.

We have lost all sense of scale as we persist in the hopeless high-speed rail effort. Here is what I mean:


August 11, 2011|By Mark K. Matthews, Washington Bureau


Reporting from Washington — The rocket and capsule that NASA is proposing to return astronauts to the moon would fly just twice in the next 10 years and cost as much as $38 billion, according to internal NASA documents obtained by the Orlando Sentinel.


The money would pay for a new heavy-lift rocket and Apollo-like crew capsule that eventually could take astronauts to the moon and beyond. But it would not be enough to pay for a lunar landing or for more than one manned test flight, in 2021.



Putting a crew on the Moon and bringing them back, one of the most difficult and challenging technological achievements of the 20th century, to be repeated will cost less than half as much as building this train. 

Below the Geddes article are some earlier articles from the American Enterprise online publications.  The second one here is by Michael Barone which appeared in the Washington Examiner. Yes, he's also a conservative, but we are singling out those people who reject high-speed rail on factual grounds. 

True, not all of them do. Some do it to tweak Obama's nose. Others for other political or ideological reasons (It's evil Socialism!).  However, we'll try to stick to those conservative thinkers who have done their homework and have a thorough grasp of the facts underlying the promotion of high-speed rail in the US generally, and in California in particular.  

And, there are lots of them. So, I have to ask, where are all the professional rail 'smarties' on my side of the aisle, those who have not indulged in the political Kool-Aid that has numbed the thinking of most of the Democrats and who don't parrot the HSR blather? (Please don't answer; it's a rhetorical question.)

Anyhow, back to Barone's article, which is now one year old. What he said then was: "California is spending $4.3 billion on a 65-mile stretch of track between Corcoran and Borden in the Central Valley, which is supposed to be part of an 800-mile network connecting San Diego and Sacramento. Its projected cost was $32 billion in 2008 and $42 billion in 2009, suggesting a certain lack of precision."

We've come a long way since then, haven't we? Now the costs are well over $100 billion and the project in the Central Valley will be 40 miles longer, but still won't include electrification and other requirements for high-speed rail.  And the funding that is available will still run out without any operational high-speed rail in sight.

Finally, the third article -- all these are from the American Enterprise Institute -- is also by Michael Barone, and he suggests that the Chinese high-speed rail system, which we so envy in the White House and in Sacramento (remember when Schwarzenegger went to China to strike a deal to have them build our rail system?) doesn't look so good when you lift the layer of political prestige propaganda that the Chinese use as paint to cover all their infrastructure developments. (Actually, this article was published before the horrific HSR accident in China, and the expose of all the corruption and mismanagement.)

He states what may be the most important fact about high-speed rail, after the fact that it's costs are ridiculously high. "High-speed rail is an amenity for the business and professional elite; it's not a form of mass transportation."

This is critically important and it is being flagrantly ignored by our Governor and the Democratic establishment.  High-speed Rail is not a form of public mass transportation.  We cannot emphasize this enough.  We know that, based on current ticket costs world-wide, that the price of admission to ride high-speed rail in California will be $200 or more from SF to LA. Indeed, it may be much more. It will be the most expensive train ticket one can buy, certainly in the USA.  

That blocks any notions of this train performing a public mass commuter service. And, it should prohibit the taxpayers' funds from building it for an elite, affluent cohort of travellers. It is not a necessity; it's an amenity. It's a luxury. The government has no business building it!

In California, high-speed rail is unnecessary and certainly unaffordable by any rational measure. And, here's a point for my fellow Democrats. When built, it will be singularly un-Democratic.  
=======================================

The right idea in the wrong place
R. Richard Geddes | 
The New York Times Room for Debate
January 27, 2012
High-speed passenger rail is a commendable public policy goal that can provide valuable benefits to the public, but should only be pursued where it makes economic sense. A project should move forward if the revenue from all sources is sufficient to cover operating costs while making a contribution to its capital costs, including paying off debt and providing its investors with an adequate return on their investment. That's true regardless of whether the investors in question are private individuals or taxpayers.

The proposed high-speed rail line between Los Angeles and San Francisco is unlikely to meet that test. The estimates of costs recently doubled, to almost $100 billion, and it may ultimately cost much more. Research by the Oxford professor Bent Flyvbjerg shows that costs are underestimated for rail projects by about 45 percent on average, the most of all types of transport projects. High-speed rail could become California's Big Dig. Moreover, ridership — and thus revenue — is often overstated.

Given uncertainty in cost and ridership, along with the fact that even the most optimistic estimates peg the costs at a minimum $50 million per mile, Californians would be wiser to first complete a line from San Diego to Los Angeles. Demand for high-speed rail between its sprawling cities could then be observed before building a much more expensive Los Angeles-San Francisco line, almost three times the distance.

But if America wants true high-speed rail, we should first improve the Northeast Corridor between Washington and Boston. Much more modest expenditures there could increase speeds on a line where there is proven demand for high-speed rail service in some of the most congested areas of the country. These cities — as opposed to many in California — have relatively dense downtown areas featuring several public transportation options at train destinations.

There are solid ways to move forward with high-speed rail in the United States, but a new line between San Francisco and Los Angeles is not among them.

R. Richard Geddes is a visiting scholar at AEI

########################################


High-speed rail is a fast way to waste taxpayer money
Michael Barone | Washington Examiner
January 18, 2011

Where can the new Congress start cutting spending? Here's one obvious answer: high-speed rail. The Obama administration is sending billions of stimulus dollars around the country for rail projects that make no sense and that, if they are ever built, will be a drag on taxpayers indefinitely.

When incoming Govs. Scott Walker of Wisconsin and John Kasich of Ohio canceled high-speed rail projects, Transportation Secretary Ray LaHood refused to let them spend the dollars on other forms of transportation and sent the funds instead to California and other states.

Walker argued that Wisconsin didn't need $810 billion for a 78-mile line between Madison and Milwaukee because there's already a transportation artery--Interstate 94--that enables people to get from one city to the other in a little more than an hour (I once drove that route to have dinner in Milwaukee).

Kasich's rationale? "They tried to give us $400 million to build a high-speed train that goes 39 miles an hour." Train boosters countered that its top speed was 79 miles per hour--about the same as many drivers on Interstate 71.

High-speed rail may sound like a good idea. It works, and reportedly even makes a profit, in Japan and France. If they can do it, why can't we?

A look at some proposed projects gives the answer. Take the $2.7 billion, 84-mile line connecting Orlando and Tampa that incoming Florida Gov. Rick Scott is mulling over.

It would connect two highly decentralized metro areas that are already connected by Interstate 4. Urban scholar Wendell Cox, writing for the Reason Foundation, found that just about any door-to-door trip between the two metro areas would actually take longer by train than by auto, and would cost more. Why would any business traveler take the train?

As for tourists headed for Orlando's theme parks, there is already a convenient rental car operation, with some of the nation's lowest rates, at the Orlando airport. Why would parents get on a train, pay a separate fare for each kid and then rent a car at the station when you could more easily get one at the airport?

As Cox points out, cost estimates for the Florida train seem underestimated and the ridership estimates seem wildly inflated. If he's even partially right, Florida taxpayers will be paying billions for this white elephant over the years.

Other projects seem just as iffy. California is spending $4.3 billion on a 65-mile stretch of track between Corcoran and Borden in the Central Valley, which is supposed to be part of an 800-mile network connecting San Diego and Sacramento. Its projected cost was $32 billion in 2008 and $42 billion in 2009, suggesting a certain lack of precision.

Or consider the $1.1 billion track improvement on the Chicago-St.Louis line in Illinois. It would reduce travel time between the cities by 48 minutes, but the trip would still take more than four and a half hours at an average speed of 62 miles per hour.
None of these high-speed projects are really high-speed. Japan has bullet trains that average 171 miles per hour, France's TGV averages 149 miles per hour. At such speeds you can travel faster door-to-door by train than by plane over distances up to 500 miles.

In contrast, Amtrak's Acela from Baltimore to Washington averages 84 miles per hour and the Orlando-Tampa train would average 101 miles per hour. That makes the train uncompetitive with planes on trips of more than 300 miles.

Now take a look at your map and see how many major metro areas with densely concentrated central business districts and large numbers of business travelers are within 300 miles of each other.

The answer is not very many outside of the Northeast Corridor between Washington and Boston. Our geography is different from France's or Japan's.

Moreover, to achieve the speed of French and Japanese high-speed rail, you need dedicated track so you don't have to slow down for freight trains. To get dedicated track, you need a central government that is willing and able to ignore environmental protests and not-in-my-backyard activists. Japan and France have such governments. We don't.

So we are spending billions on high-speed rail that isn't really high-speed, that will serve largely affluent business travelers and that will need taxpayer subsidies forever. This should be a no-brainer for a Congress bent on cutting spending.

Michael Barone is a resident fellow at AEI.

##############################################

"High-speed rail is an amenity for the business and professional elite; it's not a form of mass transportation."
-- Michael Barone

High-speed rail doesn't make sense in China, either
Michael Barone | Washington Examiner
February 02, 2011

Faithful readers know that one of my pet issues--pet peeves, really--is high-speed rail, which was the subject of one recent Examiner column and was mentioned in my most recent column Wednesday. Yes, high-speed rail might make sense in some high-density corridors connecting big cities with big downtowns, i.e., the Washington-New York-Boston corridor. But it doesn't make much sense elsewhere. I have pointed out that, with one exception, continent-sized countries like Russia, Canada and Brazil have not contemplated building high-speed rail lines except for those that would connect their two largest metropolitan areas.

The exception, of course, is China, which is lauded by the likes of Thomas Friedman for its supposedly far-sighted program of building a network of high-speed rail lines over most of the country. 

Now comes Patrick Chovanec, an American who is a professor at Tsinghua University's School of Economics and Management in Beijing, with the news that high-speed rail doesn't make much sense in China either. 

"The problem is that high-speed rail is expensive both to build and to operate, requiring high ticket prices to break even. The bulk of the long-distance passenger traffic, especially during the peak holiday periods, is migrant workers for whom the opportunity cost of time is relatively low. Even if they could afford a high-speed train ticket -- which is doubtful given their limited incomes -- they would probably prefer to conserve their cash and take a slower, cheaper train. If that proves true, the new high-speed lines will only incur losses while providing little or no relief to the existing transportation network."

We already see this phenomenon in the United States, as I mentioned in my Wednesday column. Bargain-minded travelers don't use the Acela express or cheaper Amtrak service from Washington to New York; they ride the somewhat slower but quite comfortable bus lines that are far cheaper. High-speed rail is an amenity for the business and professional elite; it's not a form of mass transportation.

Michael Barone is a Resident Fellow at AEI.

####################################################

Some thoughts about High-Speed Rail from the Conservative side of the aisle


We recently met RIchard Geddes' writings in a New York Times high-speed rail debate, and we quoted some comments from him.  Here are these comments for the American Enterprise Institute, a conservative Washington think-tank, about high-speed rail.

Basically, his point is, Northeast Corridor yes, California no. Geddes suggests that $50 million per mile is a lot of money. However, if the train cost forecast is $100 billion and that's not even for the entire two phases (which include Sacramento to San Diego), it will actually be $125 million per mile.  (One hundred billion divided by 800 miles.) 

And, the most recent cost analysis, which we presented on this blog, suggests over $200 billion total costs and that raises the per mile costs to over $250 million per mile.  If true, those numbers are preposterous, and there should indeed be a constitutional amendment in California to prohibit this.

One has to wonder, if the total costs for HSR exceed $200 billion, will that not make the train actually more expensive than building all those dreaded highways and runways, the cost for which was last pegged at $171 billion?  It looks more and more like high-speed rail is regular passenger rail, only entirely 18-karat gold-plated.

We have lost all sense of scale as we persist in the hopeless high-speed rail effort. Here is what I mean:


August 11, 2011|By Mark K. Matthews, Washington Bureau


Reporting from Washington — The rocket and capsule that NASA is proposing to return astronauts to the moon would fly just twice in the next 10 years and cost as much as $38 billion, according to internal NASA documents obtained by the Orlando Sentinel.


The money would pay for a new heavy-lift rocket and Apollo-like crew capsule that eventually could take astronauts to the moon and beyond. But it would not be enough to pay for a lunar landing or for more than one manned test flight, in 2021.


Putting a crew on the Moon and bringing them back, one of the most difficult and challenging technological achievements of the 20th century, to be repeated will cost less than half as much as building this train. 


Below the Geddes article are some earlier articles from the American Enterprise online publications.  The second one here is by Michael Barone which appeared in the Washington Examiner. Yes, he's also a conservative, but we are singling out those people who reject high-speed rail on factual grounds. 

True, not all of them do. Some do it to tweak Obama's nose. Others for other political or ideological reasons (It's evil Socialism!).  However, we'll try to stick to those conservative thinkers who have done their homework and have a thorough grasp of the facts underlying the promotion of high-speed rail in the US generally, and in California in particular.  

And, there are lots of them. So, I have to ask, where are all the professional rail 'smarties' on my side of the aisle, those who have not indulged in the political Kool-Aid that has numbed the thinking of most of the Democrats and who don't parrot the HSR blather? (Please don't answer; it's a rhetorical question.)

Anyhow, back to Barone's article, which is now one year old. What he said then was: "California is spending $4.3 billion on a 65-mile stretch of track between Corcoran and Borden in the Central Valley, which is supposed to be part of an 800-mile network connecting San Diego and Sacramento. Its projected cost was $32 billion in 2008 and $42 billion in 2009, suggesting a certain lack of precision."

We've come a long way since then, haven't we? Now the costs are well over $100 billion and the project in the Central Valley will be 40 miles longer, but still won't include electrification and other requirements for high-speed rail.  And the funding that is available will still run out without any operational high-speed rail in sight.

Finally, the third article -- all these are from the American Enterprise Institute -- is also by Michael Barone, and he suggests that the Chinese high-speed rail system, which we so envy in the White House and in Sacramento (remember when Schwarzenegger went to China to strike a deal to have them build our rail system?) doesn't look so good when you lift the layer of political prestige propaganda that the Chinese use as paint to cover all their infrastructure developments. (Actually, this article was published before the horrific HSR accident in China, and the expose of all the corruption and mismanagement.)

He states what may be the most important fact about high-speed rail, after the fact that it's costs are ridiculously high. "High-speed rail is an amenity for the business and professional elite; it's not a form of mass transportation."

This is critically important and it is being flagrantly ignored by our Governor and the Democratic establishment.  High-speed Rail is not a form of public mass transportation.  We cannot emphasize this enough.  We know that, based on current ticket costs world-wide, that the price of admission to ride high-speed rail in California will be $200 or more from SF to LA. Indeed, it may be much more. It will be the most expensive train ticket one can buy, certainly in the USA.  

That blocks any notions of this train performing a public mass commuter service. And, it should prohibit the taxpayers' funds from building it for an elite, affluent cohort of travellers. It is not a necessity; it's an amenity. It's a luxury. The government has no business building it!

In California, high-speed rail is unnecessary and certainly unaffordable by any rational measure. And, here's a point for my fellow Democrats. When built, it will be singularly un-Democratic.  
=======================================

The right idea in the wrong place
R. Richard Geddes | 
The New York Times Room for Debate
January 27, 2012
High-speed passenger rail is a commendable public policy goal that can provide valuable benefits to the public, but should only be pursued where it makes economic sense. A project should move forward if the revenue from all sources is sufficient to cover operating costs while making a contribution to its capital costs, including paying off debt and providing its investors with an adequate return on their investment. That's true regardless of whether the investors in question are private individuals or taxpayers.

The proposed high-speed rail line between Los Angeles and San Francisco is unlikely to meet that test. The estimates of costs recently doubled, to almost $100 billion, and it may ultimately cost much more. Research by the Oxford professor Bent Flyvbjerg shows that costs are underestimated for rail projects by about 45 percent on average, the most of all types of transport projects. High-speed rail could become California's Big Dig. Moreover, ridership — and thus revenue — is often overstated.

Given uncertainty in cost and ridership, along with the fact that even the most optimistic estimates peg the costs at a minimum $50 million per mile, Californians would be wiser to first complete a line from San Diego to Los Angeles. Demand for high-speed rail between its sprawling cities could then be observed before building a much more expensive Los Angeles-San Francisco line, almost three times the distance.

But if America wants true high-speed rail, we should first improve the Northeast Corridor between Washington and Boston. Much more modest expenditures there could increase speeds on a line where there is proven demand for high-speed rail service in some of the most congested areas of the country. These cities — as opposed to many in California — have relatively dense downtown areas featuring several public transportation options at train destinations.

There are solid ways to move forward with high-speed rail in the United States, but a new line between San Francisco and Los Angeles is not among them.

R. Richard Geddes is a visiting scholar at AEI

########################################


High-speed rail is a fast way to waste taxpayer money
Michael Barone | Washington Examiner
January 18, 2011

Where can the new Congress start cutting spending? Here's one obvious answer: high-speed rail. The Obama administration is sending billions of stimulus dollars around the country for rail projects that make no sense and that, if they are ever built, will be a drag on taxpayers indefinitely.

When incoming Govs. Scott Walker of Wisconsin and John Kasich of Ohio canceled high-speed rail projects, Transportation Secretary Ray LaHood refused to let them spend the dollars on other forms of transportation and sent the funds instead to California and other states.

Walker argued that Wisconsin didn't need $810 billion for a 78-mile line between Madison and Milwaukee because there's already a transportation artery--Interstate 94--that enables people to get from one city to the other in a little more than an hour (I once drove that route to have dinner in Milwaukee).

Kasich's rationale? "They tried to give us $400 million to build a high-speed train that goes 39 miles an hour." Train boosters countered that its top speed was 79 miles per hour--about the same as many drivers on Interstate 71.

High-speed rail may sound like a good idea. It works, and reportedly even makes a profit, in Japan and France. If they can do it, why can't we?

A look at some proposed projects gives the answer. Take the $2.7 billion, 84-mile line connecting Orlando and Tampa that incoming Florida Gov. Rick Scott is mulling over.

It would connect two highly decentralized metro areas that are already connected by Interstate 4. Urban scholar Wendell Cox, writing for the Reason Foundation, found that just about any door-to-door trip between the two metro areas would actually take longer by train than by auto, and would cost more. Why would any business traveler take the train?

As for tourists headed for Orlando's theme parks, there is already a convenient rental car operation, with some of the nation's lowest rates, at the Orlando airport. Why would parents get on a train, pay a separate fare for each kid and then rent a car at the station when you could more easily get one at the airport?

As Cox points out, cost estimates for the Florida train seem underestimated and the ridership estimates seem wildly inflated. If he's even partially right, Florida taxpayers will be paying billions for this white elephant over the years.

Other projects seem just as iffy. California is spending $4.3 billion on a 65-mile stretch of track between Corcoran and Borden in the Central Valley, which is supposed to be part of an 800-mile network connecting San Diego and Sacramento. Its projected cost was $32 billion in 2008 and $42 billion in 2009, suggesting a certain lack of precision.

Or consider the $1.1 billion track improvement on the Chicago-St.Louis line in Illinois. It would reduce travel time between the cities by 48 minutes, but the trip would still take more than four and a half hours at an average speed of 62 miles per hour.
None of these high-speed projects are really high-speed. Japan has bullet trains that average 171 miles per hour, France's TGV averages 149 miles per hour. At such speeds you can travel faster door-to-door by train than by plane over distances up to 500 miles.

In contrast, Amtrak's Acela from Baltimore to Washington averages 84 miles per hour and the Orlando-Tampa train would average 101 miles per hour. That makes the train uncompetitive with planes on trips of more than 300 miles.

Now take a look at your map and see how many major metro areas with densely concentrated central business districts and large numbers of business travelers are within 300 miles of each other.

The answer is not very many outside of the Northeast Corridor between Washington and Boston. Our geography is different from France's or Japan's.

Moreover, to achieve the speed of French and Japanese high-speed rail, you need dedicated track so you don't have to slow down for freight trains. To get dedicated track, you need a central government that is willing and able to ignore environmental protests and not-in-my-backyard activists. Japan and France have such governments. We don't.

So we are spending billions on high-speed rail that isn't really high-speed, that will serve largely affluent business travelers and that will need taxpayer subsidies forever. This should be a no-brainer for a Congress bent on cutting spending.

Michael Barone is a resident fellow at AEI.

##############################################

"High-speed rail is an amenity for the business and professional elite; it's not a form of mass transportation."
-- Michael Barone

High-speed rail doesn't make sense in China, either
Michael Barone | Washington Examiner
February 02, 2011

Faithful readers know that one of my pet issues--pet peeves, really--is high-speed rail, which was the subject of one recent Examiner column and was mentioned in my most recent column Wednesday. Yes, high-speed rail might make sense in some high-density corridors connecting big cities with big downtowns, i.e., the Washington-New York-Boston corridor. But it doesn't make much sense elsewhere. I have pointed out that, with one exception, continent-sized countries like Russia, Canada and Brazil have not contemplated building high-speed rail lines except for those that would connect their two largest metropolitan areas.

The exception, of course, is China, which is lauded by the likes of Thomas Friedman for its supposedly far-sighted program of building a network of high-speed rail lines over most of the country. 

Now comes Patrick Chovanec, an American who is a professor at Tsinghua University's School of Economics and Management in Beijing, with the news that high-speed rail doesn't make much sense in China either. 

"The problem is that high-speed rail is expensive both to build and to operate, requiring high ticket prices to break even. The bulk of the long-distance passenger traffic, especially during the peak holiday periods, is migrant workers for whom the opportunity cost of time is relatively low. Even if they could afford a high-speed train ticket -- which is doubtful given their limited incomes -- they would probably prefer to conserve their cash and take a slower, cheaper train. If that proves true, the new high-speed lines will only incur losses while providing little or no relief to the existing transportation network."

We already see this phenomenon in the United States, as I mentioned in my Wednesday column. Bargain-minded travelers don't use the Acela express or cheaper Amtrak service from Washington to New York; they ride the somewhat slower but quite comfortable bus lines that are far cheaper. High-speed rail is an amenity for the business and professional elite; it's not a form of mass transportation.

Michael Barone is a Resident Fellow at AEI.

####################################################