Monday, March 5, 2012

With High-Speed Rail, the Ends do not justify the Means.

Let's take another look at the jobs scam. Secretary of Transportation, Ray LaHood cannot complete any public thought or statement without adding a claim to how many jobs would be created with each dollar spend by the Transportation Department. This is particularly true with high-speed rail since that is such a contentious program, with it's inordinately high costs, and anticipated low "productivity." 

We've presented articles here before that dismantle the "jobs" concept. It was pointed out that the rail authority was really talking about job-years, not actual jobs.  And that Parsons Brinckerhoff has been rigging these numbers from the beginning.

Despite the jobs bubble having been burst by the press and some honest accounting, the political leadership persists with this inflated lying statistic of, for example, around one million new jobs created by HSR in California. Absurd!  What's hard to understand is why the Unions are buying into this flagrant distortion of reality. 

Because jobs has become the horse that will (or won't) carry President Obama into his re-election, he has been whipping this issue into a frenzy, with Ray LaHood justifying any and all expenditures in jobs terms.

There are a lot of problems with this job-as-justification agenda.

First of all, we are looking at what should be transit and transportation projects.  These should stand or fall on their own merits, not merely the means or opportunity to other ends, such as jobs. If we don't need a certain project, jobs cannot be a justification.

Second, are the projects identified all equally worthwhile, or justified on the basis of jobs numbers?  My point is that repairing existing and deteriorating infrastructure may be far more compelling expenditures, with or without the jobs benefits and therefore a better investment with those same dollars.  

High-speed rail as a major jobs creating concept is a very poor choice indeed. Not only are there more compelling transit upgrades that warrant government expenditures, such as urban public mass transit, but we are watching the irony of promising to pour billions into what should be "shovel-ready" projects that are not yet off the drawing boards, and are a long way from the commencement of construction, which is where all that hiring would be taking place. 

It's been several years since the initiation of the ARRA Stimulus Funds program, with its $8 billion earmarked for high-speed rail.  While much of that has been put into Atrak upgrades around the US, the largest single amount, $3.3 billion for California, has not yet started to happen or hiring to take place.

What's this all about?  In order to promote high-speed rail as a glamorous vision for an America that is perceived as being in the economic doldrums, we have been lied to over and over about the endless benefits and virtues of such a project, jobs among them. I was about to say willingly lied to, but that is not the case.  

We have finally come to recognize that what we have been sold as "facts" are nothing of the sort.  The entire high-speed rail solution to California's myriad problems is nothing but a scam for transferring very large amounts of money from Washington into the hands of unscrupulous politicians and their contractors and consultants. And it's being done so that those politicians can claim the benefits of jobs creation with those funds. For which we will all be expected to be eternally grateful.

Highway bills pitched by lawmakers as job generators, but are they really? Economists say no.

Associated Press
1:06 p.m. CST, March 5, 2012

WASHINGTON (AP) — The lure of roads, bridges, buses and trains isn't enough anymore to drive an expensive transportation bill through Congress. So to round up votes, congressional leaders are pitching the bills as the hottest thing around these days: job generators.

But do they really create more jobs? Not really, is the answer from many economists. The bills would simply shift investment that was creating jobs elsewhere in the economy to transportation industries. That means different jobs, but not necessarily additional ones.

"Investments in transportation infrastructure, if well designed, should be viewed as investments in future productivity growth," said Alice Rivlin, a former director of the White House Office of Management and Budget under President Bill Clinton. The dividends come over the long run.

"If they speed the delivery of goods and people, they will certainly do that," she added. "They will also create jobs, but not necessarily more jobs than the same money spent in other ways."

Indeed, the question of job creation is relatively unimportant when compared to other significant economic benefits of maintaining and improving the nation's aging transportation system, such as enabling people to get to work and businesses to speedily move goods, say economists and transportation experts.

But that hasn't diminished the jobs claims being made on Capitol Hill.

"This legislation would put 2 million middle-class Americans back to work right away," Senate Majority Leader Harry Reid, D-Nev., said Thursday, as he fumed about nearly 100 amendments that have delayed action on the Senate's version of the transportation bill.

"Although our economy has gained momentum, there are still millions of Americans out of work. So it should be obvious why we can't afford to delay efforts to rebuild our roadways, railways and bridges," he explained.

In the House, Speaker John Boehner, R-Ohio, made a transportation bill the election-year centerpiece of the GOP's jobs agenda last fall when he unveiled its broad outlines. To make sure nobody missed the point, the bill was dubbed the "American Energy and Infrastructure Jobs Act of 2012."

Support for the five-year, $260 billion House bill has since fallen apart. Conservatives thought it would spend too much money, and Democrats and some Republicans balked at policy changes they say would undermine mass-transit, weaken environmental protections and penalize union workers. Boehner is struggling to craft a new bill with some mix of policy and spending that can win passage.

Urgency is growing because the government's spending authority for highway and transit programs — and its legal power to levy most of the 18.4 cents a gallon federal gas tax — expires at the end of this month.

President Barack Obama has pitched his own six-year, $476 billion transportation bill as a jobs plan as well, but lawmakers are unwilling to consider such a large proposal. They've had to scour the federal budget to find money to pay for a Senate bill a quarter of that size. While paying lip service to their own bill, administration officials are also backing the more modest Senate bill, which would cost $109 billion over two years.

"A transportation bill will be the biggest jobs bill Congress could ever pass, bigger than anything else they've done in the three and a half years I've been in this job," Transportation Secretary Ray LaHood said, praising the Senate bill.

Sen. Barbara Boxer, D-Calif., the chief sponsor of the Senate bill, estimates it will preserve 1.8 million existing jobs and create 1 million new ones. But that's predicated on an assumption that all government funding would cease if Congress fails to act, an outcome other experts consider unlikely.

Still, state transportation officials are warning of severe disruptions if the highway program is not extended. Jack Basso of the American Association of State Highway and Transportation Officials said major highway projects could be curtailed and states would be reluctant to commit to new projects.

"There is no question people could be put out of work and jobs would go way," Basso said, a blow to a construction industry that had over 17 percent unemployment as of January.

But the 1 million new jobs Boxer expects will be created may be a long time coming, economists say.

"In many cases this is not spending that occurs very rapidly," said Alan Viard, an economist with the conservative American Enterprise Institute. "Anything that involves construction has notoriously long lead times."

The job claims overlook the most important benefit of transportation programs, which is mobility, said Joshua Schank, president of the Eno Center for Transportation, a think tank. He pointed to construction of the interstate highway system began in 1956 and was completed 35 years later.

"How many jobs did we create by building the interstate system?" asked Schank. "Nobody knows. And who cares? We built the interstate system, that's what matters."


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