Another problem with the Milwaukee line is that there is a plan to run commuter out to the western suburbs by way of the CP line and branches. Again this track gets kind of gnarled once you get out of the city proper.
A few years ago Amtrak did a trial run of commuter service in Milwaukee while I-94 was being repaved. I remember riding the train out to the end of that line and it also drops to single track as well.
Also, any word on upgrades to the UP line when the new powerplant is finnished? I remember the days when CNW’s old FM powered transfers would bang along the line and has always been great for train watching, especially where it crosses the CP line in Wauwatosa.
Gabe: Those people are still there, and there will be more of them as the opportunities afforded by deregulation are realized. When I think of Denny Washington (MRL), Henry Posner, Ed Burkhardt, Phil Anschutz, and Mike Haverty, the word that comes to mind is “entrepreneur.”
Of course, for every James J. Hill there’s at least one Jay Gould.
OK - let’s take the last one first. The issue was, in fact, resolved - the good guys (The “Deregulators”) won on merits.
The farmers and small busineses that you cite didn’t go away. Farmers are still PO’d about railroad rates. (See previous discussions on North Dakota and Montana grain). Small business may have shifted to truck transport, but they still used regulated motor freight rates.
One of the most politically active large firms in the country, ADM,
For years the “J”, the EJ&E, has been underutilized and has never lived up to its name as the Chicago Outer Belt. If it doesn’t interchange with, it crosses EVERY other railroad entering Chicago. It is double tracked from Gary, IN on the east to Joliet and maybe on to Elgin. From there it continues the rest of the way AROUND Chicago to Waukegan on the north. I don’t know who owns the “J” today but it was originally a US Steel subsidiary connecting their Gary steel mills with their other subsidiaries, American Bridge & Iron and US Steel & Wire in Joliet and Waukegan, respectively. As a US Steel subsidiary they weren’t particularly interested in being a route around Chicago for through rail traffic. Also all the major roads classification yards were located closer in to Chicago than the arc followed by the “J”. It sounds like the “J” might finally be close to realizing it’s potential as a bridge route around Chicago.
Grey, what do you think changed between 1883 and 1980 that regulation could be imposed in one and deposed in the other? Are you voting for human nature? That is, people blind to the merits of a free market in 1883 were enlightened by 1980?
If a railroad builds a bypass, and that coincidentally benefits a city by reducing traffic and pollution, should the city be allowed to partake of those benefits without charge? Isn’t that an illegal taking?
No government funding for CREAT? What about the benefits to all the citizens of Chicago by lower pollution, far less time being blocked at grade crossings, less overall business diverted from the city. As well as the surrounding suburbs.
Let’s not forget that the pupose of the former ICC was to limit the power of the railroad companies. Railroads were prohibited from owning trucking companies. The highway acts were enacted to construct and preserve the noations road network. Many now consider the roads as a right of the people, and rails as those “robber barons”. The purpose of the highway departments is to build, maintain and keep for the public good a road system. Only when this arrangement is reconciled will any rationalization of transportation occur.
You are, in effect, asserting the people of Chicago cannot contract with railroads for mutual benefit. Federal, state, and local government have always contracted with private enterprise. So long as both contracting parties have the right to refuse, I fail to see how sacrosanct notions of classical liberalism are intruded upon.
I seem to remember BN giving the Iowa Interstate Railway low-interest loans to improve certain segments of track because BN believed the money returned by IIRR’s interchange traffic would justify the expenditure. I don’t see CREAT any differently.
Cities are no less of an economic entity and market participant than ADM—and they are treated that way by courts. If you don’t believe me, watch the next time there is a problem with such a project and there is legal action. The city’s claim of “sovereign immunity" will be laughed out of court before you can say “Adam Smith.”
This is not a recent phenomenon and it has paid dividends in the past. Without the federal government “investment” in the form of land grant railroads, would your former employer the IC ever have come into existence?
I see your argument as counter to classical liberalism. The absolute bedrock of a classical liberal economic system is freedom to contract. CREAT is not government regulation; it is a contract between two parties that are free to say “yes or no.”–Capitalism in its purist form.
Nonetheless, very interesting comments and I hope you don’t stop offering your opinion on this subject. I am learning a great deal from both you and O.S.
The University of Chicago happened. Seriously - knowledge and understanding of all sciences advanced, including economics. As you said, people didn’t understand the merits in 1883, but had come to understand them in 1980. Just as doctors didn’t know about germs back then but had an understanding of infections in 1980.
The original purpose of Federal economic regulation of the railroads was to stabilize the rail cartells - the railroad companies welcomed the regulation. The original act creating the Interstate Commerce Commission was writen by a lawyer employed by the Philadelphia and Reading railroad. The law served the puposes of “Big Business” - not the “little guy”.
In the late 1800’s the railroads were constantly involved in “rate wars” that drove their prices and profits down. They hated this. In response they would attempt to form cartells and stabilize their pricing. Cartells rarely, if ever, work. Somebody’s gonna cheat. So they had it written into law. They thought they were stabilizing prices and guanteeing themselves a profit. They didn’t count on the development of motor freight. The regulation of their prices (and services) prevented them from meeting this new compitition.
By 1980 or so there was enough understanding and proof that economic regulation of transport was harmful - and it was driving railroads bankrupt.
Are you saying that it is wrong for a state or municipal government to engage in a taking of private property without due compensation, but it is right for the federal government to do so? Do you think it is acceptable for a state or city to participate in a project that benefits interstate commerce, but it is unacceptable for the federal government to encourage interstate commerce?
Now I’m really confused by your argument. Germ theory was a discovery. What was discovered by economists after 1883 that changed everything? Weren’t the benefits of a free market described 117 years earlier by Adam Smith in The Wealth of Nations, and published to broad acclaim in 1776?
Earlier I understood you to say that farmers opposed deregulation in 1980. So the farmers that didn’t understand the merits of free enterprise in 1883 and agitated for regulation came to understand its merits by 1980 and supported deregulation? Or are you saying that farmers’ never got it right, but their views commanded votes in Congress in 1883, but in 1980 Congress ignored this constituency? (You’re saying that Congress, for once, got it right? Wasn’t the House controlled by the Democratic Party then?)
Or are you saying that railroads had the power to self-regulate themselves in 1883 to bring legal protection and authority to their cartels, AKA rate bureaus, neglected to return to Congress, once it became apparent this was a mistake, to tell them to turn the switch off, and then had the power to deregulate themselves in 1980? Was I mistaken when I read all those statements about the evils of regulation in Railway Age, Railroad Gazette, and Railway Record beginning in the 1870s when states startted to regulate railroads, and continuing unabated to 1980?
If that’s not what happened, exactly who did become educated by 1980? Congress?
And to return to an earlier statement by you, when you said that small businesses opposed deregulation of motor trucking in 1980,
Again, I maintain that it is fair for the Government to contribute to the Chicago project.
Did the Big Dig in Boston come entirely out of highway user fees? Even so, it no way does for Boston the advantages that the general population of Chicago will derive from the rail improvements there. Far less waiting at grade crossings. Less pollution. Less possibility of business and employment leaving because of congestion. It is established that local and federal support (more than operating costs) for commuter rail is valuable and proper. Part of the improvement in Chicago will be for the commuter rail network. I think a very good case can be made.
Hasn’t the government already spent money on maglev research? Why?
And then there is the fuel cell Hydrogen boondogle, and it is a boondogle, there is NO chance of a SAFE Hydrogen economy. One big Hindenburg flying ship.
France SIC 1847–before the 1848 revolution–is almost certainly the most pure form of a lassie faire economic system in the history of the world—it would probably make most adherents at the University of Chicago blush as they are complaining about gas prices while filling up their SUVs.
Stated differently, the historical engine driving the 1980’s regulatory changes was Marxist rather than Hegelian. Economic circumstances and changes (stagflation) proved fertile ground for pre-existing anti-regulatory economic ideologies.
Yesterday I spent a wonderful evening poring over CREATE information until my head hurt.
The total project calls for $1.2 billion with the rails putting up $212 million. The rest will come from somewhere and the secret is in the sauce.
King Richard is just finishing up his Millinium Park project which is way over budget and priced well over $1 billion. Meigs Field went away and a new playground is planned. All over the city are signs of renewal, in the form of wrought iron fences, and of corruption (Trucks for Hire scandal and others).
Just imagine what the communities will want when they find out this money is available. Does anyone remember the Cleveland / Conrail fiasco when CSX and NS purchased CR and then had to legally bribe certain suburbs to join in?
BTW…one of the items listed in BALT’s early post was the double tracking of the lead from the CN (ex GTW) to Markham Yard (IC). This is a CN to CN interchange…shouldn’t this be a CN project, as it will benefit CN’s operation.
Nightly I hear trains being told to hold up in Indiana until 148 doubles out of Markham. It sure makes sense to have a double lead into Markham, and that CN should do it on their own.
Mmmhhmmm. You’d think. But go back up 7 lines, then left five words, to get to the one called “bribe.”
CN is giving up something very dear, their own route through Chicago, the St. Charles Air Line. They are the only railroad to have such a thing. That was the keystone to this whole project. No St. Charles Air Line going away, no Mayor Daley’s support. No mayor’s support, no project. CN wanted an ownership percentage of IHB as their reward. In a series of meetings at AAR in which I would have paid next month’s salary to be a fly on the wall, the thumbscrews were turned until CN knuckled under. In one perspective, CN was simply obtaining the best deal for its investors possible. In another, they were holding the whole hub hostage. This is really, in the whole scheme of things, a trinket traded for a treasure.
But beyond that, even though this appears to be pure CN benefit, that’s way too simplistic a way of viewing this project. The whole hub is an interconnected whole, and if trains back up in one place, it forces delays in others. If you look a little closer, you’ll find a junction that benefits “only” BNSF, a flyover that benefits “only” NS, and so forth. None of these projects, to my knowledge, are not supported by the traffic flows of the whole, and the authority on which I have that is one with which I’d trust my life.
Moreover, you’re missing the point that (a) connections between railroads for fundamental, free-market, economic reasons are the last place a railroad should put its money, and (b) the railroads aren’t earning cost of capital. If you ask a railroad that is consuming itself in the hope that tomorrow will be better to put one penny into a project that has the least potential to help it bootstrap its way to success, it’s not going to happen. When I first looked at CREATE, my first reaction was that the railroads weren’t putting in very much cash. Then I smacked heel of hand to forehead, and said, well, duh, of course! This project is of l
Well, obviously one guy didn’t sit down and write one book and cover everything. More to the point it was the spreading knowledge of how economies work and the application of that knowledge to specific situations that carried the day.
The titans of industry in the late 1800’s really didn’t buy into the competition thing. They kept trying to form cartels and limit competition. The cartels didn’t work - people kept acting in their own best interest which meant they would break the rules of the cartel.
J.D. Rocefeller Sr. formed the Standard Oil Trust to prevent competition - he wasn’t really a bad guy, he just liked things to be orderly. The economists explained where he was wrong. And he couldn’t maintain his monopoly on oil after it was discovered in diverse locations.
I never said farmers opposed dereg. I said they hadn’t gone away and were still upset about railroad rates. Basically, I don’t think farmers do what’s right, I think they do what’s in their own best interest. If they can have a rail rate held artificially low to their benifit, they’ll try to do so. If that me
"The farmers and small busineses that you cite didn’t go away. "
“But the percentage of the population living on farms was drastically lower in 1980 than in 1880 - they had lost some political clout.”
“I never said farmers opposed dereg. I said they hadn’t gone away and were still upset about railroad rates.”
Grey, I’m trying to find the merits in your arguments – it strikes me as important to see if you’re right. But among other things, I can’t even get past the foundational facts you’re using, because they seem to say one thing in one place, and something else in another. For instance, how do I reconcile these three statements of yours in reference to farmers? Did they or didn’t they go away? Did they or didn’t they lose political power? Did this loss or lack of loss of power effect different outcomes 97 years apart? Could you help me out here?
“Somewhat reduced” is not synonymous with “Gone away”
While the farm population has declined relative to the rest of the country, the agri business sector - ADM, Cargil, ConAgra, Tyson, etc. is huge. These are the entitites that actually ship the grain. Couple this up with states such as Iowa where farming is still a huge sector of the economy and you’ve got significant political power.
To say that the farmers have had their political clout “somewhat reduced” does not mean that they don’t still have significant political influence. There is nothing contradictory in the statements you cite.
And no, I don’t think it would have made any difference if they had even more political power. As I stated, economic deregulation of transportation won the day based on its merits. There were entities against it, entitites with real political power such as the Teamsters Union.
Besides, today’s farmers are not the same as their predicessors of the 1880
I’m not saying the city can’t contract. Of course it can contract. I’m not even saying it shouldn’t assist CREAT. There can be local benifits from reduced congestion and the city can contract for the “mutual benifit” of its citizens. (Although in Chicago, the ci