People try to claim that because Amtrak was chartered as a for profit corporation that it is illegally loosing money. Nothing in its charter say that it has to exceed capital costs. Profit can simply be someone’s benefit.
If Amtrak is providing some sort of gain or benefit then it is satisfying its requirement to be a for profit corporation. Semantics yes but no less true. Amtrak perfectly satisfying the needs of its charter.
Does Amtrak have a positive return? In all places and services? Just some? Are some better than others? Is money being wisely allocated and wisely spent?
Perhaps the “for profit” designation was there so people who did not vote against Railpax could later feign ignorance. In the Congress it is not totally unknown for individual members to claim strong positions for the folks back home but find a way out of those positions when it comes time for a vote.
Well Don, I think you and I and the rest of us know that Amtrak does not have a positive return. The best that can be said is that the return is less negative than it might be. But we also have to ask what do we compare the lack of a positive return to. If we compare it to the S&P 500 the losses look pretty horrible. But if we compare it to blasting away the side of a cliff for an unneeded road and suddenly finding we have the equivalent of battery acid coming out of the rock, well then Amtrack doesn’t look so bad.
If I throw a $5 out the window, that’s not as bad as throwing a $10 out the window, so throwing the $5 out is a good thing to do?
No doubt, there are parts of Amtrak where, if you sum the direct and indirect benefits, they exceed the costs. No doubt, there are investments in passenger rail that score better than the alternatives, but being better than a “bad thing” is unsound reasoning.
Volpe was the father of Amtrak. He helped write and sell the legislation on the Hill and snuck it by Nixon’s closest henchmen who were against it (Haldemann and Mitchell, predominantly) . Here’s what he thought: http://www.policyarchive.org/handle/10207/1446
Basically, he thought Amtrak could eventually cover operating costs if there was significant investment in corridors and the LD routes were further trimmed. Neither happened.
“The Amtrak Improvement Act of 1978 (P.L. 95-421); the Conference report noted that the bill removed Amtrak’s for-profit status but required that the corporation be “operated and managed as” a for-profit corporation (H.C.R. 95-1478).”
Volpe had it right in the beginning, but 40 years later we’ve made little headway in achieving his vision.
Thank you for Amtrak Profitability: An Analysis ofCongressional Expectations atAmtrak’s Creation. Randall Peterman defines three groups: Those who believed the discouragement hypothesis that the railroads were trying to drive away passengers to focus on the more profitable freight traffic, those who believed the economic efficiency hypothesis that passenger railroads were an obsolete technology that had been eclipsed by automobiles and airplanes and a subgroup of the economic efficiency people who believed that by making policies supporting automobiles and airplanes the government itself was undermining passenger railroads and if the Federal Government would only treat them the same way it treated other forms of passenger transportation they would flourish. Peterman doesn’t mention John Volpe or anyone else by name. Taking the title at face value he is focused only on Members of Congress and the positions they took.
My impression is that the issues Peterman describes are still with us today both in the Congress and among those citizens who are concerned about the future of rail passenger service.
There is an issue that jumps out at me but that the article does not consider. When Amtrak was created did anyone in the Congress or anywhere else consider what might happen if, after creating Amtrak, Congress did continue to fund it sufficiently to keep it operating but not sufficiently to accomplish the upgrades needed to operate profitably. It seems to me that was the most likely outcome of the legislation and it is what has happened.
Do we even know how much I-99, a road that is not needed, has cost us? And we are still left with pollution from the equivalent of battery acid. And a substantial part of that pollution has been covered up but not mitigated.
Why are you trying to justify Amtrak’s wastefulness? It’s exactly that wastefulness that has prevented virtually any progress outside the NEC and is responsible for the NEC being in disrepair. It keeps the debate in the gov’t pinned down on “airfare is cheaper than the Sunset” and “$15 hamburgers”.
The first step in fixing a problem is admitting you have one.
Paul M. was perhaps too critical of the tactics used by the rail advocacy folks around Madison. But in general, he had it right. For 40 years of failure we have heard a litany of justifications for passenger rail and Amtrak that don’t work.: 1. Subsidy fairness. 2. Retaining LD trains for the under served handicapped and nostalgia. 3. et al.
All to the detriment of building a viable passenger rail service that might well be used by 100 million people per year, if done right.