This morning’s New York Times has a large, illustrated article on the proposed new passenger rail station development in Stuttgart, Germany. This proposed station development is slated to cost $7 billion. That caused me to put down my paper and reflect that in the USA we are anguishing over a $8 billion investment for our entire nation, while in Germany they are about to invest $7 billion in one city alone, and it’s not even the biggest city! This just amazes and impresses me.
No wonder that anyone who goes to just about anywhere in Europe these days sees countries which have built and are building for the future on a scale that we haven’t seen in this country in several decades. Not only is the infrastructure (all
of it) that our grandparents built now falling apart, we are building or re-building on what I think is a small, timid scale, not small enough to save any real money, not big enough to engender it, California being perhaps the exception.
Then the current Trains magazine features a piece on how Amtrak can’t seem to effectively come to grips with either the challenges or opportunities of our present transportation predicament. We don’t seem able to turn a post office in Manhattan into a train station after 20 or more years of planning and hoping.
IMHO, we Americans seem to have lost our way. We have neither the political will or the investment confidence to do big projects the way we used to. I think, as I’ve said before, that while other countries, not just Europe, are planning and building for the future, we in Americ
With large expenditures you must establish priorities. Here in the USA our top priority is the military. We justify the massive military expenditures by convincing ourselves that everyone is out to get us and the military is the only thing preserving life as we know it.
We rationalize that other countries can spend money on infrastructure and health care because WE are providing for their defense needs when in fact those other countries just don’t share our paranoia and have a military just large enough for actual defense if invaded.
So while the world is exploring the benefits of increasing their trains from 180 or 250 to 300 mph, we are exploring the benefits of increasing from 79 to 110 mph, which we laughingly call “high speed rail” and we agonize over whether or not we can afford that.
I think you are 100% correct. I’m 64 and have no illusions about high speed rail, real high speed that is. I rode on the MagLev from Shanghai to the airport at a top speed of 268 mph. I may see 110 here but I think it will to be incremental, a little here, a little there, for many years. But its not just railroads. Why don’t big companys build factories here anymore? Its not just the cheap overseas labor, but also the trouble it takes to get permits, fighting the locals who hire lawyers to delay the process until they run out of patience.
And as long as I’m on a soapbox has anyone other than me noticed that America’s ruling class is predominately made up of lawyers? Almost all of Congress, most state government legislatures, and lobbyist. We normal people no longer run this country, and once you get past the retoric we have little or no influence with those that do.
OK, I’m finished, I apologize if any good lawyers were upset with this rant but I feel much better.
I work for a BIG Mfg. company and it is just like you say.
To illustrate, we recently had a vollyball tournament as a ‘wellness’ team-building imaginexperience:
We had to pay a private firm to come out, in back of our plant and check for buried underground cables, wires, etc, before our safety department would let us put up the net! Everyone, including observers was made to sign a waiver of all liability incase someone blew a hangnail.[soapbox]
What was once a proud huge USA company and employer and maker of many products now is mainly staffed by compliance, regulatory, environmental and safety people. The few of us left working on PRODUCT (final test of India and Mexico parts), in the good ol’ USofA are now even blocked out of the complaint reporting system without manager approval. At least, our product manuals are now in 20 languages…the english version, sadly, is now of the ‘broken’ variety.
You are probably correct about the hassle of building here. By the time you do all the required environmental reviews, engineering reviews, historic preservation surveys, community input meetings, get all the required permits and settled all the litigation, your competitor has had his off shore factory up and running for years.
Now I’m going to pack my soap box away, too. I feel better now.
I’m not going to offer an opinion but an observation here: Generally speaking the countries in Europe have significantly higher tax rates than we do in the U.S, and the tax paying public accepts that, feeling that the services they get in return are worth it…
We have a very different political situation and attitudes towards taxation in the US…
BTW, the environmental regulations in Europe are as stringent or more so as what we have in the US, I am under the impression that the liability issues may not be great over there but only because the respective goverments tend to have tight regulatory environments.
Debating the respective philosophies should really be done on a political forum, I just meant to point out that their are significant differences…
I sure don’t see timidity in the willingness of the U.S. public sector to spend money. It is about as far from timid as we have ever been. The timidity of investment today is in the private sector, largely due to the reckless spending of the public sector. The prospect of needing to pay back this rising deficit, coupled with the government’s sudden enthusiasm for changing the rules of the economic / business playing field, is driving up the risk of private investment.
No, but I am sure there are a million of them, plus another million developed by the public sector that show that government spending makes us all more prosperous. So, I would not expect to convince anybody with studies. The fact that excess government taxing, borrowing, and spending crowds out private sector investment is just common sense to me. We are living through a grand demonstration of it.
I’m not sure that there are any real studies on correlating high public expenditure with low private expenditure. However, what is very well understood indeed is that for there to be significant private expenditure, it is necessary that the ground rules be understood, and that there be confidence that they won’t change. The ground rules being the regulatory and tax environments. Unfortunately, the second half of that equation is missing in the US. Both the regulatory and tax environments are subject to change without notice, and there is not sufficient certainty to justify spending sizable amounts of capital which you may or may not get back. So a prudent private firm just isn’t going to bother to play. I would note, however, that the US is not alone in this problem: EU rules are about as opaque as they come, and as for the third world… it’s no wonder that there are economic problems! The regulatory and legal hurdles (environmental studies, hordes of NIMBY lawyers, etc.) are very similar for both public investment and private investment, and are utterly crippling. This is not the case in Europe: although the rules are incredibly complex, and quite rigid (and sometimes irrational), there is a fairly high level of certainty in negotiating the regulatory process, and interminable legal challenges are not part of the system. Whether this is better or worse I won’t say; just that it’s different.
Objectively, many of the inter-city distances here in the U.S. are much longer than comparable ones in Europe. As a result, not only would an upgrade to HSR necessarily have to cost a lot more for that reason alone, but the rail travel time would still be long enough for aircraft to be viable alternatives.
I too cringe at how long it takes to accomplish these projects, esp. commuter rail extensions. Even allowing for the much better quality and capability of current track and equipment, it’s still absurdly long. If the old buzzards who built most of our rail network starting about 150 years ago could see us now, they would laugh - and then wonder where they went wrong with us, or why their misbegotten offspring can’t seem to get it together. We don’t have dispossessed indigenous peoples shooting arrows (or worse) at the construction crews, the earthwork machinery is light-years better, and the logistical infrastructure to supply the construction operations is without peer. But even in the long time it took them to build the first transcontinental railroad across the continent, we can’t seem to even get the Environmental Impact Statement finished and approved and past the appeals to court, etc.
Those delays are most endemic to publicly funded projects, where there are a host of other competing priorities. In the private sector, there may still be delays for the seemingly endless studies and pemits - but once those hurdles are cleared and they decide to go, it pretty much happens. Look at the BNSF and UP double-tracking of their respective Transcons as examples.
It deals with “Crowding Out.” This is a process in which government expenditures literally “Crowd Out” private expenditures. If the dang government takes the available capital investment resources (by force), which are scarce and normally rationed by price (the interest rate) the private sector can’t have the capital. You can’t spend the money twice.
What we get is dang fool political investments such as passenger trains between Chicago and Iowa City that will destroy the capital they require and make us all poorer. What we loose is needed investments (as signaled by market forces) such as freight railroad capacity improvements. We’ll destroy scarce investment capital and, at the same time, fail to create additional investment capital. We’re on the road to becomming another Argentina. Argentina was one of the richest nations in the world at the beginning of the 20th Century. They threw it all away. We can do the same and are headed down that path.
The government is now using a ridiculously low 7% discount (or “Hurdle”) rate to provide a fake political cover for such investments. (The study I’ve seen on the Chicago-Quad Cities portion of the subject proposed passenger service projects a $6 million/year defficit. How they turn a $6 million deficit into a positive return on the investment, even with a fictional 7% discount rate, is yet to b
I would just like to point out what a great political–dare I say–conversation this is. Jay and Greyhounds, two rational posters whom I respect a great deal discussing politics as it relates to railroading–undoubtedly the most important impact on railroads in the last 40 years.
I am going to enjoy this before it gets locked . . .
Gabe
P.S. This should not be mistaken for a larger political belief, but if we were to spend $7 billion dollars on a train station in, say, Kankakee Illinois–wait, bad example, political corruption would be responsible for that–Waterloo, Iowa, I would reconsider my position in joining a militia. Although the propriety of government investment in rail is a separate conversation, the premise that this thread holds out this investment as a positive thing is a bit lost on me . . . .
For a long time Jay has had a saying at his signature that I have envied- and in this day and time of apparent political termoil, it can be said to be more truth than poetry.[2c]
“We have met the enemy and he is us.” Pogo Possum (from Walt Kelly via jeaton)
Greyhounds, as well: Includes some statements that are clearly prophetic of our times…
“If Illinois isn’t the most corrupt state in the United States, it sure is one hell of the competitors,” said the head of the FBI’s Chicago office, Robert Grant.
“I don’t know who initiated the initial initiation,” said Barry Maram, director of the Illinois Department of Healthcare and Family Services. (Regarding unauthorized expenditures at the governor’s impeachment hearing.)
It should be worth noting that the authors in the study cited by Greyhounds argue that while increased government spending or tax reductions, or both, resulting in government borrowing, will grow the economy, the government borrowing takes from the limited supply of money available for investment. They believe that if the money borrowed by the government was instead left available for use by the private sector to invest, the resulting economic growth would be greater.
If their premise is correct, and I can’t present a valid argument that they are wrong, then we can say that the reduced federal tax enacted in 2003 coupled with the subsequent increase in spending required by the Iraq war was a mistake. And equal to that it could be said that the tax rebate of 2007 and the reduction in federal taxes going along with the current government funded recovery act are also mistakes. Of course, you can argue that the ARRA expenditures for construction projects are also wrong, but you may not want to raise that with the guy who would otherwise be sitting at home while his personal wealth is going in the tank.
What follows, of course, is that tax and spending should be equal. So beside the government spending that is of no personal value to you, what do you want to cut?
As indicated in the first post to this thread, the countries that have and are now investing heavily in passenger rail systems can do so because they spend far less of a percentage of their GDP on military. It is well known that those systems don’t make money and require continued government support. On the other hand, the cost of the passenger rail is at least somewhat offset by a reduction in the amount of money that would be drained out of their economy to pay for foreign oil.
I may be way off the bat, but if we could reduce our oil consumption by say 10
Once again it’s gratifying to see so many thoughtful and divergent opinions. In regards to some comments by greyhounds let me reply.
Why, exactly, is it “silly” to spend $7 billion on a train station and urban development (including 37 miles of underground tracks)? The development’s planners in Stuttgart seem to feel that by putting the station underground and selling the air rights for re-development the $7 billion can be recouped and more. They must have the studies to show that in order to get the funding, no?
If I understand greyhounds, he feels the $7 billion should be spent on “productive investments such as additional freight capacity.” One point in the article originally referred to is that the Stuttgart project is being partly proposed because it will cut transfer and travel times for passengers but not by as much as would rebuilding the main line between Stuttgart and Ulm (the next big station). The point here is that the Germans would be just as willing to put the $7 billion into right of way as they would the urban development and station. So, while we debate and underfund, they are prepared to go ahead with one and probably later will do the other. Building a better station or rebuilding the right of way is not something that only a few people (like railfans and ideologues) debate endlessly there; they “git 'er done,” fast and well.
Having taught Economics for some years I can agree that the “Economic Literacy” of the people in the US is often “pathetic.” Economics is a difficult subject and generally not taught well. Besides, how much impact does the average citizen have in the economic course of his nation or c
PHOEBE VET makes some good points here, but I’d like to offer another perspective.
Since World War 2 it seems that a lot of American foreign policy has been driven by the desire to keep the unfettered flow of raw materials and markets open to the U.S., its trading partners and allies. That’s why it’s so easy for the State Department to “cozy up” to a lot of small-time, third-world, tin-horn dictators - just as long as they keep the supplies of bauxite, cobalt, copper, tin, oil and other strategic commodities moving our way.
As for Americans being paranoid with the idea that the world is out to get us, I say the bigger paranoia rests at just one address: 1600 Pennsylvania Ave.
Look, I’m unprepared to say whether or not the six years we’ve spent on a military adventure in Iraq and A