I guess the chairman of the U.S. House Transportation & Infrastructure Committee Introduced a bill that would privatise much, if not all, of Amtrak. I say go forth and do it. Amtrak doesn’t make any money as is.
The concept that Amtrak make money was verbage put into the legislation to assure that it would be a failure and that the whole idea that people wanted to and would ride passenger trains would be done and over with within a year or two. So…should the Northeast Corridor…what, Boston to Newport News?..be sold off to a private entity? And if it fails should the government or Amtrak regain control? Or should the government as Amtrak or other entity, either retain control and ownership or work in concert with the new owner. If private enterprise, how should the trackage rights, operations, etc. of MARC, SEPTA, NJT, MNRR, CONNDOT-Shore LIne East, and MBTA be handled? Hand over those operations to the new owner? Be required to continue the existing agreements? Throw them off the tracks and tell them to get their own lives? It is not an easy toss, giving Amtrak to a private carrier…there are many private carriers who probably don’t want to get involved with these operating authorities! There is no black or white, no private or public, no simple answer to Amtrak. Only outsiders to the area and to rail think this is just another Lionel set.
Maybe it’s good, maybe bad, but I think this proposal is part of a larger agenda posing as ideological which has way too much to do with politics to be allowed to discuss here.
WHY?
Why do so many people on this Forum feel that if something does not make a profit it should not be done?
“promote the common good”
How much “profit” does the “Interstate Highway System” make? Or does it just make it posible for others to run businesses that makes a profit?
How much “profit” does the “Air Traffic Control System” make. The United States has been the leader in Aviation, yet, most aircraft designs were aided by Government research and support.
When the northeast Freight Railroads were bankrupt, it was the Government that formed “Conrail”, made it profitable, and then turned into a stock company which was later taken over by NS/CSX.
We, us Amercans, have a passenger rail system that is third rate, we are not leaders, we are not even followers of Europe, China, or Japan.
Doesn’t a country 3,000 miles wide REQUIRE long distance air travel (and i’m not talking Airlines that only make a profit by charging for Bags, Pillows, and Snacks) , High Speed Rail for shorter distances (500 miles or less), and the Automobile for local transport?
DMUinCT you are raising the same questons many of us have raised in the past. As was explained in an NPR interview yesterday, the Tea Party is ensconced in the idea that government is spending too much money and should stop spending all money. They are doing this with the backing of some highly rich people. Some in the Party understand the stance and consequences, others are just along for the ride. There is some merit in what they say, but their unmovable stance, their inabiiity to compromise or come up with solutions, are causing problems in following through with their mandate. Amtrak is one of their targets but most don’t understand, or seem to want to understand, that life is a cooperative effort between government and business working together to make things happen for the greater good. There may in fact be some merit in selling off the Corridor either to private enterprise or to the states enroute. Wholesale condemnation of either pose, at this point, doesn’t seem to make sense, and niether is wholesale backing of the idea. The answers are not among railfans, but amogst the voters and their governors.
This measure, as introduced by two Republican Congressmen, is just a political gambit. It may have merit not by itself but as part of a wholesale restructuring, rationalization, and programming of an integrated, interdependent, transportation system. It may or may not fit or accomodate or achieve anything as a stand alone conecpt. But merged with other rail, highway, air, and waterway programs and projects, may be feasable. No, this is not a good transportation proposition but a political posturing. It may work, but has to work within the entire framework of transportation and not as a Tea Leaf pagent.
Neither does METRA…Of course there are many transit operations in the U.S that are “privatized” in the sense that they are operated by a private company but said company gets a hefty subsidy for the services provided…
You mentioned “privatizing” which is the key element. The company gets a subsidy and there are new opportunities for kickbacks, etc. to get the contract. Pay to play. Check some of the outsourcing contracts done in Iraq for services that used to be handled directly by the quartermaster corps.
Let’s see…what else doesn’t make money in Washington…about the only thing I think does make money is the printing presses! The Defense Department doesn’t, Nor the Highway Adminsitration nor the FAA or FCC…I don’t think there is a government agency or department that does except the Treasury Department! So why pick on Amtrak? It is too much socialism for the Tea Party to bear?
I think Amtrak loses the MOST money out of all of them, and that’s why privatization is put on the table as ideas. That’s how it was before 1972, but the RPOs went out of business in the sixties with the creation of the zip code, and train lines lost much of their revenue from it.
You might want to take a look at the Federal budget and then reconsider your statement.
It is not because Amtrak loses the most money of all of them…in fact there is no reason to say that because non of the other are designed as profit centers…the real reason is political. Amtrak smacks of socialism and socialism is wrong in this country…just ask anybody sitting on the right side of the aisle or aligned with any right side political or social or religious organization. It’s a “somebody gets to ride a choo choo and I don’t so why should they on my dime?” mentality . Amtrak is a selected entity because of politics, that’s all.
It depends on what is meant by loses money.
Amtrak is a federally sponsored commercial enterprise. It is in the business of transporting people from one point to another. Its operations are accounted for in an enterprise fund, which emulates the accounting for a private business. It generates an income statement (operations statement), statement of cash flows, balance sheet, and statement of retained earnings.
The federal government sponsors several commercial like enterprises, i.e. Federal Deposit Insurance Corporation (FDIC), Pension Benefit Guaranty Corporation (PBGC), Tennessee Valley Authority (TVA), etc. These organizations are expected to cover their costs from fees, rates, etc., and therefore be run like a competitive business, although in most instances they don’t have any direct competition.
In FY10, as examples, the FDIC earned $13.5 billion as compared to a loss of $38.1 billion in 2009, due largely to an increase in bank closures sparked by the recession; the PBGC had a loss of $1.0
Sam, thank you for supporting my contention that most Americans really don’t know much about our government and its operations, income and “dispursments” if you will. Likewise, thank you for also showing me the way toward reevaluating, reinventing, revamping, whatever you want to call it, transportation system by starting at scratch, from a point that all we know is that there is a powered vehicle that goes along the roads, another that goes on parallel steel rails, another that goes through the air, and another that floats on water. Then from there we design transportation system that utilizes and integrates the best of the three systems to economic and environmental advantage. Think like nothing exists now and build from that…no politics, no lobbyists, no pork barrels.
I think I may go into anaphylactic shock!!
I agree…it is all politics and beyond the scope of this forum. We paid half a million for a painting of a fish on the tail of a plane…but Amtrak does not serve a purpose???
I have never, to the best of my memory, supported unfettered capitalism. I don’t know anyone who has.
I support properly regulated, robust, competitive markets. The role for the government, in a nutshell, is to ensure a level playing field, promote competition, and call balls and strikes. It should not pick winners and losers. And it should not be in the business of running an intercity passenger railroad that will not be paid for by the users.
Several years ago I did an analysis of where Amtrak, competing as a private entity, could be successful. That is to say cover all of its costs but not turn a profit for its owners. In other words, break even. I concluded that it could compete in the New York to Washington market, as well as LA to San Diego, by raising its fares an average of 15 per cent whilst reducing its labor costs by 30 to 40 per cent. Both would be doable, especially if motorists were made aware of the true cost of driving at the pump.
Don’t worry. The politicians will never let it happen. That is to say, they won’t privatize Amtrak, and they won’t stop subsidizing or hiding the true cost of alternative modes of transportation.
On another note, my company (Fortune 250) outsourced as much as 80 per cent of our construction and maintenance work. The key to successful outsourcing is effective contractor management. In many of the instances where outsourcing has not worked well, it is because the
Unfortunately Sam, there are many who are, or think they are, proponants of “unfettered capitalism”. This is because they don’t know and understand history, they don’t know and understand what actually is how the US…and most of the world…actually operates, and they are just plain don’t understand what they are talking about but are espousing views the picked up from talk radio. I am presently rereading (for at least the fourth time) William Helmer’s RIP VAN WINKLE RAIROADS about the railraods proposed and built to conquor the Catskill Mountains of NY in the 19th and 20th Century. Capitalism was the catylist and promotor while government provided the surveys (US Army), the bonding, the authority, the loans, the permissions, the abilities so that private enterprise could have this privilige and real estate. If there hadn’t been local, state, and federal activiies in these areas capitalism could never have accomplished the feat. Likewise if capitalism wasn’t the catylist and promotor, the question could be would any progress have been made,would railroads have been built? After all this, the monopolistic hold railroads had led to organizations like the Grange to take thier plight to the government to create controls lke the ICC to reign in the powers of capitalism. Its all in our history, just read it.
And then there are “crony capitalism” and “pay to play” situations, where government is closely allied with favored corporate interests, through subsidies, tax breaks, sweetheart government contracts, some examples of privatization, elimination of competition, kickbacks, etc.
I graduated from Penn State with a degree in history and economics. I was an honor student and a member of Phi Alpha Theta, which is the history honor society. I have maintained my interest in history and have read an average of 25 to 30 serious history works every year since graduation.
I don’t listen to talk radio. I don’t have a television. I am reasonably familiar with the economic development of the United States.
At the end of the day, however, it does not matter. The question is where does it make sense to support passenger rail? And what role, if any, should t