PRIVATIZING AMTRAK

Paul,

You correctly note that the passenger train advocacy community has not made any significant progress over the last 45 years.

I suggest the fundamental problem is that the general public quite simply does not give a dam about passenger trains. I think that is true for a whole host of reasons.

The only “corporate interests” are the freight carriers who are forced by law to give ATK virtually free access to their very expensive fixed plants and to suffer the costs of thousands of hours of uncompensated freight train delay every month. They have every reason to resist expansion of ATK in terms of either route or frequency. You would do the same thing if you were in their shoes.

My personal opinion is that the advocacy community would be wise to support termination of ATK as we know it, including their free ride on the freight carriers. That would regionalize the NEC and allow anything involving the freight carriers to be based on market based access to the network.

For the foreseable future that would be the end of service beyond the NEC. At some point if demand ever warrented it, the business would be organized on business principles, as opposed to theft of freight capacity.

As long as the interstate highways and jet planes exist, passenger service is not a business, it is just another welfare program.

Mac McCulloch

So long as it is talk - it is posturing. When REAL money is being invested and spent and construction projects are moving dirt or purchasing equipment then it becomes real. Until then posture away!

One of the determinations that has to be made is where to you measure financial success of a passenger service? At the cash box or somewhere else? And are you talking all passenger services, just commuter, or just intercity/long distance? In commuter services…if there were no trains running in and out of NYC for instance, what would the economy be like? How many businesses would not longer be and how many would not be working? So, take the commuter’s ticket price and subsidy and determine the value of the service, What does the service do for the overall economy and business of a region and what would happen if the service were gone? How about any and all services on Amtrak’s Boston-D.C. Corridor? What if Amtrak weren’t there, no trains besides commuter trains existed? What is the value to the commerce and ecnomony of the East Coast? Is there only one way to determine value and profit of railpassenger service, i.e. somebody gets to count more money in the cash box? Doesn’t it really mean the most after where you put the cash box?

Seems like all the usual cast of characters with the usual set of opinions. Two stand out, to me at least. CSSHEGWISCH Paul is quite right about the failure of advocacy for clinging to the past, by extolling the virtues of long distance trains. Paul M. also is critical of the advocacy community for a host of reasons, here and earlier, but does not seem to articulate any reason FOR passenger service, only all the fallacies. Are there any positives, in his view, such as some corridors?

You want to talk about posturing vs “real” money. I’ll tell you all about real money, posturing, and the advocacy community.

It is in the early Summer of 2010. Extending Hiawatha Service to Madison, Wisconsin had 810 million dollars of real ARRA “Stimulus Bill” money behind it.

Sometime in May, 2010, the Governor of Wisconsin, the Wisconsin DOT Secretary, and the Mayor of Madison, WI gave a joint news conference and announced that the location of the train station would be on East Wilson Street within walking distance of the Capitol Square.

This was not something our brick-and-morter advocacy group, which had been promoting the Madison train for more years than anyone can remember, was ready for. In fact, from the president of that group on down through the ranks of the membership, this announcement was something of a betrayal. The station for years and years of WisDOT plans was “supposed” to be neighbor to the Dane County Regional Airport – you can in fact see the train tracks when you turn the corner after dropping off or picking someone up at the airport just as you leave the terminal. The train station was supposed to share parking with the Airport.

The Downtown location of the proposed Madison station had some technical problems. One problem was parking. Another problem was, as explained by a WisDOT person, that the train tracks to be used ran through the Oscar Mayer plant. Yes, that Oscar Mayer as in “My bologna has a first name, O-s-c-a-r . . .” Ever

If the users pay for the goods and services that they consume, thereby covering the costs of the entity offering them, it is a financial success. If they require a taxpayer bailout to cover the cost of goods and services, it is not a financial success. I don’t know a single accountant, financier, or economist who would argue otherwise. This is true for commercial enterprises run by the government, e.g. passenger rail, postal services, etc., as well as non-commercial activities, e.g. police, education, etc.

If a nation covers the cost of the services that people want, it is a financial success. Passenger rail is not a financial success in the sense that the passengers are willing to pay for it. And given the debt structure of the United States, which is in hawk to the tune of $18 trillion, which includes national as wel

I disagree in that too many passenger train advocates have held on to the past too dearly. I keep saying that the whole transportation system ( rail, air, highway,waterway, intercity, interstate, intrastate, freight and passenger) should be shut out of one’s mind and the whole thing redsigned from the ground up…it is more than thinking outside of the box, it’s thinking like there was no box at all. Yes, it is just like reinventing the wheel, but too many are trapped in the past of choo choo’s with robber barons and union thugs, grandpa’s Oldsmobile, business jet flights of the 60’s, and the romantic life of on the road again truckers. None of them ain’t the future! Yes, there are some good things about the past that must be incorporated in the future, but those are blocks to be attached after it is determined what we need and how it will work and not the base foundation.

[quote user=“Sam1”]

henry6:

One of the determinations that has to be made is where to you measure financial success of a passenger service? At the cash box or somewhere else? And are you talking all passenger services, just commuter, or just intercity/long distance? In commuter services…if there were no trains running in and out of NYC for instance, what would the economy be like? How many businesses would not longer be and how many would not be working? So, take the commuter’s ticket price and subsidy and determine the value of the service, What does the service do for the overall economy and business of a region and what would happen if the service were gone? How about any and all services on Amtrak’s Boston-D.C. Corridor? What if Amtrak weren’t there, no trains besides commuter trains existed? What is the value to the commerce and ecnomony of the East Coast? Is there only one way to determine value and profit of railpassenger service, i.e. somebody gets to count more money in the cash box? Doesn’t it really mean the most after where you put the cash box?

If the users pay for the goods and services that they consume, thereby covering the costs of the entity offering them, it is a financial success. If they require a taxpayer bailout to cover the cost of goods and services, it is not a financial success. I don’t know a single accountant, financier, or economist who would argue otherwise. This is true for commercial enterprises run by the government, e.g. passenger rail, postal services, etc., as well as non-commercial activities, e.g. police, education, etc.

If a nation covers the cost of the services that people want, it is a financial success. Passenger rail is not a financial success in the sense that the passengers are willing to pay for it.

But Henry, why can not the commuters, your foundation of commerce, pay the full cost of their ticket?

Mac

Goods and services, including public transit and transportation, should be priced at the user interface to reflect their true cost. Then if society decides that everyone should be able to ride public transit (I agree), as an example, those who meet an income test could be given vouchers to pay the difference between what they can theoretically afford and the cost of the service.

If people see the real cost of their “stuff”, they are likely to make better decisions about how much of it they really need, i.e. buy a vehicle that pollutes less, live closer to an urban community as opposed to facilitating urban sprawl, etc. Don’t worry, however, the politicians will never allow it.

My point isn’t about who pays but where do you put the end value. In our country the foundation of commerce is the investor owned businesses. Therefore the business that benefits from a work force able to get to and from work which otherwise couldn’t, could be the end point of the value, or the town in which the business is located could find the endpoint of the value somewhere in their tax structure or their mere existance.

And let me add…how much real estate is sold, how many jobs are chosen, with the sales point of good convenience to public transportation…bus stop or commuter rail? It is a bonus to industry and businesses, it is their benefit as much as it is the commuter’s. So, again, where is the end point at which we determine cost, value, and return?

Henry,

What are you blathering about with “end value”. I have not seen that term before. It sounds to me like the begining of an arguement for ever more govt medling with the economy to me.

It is the medling that is the source of the problem. Instead of allowing people to make their own decisions based on the market cost of things, which is equal to all, and the relative value of things to them, which is not equal, we simply declare everything to be a right. This destroys the ability of all individuals to choose privately, makes everything a political issue, shifts ever more power from individuals to the politicians, and subjects the people to the cost of the government’s “generosity” either through taxes or unfunded mandates on an ever shrinking pool of people who do useful work.

Mac

I am saying that the guy who rides the train may not be the sole benificiary of the ride…that businesses and towns may actually benefit as much or more. If a business can operate or a town can exist because there is a train seat to the factory or in and out of town and they benefit by the rider coming into town, then the final value is not in the cost of the ticket paid by the rider but at the point of benefit to the business or municipality. As for more government or socialism, it is too late to argue that because it has been going on in transportation since th Post Roads were deemed important by our Founding Fathers and part of our practice of government since.

But priced properly for who and by who? If the rider is not the main beneficiary of the service, what is his share compared to a town that wouldn’t exist if there were no riders or businesses who benefit because employees can use rail or bus to commute to and from work…(benefit to business: not have to maintain huge parking lots which are taxed; commuters can get to and from place of employment with little or no hassel from service with integrety and reliablity. Towns benefit because they don’t need to take property off tax roles for parking spaces and the attended need for patroling; retailers and other besinesses benefit by customers using public transportation, etc.). Again, where do we draw the line where there is a cash benefit…to the rider, to the business or manufacturing facility, or to the municipallit(ies?) which it serves. We are so far along, admittedly, that this is an answer which is unfathomable to most people, and may be more rhetorical than anything. Maybe what I am saying is that we’ve got to attach values and not just costs to public transportation.

The rider in the case of public transport or the motorists in the case of the highways totes the full note. If public transit adds value for the community or a business or whatever, they can help defer the cost of the note with voucher subsidies. That is exactly what my corporate employer did. It bought bus and train passes from Dallas Area Rapid Transit (DART) and sold them to employees at a discount because it believed it was in the interest of the business to do so. I was one of seven managers out of more than 750 who rode public transit.

However, neither my employer or most riders had any idea of what the service really cost. And therein lies the problem. Because no one fully understands the cost, i.e. it is not reflected at the price point, all sorts of bad decisions were made about its construction and operation.

A datum that is perhaps more appriate to commuter rail than LD passenger rail:

The county courthouse in downtown San Diego does not provide parking for jurors even though they are required by law to show up for jury duty. The court does recommend use of public transit for travel to/from the court (and it is convenient for both the “Trolley” and the Coaster). I would argue that the court benefits from not having to provide parking space for jurors and thus should contribute to operating costs of the various public transit agencies.

  • Erik

So, Sam1, are you saying you see my point and may even agree with me that it is a question that we must agree on in order to find agreement of how to tackle the future of transportation in our country?

A little bit!

The United States has a transport framework. Otherwise, how did we get to where we are now, which for all of its flaws is a transport system that works pretty well. And one that appears to reflect the wishes of the people. Having said that, the system can and should be tweaked from time to time as circumstances dictate.

If one believes that Washington or Austin bureaucrats know more about planting cotton on the high plains of Texas than the cotton farmers, then they are inclined to favor highly centralized, top down centralized planning. On the other hand, if like me they believe that the high plains cotton farmers know more about planting the cotton, then the role of the central planners should be to develop a framework to help bring about better cotton yields. But they should not attempt to micromanage the outcomes because every time they do so they mess it up.

What would be nice is for governments to understand that while they have to pay for some services and infrastructures they should no micormanage but leave it to experts but with a knowledgable overseer at hand. From school boards on up the chain.