It is total fact.
[quote user=“Bucyrus”]
Well I am putting it in a rather simplistic way to make a clean point. We live in a tangle of real needs, agenda driven needs, public and private financing. And it is true that if the return is too long-term, it will discourage private investment. But if the return is too low, that will likewise discourage investment. Add to that the fact that somebody can easily make a case for need, and you have needs going unfunded. So there is a threshold at which a need is great enough to attract private investment. But if a need is not great enough to meet that threshold, I think that is excellent criteria for ruling out pubic financing of it.
And you can cite those facts?
True, but look to individual cases:
What is the most unnecesssary domestic canal the U.S. built post-WW II? Probably the Tennessee-Tombigbee canal, which the Army Corps of Engineers decided was vitally necessary, but has not lured domestic shippers who weren’t there to begin with. It is, however, a haven for large-mouth bass fishermen. (Talk about unintended consequences!),
Financially, what is the most messed-up major component of transportation? Probably the passenger airlines, despite the fact that the fed gov’t has helped build them terminals, set up ATC towers and training, even nursed at least one through bankruptcy that busted the union but kept the planes flying (United).
What is the most neglected part of US transportation infrastructure today? Probably bridges and elevated roads, both in and ot of the Interstate program. I am not plumping for privtate ownership, but if you watched PBS’ series on infrastructure last week, you’ll recall that some very serious (and non-libertarian) experts say that bridges and elevated roads in the Interstate system may have to charge tolls because there simply isn’t enough money in general revenue or from the gas tax.
What is the best-running major component of freight transportation today? Arguably the Class One’s. They turn a profit, pay dividends, yet fund their own projects. They have gotten much better at marketing. Very roughly speaking, since 1980 the Class One’s are hauling half again as much freight with three-quarters the route miles and one third fewer employees.
What freight railroads could benefit from federal largesse? It would be fun, say, to electrify the BNSF Southern Transcon (Chgo- LA) but it is far from vital. Santa Fe and BNSF have proved repeatedly that a "hotshot’ IM can run th
[quote user=“jeaton”]
[quote user=“Bucyrus”]
Well I am putting it in a rather simplistic way to make a clean point. We live in a tangle of real needs, agenda driven needs, public and private financing. And it is true that if the return is too long-term, it will discourage private investment. But if the return is too low, that will likewise discourage investment. Add to that the fact that somebody can easily make a case for need, and you have needs going unfunded. So there is a threshold at which a need is great enough to attract private investment. But if a need is not great enough to meet that threshold, I think that is excellent criteria for ruling o
I am not saying that the fed. gov’t NEVER invests or builds wisely, but I am saying it has two major strikes against it: (a) the funding is by definition politicized, relying on Congress; and (b) most (not all) of Congress puts all its marketing skills into re-election campaigns, not becoming instant experts on diverse industries or scoping out markets – which is probably not possible anyway.
So, by your statements, if BNSF can pay for only 75% of the improvements needed over the next 20 years, BNSF does not truely need all of those improvements. Or, did I misunderstand something?
FYI: a parallel thread about upset shippers has some intersting insight and perspective into these very same arguements and statements
I said all public funds are available as private funds.
That statement about the sufficiency of the amount of investment capital available was in response to this statement by jeaton, which was in response to what I said earlier about letting the private sector do all financing. jeaton said:
“The premise that if there is a real need, then private financing will fulfill the need is faulty because it assumes that there are unlimited private funds. That is simply not the case.”
I take the implication of this statement to mean tha
On the contrary, public funds invested in the Interstate highway system opened up many money making opportunities in transportation and its attending fields including, but not limited to, vehicle sales, gasoline sales, nationwide restaurant chains, local and nationwide hotel chains; industrial development in many communities, etc. And the creation of these industries and services accompanied by the paychecks produced, have given back monies to the governments in the form of income, sales, and other taxes. The government’s investment in Conrail paid itself back not just in stock sale but also in bolstering the economy (tax base) of much of the east. Early governments bonding, granting, loaning and legislating allowed for turnpikes, canals, waterways, and railroads to build and expand the economy. The airline industry is supported by government military r&d, federal operation of airways, and owned and owned and operated airports all of which supposedly have benefits which go directly into the communities and their governments. Oh, there have been governement boondogles, no one is denying that. Private Sector Business has laid many bombs itself from products and service that were not needed, wanted, or viable from the start to Big Businesses missing the mark
One thing not discussed here, I may have missed it, is that a railroad will walk away from Gov’t participation if onerous terms are placed upon it.
There are always priorities regarding the components of infrastructure inhancement and competent management will postpone those components having lessor significance if forced to do so, by either their own finances or outside conditions. Gov’t just says “damn the torpedos, full speed ahead” once a project has been approved and they never look to make adjustments.
Almost without fail Gov’t agencies will spend every dollar appropriated before the end of the fiscal period, and do so without regard to the value of whatever they choose to do as they empty the current budget appropriation.
True, any business will walk under unfavorable conditions which cannot be negotiated or dealt with. So what’s your point? And your final sentence is a very broad generalization based more on political persuasion than all facts. But also note, is the fact that private enterprise railroads are coming to the trough so to speak. Government is not imposing anything on them, begging them on. The railroad industry, like BNSF, has said that they cannot see more than 75% private monies available needed for improvements and maintenance over the next 20 or so years. What they are saying in effect is: do you want big business to continue as a provider of transportation needs or do you want us to do just what we can and burden you with what’s left? There statement is not begging, not socialism, not passing the buck, not looking for pork, not even the failure of privatea enterprise, but rather a realistic look at the transportation needs of the future in this country, and seeking ways to make it happen, not just for private enterprise, but for the public’s governements as well.
Maybe it’s me, aren’t they (BNSF) saying, “If you want big business to continue as a provider of transportation needs, we’ll do what we can and burden you with what is left.” I see it this way because the government is being asked to pay a quarter of the cost.
I am guessing BNSF’s evaluation of funds is based on todays numbers, what happens in five to ten years when revenues, investments, etc. are at a point where BNSF no longer needs government monies. Do they turn down the cash? Or, vice versa, BNSF’s projections are wrong, do they hit up the government for more funds? You know, in for a penny, in for a pound.
henry6, My 1st point is that RR’s may be asking for some Gov’t participation on projects which are mutually beneficial, but unless we know the specifics of those projects we cannot judge how significant they are to the RR’s on say a 1 to 100 list of the total.
If the RR’s currently think they can pay for 75% then it may well be that items 76 to 100 will be postponed, or not done at all because as 1 to 75 are done some of the remaining 25 may diminish in importance or even dissappear. After all this is a long rage projection and the rule of thumb is “plan for five years”, and be studying beyond that time frame.
Yes I know that the RR’s compiled the list but I believe that there are priorities and that some of the items are not very significant to the RR’s, but if coupled with public projects may be mutually beneficial.
Finally sir I am not in the habit of injecting politics into discussion here. It matters not which political party prevails at any given time, the Agencies will spend all that is appropriated unless they are specifically instructed not to.
Regarding the last two posts: unless you, actually we…us here posting…are inside the boardrooms or have a perfectly clear crystal ball, we can only debate what is put before us as fact or make up scenerios which may or may not happen. The latter is most dangerous.
[quote user=“henry6”]
On the contrary, public funds invested in the Interstate highway system opened up many money making opportunities in transportation and its attending fields including, but not limited to, vehicle sales, gasoline sales, nationwide restaurant chains, local and nationwide hotel chains; industrial development in many communities, etc. And the creation of these industries and services accompanied by the paychecks produced, have given back monies to the governments in the form of income, sales, and other taxes. The government’s investment in Conrail paid itself back not just in stock sale but also in bolstering the economy (tax base) of much of the east. Early governments bonding, granting, loaning and legislating allowed for turnpikes, canals, waterways, and railroads to build and expand the economy. The airline industry is supported by government military r&d, federal operation of airways, and owned and owned and operated airports all of which supposedly have benefits which go directly into the communities and their governments. Oh, there have been governement boondogles, no one is denying that. Private Sector Business has laid many bombs itself from products and service that were not needed, wanted, or viable from the start to Big Businesses missi
First, I fear your responses are fears and assumptions not based on fact but emotional responses based on political persuasion. In the second paragraph above, you claim that there is a difference in investment between government and private business based on source of money. Private enterprise uses a lot of other people’s money to advance itself. Thus the current mortgage and credit catastrophe. And financial risk is a very big part of government operations when seeking bonding, or satisfying its constituency. Power is the ego trip of the participants of both, not the aim of the entity. And in your first graph above, money spent by a government benefits reach further than the mere immediate recipiant. It is as much a calculated investment as any banker makes. Sit in on a municipal government meeting, or talk with a state or federal employee or official and see that they have to find a return on investment in their deliberations on projects and programs just the same as Mr. Businessman. Thus a bridge over a river would help people get to work, or allow bigger trucks traffic or mean less maintenance, or allow for development or decrease insurance costs or help emergency vehicles respond, and whatever else could be thrown in. So by giving the dollar to the bridge builder actually goes a lot further than his bank account. LIkewise for water, sewer, parks, recreation, etc. The one thing I have always wondered is why those who support only private enterprise fear anything for the common good of the community being done by government as if it would take too much from them…or is it the ego/power thing afterall? If a town want a quiet zone, why should the railroad pay for it? If a town wants to eliminate a grade crossing, shoudl the railroad pay for it? If the railroad wants to realign in tracks through a town to eliminate grade crossings, should a town help pay if it means safer roads, better emergency protections,
Henry,
Well said.
- Erik
First, a question. Have you ever taken college level economics classes? I have. This is a scientific disciplin. It’s not something made up on the spot. People spend their lives studying how to effectively allocate scarce resources such as capital investment. The best way to do it is for the government to stay out and let market forces direct investment to where it is most needed.
The difference is night and day. For its history the US has generally, but not always, allowed the market forces to direct investment. Other countries, such as the Soviet Union, went with government directed investment. The USSR did a poor job providing for its people and only lasted about 70 years. The US has lasted well over 200 years and has a great lving standard.
You say private enterprise uses other people’s money and cite the current mortgage crisis. I know that the current mortgage crisis was caused by government involvement in the economy through "Government Sp
[quote user=“henry6”]
First, I fear your responses are fears and assumptions not based on fact but emotional responses based on political persuasion. In the second paragraph above, you claim that there is a difference in investment between government and private business based on source of money. Private enterprise uses a lot of other people’s money to advance itself. Thus the current mortgage and credit catastrophe. And financial risk is a very big part of government operations when seeking bonding, or satisfying its constituency. Power is the ego trip of the participants of both, not the aim of the entity. And in your first graph above, money spent by a government benefits reach further than the mere immediate recipiant. It is as much a calculated investment as any banker makes. Sit in on a municipal government meeting, or talk with a state or federal employee or official and see that they have to find a return on investment in their deliberations on projects and programs just the same as Mr. Businessman. Thus a bridge over a river would help people get to work, or allow bigger trucks traffic or mean less maintenance, or allow for development or decrease insurance costs or help emergency vehicles respond, and whatever else could be thrown in. So by giving the dollar to the bridge builder actually goes a lot further than his bank account. LIkewise for water, sewer, parks, recreation, etc. The one thing I have always wondered is why those who support only private enterprise fear anything for the common good of the community being done by government as if it would take too much from them…or is it the ego/power thing afterall? If a town want a quiet zone, why should the railroad pay for it? If a town wants to eliminate a grade crossing, shoudl the railroad pay for it? If the railroad wants to realign in tracks through a town to eliminate grade crossings, should a town help pay if it means safer roads, bet