News
Guest Editorial: Shai Agassi
Apr 24, 2009
We'll take the day off and let Shai Agassi talk to you about A bold plan for mass adoption of electric cars. This TED Talk will show you how whole countries will be driving emission-free electric vehicles by 2020. “Persuasive; Inspiring; Ingenious!”
Sick Transit
Nov 29, 2008
As did John McCain, we confess to a lack of perfect understanding of the “dismal science” of economics. We are more or less at one with Mr. Micawber, who summed up all fiscal wisdom thus: “Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”1
Though economists pretend to more complications in their calling than this, it all comes down to the same thing: Live within your means or pay the consequences. Thus far, many domestic enterprises which have failed to live within their means, which concocted exotic and opaque financial instruments and bought them with—horrors!—borrowed money, have failed to pay any consequences; however, we Micawber types know those consequences are coming, don’t we?
As we say, the ins and outs of the dismal science are a closed book to us. With a ten trillion dollar national debt, four trillions of which were added by Bush in the largest increase under any U.S. president,2 we suspect much misery lies in wait just over the horizon.
For 32 metropolitan transit agencies, that horizon is now. In a deal too complicated to describe here, but which is admirably explicated in the Tax Foundation’s Fiscal Fact No. 153, Transit Agencies in Bind Due to SILO Deals and AIG Collapse, those agencies—very likely including your bus and subway provider—may be in for many billions in contract termination fees demanded by foreign banks. The perfect storm of economic collapse has rippled across the landscape, with a great deal more damage impending than we are advised of on the nightly news.
The transit agencies have now gone to Congress looking for—what else?—their own bailout.3 They are going to have to stand at the end of a long and very unruly line.
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1 David Copperfield, chapter 12, by Charles Dickens (Accessed November 25, 2008)
2 Bush Administration Adds $4 Trillion to National Debt, by Mark Knoller, from CBS News, September 29, 2008 (Accessed November 25, 2008)
3 Transit Agencies on Capitol Hill to Lobby for Bailout, from Tax Foundation, November 19, 2008 (Accessed November 25, 2008)
All Aboard!
Oct 25, 2008
We know now that in the 1950s, when we started building all those interstate highways, we should have been concentrating on rails, not roads. By 1970, private rail passenger service threw up its hands in despair and was taken over by the government, becoming the National Railroad Passenger Corporation (known to you and me as Amtrak). At the time of takeover, half the passenger service routes were shut down.
Since then, our passenger rail service has been limping along on poor customer relations and deteriorating trains and rail beds, living off government subsidies, and suffering a lot of bad press. But guess what? Amtrak is doing just fine.
In fact, they recently posted their sixth straight year of gains and set a record for passenger trips. And their gains were not limited to popular routes. Every Amtrak train across the country saw increased ridership (over 28.7 million, 11.1 percent more than last year) and revenues ($1.7 billion, a 14.2 percent increase). Their News Release tells a tale of a mass transit system which may yet play an important role in saving us from ourselves. On almost every route, increased ridership numbers have been exceeded by increased revenues, indicating riders are flocking to rail service in spite of higher fares.
This land was made for railroads. And, finally, we seem to know it.
And Miles to Go...
Aug 24, 2008
These guys at Brookings—it’s just think, think, think, with them. Well, I guess that’s what a think tank is for.
Now they’ve come up with an insurance plan called Pay As You Drive. The plan, outlined in a recent report, entitled “The Impact of Pay-As-You-Drive Auto Insurance in California,”—well, that says it all. In California, according to this report, 20 percent of drivers drive 46 percent of the miles driven. Auto insurance costs are basically the same for everyone, with some variation built in for age, driving record, age of vehicle, etc., without any consideration given to miles driven. If we start considering that important variant in the pricing of auto insurance, 64 percent of households in California would have lower premiums. Not only that, but other benefits would accrue as well:
- There would be an 8 percent reduction in driving from light-duty vehicles (the kind you and I drive).
- The social benefits from reduced accidents and congestion would total over $10 billion per year.
- The state of California would save $54 million a year due to reduced medical payments and spending on emergency services.
- The reduced driving could provide 7 to 9 percent of the total CO2 reductions needed to meet California’s targets for 2020.
- Low-income drivers would benefit the most because they tend to drive the fewest miles.
The Brookings solution argues, in effect, that the person who drives 20,000 miles a year is ten times more likely to suffer the risky outcomes of that activity than the person who drives 2,000 miles a year; however, I am not at all sure that is the case. Simple math does not always suffice to gauge or predict human activity. The struggling salesman who puts 100,000 miles on his odometer every year may very well be a great deal more adept at the wheel than the millionaire octogenarian who only drives his Lexus to church every week. The variations built into auto insurance already, and mentioned above—age, past driving record, value of one’s vehicle—are probably by themselves adequate and sufficient criteria for justifying variable rates, and perhaps we only need to tweak those rates some to realize the other beneficial outcomes listed above.
I could be wrong about that. However, this Brookings report contains nothing to convince me of that.
Driven to Despair
Aug 19, 2008
Americans drove nearly 10 billion fewer miles in May 2008 than they did in May 2007.1 We still burned through a goodly pot of nonrenewable energy driving 254.7 billion miles. Let’s see, figuring a generous 20 miles to the gallon, that’s around 13 billion gallons—just in May! Our grandchildren are going to be appalled at our profligacy.
Meanwhile, what should be cause for some celebration has suddenly morphed into an accompanying catastrophe. In an article on Stateline.org, we learn that “States worry about dwindling road funds.” States use funds from gasoline taxes to pay for road, rail, and bridge work, sometimes supplementing those funds with taxes from new car sales. With both driving and new car sales down, their departments of transportation are beginning to feel—in the immortal words of Tom Lehrer—like Christian Scientists with appendicitis. The panic that has set in has reached Congress, where they are trying to grab $8 billion from the General Fund to make up a shortfall in this year’s Highway Trust Fund. Bush, of course, is opposed, as he is opposed to all measures to benefit anyone but America’s wealthiest. Key interest groups, such as the American Association of State Highway and Transportation Officials, say 400,000 jobs could be at stake should funding expected from Washington be delayed.
This “perfect storm” of bad news for the transportation sector strikes me as a golden opportunity. Higher gasoline prices have done what no amount of palaver, handwringing, and fancy think tank reports have been able to accomplish—we’re driving less, carpooling and busing more, and buying smaller, more energy-efficient vehicles. And what’s happened because of that in the last couple of weeks? The price of gas has plummeted. Hip-Hip Hooray! Now let’s keep up the momentum, and raise federal and state gasoline taxes proportionally to a sufficient level to fund our infrastructure maintenance. This will keep the price of gasoline up there around $4 a gallon; people will, at that rate, continue to drive less and make smarter new car purchases; and the price of gasoline may be stabilized—right at that threshold of pain that encourages us to do the right thing.
And out of a perfect storm of bad news comes a bright new day. Whaddaya say, Barack?
Update: We dropped even more miles in June, driving 12.2 billion miles less—a 4.7 percent decline—from June 2007.2
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1Nearly 10 Billion Fewer Miles Driven in May 2008 Than May 2007, U.S. Department of Transportation (Accessed August 12, 2008)
2Fewer Americans hit the road in June, by Martin Zimmerman in the LA Times, August 14, 2008 (Accessed August 14, 2008)
Interstate, Inc.
Aug 11, 2008
We’ve previously noted the ill effects that can arise from letting the private sector intrude on the public infrastructure that delivers and treats our water (see Water, Incorporated). Now comes this Congressional Research Service (CRS) report (RL34567) on “Public-Private Partnerships in Highway and Transit Infrastructure Provision.”
We are moving into Phase II of all those tax cuts we’ve been seeing over the course of the last several administrations. We see now it was all for the purpose of starving government to the point it had to consider introducing the profit motive into areas where the profit motive is inappropriate. Business is a wonderful thing in its place. In a free market where competition is assured, where transactions may occur—or not—between a willing buyer and a willing seller, businesses must be lean and quick, grabbing at opportunities that present themselves and dropping hot potatoes with dispatch. The rough-and-tumble of markets, of buying and selling, of profit and loss, of growth and decline, have no place in the public sector, where products and services essential to a stable social infrastructure must be delivered equally to all, without regard to considerations of supply and demand.
The private sector has one responsibility to its constituents, who are its owner/shareholders and not the public, and that is the maximization of profit before and beyond any other consideration. And that is as it should be. And that is why the private sector must be kept out of the public sector. And that is why only a single-payer, public health care system will ever work—perhaps not as well as we might want it to in our ideal imagination—but far better than it ever could if kept within the private sector, and far, far better than it does now.
And that goes for our roads, our tunnels, our bridges, and our entire transportation infrastructure. Where we have privatized it—in the railroads, in the airways, and in the airwaves—it’s a mess, with no consideration but that of delivering a minimal product at a maximum profit.
Get on the Bus!
Jun 09, 2008
Members of the American Public Transportation Association (APTA) include 1500 public transportation systems that serve more than 90% of those using public transportation in the U.S. and Canada.
APTA reports ridership in public transit systems was up 3.3% in the first quarter of 1998, for a total of 2.6 billion trips, 85 million more than for the same period last year. And that was before gasoline hit $4 a gallon. Wait 'til next quarter!
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