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Monthly Archives: March 2011

Reallocating Florida’s HSR Grant

By | | Transportation
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When Ohio and Wisconsin elected governors who promised to cancel those states’ high-speed rail projects, Secretary of Immobility Ray LaHood redistributed the federal grants to those projects to other states (including $342 million to Florida) before the new governors even took office. Now that Florida has also cancelled its high-speed rail project, LaHood is being a little more careful with where he spends the freed-up dollars.

Instead of arbitrarily handing out the money to other states, the Federal Railroad Administration has announced a new competitive grantmaking process. As faithful Antiplanner ally Wendell Cox writes, the FRA has some very strict requirements in the grants.

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Reining in the Tax-Gobbling Menace

By | | City planning, News commentary
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Rahm Emanuel, the newly elected fiscally conservative mayor of Chicago, wants to “overhaul” that city’s tax-increment financing program, which he says “morphed from a tool for blighted economic communities into an all-purpose vehicle.” TIF was first used in Chicago by Mayor Harold Washington in the 1980s, whose goal was to help blighted neighborhoods.

Critics say that the second Mayor Daley, however, used TIF as a “private slush fund” to reward developers and punish disobedient aldermen. Chicago’s 180 TIF districts cover nearly a third of the city and siphon $500 million a year away from schools and other programs.

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Aid and Comfort to the Enemy

By | | Regional planning
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Later this week, the Antiplanner will review The Triumph of the City, a new book by Harvard economist Edward Glaeser. But because a crucial part of that book is based on a working paper written by Glaeser and UCLA economist Matthew Kahn, I first want to review that paper.

Titled “The Greenness of Cities: Carbon Dioxide Emissions and Urban Development,” the paper attempts to estimate household CO2 emissions from 66 major urban areas. The paper concludes that some urban areas produce substantially less emissions per household and also that suburban emissions are larger than central city emissions, especially in the case of older cities such as New York.

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It’s Still Dead

By | | News commentary, Transportation
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Sometimes I feel like Chevy Chase proclaiming, week after week, that Franco, by which I mean Florida’s high-speed rail, is still dead. Yet people are still trying to revive Florida’s high-speed boondoggle. The latest is a just-released ridership projection showing that the rail line, if built, would earn an operating profit as soon as it opened.

The original projections (see page 9) estimated that the Tampa-to-Orlando train would carry 2.7 million riders in 2015 and 3.2 million in 2020. Based on fares of about $20 a ticket and operating costs of about $50 million a year, the line would initially require an operating subsidy but would cover its operating costs after 2020.

The new projections say the train would carry 3.2 to 3.6 million riders in 2016. That’s enough riders to cover its operating costs right away–assuming the cost and fare projections are correct. The new analysis uses the same costs and fares as the state’s.

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Why Do Reporters Love Trains So Much?

By | | News commentary, Transportation
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As C.P. Zilliacus noted in one of his comments yesterday, Slate published an article subtitled, Why Do Conservatives Hate Trains So Much?. The writer, David Weigel, covered most of the bases, but a couple of clarifications are in order.

First but not foremost, Weigel seems to confuse passengers with passenger miles when he writes, “Amtrak got $2.2 billion in pure subsidies in 2010 and carried 28.7 million people, for around 13 cents per passenger, although some researchers estimate the annual cost at closer to 30 cents. Highways got $42 billion in funds in fiscal year 2010, but far more people use them; the estimate puts cost at between 1 cent and 4 cents per driver.”

I told him that Amtrak subsidies are nearly 30 cents per passenger mile (not per passenger), and road subsidies are about a penny a passenger mile (not per driver). Even his arithmetic is wrong: $2.2 billion in subsidies divided by 28.7 million passengers is $76 per passenger, not 13 cents. I’m not even sure where he got the $2.2 billion in subsidies; I think it was closer to $1.7 billion in 2009. Maybe this is one reason why reporters like trains so much: they can’t do the arithmetic.

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The Chinese Have a Phrase for It

By | | News commentary, Transportation
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A new trend in Chinese is to turn an active verb into a passive verb–usually with a sinister context–by prefixing the character “bei” (pronounced “bay”). For example, bloggers who have been censored will say they’ve been bei huh-shyeh, or “harmonized”–a reference to the Chinese government’s efforts to create a “harmonious society.” This new, and formerly ungrammatical, usage of bei has become so popular that Chinese education ministry declared bei to be the “character of the year” for 209.

One frequent use of this character is to combine it with Gao Tie, which means high-speed train (literally, “fast iron”). Bei GaoTie means high-speed railroaded, or “being forced to take expensive high-speed trains” because conventional (and affordable) service is not available. High-speed train fares are typically three times as much as conventional fares, but with high-speed trains taking some of the business of conventional trains, conventional train service is often reduced.

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Antiplanner’s Library: Too Big to Fail

By | | Book reviews, Meltdown
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The Antiplanner finished reading Too Big to Fail, a 539-page tome describing the events of the financial crisis from the Bear Stearns collapse in March, 2008 to the Treasury’s forced purchase of billions of dollars worth of shares in nine major banks in October, 2008. New York Times reporter Sorkin says the book is based on “more than five hundred hours of interviews with more than two hundred individuals who participated directly in the events surrounding the financial crisis.”

With the exception of an eleven-page epilogue, the author makes no apparent attempt to interject his own opinions about what happened. As such, the book represents the best and worst of modern journalism: the best because it appears to be a frank recitation of events on Wall Street, in the Fed, and the U.S. Treasury; and the worst because the accuracy of that recitation depends on who the author interviewed (whose names he doesn’t specifically reveal).

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Selling off Assets

By | | Meltdown, Public lands
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Back in 1993, the Antiplanner wrote a report titled Pork Barrel and the Environment warning environmentalists that the federal government could not sustain its current expenditures through 2020. Those who cared about public lands such as national forests and national parks, the Antiplanner advised, should work to fund those land entirely out of user fees, else someone else would soon propose to simply sell them.

Now, economist Niall Ferguson, writing in Newsweek, makes the case for selling most public lands as well as other federal assets. Ferguson observes that most of the debate over federal finances focuses on either raising taxes or reducing spending. He suggests that selling federal assets represents a third option.

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LaHood: Amtrak Makes Money

By | | News commentary, Transportation
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Speaking in Indiana last week, Secretary of Immobility Ray LaHood said Amtrak’s success shows that American should build high-speed rail. “Amtrak is doing very well,” claimed LaHood. “They’re making money, that wasn’t true a few years ago.”

This led BoydGroup, an aviation consulting firm, to say, “This guy is lost in space.” BoydGroup points out that Amtrak lost $1.4 billion in 2010, which is actually underreported because Amtrak counts state subsidies as “revenues.”

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Is Gov. Walker Selling Out Taxpayers?

By | | News commentary
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Wisconsin’s Governor Walker is losing the public-relations battle to the public-employee unions whose power he is challenging. Whenever I see this issue discussed on the news, people on Walker’s side are quoted saying the state has to cut costs or it will go broke, while people on the unions’ side say they are willing to make salary and pension concessions, they just don’t want to lose the right to collective bargaining. To the average American, Walker is a meanie trying to deny downtrodden public employees their rights.

There is a very good reason why public employees should not have the right to collective bargaining. In the private sector, companies may consist of thousands of stockholders and thousands of workers. It is obviously impossible for each stockholder to bargain with each worker. The stockholders hire managers to represent their interests, so it seems only fair that workers have unions to represent their interests. Both sides can bargain effectively based on their conflicting interest (each wants as big a share of the revenues as possible) and shared interest (each wants the company to continue).

This symmetry doesn’t exist in the public sector. On one side are the taxpayers whose money pays public employees, while on the other side are the employees. But elected or appointed officials who would bargain on behalf of the state don’t represent taxpayers; they represent voters. And if a large segment of those voters are public employees, and if their unions make large contributions to political campaigns, then the state officials are likely to make concessions that taxpayers won’t want or can’t afford to pay.

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