Oil Spill Revisited

The Antiplanner’s previous post about the Gulf oil spill featured a streaming video showing the underwater plume of oil. When I checked it after the post went live, the video showed no oil, so I suggested they had stopped the leak. But that turned out to be optimistic; now the video stream just shows a test screen. (BP has other live feeds if you want to look at one.)

In the meantime, we’ve been treated to hysteria about the spill from all sides. Curiously, most media reports measure the amount of oil released in gallons, when it is conventional to use larger units, such as tons (which are a little over 300 gallons), when describing large amounts. In terms of tons, the spill is in the tens of thousands; in terms of gallons, it is in the millions. Millions sounds bigger, so that is what sensationalists would use. (I suppose they could use ounces.)

The last major spill in the Gulf required 10 months of effort to plug. That was in 1978. I suspect that the current spill attracts more attention because we have better video, and television news today is defined by what they can put on video.

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What a Surprise, Amtrak Lies

The Washington Times has uncovered a nearly decade-old accounting scandal in which Amtrak employees deliberately falsified financial statements to make it appear that the government-owned company was more financially solvent than it really was. The employees were eventually terminated, but not until they had spent $150,000 of taxpayers’ money defending themselves from charges of fraud and misrepresentation.

Amtrak needs work.
Flickr photo by JFeister.

But Amtrak deceptions go back much further than just to 2001, the year in which the fraud was supposed to have taken place. In the 1980s, Graham Claytor — who many rail fans still regard as the best president Amtrak ever had, largely because Claytor had supported passenger trains and steam locomotives when he was president of the Southern Railway in the 1970s — responded to the Reagan White House by repeatedly promising that Amtrak would be able to cover all of its operating expense out of passenger fares.

Almost as soon as Claytor retired, his replacement, Thomas Downs, repudiated those claims and said that Claytor had been misleading people and deferring maintenance to make trains appear more cost effective. Of course, Downs took office when Clinton was president and he probably thought he could get a windfall from a Democratic White House and Congress. By 1995, when Republicans had swept Congress, Downs too began claiming that Amtrak could run without operating subsidies by 2002.
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Don’t Let Your Senator Become a Committee Chair

Members of Congress take it for granted that they can do their states and districts a lot of good by ascending to the chairs of powerful committees. Indeed, a new study from the Harvard Business School finds that states receive 40 to 50 percent earmark spending when a senator from that state becomes chair of a major committee, while the increase for house chairs is about 20 percent.

At the same time, the researchers were surprised to find that a shift in chairs led to a significant decrease in corporate spending within a state. Companies reduced capital investments by 15 percent and also reduced research and development programs. These reductions continue so long as the senator or representative remains chair, and are only partially reversed when the senator or representative resigns. Both large and small firms reduce their spending, though the largest reductions were found in firms that are geographically concentrated (i.e., had a large share of their operations in a single state or district).

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Power for Future Mobility

The tragic explosion that killed 11 people and led to millions of gallons of oil spilling into the Gulf of Mexico has many people, even die-hard auto enthusiasts, arguing that we should undertake a crash program to find alternatives to petroleum to fuel our transportation system. While it is nice to fantasize that some sort of “race-to-the-moon” research program will uncover magically new energy sources and technologies, realistically it isn’t going to happen.

Here is how the world works. You use the cheap resources first. The income you make from using those resources allows you to build up wealth. When resources start getting more expensive, you don’t hardly notice because you are wealthy enough that the higher-cost resources actually require a smaller share of your income than the low-cost resources once did. Eventually, you find new technologies and substitute resources that would have seemed prohibitively expensive when you were starting out, but now their adaptation causes barely a hiccup in the economy.

Oil critics will argue that, when the environmental costs are counted, oil is more expensive than first thought. That may be. But instead of trying to pay those costs from the outset, we first became a wealthy society, thanks in part to cheap oil, and then applied some of that wealth to reducing air pollution and solving other environmental problems. As bad as the Gulf oil spill may be, I suspect BP will eventually cap the well (update: looks like it has already happened) and, no matter how many billions it may cost, largely restore the ecosystems and compensate those who were harmed. This may add a few cents per gallon to the world price for gasoline, but consumers will absorb that just like they absorbed the cost of catalytic converters and other technologies aimed at reducing air pollution.

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The Junk Science of Walkability

Sigh. Another day, another junk science paper from the smart-growth advocates. This time it is a paper titled Walking the Walk, which argues that the fact that housing prices are higher in so-called walkable neighborhoods proves that “consumers and housing markets attach a positive value to living within easy walking distance of shopping, services, schools and parks.”

In fact, all the paper proves is that the person who wrote it doesn’t understand basic economics. The report is junk science because it confuses cost with demand and presumes that correlation equals causation.

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Race to the Top

Sunday’s New York Times Magazine reported on the Obama administration’s Race-to-the-Top education program and how it is subverting the power of the teachers’ unions. The administration would do well to adopt a similar program for transportation in general and transit in particular.

As the late UC economist Charles Lave noted 16 years ago, there was a “large decline in the transit industry’s productivity” after 1964, when Congress began funding transit with federal dollars. Noting that inflation-adjusting operating costs per unit of output had nearly doubled, Lave commented that, “It’s uncommon to find such a rapid productivity decline in any industry.”

Transit productivity has continued to fall since 1985, when Lave’s data ended. According to historic data published by the American Public Transportation Association (APTA), inflation-adjusted operating expenses have grown by 70 percent since 1985, and the number of operating employees has grown by 48 percent, yet transit ridership has grown by only 17 percent. APTA does not report capital costs before 1992, but since that year capital expenses have grown by 131 percent, yet transit ridership (which was actually lower in 1992 than 1985) has grown by only 24 percent.

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FTA Chief Criticizes Rail Transit

In a speech in Boston early this week, FTA Administrator Peter Rogoff sounds like he is channeling Wendell Cox or another of the Antiplanner’s faithful allies.

“Supporters of public transit must be willing to share some simple truths that folks don’t want to hear,” said Rogoff. “One is this — Paint is cheap, rails systems are extremely expensive. Yes, transit riders often want to go by rail. But it turns out you can entice even diehard rail riders onto a bus, if you call it a ‘special’ bus and just paint it a different color than the rest of the fleet.” By coincidence, the Antiplanner made the same point on the same day as Rogoff’s speech.

Rogoff pointed out that America’s transit systems have $78 billion of deferred maintenance, the vast majority of which is for rail lines even though the majority of transit trips are by buses. His point is not simply that we aren’t maintaining rail lines, but that such maintenance is extremely expensive and rail supporters often deceptively ignore such costs when trying to sell new rail lines to the public. “if you can’t afford to operate the system you have,” Rogoff warns urban leaders, “why does it make sense for us to partner in your expansion?”

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Much More Ado about the Suburbs

“White Flight: Suburbs Lose Young Whites to Cities,” proclaims the headlines. While whites are moving to the cities, the suburbs are supposedly turning into slums. Horrors! Sounds like a job for Superbiggovernmentman!

A few decades ago, urban planners knew suburbs were evil because they were enclaves of wealthy whites, while downtrodden poor and minorities were left behind in the cities. But a new report (part one and part two — 8 and 16 MB respectively) from the Brookings Institution’s Metropolitan Policy Program reveals that suburbs today include people of all incomes and all races. Instead of viewing this as a cause for celebration, the report’s writers argue that “National policy makers have the unique obligation” to “manage this change.”

One of the report’s co-authors, William Frey, was quoted by the media saying, “What used to be white flight to the suburbs is turning into ‘bright flight’ to cities that have become magnets for aspiring young adults who see access to knowledge-based jobs, public transportation and a new city ambiance as an attraction.” In fact, there are no data in the report to support the claim that suburbs are “losing” young whites or high-income whites to the cities.

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Chicago Rail Tragedy

A sad story from Illinois: Phil Pagano, the head of Metra, Chicago’s commuter-rail agency, was recently accused of granting himself an unauthorized $56,000 bonus (on top of his regular pay of $270,000) in 2009. The agency initially denied it, but then announced it had suspended Pagano during its investigation, which later revealed that he had written himself forged signatures on checks totaling “about $100,000” (update: now up to $475,000).

In response, a few hours before a planned meeting with the agency’s board of directors, Pagano walked in front of one of his trains and stared into the face of the engineer as it ran him over. In his pocket investigators found “a copy of Metra’s procedures on how to handle a service disruption after a suicide.”

Without making light of this tragic situation, faithful Antiplanner ally Peter Samuel asks a good question: Why do we pay transit agency executives so much money in the first place? Samuel points out that the Illinois Tollway carries ten times as many passenger miles (and infinitely more freight) as Metra, yet the CEO of that agency makes only $189,000 a year.

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Not So Fast for High-Speed Rail

Over most of Obama’s so-called high-speed rail network, the administration proposes to run passenger trains at top speeds of 110 miles per hour on the same tracks as freight trains. But CSX says it will not allow passenger trains to run faster than 90 mph on the same tracks as its freight trains. If the government wants to build new tracks, they must be at least 30 feet from CSX freight tracks.

Since New York, among other states, was counting on using CSX tracks for some of its moderate-speed rail routes, the Empire state has unsuccessfully pressured CSX to change this policy. Last month, the director of the state’s high-speed rail program quit in disgust because she felt other state officials were lying to CSX and not negotiating in good faith.

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