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Category Archives: News commentary

Throwing Good Money After Bad

By | | City planning, News commentary, Planning Disasters, Transportation
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TriMet, Portland’s transit agency, is planning to spend $7 million upgrading the 24-year-old Rockwood station in the city of Gresham, Portland’s largest suburb. TriMet officials hope the improvements will “leverage investment in transit into nearby development opportunities” in that neighborhood. Fat chance, especially since it was the light rail that killed the neighborhood in the first place.

The Rockwood Fred Meyer in 2000. Note the light-rail train in the background.

For 45 years, the center of the Rockwood neighborhood was a Fred Meyer store, a “supercenter” selling groceries, clothing, variety, and hardware. Fred Meyer also leased storefronts to other businesses such as coffee shops and locksmiths. When Fred Meyer spent $400,000 remodeling the store after TriMet opened the light-rail line in 1986, TriMet triumphantly counted it as an investment inspired by the light rail. Never mind the fact that Fred Meyer bragged on its web site that it had remodeled all of its 130 stores at about the same time.

The truth was, things were not going well at the Rockwood store. In January 2003, Fred Meyer shocked the neighborhood by closing it even though it was obligated to pay a lease on the site for another 10 years. The store “was in decline for a number of years,” a Fred Meyer official told the Oregonian (article available to those with access to Infoweb). “It was in a decline before the last remodel.” This was the only time in the chain’s history that it closed a store without immediately reopening a replacement nearby.

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Florida vs. Klein

By | | News commentary, Planning Disasters
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Is it ironic, or just self-serving, that Richard Florida, the man who urged cities to attract the so-called creative class with policies that made housing unaffordable, now writes a Wall Street Journal article (link to full article for non-subscribers) arguing that “homeownership is overrated”? Pay no attention to the facts behind the curtain, which are that growth-management policies encouraged by Florida’s ideas created an affordability crisis, which led policymakers in Washington to pressure lenders to loosen mortgage criteria so people could buy overpriced homes, and that growth-management also made prices more volatile so that eventually a large share of American homeowners would be underwater.

Florida can get away with his brazen approach because most of his followers don’t understand economics well enough to follow the above train of logic. As George Mason University economist Dan Klein points out in the very next day’s WSJ, when asked if “restrictions on housing development make housing less affordable,” 60 to 70 percent of liberals and progressives incorrectly answer “no.” By comparison, only 16 percent of libertarians and less than 23 percent of conservatives said “no.”
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This raises some interesting questions. Does economic ignorance lead people to lean left? Or do progressives cultivate economic ignorance? Klein doesn’t speculate about the answer. However, I suspect that some people find economics to be more intuitive than others, and those who don’t easily understand it are more likely to be attracted by flim-flam artists such as Richard Florida.

FTA Wants Your Comments

By | | Follow up, News commentary, Transportation
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Last January, Transportation Secretary Ray LaHood announced that he was replacing rules that required that federal transit grants had to be “cost effective” with rules promoting “livability.” Yesterday, the Federal Transit Administration asked for your comments on this proposal.

The FTA doesn’t have new rules yet; it just wants to know what you think of the idea. Considering that the head of the FTA has revealed that he is skeptical of expensive rail projects, especially when cities can’t afford to maintain and operate the systems they have, they might genuinely be interested in some new ideas. After all, how livable can a city be where lots of people have given up their cars for transit only to find that the transit agency has stopped running for lack of funds?

Speaking of costly transit, the Tennessee Center for Policy Research has just published a new paper on the cost of transit in that state. The paper also shows how Tennessee transit systems use more energy and emit more greenhouse gases, per passenger mile, than cars or even SUVs. The only really efficient transit system, the paper shows, is vanpooling, which is the closest thing most transit agencies have to actual automobiles.

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Oil Spill Revisited

By | | News commentary
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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

By | | News commentary, Transportation
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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

By | | News commentary
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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

By | | News commentary, Transportation
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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

By | | City planning, News commentary
38 Comments

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

By | | News commentary, Transportation
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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

By | | News commentary, Transportation
18 Comments

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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