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Seven to Become Six

By | | News commentary, Transportation
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There was a time when every region and almost every major city in the country was served by at least three major railroads. The Northeast had Erie, Lackawanna, New York Central, and Pennsylvania, among others. The Southeast had Atlantic Coast Line, Seaboard, and Southern. The Midwest had the Burlington, Chicago & North Western, Milwaukee, and Rock Island. The Northwest had the Great Northern, Milwaukee Road, and Northern Pacific. The Southwest had Santa Fe, Southern Pacific, and Union Pacific.

Canadian Pacific and Kansas City Southern meet at only one point, so a merger between them preserves competition. Kansas City Southern photo.

Then came the merger movements of the 1960s, 1970s, and 1980s, and now we are down to just seven class 1 railroads: two in the East, two in the West, two in Canada making various incursions into the United States, and Kansas City Southern, which connects Missouri with Texas, Louisiana, Mississippi, and Mexico. Continue reading →

The Fix Was In

By | | News commentary
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It cannot have escaped everyone’s notice that 17 Republican senators had agreed to support the infrastructure bill that the senate passed yesterday — enough to prevent a filibuster. A former senate staffer once told me that the fix was always in for senate votes: the leadership would decide what to do and then twist enough arms to make it happen.

So what was in it for the Republican leadership to support this bill? The bill included billions of dollars for projects we don’t need, like rural broadband, urban transit, and new Amtrak trains. Some Republicans may benefit from the pork, but I wonder if the leadership thought that going along with this bill will help them to fend off the $3.5 trillion bill the Democrats want to pass next.

That bill includes money for clean energy, preschool, and affordable housing, among other things. As with the infrastructure bill, these things are arguably not necessary or, to the extent they are, the top-down approach taken by the bill will do more harm than good. For example, we know the reason housing is unaffordable in many states is because state and local land-use rules of restricted the supply of land for new housing, but the bill will do nothing about those rules. Continue reading →

House Passes Spending Bill

By | | News commentary, Transportation
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The House of Representatives passed a transportation reauthorization bill called the INVEST Act, but it really should be called the SPEND Act. Spending money is only an investment if the spender expects to get something in return for the cost, and much of the money in the INVEST Act will produce no real returns.

The bill, which has yet to be approved by the Senate, represents the normal reauthorization of the Highway Trust Fund, meaning federal spending on highways and transit, which happens about every six years. Normally this mainly deals with how the gas taxes and other federal highway user fees are spent. But this year, the House has gone overboard, agreeing to spend $715 billion over five years, which more than twice as much money as the Highway Trust Fund is likely to collect.

Admittedly, part of that $715 billion includes $168 billion for water infrastructure, which has never previously been a part of a transportation reauthorization bill. It also includes $95 billion for Amtrak, which is also not from the Highway Trust Fund. Spending on highways and transit would total to $452 billion, which is still more than twice as much as is likely to be collected in highway user fees. The federal government collected less than $45 billion in user fees in 2019 and, since collections in 2020 and 2021 will be smaller, total revenues are likely to be less than $220 billion over the five years of the bill. Continue reading →

Push-Back Against Working at Home?

By | | News commentary, Transportation
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The share of “knowledge workers” who will continue to work at home after the pandemic is likely to double from before the pandemic, according to a new study from the Gartner management-consulting firm. If that can be scaled up to all workers, that means the share of people working at home is likely to go from about 6 percent in 2019 to 12 percent in 2022.

Home office photo by Jeremy Levine.

I suspect it will be even more. So-called knowledge workers were already more likely to work at home than people in other professions, and I suspect the telecommute shares of some of those other professions are likely to grow more. Another recent survey, for example, found that a full 25 percent of New Jersey workers are likely to continue working at home after 2021. Continue reading →

Oregon’s Mileage-Based Fee Program

By | | News commentary, Transportation
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CBS News reports on Oregon’s mileage-based user fee program, noting there is both support and opposition to the program. However, reporter Brook Silva-Braga notes that, not only that gas taxes aren’t working anymore, but that mileage-based fees can help relieve congestion.

Silva-Braka found someone who argued that charging user fees would hurt low-income people. But it would be better for low-income people to pay for what they use than to pay regressive taxes that often end up supporting programs used mainly by higher-income people. Continue reading →

The Politics of Working at Home

By | | News commentary
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JPMorgan, the nation’s largest bank, has said it will require employees to return to offices rather than continue working at home after the pandemic. Apple Computer has asked its corporate headquarter employees to return at least three days a week starting in September.

Office workers aren’t all happy with this. Apple employees, for example, have protested the new policy and stated that some have already quit their jobs. On a larger scale, the Bureau of Labor Statistics reports that record numbers of people are resigning from their jobs, some out of fatigue as the pandemic is winding down but some because they are happy working at home and don’t want to be ordered to go back to an office.

“Humans have a fundamental need for autonomy,” observes Texas A&M Business Management professor Anthony Klotz, who specializes in employee and organizational behavior. He predicts there will be a “great resignation” in the next few months. Managers who insist that employees return to the pre-pandemic methods of working, he adds, are guilty of “lazy management.” Continue reading →

How Many Trillions to Waste?

By | | News commentary, Transportation
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President Biden wanted to spend $2.25 trillion we don’t have on projects we don’t need. Republicans countered by saying they weren’t willing to spend more than $568 billion we don’t have on projects we don’t need. President Biden, desiring to show he was willing to compromise, offered to spend $1.7 trillion we don’t have on projects we don’t need.

Now the latest is that Republicans have agreed to spend “close to $1 trillion” we don’t have on projects we don’t need. Whereas Biden hinted that he would agree to raising taxes on corporations and people who earn more than $400,000 a year to pay for part of his plan, a key provision of the Republican proposal is that taxes won’t be raised on anyone to pay for it, thus absolutely ensuring we won’t have the money to pay for their infrastructure projects we don’t need.

It is easy to say that this is just politics, but I can’t help but feeling that everyone inside the Beltway has gone nuts. As I noted earlier this week, Democrats have successfully moved the goal posts so far out that Republicans think that spending nearly $1 trillion in funny money is a fiscally conservative proposal. Continue reading →

Dems Successfully Moved the Goal Posts

By | | News commentary, Transportation
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At first glance, a proposed $400 billion transportation bill from House Republicans appears to be more reasonable than President Biden’s $2.3 trillion infrastructure bill or even Senate Republicans’ $568 billion alternative infrastructure plan. In fact, the latter two plans are supposed to be on top of Congress’ periodic reauthorization of routine highway and transit spending, while the House Republican plan is supposed to be for that reauthorization.

As such, the Republican plan represents such a massive increase in spending over previous years that it is almost as if it was written by the Democrats. The 2015 “FAST Act” spent $305 billion over five years, or $61 billion a year. That in itself was too much because the Highway Trust Fund collected less than $212 billion in highway user fees during those five years, so an additional $93 billion came out of deficit spending.

Considering the pandemic, revenues over the next five years aren’t likely to be much greater. Yet House Democrats proposed last year to spend $495 billion over five years, a huge increase that would require a tripling of deficit spending over the previous five years. The Republican response is a $400 billion bill, which is still a doubling of deficit spending. Instead of being ashamed of this, Republicans bragged that they are proposing “the largest percentage increase for surface transportation programs in the last quarter-century.” Continue reading →

Who Lives in Rural Areas?

By | | News commentary
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One of the provisions of President Biden’s American Jobs Plan is to spend $100 billion bringing broadband internet services to “more than 30 million Americans” who live in rural “areas where there is no broadband infrastructure that provides minimally acceptable speeds.” That’s $3,333 per person or about $8,800 per household.

Rural home in desperate need of high-speed internet.

Who are these people who deserve such a big subsidy? Well, I’m one of them. Here in rural central Oregon, we have DSL speeds that are barely faster than dial-up. The alternative is satellite, which is pretty fast but I don’t like the idea of paying by the gigabyte. That’s just me; some of my neighbors have it and it works pretty well for them. Satellite is available everywhere, so it’s not like any rural Americans are physically deprived from broadband. Continue reading →

The Biden Pork-Barrel Plan

By | | News commentary
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President Biden’s proposed infrastructure plan includes $621 billion for transportation. It would spend $115 billion on accelerated road and bridge repairs, $20 billion for “vision zero” and other anti-auto programs, $85 billion for mass transit, and $80 billion for Amtrak’s backlog and expansion of Amtrak service. It also would spend $174 billion supporting electric vehicle manufacturers, $25 billion on airports, and $17 billion on inland waterways. That’s $104 billion short of $621 billion, but the White House press release doesn’t say where that $104 billion will go.

Non-transportation items in the plan include $111 billion on safe drinking water, $100 billion for high-speed internet service, $100 billion on the electrical transmission system, $10 billion on a Civilian Climate Corps, $213 billion on housing, including retrofitting homes to save energy, $100 billion on new schools, $18 billion on new veteran’s hospitals, $10 billion modernizing federal buildings in Washington DC, $400 billion on care for the elderly and disabled, $180 billion on research, $300 billion on manufacturing and small businesses, and $100 billion on workforce development. News reports call this a $2 trillion plan but by my count it adds up to at least $2.26 trillion.

Instead of calling this an infrastructure plan, the White House calls it “the American Jobs Plan.” This is ironic because the only reason why most unemployed people don’t have jobs today is the lockdowns enforced by mostly Democratic governors. End the lockdowns and there won’t be many unemployed people to take the jobs created by the Biden plan. Continue reading →