I don't have much hope for Amtrak.
Before you all get in my face about not supporting Passenger Rail, let me add this: I never had much hope for Amtrak.
So things haven't changed. The fact that Amtrak has managed to struggle into its fifth decade proves that I am just a little bit wrong, and also a little bit right. For any government-created entity to struggle that long while coping with the daily - and I do mean daily - political battles is a massively high-scoring achievement. Then there are the idiots that run Amtrak.
No, I'm not talking about Amtrak's board, or its management! I'm talking about Congress and We The People. Come on folks! Is this how you'd run a business if it was all your own to run?
There have been times when my hope for Amtrak flickers brighter than now. And there have been times when I thought it was doomsday for sure. The Reagan administration was one of the latter. While I admire Reagan conservatism, I deplore the tendency of conservatives to look at every government subsidy as anathema. Reagan scared me as far as Passenger Rail was concerned. He had the guts and the wherewithal and the character to accomplish whatever he wanted. Subsidizing Amtrak wasn't one of those "whatevers."
But I have never felt so hopeless as today, when it appears that the lip-service to HSR has all been paid out and the next Congress will most certainly cut Amtrak money again, and when there's (sometimes reasoned sometimes not) argument that Amtrak should be broken up and the profitable parts kept and sold to the highest bidder. (Read "profitable" as not losing as much money as the other parts.)
Don't get me wrong, because I do realize I'm all over the map here. It would have made a lot more sense to break up Amtrak during boom times rather than on the (very slow) recovery side - and I'm not convinced of that yet - of a major economic recession.
But it's not all gloom. No matter how dark the days, Amtrak always seems to survive. And as long as there are tracks, there will be other - I hope better - Passenger Rail projects out there. If I had the money, (I don't - the recession has crapped on my finances) I would invest in Passenger Rail, but probably not in any part of Amtrak as it exists today.
So I guess I should have opened with: I have hope, but not much for Amtrak.
©2012 - C. A. Turek - mistertrains@gmail.com
Saturday, January 21, 2012
Thursday, December 15, 2011
The Devil Is In The Details
One of the biggest problems with any kind of changes (whether upgrades, downgrades, or innovations) in our Passenger Rail system - we're talking North America here - is the complexity of our system. I'm not talking about the rail network, nor am I talking about engineering. I'm talking about all of the ways that we go about financing and managing passenger rail.
For most of you who are interested in this subject, it's not necessary to go through a comprehensive list. Let me just list a few.
1. Private enterprise and private enterprise with public funding. Example: ARR
2. Public funding, public oversight, private operators. Narrow gauge in the west, NM Railrunner
3. Public funding, public oversight, public operators. Chicago Metra
4. Public funding, state ownership, private operator. California
The list goes on.
The point that I'm getting around to making is that entrenched complexity is hard to overcome. There is an inertia to it.
Now, life must go on, and it would be a disaster to shut down, say, a commuter railroad, even for a week, to reorganize it. So how do we get from where we are to where we need to be?
One idea is a reset button. It's not as far fetched as you think, and it's been proposed for more than just passenger rail. A reset button law could solve a mortgage crisis, for instance. A reset button law could erase the political establishment that some blame for the decline of America. A reset button law could erase years of bad law and the results of unnecessary litigation that imposes costs on everything we do.
The trouble is, first we have to decide on what the default state of things should be. Now, in government in The United State of America, we have The Constitution. That's the default state, and everything else in government is window dressing.
Back to Passenger Rail. Default state could be defined as X number of routes serving Y number of population centers with a total population of Z, a defined train frequency, and defined services. What does it take to have that, and would any private enterprise be willing to run it? On a specific date, press the reset button and Amtrak goes away. There's more to it than that, of course, but you get the idea.
This is not a new idea. In the Judeo-Christian Bible, Deuteronomy prescribes the seven-year cycle of forgiveness and even the "default state" in which the debtor is to begin the next cycle.
Just thinking, but the devil is in the details.
©2011 - C. A. Turek - mistertrains@gmail.com
For most of you who are interested in this subject, it's not necessary to go through a comprehensive list. Let me just list a few.
1. Private enterprise and private enterprise with public funding. Example: ARR
2. Public funding, public oversight, private operators. Narrow gauge in the west, NM Railrunner
3. Public funding, public oversight, public operators. Chicago Metra
4. Public funding, state ownership, private operator. California
The list goes on.
The point that I'm getting around to making is that entrenched complexity is hard to overcome. There is an inertia to it.
Now, life must go on, and it would be a disaster to shut down, say, a commuter railroad, even for a week, to reorganize it. So how do we get from where we are to where we need to be?
One idea is a reset button. It's not as far fetched as you think, and it's been proposed for more than just passenger rail. A reset button law could solve a mortgage crisis, for instance. A reset button law could erase the political establishment that some blame for the decline of America. A reset button law could erase years of bad law and the results of unnecessary litigation that imposes costs on everything we do.
The trouble is, first we have to decide on what the default state of things should be. Now, in government in The United State of America, we have The Constitution. That's the default state, and everything else in government is window dressing.
Back to Passenger Rail. Default state could be defined as X number of routes serving Y number of population centers with a total population of Z, a defined train frequency, and defined services. What does it take to have that, and would any private enterprise be willing to run it? On a specific date, press the reset button and Amtrak goes away. There's more to it than that, of course, but you get the idea.
This is not a new idea. In the Judeo-Christian Bible, Deuteronomy prescribes the seven-year cycle of forgiveness and even the "default state" in which the debtor is to begin the next cycle.
Just thinking, but the devil is in the details.
©2011 - C. A. Turek - mistertrains@gmail.com
Friday, November 25, 2011
Serious Business - Proposition 5
The longer we wait, the longer it will take to get things right. Am I talking about Passenger Rail? You bet!
As I write this, Amtrak is probably going to finish the year with its first reduction in ridership in a long time. That is in part due to the weather. No joke, it's not the fault of a politician or bureaucrat. It's also in part because Amtrak, like other railroads, has to take time out to upgrade and maintain. Upgrades will help in the long run, but not in the short. The reason is that there simply are no alternate routes for Amtrak trains. Some have to be shut down, others converted to bus routes until the trackwork or storm cleanup is done.
The United States no longer has enough alternate rail routes to just re-route a passenger train without having serious impact on freight deliveries. Those spare routes that are out there are just too unsafe to run an Amtrak train. For the first time in history, freight rail is challenging the laws that established Amtrak and Amtrak's right to use their private rail systems. I don't know if they will succeed, because many politicians with demagogue it and point to the fat-cat railroads as just bad public-private partners.
I dislike this description of how government wants to involve private enterprise in something it can't get right on its own. I have used the term, but it's like the term privatize. It's a bad way to characterize a situation where the credit goes to the government and anything bad is the fault of the private part of the equation. When you come down to it, all industry is a public-private partnership. But the public part of the partnership should only have three jobs: 1. Provide protection of individual property rights though a stable system of government and national defense where business can be assured that it's ownership of property will not be challenged or usurped by the government or challenged by an enemy. 2. Provide a stable economy and monetary system where commerce can proceed without fear that the government will, by caprice, devalue investments made by private parties who expect a reasonable return on their investments. 3. Where an industry is deemed a necessity to maintaining the other two situations, provide the monetary means to assure that the private side will not have to take all the risk to keep the government stable.
So we need more passenger route miles, and we need them right away, or Amtrak will just erode more. If these route miles come from private investment, then, as in 3. above, the government should be willing to step in and provide some capital. However, as I have said before, it shouldn't be off the table to just dissolve Amtrak and structure something else - something better. Amtrak, after all, has pissed off enough commuter agencies that is is losing their contracts to private enterprise. That is good, because the competitors for those operating contracts are private enterprise.
Where is the money for that federal funding going to come from? From all of us. But there are other ways than through taxes. Deregulation of industry could raise almost as much tax money as would significant increases in taxes on high income entities. Deregulation of freight rail has turned it into an industrial powerhouse.
Again, I ask the question. Do we have the political will?
©2011 - C. A. Turek - mistertrains@gmail.com
As I write this, Amtrak is probably going to finish the year with its first reduction in ridership in a long time. That is in part due to the weather. No joke, it's not the fault of a politician or bureaucrat. It's also in part because Amtrak, like other railroads, has to take time out to upgrade and maintain. Upgrades will help in the long run, but not in the short. The reason is that there simply are no alternate routes for Amtrak trains. Some have to be shut down, others converted to bus routes until the trackwork or storm cleanup is done.
The United States no longer has enough alternate rail routes to just re-route a passenger train without having serious impact on freight deliveries. Those spare routes that are out there are just too unsafe to run an Amtrak train. For the first time in history, freight rail is challenging the laws that established Amtrak and Amtrak's right to use their private rail systems. I don't know if they will succeed, because many politicians with demagogue it and point to the fat-cat railroads as just bad public-private partners.
I dislike this description of how government wants to involve private enterprise in something it can't get right on its own. I have used the term, but it's like the term privatize. It's a bad way to characterize a situation where the credit goes to the government and anything bad is the fault of the private part of the equation. When you come down to it, all industry is a public-private partnership. But the public part of the partnership should only have three jobs: 1. Provide protection of individual property rights though a stable system of government and national defense where business can be assured that it's ownership of property will not be challenged or usurped by the government or challenged by an enemy. 2. Provide a stable economy and monetary system where commerce can proceed without fear that the government will, by caprice, devalue investments made by private parties who expect a reasonable return on their investments. 3. Where an industry is deemed a necessity to maintaining the other two situations, provide the monetary means to assure that the private side will not have to take all the risk to keep the government stable.
So we need more passenger route miles, and we need them right away, or Amtrak will just erode more. If these route miles come from private investment, then, as in 3. above, the government should be willing to step in and provide some capital. However, as I have said before, it shouldn't be off the table to just dissolve Amtrak and structure something else - something better. Amtrak, after all, has pissed off enough commuter agencies that is is losing their contracts to private enterprise. That is good, because the competitors for those operating contracts are private enterprise.
Where is the money for that federal funding going to come from? From all of us. But there are other ways than through taxes. Deregulation of industry could raise almost as much tax money as would significant increases in taxes on high income entities. Deregulation of freight rail has turned it into an industrial powerhouse.
Again, I ask the question. Do we have the political will?
©2011 - C. A. Turek - mistertrains@gmail.com
Sunday, October 23, 2011
Serious Business - Proposition 4
This is the fourth in a series of blog posts about how America might go about getting private enterprise back in the Passenger Rail business.
Proposition 4 is that bankers and venture capitalists are going to have to be willing to take more risk with less guarantee that government will back them up.
Hold on, you say? This is supposed to be a blog about Passenger Rail and not about the sorry state of the banking system. Well, the two overlap.
Proposition 4 probably applies to a lot of businesses, particularly heavy industries and heavily capitalized ones. Railroading is both. America has gotten itself bunged up in an economic situation that has no way out without risk. And this risk is going to have to be on the part of private enterprise and government both. As a country, we have to be willing to believe that government bailouts of businesses -particularly financial ones - simply postpones the inevitable, and that the term "too big to fail" should not be a part of our vocabulary.
Now, from my point of view, government regulation and public policy drove the financial industry to ruin when institutions were forced to lend money to home buyers who had no hope of paying it back. This house of cards had to fall. No, I don't care who's to blame, but I do care who's to blame for our current situation. Now we have a situation where the lending institutions are gun shy, and the government has just slapped on more regulations. This is probably good for the single-family home market. It will keep home prices reasonable for years. But it's not good for the business community, and not for heavy industry. Heavy industry runs on capital. If the capital is not out there, heavy industry does nothing but stagnate.
I think Passenger Rail could return to the private sector if lending institutions were willing to forgo the promise of government bailout along with the regulations that come with it. I think that, as time goes on, institutions with money to lend will see the upturn in demand for Passenger Rail, the astute management of the rail industry in general, and with God's grace the lifting of onerous regulation, and then see in Passenger Rail an opportunity to make a lot of money. This will do a lot for the country and a lot to lift Passenger Rail out of the doldrums of Amtrak.
The only question is: Do we have the political will to accomplish this?
By next time, I'll decide if there is a Proposition 5.
© 2011 - C. A. Turek - mistertrains@gmail.com
Proposition 4 is that bankers and venture capitalists are going to have to be willing to take more risk with less guarantee that government will back them up.
Hold on, you say? This is supposed to be a blog about Passenger Rail and not about the sorry state of the banking system. Well, the two overlap.
Proposition 4 probably applies to a lot of businesses, particularly heavy industries and heavily capitalized ones. Railroading is both. America has gotten itself bunged up in an economic situation that has no way out without risk. And this risk is going to have to be on the part of private enterprise and government both. As a country, we have to be willing to believe that government bailouts of businesses -particularly financial ones - simply postpones the inevitable, and that the term "too big to fail" should not be a part of our vocabulary.
Now, from my point of view, government regulation and public policy drove the financial industry to ruin when institutions were forced to lend money to home buyers who had no hope of paying it back. This house of cards had to fall. No, I don't care who's to blame, but I do care who's to blame for our current situation. Now we have a situation where the lending institutions are gun shy, and the government has just slapped on more regulations. This is probably good for the single-family home market. It will keep home prices reasonable for years. But it's not good for the business community, and not for heavy industry. Heavy industry runs on capital. If the capital is not out there, heavy industry does nothing but stagnate.
I think Passenger Rail could return to the private sector if lending institutions were willing to forgo the promise of government bailout along with the regulations that come with it. I think that, as time goes on, institutions with money to lend will see the upturn in demand for Passenger Rail, the astute management of the rail industry in general, and with God's grace the lifting of onerous regulation, and then see in Passenger Rail an opportunity to make a lot of money. This will do a lot for the country and a lot to lift Passenger Rail out of the doldrums of Amtrak.
The only question is: Do we have the political will to accomplish this?
By next time, I'll decide if there is a Proposition 5.
© 2011 - C. A. Turek - mistertrains@gmail.com
Sunday, October 09, 2011
Serious Business - Proposition 3
So far, I have suggested two propositions regarding a new direction for intercity Passenger Rail in America.
The first was that the freight railroads could absorb some of the losses it may take to get passenger service re-integrated with the rail system in general. I think this is true, but only under certain conditions.
The second was that freight railroads do not have handling passengers in their business plans, which, I think, is false for the reasons stated. (Go back and read!)
Proposition 3 is that freight rail will want some serious concessions from government in order to re-assume the burden of moving passengers in any form greater than their lackadaisical handling of Amtrak. I think this is true, but I don't think these concessions will have to be as costly as one might think.
Go back to the airport/airway model again. Making railroads copy this model wholesale is just not a good idea. The railroad business has too much capital tied up in land, track, and other infrastructure. This wouldn't be a concession to a profitable private enterprise, but a wholesale nationalization. But I think freight railroads, the profitable ones that have experience in leveraging real estate to their advantage, would listen if government was ready to provide the land and pave the way for new kinds of passenger terminals.
Didn't railroads used to lose money on terminal operations before? Why would they want to go back there? These questions do not jive with historical perspective. Railroads lost money on passenger services for many reasons, the chief among them being loss of revenue to cheaper and faster modes of transportation. But hear me out.
I don't have a crystal ball, but I don't see anyone saying that air travel is going to get cheaper or easier. I don't see anyone saying that highway congestion is going to go away, or that trucks are going to stop using the Interstates altogether. I don't see any competition on the horizon for moderately fast, comfortable and efficient Passenger Rail. Terminal services, from large stations to small, could be where the already well established sales departments of freight railroads could shine. I'm not talking about service from the 1930s to the 1960s, but the kind of amenities that could be provided today. Luxury hotels, amusement, shopping, short-term layover facilities, casinos, tours, and things that haven't been created yet, all integrated to a much greater degree than possible before our digitally connected era.
I think there are freight rail companies that would be willing to get things like this going for passenger rail, and make them profitable, given just the minor subsidy of real estate to build on, and the minor guarantee from government that the tax structure and regulations for this form of transport would remain predictable and stable for the better part of a half century. Railroads aren't the staid old corporations run by grandfatherly old men that many people think of when they think of railroads. In the new era, the average railroad executive is going to be just as connected as the rest of us. And maybe just as creative.
Next time, Proposition 4.
©2011 - C. A. Turek - mistertrains@gmail.com
The first was that the freight railroads could absorb some of the losses it may take to get passenger service re-integrated with the rail system in general. I think this is true, but only under certain conditions.
The second was that freight railroads do not have handling passengers in their business plans, which, I think, is false for the reasons stated. (Go back and read!)
Proposition 3 is that freight rail will want some serious concessions from government in order to re-assume the burden of moving passengers in any form greater than their lackadaisical handling of Amtrak. I think this is true, but I don't think these concessions will have to be as costly as one might think.
Go back to the airport/airway model again. Making railroads copy this model wholesale is just not a good idea. The railroad business has too much capital tied up in land, track, and other infrastructure. This wouldn't be a concession to a profitable private enterprise, but a wholesale nationalization. But I think freight railroads, the profitable ones that have experience in leveraging real estate to their advantage, would listen if government was ready to provide the land and pave the way for new kinds of passenger terminals.
Didn't railroads used to lose money on terminal operations before? Why would they want to go back there? These questions do not jive with historical perspective. Railroads lost money on passenger services for many reasons, the chief among them being loss of revenue to cheaper and faster modes of transportation. But hear me out.
I don't have a crystal ball, but I don't see anyone saying that air travel is going to get cheaper or easier. I don't see anyone saying that highway congestion is going to go away, or that trucks are going to stop using the Interstates altogether. I don't see any competition on the horizon for moderately fast, comfortable and efficient Passenger Rail. Terminal services, from large stations to small, could be where the already well established sales departments of freight railroads could shine. I'm not talking about service from the 1930s to the 1960s, but the kind of amenities that could be provided today. Luxury hotels, amusement, shopping, short-term layover facilities, casinos, tours, and things that haven't been created yet, all integrated to a much greater degree than possible before our digitally connected era.
I think there are freight rail companies that would be willing to get things like this going for passenger rail, and make them profitable, given just the minor subsidy of real estate to build on, and the minor guarantee from government that the tax structure and regulations for this form of transport would remain predictable and stable for the better part of a half century. Railroads aren't the staid old corporations run by grandfatherly old men that many people think of when they think of railroads. In the new era, the average railroad executive is going to be just as connected as the rest of us. And maybe just as creative.
Next time, Proposition 4.
©2011 - C. A. Turek - mistertrains@gmail.com
Sunday, September 25, 2011
Some Serious Business - Proposition 2
Proposition 2: The business plans for the freight railroads do not include Passenger Rail.
If we are talking about the major players, I think this is a fallacy. Sure there are some railroads, probably mostly short lines, where you could say there will never be a scheduled passenger train. And you'd be right.
If I were running a major railroad, however, I would want to have a business plan in place that includes contingencies for carrying passengers. Even for carrying a lot of them. Given the current world political and economic climate, I can imagine many scenarios where Passenger Rail could become very strategically important, both economically and militarily.
So I cannot believe that the people running the major, Class One railroads, are not smarter than I am.
So the next question becomes this: Would operation of passenger services by modern freight railroads make Passenger Rail better, or worse?
Does anyone see where I'm going with this?
Next time: Proposition 3.
©2011 - C. A. Turek - mistertrains@gmail.com
If we are talking about the major players, I think this is a fallacy. Sure there are some railroads, probably mostly short lines, where you could say there will never be a scheduled passenger train. And you'd be right.
If I were running a major railroad, however, I would want to have a business plan in place that includes contingencies for carrying passengers. Even for carrying a lot of them. Given the current world political and economic climate, I can imagine many scenarios where Passenger Rail could become very strategically important, both economically and militarily.
So I cannot believe that the people running the major, Class One railroads, are not smarter than I am.
So the next question becomes this: Would operation of passenger services by modern freight railroads make Passenger Rail better, or worse?
Does anyone see where I'm going with this?
Next time: Proposition 3.
©2011 - C. A. Turek - mistertrains@gmail.com
Saturday, September 17, 2011
Some Serious Business
Starting with this post, I want to try to shed some of the politics and get back to the roots of this blog. I started it because I like trains, and I like passenger trains even more. While I find freight trains and their infrastructure fascinating, and while passenger trains never would have existed as they did in the United States during the golden age - between about 1939 and 1959 - without freight rail, I still find nothing more pleasing than the thought of riding, dining, and sleeping aboard a passenger train.
So, I've been thinking. What could we actually do in America to get back to those thrilling trains of yesteryear, with just enough of the modern and innovative thrown in to make everybody happy.
The first thing I thought about was not so-called high-speed rail. The first thing I thought about is a reverse Amtrak. What does that look like, you ask? Well, it may take several blogs to lay it out for you.
The thought arises from the fact that railroad deregulation via the Staggers Act did not take place until after Amtrak was formed. But we've never deregulated Amtrak. The freight railroads have thrived under deregulation, and, unless the heavy-handed progressives get their way in congress, will thrive even more in an economic recovery. Much of freight rail did not even lose money during the recession and is not losing it now - even if whether or not the recession has ended can be debated. Could the same have happened for passenger rail in an era of deregulation?
Proposition One: The profitable freight railroads could probably absorb short-term losses on passenger rail, still make a profit,and possibly turn passenger rail around for the better. All of the innovations that make freight rail profitable today did not come about because of government regulation, but because of the profit incentive and competition for routes. (Government please listen: Your only function should be to make sure there is a level playing field for private enterprise, and then get out of the way.)
Next time: Proposition Two.
©2011 - C. A. Turek - mistertrains@gmail.com
So, I've been thinking. What could we actually do in America to get back to those thrilling trains of yesteryear, with just enough of the modern and innovative thrown in to make everybody happy.
The first thing I thought about was not so-called high-speed rail. The first thing I thought about is a reverse Amtrak. What does that look like, you ask? Well, it may take several blogs to lay it out for you.
The thought arises from the fact that railroad deregulation via the Staggers Act did not take place until after Amtrak was formed. But we've never deregulated Amtrak. The freight railroads have thrived under deregulation, and, unless the heavy-handed progressives get their way in congress, will thrive even more in an economic recovery. Much of freight rail did not even lose money during the recession and is not losing it now - even if whether or not the recession has ended can be debated. Could the same have happened for passenger rail in an era of deregulation?
Proposition One: The profitable freight railroads could probably absorb short-term losses on passenger rail, still make a profit,and possibly turn passenger rail around for the better. All of the innovations that make freight rail profitable today did not come about because of government regulation, but because of the profit incentive and competition for routes. (Government please listen: Your only function should be to make sure there is a level playing field for private enterprise, and then get out of the way.)
Next time: Proposition Two.
©2011 - C. A. Turek - mistertrains@gmail.com
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