Please read this article and our previous blog post, then please read this post for more about Dr. Utt's article.
To summarize, Dr. Utt - we are told this is the correct form of address for a Ph.D. - doesn't much like the way Amtrak is run, and doesn't much like the way he thinks Congress is going to run it. He would have us believe that any increase in federal subsidy for Amtrak is too much and that all of Amtrak's current woes have nothing to do with the fact that it has never been given enough of a subsidy to accomplish its mission and gain the holy grail of profitably, however defined by the accountants.
Dr. Utt's solution to the problem, summed up in less words than it takes to abstract an article from a medical journal: Let the states take up the burden, and privatize the rest.
We agree that this would lessen the burden on the federal treasury. But what about the states? What about private enterprise?
We will state the basic premise of this blog again: Historically, without the accounting tricks that Dr. Utt decries when used by Amtrak, Passenger Rail has never made a penny of profit for the railroads. As always, we are talking about regularly scheduled common carrier Passenger Rail routes, not tourist rail and definitely not rail cruise operations.
Nonetheless, Dr. Utt wants to use rail cruise operators as an example of Passenger Rail that turns a profit. But first let us laugh at his other examples of profitable operations.
Japan, UK, and Germany are poor examples, because nowhere in the United States do the population density, the proximity of major cities and the demographics compare with any of these locations. The gross contrasts increase in the western United States.
Canada is a better comparison, except that politics in Canada differ so greatly from politics in the United States that the mission of VIA cannot be compared to that of Amtrak.
Yes, Los Angeles, Boston and California - last time we looked Los Angeles was part of California - have privatized some services previously provided by Amtrak. But again, we are talking about densely populated urbanized areas where higher population makes for higher numbers of riders.
LOL. There's more to come, for Dr. Utt wants us to come out of our fantasy world when it comes to Amtrak.
Fair Share of Public Subsidy. The highway program is solvent. Ha! Using Dr. Utt's example, the highway program is solvent because it can tax fuel. How is this not a government subsidy? Using this logic, Amtrak should be able to become solvent by taxing something it happens to use a lot of to stay solvent. OK, we've got it. Since Amtrak uses a lot of rail, made of steel, let's tax every pound of steel that is sold in this country. Every penny of the tax should go to Passenger Rail, and Passenger Rail will, we guarantee, be solvent. By Dr. Utt's definition of solvency.
And then, oops! The FAA trust fund failed to make a profit. Imagine that! People don't want to ride in metal tubes facing forward so much any more. No so much. Airlines use a lot of air. Maybe the FAA trust fund should tax air.
We get off the track when we are facing ridiculous arguments.
REVAMP NOTHING! Frankly, we would like to see the entire premise and mission of a national passenger rail system changed. New trains, new tracks, and new routes, with new sources of funding and little reliance on the old. Dr. Utt does have it right when he says that the old model for Amtrak is archaic. We disagree that it is socialist. It is merely outdated.
But, and this is a big but, if we are to have a true National Passenger Rail network, one that serves all regions, there must be long distance routes. If we cannot figure out a good way to fund them, and find the political resolve to do so, then we get what we deserve. Oh, wait. We already have it, and it is Amtrak.
©2006 - C. A. Turek - mistertrains@gmail.com
1 comment:
One possibly valid comparison is France, with a similiar geography and population density to many spots in the US (such as Ohio). There the TGV not only makes money, but has paid a return on it's investment.
HOWEVER in France the compition is TOLL highways and very high gas costs. And conventional trains continue to loose money.
which brings up the real point here:
Any business can make or loose money when the playing field gives it enough of a competitive advantage or disadvantage. That's the place to start discussion.
If we truly had a level playing field and all modes paid their own costs, rail would be viable in a great many markets as a profitable business. Even in the current situatioin where air and road are so tremendously subsidized, I do believe that rail COULD make a profit -- but not enough to justify the RISK that private companies would take on to spend the necessary capital to get into this business.
Change the playing field, and that changes. If automobiles paid their costs, railroads could too. If railroads had some source of capital funds, then all of a sudden private companies would be able to operate, just like the airlines are able to operate into public airports.
My ideal would be a level playing field, without distortion intoduced by political interests of those who have the biggest lobbying budgets.
But what is the reality now? What can we achive? That's another post in itself.
There are private companies out there whoes business is to profitably operate passenger rail (Connex, First Group, Stagecoach, SeaContainors and others) but it is governement that makes that possible and that includes a fair amount of funds that flow to them (just like the bus companies get governement funded busses and bus stations and continue to say they are pivate operators).
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