Sunday, May 02, 2010

Passenger Rail: Everything Old Is New Again

Is it too unusual to blog my own blog?

Passenger Rail: Everything Old Is New Again gave some of you an idea of where I am coming from in this blog, and gave others the wrong idea.

Bottom line here, there are some areas where government subsidy and/or government intervention is desirable, and even where it is needed, and some places where it is not.  From a pragmatic point of view – that’s reality for you simple folk, and you know who you are – government subsidy is needed for Passenger Rail, for the foreseeable future.

Where’s the line to be drawn?  Those of us who see the line clearly get frustrated with those who don’t.  Those who don’t generally think everything should be subsidized by government, and, in some ways, everything is.  The purpose of limited government is to allow the rest of us to function productively in a free society.  That small feat costs money.  It has always cost money.  So in that limited sense, government is subsidizing every free activity of every man, woman and child.  Think about it!  For example, in order to maintain your freedom of religion, there must be a government system in place that guarantees you will not be persecuted in the practice of that religion, by anyone including the government.  That costs money, and the government must tax you to get that money.  Do they?

The federal government still has a lot of assets that it has chosen to bank for the people rather than sell.  It also includes a hell of a lot of assets that could be freed up to sell for the people, to support it’s primary function: to subsidize freedom.  In my state, New Mexico, more than a third of the land is held by the federal government. 

Don’t get antsy – I’m on my way to Passenger Rail.  Just let’s make a stop at rail in general.  Railroads would not be as they exist today in America without huge subsidies.  These came in many formats.  The largest were the land grants for the pacific roads.  More obscure, but still, in a way, subsidies, were the charters or franchises for construction of the earlier railroads, and the powers of eminent domain, sometimes given directly to the railroads, and sometimes exercised by favorable local government.  Most town governments wanted railroads to come through, so they didn’t hesitate to give them land, or take somebody else’s in order to accomplish that end.

So back to where I am coming from on the subject of Passenger Rail.  We have a choice of how it gets subsidized.  Not every choice is good for all situations, but government seems to have settled on a one-size-fits-all solution.  The quasi-governmental entity, I think, has seen its better days.  The primary reason: When the public is seeking efficiencies, the agency is just seeking more money and ignoring the possibility of efficiencies.

Can we place funds in the hands of private enterprise?  “Goldman Sachs” kind of excesses make private enterprise look as bad as, or worse than, government.  So what are we to do? 

In actual practice, rail transit agencies put money – in the form of operating contracts – into private enterprise all the time.  The operators are required by their free-enterprise contracts to perform their jobs efficiently, or lose money.  But in most cases, the transit agency still overlies the operator.

Would we save money by eliminating the middle man?  What if we just sold the transit agency to private enterprise with a guarantee of a contracted subsidy?  If they didn’t do their job efficiently, they’d go out of business.  Perhaps if there was the overlying threat of bankruptcy, there would be more efficiency and less waste.

Would this ever get us to so-called “profitable” Passenger Rail.  I think not.  But we need to try new things and stop whining about who stands for capitalism and who stands for socialism.  We are all in this together, and an even mix of all good ideas is probably the solution to a lot of problems, not just for Passenger Rail

©2010 – C. A. Turek –

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