Thursday, August 23, 2012

Politician's Fetish For High Speed Rail

What is it with politicians and their fetish for high speed rail projects?

Around the world, central planning politicians from Obama, the Governor of California Jerry Brown all to the way to the Prime Minister Yinluck here in Thailand seem to have a fetish for high speed rail projects.

The cause of all this fetishism is China.   Communist China is the envy of the socialists, statists and authoritarians of the world----spending huge amounts of Yuan on high speed rail.  Nevermind, these projects don't have to make economic sense because every market in China is manipulated and capital is freely mis-allocated.  In China, there are no real market forces, no "un-manipulated" banking sector, no required rates of return and no investors in any conventional sense---other than The State.  "The State" is doing these and many other unwise projects to create jobs at any cost.  (Gee, sounds like the "stimulus" in the USA in 2009 which created jobs at $400,000 a pop)

Also, the breakneck growth in China invites accidents: both of the financial and actual train wreck kinds.  Two trains collided killing 35 people in the Zhejiang province in July of this year.   [I wonder if the authorities harvested body parts from the dead?]    Most of the loans to the ill-conceived capital projects will go "bad".  But the authoritarian communist Chinese government can sweep the bad loans "under the rug" for awhile----maybe even decades.

High Speed Rail is a loser everywhere

You will never see any actual and/or trustworthy data from China but I'd be willing to bet that none of these projects has any viable economic justification.  These projects are incredibly expensive and are difficult to justify with any reasonable fares and ridership.  Similar projects are proven losers world-wide.  From,
France subsidizes its high-speed rail system by nearly $10 billion annually. Japan subsidizes its rail system with nearly $2 billion annually. And Spain spends nearly $3 billion on high-speed rail subsidies every year.
The US subsidizes the incredible slow and decrepit AMTRAK, which should be called 3rd World Rail or SSSR or Super Slow Speed Rail.  Not only is it slow, but you get a good dose of bad attitude from the employees, usually African-American, as a bonus!  What else would you expect from government employees who are, without a shred of doubt, members of an unnecessary public union?

At least we see a few glimmers of common sense from Republican governors.  From George Will at The Washington Post,
Wisconsin Gov. Scott Walker (R) rejected $810 million in federal money for a 78-mile high-speed rail project paralleling Interstate 94 between Milwaukee and Madison. Ohio Gov. John Kasich (R) rejected $400 million for a high-speed (well, about automobile speed) train paralleling Interstate 71 between Cleveland and Cincinnati. Florida Gov. Rick Scott (R) rejected $2.4 billion for 90 miles of high-speed rail paralleling Interstate 4 between Tampa and Orlando. In faith-based transportation policy, rail worshipers think people will park their cars in Tampa and then rent cars in Orlando.
I'm glad to see some Republican governors exercise some fiscal prudence and common sense.  Now if we can just duplicate the same prudence and sense at the national level!  I'd love to see the Republican party stand for competent administration (and forget the irrelevant social issue litmus tests).

Thailand Folly

So, to hell with facts, even the Yinluck government in Thailand has caught the high speed rail bug.  She has proposed $13 Billion dollars (equivalent) of spending for various high speed rail links in Thailand as part of an infrastructure program in preparation for ASEAN integration in 2015.   Nevermind that Thailand doesn't even have any limited access national highways and existing trains are quite old fashioned and outdated.    Yinluck would be well-advised to spend a relatively small amount of money to bring about 10,000 foreign teachers of English, Science and Math to teach the extremely ill-prepared young minds here.  Right now the young people here are as about as dumb as wood. It's so bad that I think Thailand's progress is about to stop or go backward.  But, back to project ideas,  a few limited-access highways should be the first priority.  You can't ship as much freight on high speed trains!

The Yinluck and the Chinese Government are a bunch of idiots.  Those that admire them and their central planning foolishness are idiots too.  That includes Obama, Diane Feinstein, and half of the US congress.

California Folly

A high speed rail project in California, initially estimated to cost $30 billion has escalated to an estimated $100 billion (then back down to $68 billion as the project becomes less high speed).  The project would make economic sense if gasoline cost $40 per gallon!  That's a stretch!    See the article by George Will in the Washington Post.   With the extreme bureaucracy, regulation, permits, litigation that marks doing business in California, the project from San Francisco to Los Angeles will never get done and they will still spend the money trying.  California doesn't have the money!!  Helloooo!  Wake up people!  (See my blog A State Without A Republican.)

And if it gets done, then the state will be on the hook for subsidies to keep it going.  NO ONE is counting the future cost of subsidies that will inevitably occur since gasoline is never going to be $40 per gallon (unless a cup of coffee costs $10-----which might be the case with the mad men at the US Federal Reserve---but the rail project will have escalated by then as well).

Obama Folly

All of this "California Folly" is being promoted with about $4 billion of Federal subsidies from the Obama Administration ($4 billion out of $100 billion isn't much).   Never mind, the Obama Administration doesn't have the $4 billion and must borrow from the Chinese to subsidize a hare-brained project in California.

How screwed-up do things have to get before the public catches-on in the USA?

No comments: