High Speed Rail is no panacea

Richard Florida loves trains. He loves them so much he advocates for trains when little evidences shows they will help achieve the goals he desires. He argues that our current system has reached the end of its useful life: 

It has led to overinvestment in housing, autos, and energy and contributed to the crises we are trying so hard to extricate ourselves from today. It’s also no longer an engine of economic growth. With the rise of a globalized economy, many if not most of the products that filled those suburban homes are made abroad. Home ownership worked well for a nation whose workers had secure, long-term jobs. But now it impedes the flexibility of a labor market that requires people to move around. My own research shows that the most innovative, most productive, and most highly skilled regions have rates of homeownership of 55-to-60 percent, while those where homeownership exceeds 75 or 80 percent are economically distressed.

I could buy the argument that homeownership harms labor mobility a makes economic transition harder. And I’m sympathetic to Florida’s argument that we over-subsidize homeownership. But I don’t think the data is saying that Florida thinks it is saying. The productive, highly-skilled regions Florida favors are dominated by San Francisco, San Jose, Austin, San Diego, New York, and Los Angeles. I don’t think policy, such as heavily subsidizing trains, as Florida later suggests, is going to turn Detroit or Cleveland, into San Diego or San Francisco. One reason these cities have lower home ownership rates is that, except for New York, they have pretty climates that people flock to and they have serious naturally imposed growth boundaries. They limit the supply of housing, increase the price, and make it more difficult to buy a home.

Florida goes on to describe what he see as the fix. High speed rail: 

Infrastructure is key to powering spatial fixes. The railroads and streetcar, cable car, and subway systems speeded the movement of people, goods, and ideas in the late 19th century; the development of a massive auto-dependent highway system powered growth after the Great Depression and World War II. It’s now time to invest in infrastructure that can undergird another round of growth and development. Part of that is surely a better and faster information highway. But the real fix must extend beyond the cyber-economy to our physical development patterns—the landscape of the real economy.

 

That means high-speed rail, which is the only infrastructure fix that promises to speed the velocity of moving people, goods, and ideas while also expanding and intensifying our development patterns. If the government is truly looking for a shovel-ready infrastructure project to invest in that will create short-term jobs across the country while laying a foundation for lasting prosperity, high-speed rail works perfectly. It is central to the redevelopment of cities and the growth of mega-regions and will do more than anything to wean us from our dependency on cars. High-speed rail may be our best hope for revitalizing the once-great industrial cities of the Great Lakes. By connecting declining places to thriving ones—Milwaukee and Detroit to Chicago, Buffalo to Toronto—it will greatly expand the economic options and opportunities available to their residents. And by providing the connective fibers within and between America’s emerging mega-regions, it will allow them to function as truly integrated economic units.

It is hard to take this argument seriously. Why will an inflexible, uneconomic, transportation system help the economy? High speed rail does not quickly move goods or ideas. Goods are moved by freight rail, and our freight rail system is the best in the world. Ideas are quickly moved by the internet.

High speed rail quickly moves people. But where is the evidence that high speed rail will help the economy? Japan has high speed rail and the building of high speed rail didn’t help Japan out of its economic malaise.

Florida recognizes that high speed rail might be expensive, “truly national high-speed rail system runs somewhere between $140 and $500 billion. That’s a lot of money, but measured in 2009 dollars, Eisenhower’s Interstate Highway System cost $429 billion to build—which makes it look like something of a bargain.” There’s a major difference however—the Interstate Highway System paid for itself through gas taxes. High speed rail will never pay for itself. It doesn’t pay for itself in Europe, which is better suited than the U.S. for high speed rail.  Plus, Florida’s estimate of the cost of nationwide high speed rail is low—it will cost $100 billion in California alone.

It’s too bad that people like Florida don’t look at actual performance. For example, there good arguments that rail in Los Angeles should never have been built. In L.A., the push for rail has forced transit ridership down. 

As Randal O’Toole writes about rail in L.A. and is equally applicable to Richard Florida, “how many miles of rail costing how many billions of dollars will be needed before rail advocates finally concede that rail transit is a failure?”

Can Republicans Win Back the Senate?

The left-of-center New Republic thinks it’s possible for the Republicans to win the Senate back. I will be absolutely shocked if it happens because everything would need to break the Republicans’ way.

Why the liberals are wrong who think that Obama should have done more

Jay Cost explains why Obama wasn’t able to do more:

In our system, it’s not just the number of votes that matter, but – thanks to Roger Sherman – how they are distributed across the several states. Obama’s urban support base was sufficient for political success in the House, which passed a very liberal health care bill last November. But rural places have greater sway in the Senate – and Obama’s weakness in rural America made for a half-dozen skittish Democrats who represent strong McCain states. The evolving thinking on the left – “Obama should have used his campaign-trail magic to change the political dynamic” – is thus totally misguided. The “remarkable capacities he displayed during the 2008 campaign” never persuaded the constituents of the red state Democrats he had to win over. Why should they suddenly start doing so now?

Obama simply lacked the broad appeal to guide the House’s liberal proposal through the Senate. So, the result of “going big” was an initially liberal House product that then had to be watered down to win over red state Senators like Landrieu, Lincoln, Nelson, and Pryor. The end result was a compromise bill that, frankly, nobody really liked. Liberals were disappointed, tantalized as they were by the initial House product. Conservatives were wholly turned off, recognizing as they did that the guts of the bill were still liberal. And Independents and soft partisans were disgusted by congressional sausage-making and wary of the bill’s provisions.

Progressives aren’t good at math

In this words of Jim Pethokoukis, this piece by Matt Miller is a “perfect crystallization of liberal Wash thinking on taxes, spending”. Amazingly, some people think it’s a “brilliant taken-down” and Ezra Klein says that “Matt Miller is about as credentialed a deficit hawk as has ever walked the earth, so when he delivers this hard a blow to the fiscal commission, it’s worth paying attention.”

These plaudits surprised me, since Miller isn’t necessarily mathematically literate.  He writes:

I don’t want to overreact. I’d hate to prematurely diss President Obama’s National Commission on Fiscal Responsibility and Reform, which held its fourth public meeting Wednesday. But the commission’s Democratic co-chair, Erskine Bowles, may have already blown it.

 

In little-noticed remarks a few weeks ago, Bowles suggested that the long-term goal the commission should adopt for federal spending should be 21 percent of gross domestic product. This sounds like a bookkeeping matter. But Bowles’ goal would end progressive ambition, ratify America’s declining competitiveness and bury the American dream.

 

Why? For starters, federal spending under Ronald Reagan averaged 22 percent of GDP. Under Bowles’s view, therefore, the outer limits of the Democratic Party’s 21st-century aspirations would be to run government at a size smaller than did a 20th-century conservative icon.

 

What’s more, Reagan ran government at this size at a time when 76 million baby boomers weren’t about to hit their rocking chairs. In 1988, 32 million retirees received Social Security and 33 million were on Medicare, our two biggest domestic programs. By 2020, about 48 million elderly Americans will receive Social Security, and 62 million Americans will be on Medicare (then the numbers really soar).

 

As a matter of math, if you run the government at a smaller level than did Ronald Reagan while accommodating this massive increase in the number of seniors on our health and pension programs, you have to decimate the rest of the budget.

Sorry Matt, but as a “matter of math”, you are wrong for at least two reasons. First, the absolute numbers don’t matter. What matters is the proportion of retirees to workers. But you don’t include this crucial statistic. I don’t know the size of the workforce today compared to 1988, but the U.S. population has increased about 20% since 1988.

Second, you are comparing government spending to GDP and only looking at the growth in people on Social Security or Medicare without looking at the growth in GDP. “As a matter of math” you GDP could grow to match the increased numbers on these programs. For example, since 1988, GDP has increased about 27% according to my calculations.

While Miller’s point about math isn’t necessarily correct, he is correct that it will be hard to restrain government spending and pay for Social Security and Medicare.

Why this Miller’s piece of “brilliant” is beyond me, but then again, I’m not a progressive.

Besides Miller’s lack of math skills, my favorite part of this argument is his lead argument against limiting federal spending at 22 percent of GDP—because that’s what Ronald Reagan did and we all know that he was the anti-Christ and the U.S. in 1988 was hell on Earth.

How could the Business Roundtable be so naive?

I admit to a certain amount of schadenfreude at the Business Roundtable’s belated realization that the Administration and their congressional allies are anti-business, pro-tax, and anti-trade. They have never portrayed themselves as anything else, but the Business Roundtable choose to sell out the American people on the president’s health care plan in exchange for access that didn’t matter at the end of the day.

Ivan Seidenberg, Verizon’s CEO, who moonlights as the Chairman of the Business Roundtable revealed his discontent in a recent speech, as reported by Kim Strassel of the WSJ:      

Mr. Seidenberg made clear this week with his newsy and newfound criticism of the White House. The chairman revealed in a speech to the Economic Club of Washington that he’d become "somewhat troubled" by a "disconnect between Washington and the business community." Here he and his fellow CEOs had "worked closely with policy makers"—they’d even pushed ObamaCare. And yet! "We see a host of laws, regulations and policies being enacted that impose a government prescription" on private actors. Truth was, Washington had created a downright "hostile environment" for job creation!

 

Agreed, said Roundtable President John Castellani, in an op-ed the same day. We stuck with that majority "through trying circumstances," even "alienating many of our traditional colleagues," and what did we get? They keep "vilifying" the private sector! And taxing it, and empowering unions, and ignoring trade. "The time has come for a new course," declared Mr. Castellani, a mere 18 months after Democrats announced plans to tax companies, empower unions and ignore trade.

…

Now that it thinks about it, the Business Roundtable is hard-pressed to name much the White House has done for growth. It is standing by as taxes increase on dividends. Its financial reform threatens derivatives and opens boardrooms to activists. It has failed to pass trade agreements. It still wants union "card check." Its EPA is taking over energy markets. It will stifle the Internet. It has ignored tort reform. Immigration remains broken. Deficits are nuts. Even that health-care bill is creating "uncertainty."

 

One can only guess how much shorter this list might be had the "leading U.S. companies" been fighting for free markets from the start. In the meantime the Roundtable can join that nonexclusive club of economic actors—health insurers, drug companies, Medicare doctors, utilities—that purchased a share of the Obama agenda and are now feeling buyer’s remorse.

How could General McChrystal be so naive?

President Obama did the right thing firing General McChrystal. Any military officer that is so naive as to believe a Rolling Stone report would help him out should be fired for gross incompetence. 

Victor Davis Hanson argues that Rolling Stone and McChrystal deserve each other:

In short, each gamer and conniver did not quite get out of this sordid episode what they had hoped: Instead of Bruce Lee with four stars surrounded by a brilliant but misunderstood Lawrence of Arabia staff,  we get a near insubordinate general desperate for his supposedly unique “story” to get out, surrounded by a crowd  of well-meaning groupies — all to be exposed by a duplicitous Hunter Thompson wannabe who now finally “makes it” with the scalp of a four-star — all against the backdrop of an anti-military tabloid that can’t quite believe its good fortunate that its intended victim gladly put his head in their noose, and all for their ultimate aim of getting the U.S. out of Afghanistan in defeat and shame.

As my other grandfather, the old Swedish horse-breaker, used to say, “What a bunch.”

My very limited sympathies are, of course, with a distinguished general, who is a better, braver sort that those who did him in. But that said, his laxity and absence of judgment — and, yes, ego — did an enormous amount of damage at a time of war, and all of the ripples (changes in command, effect on the enemy, political insider stuff with the Afghans and at the White House) are not quite yet over with. (One can see Nemesis at work yet again [she's busy with sanctimonious Al Gore as the sex poodle after flying off from the Edwards' mansion to circle around the Katrina-BP Gulf], as McChrystal should have learned from his early freelancing comments not to press his luck with the deadly goddess.)

But readers, you’ve already beat me to the moral of the story: God help us all when a four-star general really believes he can use Rolling Stone to help get a message out that might help us defeat the Taliban and help himself in the process.

How can Obama think the American people are this stupid?

The President’s weekly radio address bemoaned those dastardly Republicans. The Republicans are blocking progress Obama claims. How can and honest person make this argument? Does Obama really think the American people don’t know the Democrats have wide majorities in the House and Senate?

Obama’s party has a 59-41 majority in the Senate (technically 57 Ds and 2 independents who caucus with the Ds) and a 255-178 majority in the House. At most one single Republican is holding Obama back—1 single Republican Senator is all it takes to pass something the Democrats care about.

The reality is that Democrats are holding back Obama agenda, not Republicans. And there is no way Republicans will back the President after he has alienated a majority of the American people.  

The Economist isn’t happy with Obama

The Economist might be wishing they could take back some of the happy words they have written about Obama. After all, they endorsed him. Maybe next time they will look past a politicians words and look at their actions. Here’s what they have to say about Obama’s shakedown of BP:

For several reasons. The vitriol has a xenophobic edge: witness the venomous references to “British Petroleum”, a name BP dropped in 1998 (just as well that it dispensed with the name Anglo-Iranian Oil Company even longer ago). Vilifying BP also gets in the way of identifying other culprits, one of which is the government. BP operates in one of the most regulated industries on earth with some of the most perverse rules, subsidies and incentives. Shoddy oversight clearly contributed to the spill, and an energy policy which reduced the demand for oil would do more to avert future environmental horrors than fierce retribution.

Mr Obama is not the socialist the right claims he is. He went out of his way, meeting BP executives on June 16th, to insist that he has no interest in undermining the company’s financial stability. But his reaction is cementing business leaders’ impression that he is indifferent to their concerns. If he sees any impropriety in politicians ordering executives about, upstaging the courts and threatening confiscation, he has not said so. The collapse in BP’s share price suggests that he has convinced the markets that he is an American version of Vladimir Putin, willing to harry firms into doing his bidding.

Nobody should underestimate the scale of BP’s mistake, nor the damage that it has caused. But if the president does not stand up for due process, he will frighten investors across the board. The damage to America’s environment is bad enough. The president risks damaging its economy too.

Helen Thomas to the jews—get the hell out of Palestine

Helen Thomas is a real treasure. I knew she was biased, but I didn’t realize she is bigot. She says the Jews should “get the hell out of Palestine” and go back to Germany and Poland.

Anyone that smart has got to be a free trader at heart. He’s just saying this to pander to those idiots.

Virginia Postrel has some insightful things to say about Presidential glamour.  About Obama she says:

Postrel: Yes, President Obama is a very glamorous figure. Glamour is a particular form of illusion. It’s an illusion that tells a truth about the audience’s desires, and it requires mystery and distance. During the campaign people projected onto Barack Obama whatever they wanted in a president or even in a country. Lying is usually a bad thing, but they would project onto him that he was lying about his positions because he secretly agreed with them: “Anyone that smart has got to be a free trader at heart. He’s just saying this to pander to those idiots. He can’t really mean it.”

You’ve seen, as he’s taken office and tried to govern, this back and forth where he is consciously or unconsciously trying to maintain his glamour—which requires a kind of distance from the political process so that people can continue to see him as representing them, regardless of their contradictory views—while actually trying to be president, which means you have to decide what to do about Guantanamo. You have to decide what health care bill you’re going to back. You have to decide all these things, and you’re going to make somebody disillusioned. This morning I saw that the former editor of Harper’s is about to write a book, The Mendacity of Hope, attacking Obama from the left. That’s the power and the downside of glamour.

Also here’s what she has to say about Reagan’s glamour:

Postrel: There were two glamorous presidents in my lifetime besides Obama. The first was JFK, and he dealt with this problem by getting killed. That was something I didn’t want to mention in an article about Obama. There were lots of problems in the Kennedy administration and lots of secrets that were being hidden that came out later. But because he was assassinated, the glamour stayed.

The other glamorous president of my lifetime, I would argue, was Ronald Reagan. And he managed to govern because he actually did stand for some specific ideas that brought a broad consensus of supporters together. He was still a figure of distance and mystery, to the extent that his authorized biographer, who followed him around for years, was unable to get at what the man was really like and wrote a semi-fictionalized biography with fake characters. But there was a core of identifiable beliefs that enabled him to govern and to maintain this sort of glamour, particularly to the Reagan coalition. Libertarians would say, “well, he’s really more libertarian,” and social conservatives would say, “well, he’s really more socially conservative.” But he did have specific beliefs that held those people together. They didn’t hold together so well after him.