Owen: Railing against rail

Tuesday, September 14, 2010 at 11:45pm
Justin Owen

You can always tell when people really want something by their willingness to pay for it. When the price of a product reaches the point where one person would rather have the product than money, she will exchange her money for it with the other person, who would rather have the cash.

It appears people don’t want to trade in their cash to park their cars and hop aboard trains. That is, unless taxpayers are throwing in a substantial portion of the cash for them.

For instance, mass-transit advocates want to build a high-speed train between Atlanta and Chattanooga, and eventually on to Nashville. Most citizens like these types of ideas, particularly the thought of whizzing from one urban metropolis to another at lightning speed. Unfortunately, those citizens are rarely told the cold, hard facts. If they knew how much it would cost them — even if they never set foot on a train — they would be less enthusiastic.

The problem with the proposed Atlanta-Nashville rail line is that train travel is incredibly expensive, and no one will ride for the true cost of the ticket price. People will only ride if taxpayers heavily subsidize the cost. And contrary to the claims of rail advocates, trains receive exponentially more subsides than automobiles or even airlines.

For every 1,000 passenger miles traveled, air travel subsidies are $4.23. Conversely, every time someone rides 1,000 miles on a train, taxpayers fork over $166. Automobile travel actually
nets money, as highway funding received from gasoline taxes frequently gets rerouted to non-automobile, and in some cases, non-transportation purposes.

In fact, motorists cover the costs of most rail transit systems. About 75 percent of all federal rail subsidies come from automobile drivers, with general taxpayers covering the rest.

As these facts show, the high cost of rail transit has to come from taxpayers’ pockets. That’s precisely why the Georgia and Tennessee Departments of Transportation have asked the federal government to send down $34 million to pay for the Atlanta-Nashville rail line.

U.S. Rep. Zach Wamp, who recently lost his bid to become Tennessee’s next governor, has already secured $14 million for the project. When all is said and done, the project will cost more than $5.4 billion, most of which will come from taxpayers, not riders.

To get an idea of the inefficiency of the Atlanta to Nashville excursion, take Amtrak’s “Lincoln Service” line between Memphis and St. Louis. The 284-mile train ride costs $80 and takes more than seven hours. Driving the same distance would take less than four hours, with gas costing half the price (and that’s in a gas-guzzling SUV). Even after heavy subsidies, train ticket prices rival the high cost of flying, while driving takes less time and money. Although a high-speed train would move faster than an Amtrak clunker, most people will still choose to fly or drive.

Government should not attempt to falsely engineer consumer demand — it’s like putting the cart before the horse. Every day, people realize that a demand for some good or service exists and then actively seek to supply that demand. We call this the free market.

With rail transit, the opposite is true. Government uses taxpayer money to create a supply for which there is little or no demand. The hope is that if they create the supply, demand will surely follow.

This “build it and they will come” premise is the main deficiency in the proposed rail line between Nashville and Atlanta. Unlike in Field of Dreams, Shoeless Joe won’t be coming. Nor will anyone else for that matter. Despite it all, taxpayers will still be on the hook for the multi billion-dollar deal. We call this government waste.

Justin Owen is the president of the Tennessee Center for Policy Research, an independent, nonprofit and nonpartisan research organization.
 

17 Comments on this post:

By: govskeptic on 9/15/10 at 5:56

Amtrack service in the most populated area of our nation
can't come close to breaking even in spite of heavy
ridership. After being built at hugh estimated and then
always heavy overrun cost the ongoing expenses are
the true killers. Those fixed cost by themselves usually
are greater than the revenues. Wonderful dream-Nightmare
reality!

By: binkleym on 9/15/10 at 7:31

Can you tell us how much taxpayers subsidize *AUTOMOBILES* per 1,000 miles if you include spending a trillion dollars of military funding in Iraq securing oil? Because you don’t see us invading the Sudan, Burma, Somalia, etc.

I dislike subsidies of any stripe. I also dislike people who complain about someone else’s subsidies while turning a blind eye to the ones *they* happen to prefer. For someone in charge of a (supposedly) independent free-market research organization, that’s a pretty unforgivable bias.

By: HokeyPokey on 9/15/10 at 5:11

w/binkleym: Can the author provide references for the financial claims he has made?

Can the author also speak to the idea that there's more than the interest of the individual passengers' interests involved, meaning the interested of the metro areas served by rail?

HP

By: MusicCity615 on 9/16/10 at 5:10

Mr. Owen-

when has a road or highway "made" money?

I think the high speed rail to chattanooga and Atlanta is a great idea and I woud love to have it built as soon as possible. We cannot rely on our cars, foreign oil. We cannot keep polluting the air with our automobiles, we cannot keep destroying the environment with more highways and destroying more of our environment with urban sprawl.

Please build a high speed rail throughout Tennessee, please build ight rail within Davidson County!

By: HokeyPokey on 9/16/10 at 6:19

Apparently Owen has been beating this dead train for a while now.

A carbon-copy of this piece is on the justly-ignored TCPR website: http://bit.ly/TCPR001

And, no, he doesn't provide any citations there either.

#CityPaperFail

By: shey69 on 9/16/10 at 9:10

Mr. Owen has given us a clear example of what is wrong with so many Americans today. They are shortsighted. Everything is about supply and demand. What we want and what we can get cheap. Running a country based on giving Americans what they want is like running a family where you spoil your children until you run out of money to feed them. Or more accurate to the reality of families today- feed them whatever they want (which is cheap due to high demand) and spend more money to fix the ailments that follow.

Right now we should focus on electing educated "parents" who can also focus on educating their "children". Then maybe someday the demand will be in step with the need.

It is easy to steer people in the wrong direction. Mr. Owen may want to consider the big picture before he supports spoiling the child.

By: Magnum on 9/16/10 at 12:10

The politicians must love you shey.

By: Not So Fast on 9/16/10 at 3:20

Shey, it's amazing how many people become "great innovators" for the supposed benefit of society when they're not on the hook for the bill.

The great irony is that the proposed high speed rail from Chattanooga will consume a vast amount of resources--and will require perpetual subsidizing (draining more resources)--all in the name of conservation and progress.

If this were such a no-brainer and ahead-of-the-curve endeavor, wouldn't you see private capital financing similar projects across the country? Entrepreneurs are rewarded heavily when they recognize a demand that has yet to be met. An easy rule of thumb: If it's a government project, it's not a viable endeavor.

By: alonwolwm on 9/16/10 at 5:24

While the writer's anti-government expenditure slant is apparent, what isn't apparent is his need to use made up facts to support his argument.

Quoting the article: "To get an idea of the inefficiency of the Atlanta to Nashville excursion, take Amtrak’s “Lincoln Service” line between Memphis and St. Louis. The 284-mile train ride costs $80 and takes more than seven hours. Driving the same distance would take less than four hours, with gas costing half the price (and that’s in a gas-guzzling SUV)."

As someone who has recently moved to Nashville from Memphis, I can assure you there is no train service connecting Memphis to St. Louis. The only passenger train service available in Memphis is the City of New Orleans, that connects Memphis to New Orleans and Chicago. Having ridden the train on several occasions to both destinations, I found it a welcome alternative to either driving or paying the price to fly. There is a service available from Amtrak to get one to St. Louis from Memphis, but it involves a 4 hour train ride to Carbondale, IL, followed by a two and half hour bus ride from Carbondale to St. Louis. There is no direct train route to St. Louis from Memphis.

If the author wished to demonstrate the inefficiency of government expenditure on train travel, it might have been helpful had he chosen a train route that actually existed as an example. Rather, this article must be taken with a grain of salt given the author's willingness to make up the facts to support his argument. And one must question the City Paper's editorial practices that lets such a blatant factual error appear, even in an opinion piece.

By: AmyLiorate on 9/17/10 at 8:42

alonwolwm -
let's give him a mulligan on the "Lincoln Service". He said Memphis, but clearly meant Chicago. The distance is indeed 284 miles.

http://www.amtrak.com/servlet/ContentServer?c=AM_Route_C&pagename=am%2FLayout&cid=1241245664293

My having the wrong city but the correct service and cost it looks like Owen's point is still very valid.

Although he should proof his writing better in the future.

By: HokeyPokey on 9/17/10 at 9:07

You should catch Owen sometime on the laughably-named 'Nashville's Morning News" on W-Tn. It's easy to spot his real convictions and biases when he's engaged with Ralph Bristol.

By: townsend on 9/17/10 at 11:39

Once some true high-speed passenger rail is up and running in this country, the general population will see that in the time it takes to get through the airport and onto the plane, many trips via HSPR will already have been completed. Walk into the station, validate your online ticket, and board the train. In Europe, this is accomplished in one or two MINUTES. It can be done here, too.

Amtrak service shares rail with slow freight. The slow freight has first priority most of the time, and Amtrak trains often sit and wait while a freight train trundles past at 5-15 MPH.

HSPR should share NO track with other rail services, and MUST not have ANY road crossings. If people can't get out of the way of a train doing 10MPH, they'll have no chance against one doing 260 MPH.

By: localboy on 9/17/10 at 12:14

"Apparently Owen has been beating this dead train for a while now.

A carbon-copy of this piece is on the justly-ignored TCPR website: http://bit.ly/TCPR001

And, no, he doesn't provide any citations there either."
Thought I'd seen this before!!

By: CountryBoyinCity on 9/17/10 at 3:39

Automobile travel actually nets money? Yeah right. Okay well maybe it would if the gas tax either kept pace with inflation or was based on a certain percentage of the cost of a gallon of gas, but instead it has been remained at 18.4 cents a gallon since 1997. In that time our infrastructure has continued to age and we have fallen further and further behind on maintenance. The American Society of Civil Engineers has given our national infrastructure a grade of “D” for the past several years. So we haven’t been paying for what we have, but we continued to build even more highways and major roads which we don’t have the money to maintain. Cars have gotten more fuel efficient which is good, but it means less gas tax revenue and more wear and tear on the roads that is not paying for itself. In 2008 gas tax revenues finally fell into the red and congress has been putting money directly into the highway trust fund out of the general fund, but this cannot go on forever. No one knows how much oil there is left in the world that is economically profitable to extract (its becoming more difficult to find and more expensive to extract as the deposits get smaller and further from the surface) but we know that China and India’s demand for oil is exploding while ours continues to grow.

Get a grip people, continuing to build roads and parking lots will not sustain our economy. The solutions are pretty simple, neighborhoods just need to start looking more like they used to before everyone had a car, okay before everyone had three cars….

How about we pay to repair the automobile infrastructure we have, and invest new money into projects that are more economically sustainable. Change land use policies to allow higher densities around transit, this reduces the infrastructure burden per household because you have less miles of roadway, water, sewer, gas, telecom and electrical per household. It requires less parking when you have other transportation options available which reduces the development costs for private developers. Living in more compact walkable communities near transit (like people used to before World War II) would mean that kids might be able to start walking to school again and would probably be healthier for it. We can make these decisions now voluntarily, or we can wait for 10 dollar a gallon gas to happen which will force us into these decisions, and it will be a lot more painful.

By: alonwolwm on 9/17/10 at 7:44

AmyLiorate--

I'm not willing to grant him a mulligan just yet. There is indeed a service called the Lincoln service, but once again it does not provide direct train service between Chicago and St. Louis, but rather requires a 2 hour bus trip from Springfield, Il.

Regardless, there are further factual problems with his assertions regarding this service. First, in what world can you drive from Chicago to St. Louis in 4 hours? Having done that as well, it is 5 hours at the fastest, more like 5 hours 30 minutes. Second, regardless of his assertions regarding the speed with which one can drive it, even if one does take the Lincoln Service, it only takes 6 hours and 15 minutes to get there, not the 8 hours asserted by the author. Third, it does not cost $80, more like $32 one way.

According to Amtrak's website, there is direct rail service between Chicago and St. Louis on the Texas Eagle. One way, this costs $66 and takes 5 hours and 36 minutes. So if this is the author's intended example, this service is neither as slow nor as expensive as asserted by the author.

So it appears that he is still willing to make up facts to support his argument. However, as another commenter noted, comparing current Amtrak service to the proposed High Speed Rail corridors is like comparing apples to oranges.

By: alonwolwm on 9/17/10 at 7:53

Although, Amy, looking at the Amtrak website a second time, it looks like the Lincoln service requirement of the bus service is a temporary condition. On the schedule that doesn't require the bus service, the one way ticket on the Lincoln Service is $24 and takes 5 hours and 30 minutes. So once again, the facts used by the author are completely fabricated out of thin air.

By: HokeyPokey on 9/19/10 at 10:27

I do hope someone at Southcomm is paying attention to this thread.

Perhaps, in future, they could take a little bit more care which sniveling little rat-faced gits they choose for "city voices."