High Speed Rail Going Nowhere, Mighty Fast

Yet a third devastating piece on government venture capitalism appeared this week, this time in the form of an editorial in the Washington Post. The subject this time was not energy but transportation.

THINGS JUST WENT from bad to worse for high-speed passenger rail in California. After the Golden State's voters approved a $9 billion bullet-train bond issue in 2008, officials said they could build an 800-mile system by 2020, for $35.7 billion. The cost projection now, as issued by the state Nov. 1: $98.5 billion, with a completion date of 2033.

Time to pull the plug, right? Not according to Gov. Jerry Brown (D). The new "business plan is solid and lays the foundation for a 21st-century transportation system," he said. Equally upbeat, Transportation Secretary Ray LaHood offered Mr. Brown his congratulations on "a sound, step-by-step strategy for building a world-class high-speed rail network."

This is unreal. Apart from the bond issue and $3.6 billion in federal funds already in hand, the cash-strapped state hasn't credibly identified a source of funds for the system. The new report basically repeats previous assertions that, if California builds, federal and private-sector dollars will come. This is wishful thinking in an era of massive federal deficits, and if the opportunities for the private sector were really so great, where are the companies clamoring to invest?

I have pointed out the stupidity of high speed rail projects. What the WaPo notes is that government just can't let the idea go. Even after it has failed almost everywhere it has been tried. Even when everyone can see that a particular project is doomed, there is some governor and Barack Obama to double down.

The way the stimulus legislation is written, California will lose $2.3 billion is federal subsidies unless it starts construction by October 2012.

Alas, there is only one place where the state could finish the necessary environmental impact statements and other bureaucratic requirements before the use-it-or-lose-it date: a thinly populated 130-mile stretch of flatland that starts just north of Fresno and ends just north of Bakersfield…

In the all-too-likely event that funding for the rest of the system never materializes, the report adds, "the state will be left with a rail segment unconnected to major urban areas that has little if any chance of generating the ridership to operate without a significant state subsidy." It would be a train to nowhere, but at least it would go nowhere fast.

It may be the one grace of big government, if not a saving grace, that it often ties itself in knots before it can do all the damage it sets out to do. High speed rail lines might be cut through granite, but not through the barriers of "environmental impact statements and other bureaucratic requirements", or at least not in time.

The fact that this is even being considered is evidence of the dysfunctional political culture we now enjoy. It is a good sign, if a small one, that the WaPo has not taken leave of its senses.

Comments

[Donald Pay]

I generally agree with you on trains. LaHood likes to say these are step-by-step projects to get to high speed rail, but that's just bunkum. These are medium speed trains. I have no problem building one real high speed pilot project to see if it can run without too much of a subsidy.

[duggersd]

Donald, perhaps you could explain a little. These are medium speed trains? The government is calling them high speed trains. Give me an concept of what your concept is. A non-stop train from NYC to LA? Or one that stops in CHI? And as for a pilot project, from where to where? Rail is expensive as it is. And how much is too much of a subsidy? And if it is "too much of a subsidy", what happens? Does the government abandon it? I am trying to imagine the rail company willing to make that kind of a gamble.

[Ken Blanchard]

Donald: we agree? where's the fun in that? I confess that I don't see the point of a demonstration project for high speed rail. We already know more than we want to know. The fact that government will not let go of this crazy idea is evidence for my general thesis about government financed venture capitalism.

By contrast, I think demonstration projects for wind and solar power make sense. The big investments we have made make no sense at all.