Trust (Hoisted from Comments)
Robert Cruickshank’s much-anticipated reply to my posts about political versus technical transit supporters and their activism says that high-speed rail is a political issue, and therefore what’s important is to just get it done.
To me, the problem comes from my unfortunate choice of the terms political and technical. The main difference is not about technical concerns; it’s about whether one trusts American transit agencies. Thus I don’t really see the point when Robert complains about neo-liberalism and the evils of financial cost-benefit calculations. The terminology I picked may have reinforced the image of technicals as heartless engineers and technocrats, but in reality the opposite is true. Technicals have a much bigger standard deviation in their political attitudes than politicals; they range from Rothbardian libertarians to free speech advocates and people who make fun of the phrase “undisclosed location” in the context of US-sponsored torture. The common thread is mistrust of agency officials; the technical arguments are there because when we disagree with officials rather than just report what they say, we need to actually rebut their claims.
In contrast with Robert’s picture of the technical as a technocrat, my technical activism comes from the opposite end: it’s a rejection of a self-justifying bureaucracy that equates “build nothing” with “continue to build highways” and that thinks progress equals megaprojects. It’s a matter of supporting consensus politics and informed citizenry rather than subservience to agency officials. US government officials spend 2-10 times more on infrastructure projects as they have to. They have agency turf battles that make transit less user-friendly, and to cover up those turf battles they propose to spend billions of dollars on gratuitous viaducts, caverns, tunnels, and what have you. They write passenger rail-hostile regulations. And when called on it, they defraud the public and even tell outright lies. Trust in government agencies is so low that when the California HSR Authority admitted to the cost overruns, the LA Times treated it as a moment of honesty.
It’s precisely this trust that people care about, and it’s eroding when HSR becomes the equivalent of $600 toilet seats. Of course there is money for transit, but it’s either wasted or not given to transit because people can’t trust that it can be used wisely. I view it as part of my goal to showcase how good transit can be done, so that it doesn’t look so expensive for the benefit provided.
A fundamental tenet of risk perception theory is that people are most concerned about risks they find morally reprehensible – and this collusion between government and government contractors offends me. Just because it’s greenwashed doesn’t mean it’s any better than subsidizing oil drilling, paying military contractors $1,000 per day, or bailing out financial companies that then use the money to pay the executives who caused the financial crisis multi-million dollar bonuses. No wonder that when Republicans talk about the ingenuity of individual business leaders, they talk about Mark Zuckerberg, the Google guys, and Steve Jobs; they have to go that far out of the industries that give money to the GOP, such as oil, to find people who’ve actually innovated rather than just sucked public money. In fact one of the impetuses for the spread of neo-liberal boosterism in popular culture is the perception that entrepreneurs who are untainted by the public sector are good, while government is inherently incompetent and corrupt. When the government doesn’t do a good job, people stop believing it’s even possible for good government to exist.
Yonah Freemark writes that it doesn’t matter if costs are high because HSR costs are a small part of the transportation budget, which is itself a tiny part of GDP. But transportation is also not the biggest priority in spending. Most of the GDP, even most government spending, is and should be things that aren’t transportation; and most transportation funding isn’t and shouldn’t be intercity.
For an order of magnitude of what other issues are involved, Robert is proposing $1 trillion in student loan forgiveness as economic stimulus. My point is not to impugn him; I agree with him there. It’s that the big-ticket items are not transportation, but instead transportation is one of many small-ticket items of spending. But pool many small expenses – a hundred billion here, a hundred billion there – and you’re starting to talk about real money.
And this is true politically, not just economically. The Democratic Party has been advocating for universal health care since the Truman administration. After early successes with Medicare and Medicaid, its efforts stalled; its empathy-based appeals went nowhere. In Politics Lost, Joe Klein writes about how Bob Shrum would insert the phrase “health care is a right, not a privilege” into the speeches of every Presidential candidate he worked for – and how every candidate he worked for lost. Meanwhile, US health care costs were ballooning faster than those of other first-world countries. By 2005-6 it was impossible to miss, and liberal pundits seized and owned the issue, portraying American health care as not only inequitable but also inefficient. Five years later, they got their universal health care bill, flawed as it is. Nowadays the people who are pooh-poohing the idea of health care cost control are Greg Mankiw and the Tea Party.
Spending is a zero sum game, but economically and politically. The Great Recession won’t last forever. Any infrastructure building plan is going to outlast the recession, triggering real tax hikes, spending cuts, or interest rate hikes in the future. It’s fine if the infrastructure is cost-effective; it’s not fine if it isn’t. (In comments on CAHSR Blog, I was told that the example of Japan shows that the recession can last forever; if it does, the US will have bigger problems than transportation.)
And this is equally true politically. The amount of government spending is controlled tightly by the political acceptability of deficits. Some deficits are more politically acceptable than others – for example, military waste is acceptable to many right-wingers – but in this political climate, HSR is at least as controversial on the right as extending jobless benefits, and far less useful as stimulus per dollar spent. The unemployed tend not to fork over much of their benefits to international consultants. If a few billion dollars are enough to showcase workable HSR then by all means the administration should spend them, but if they’d eat $20 billion out of a $50 billion jobs bill that Obama’s going to run for reelection on, there’s no point.
I think that both on transportation and on health care, there’s a political not-invented-here reasons among the partisans. Liberals owned health care cost control, so Greg Mankiw started arguing that it wouldn’t help society much and that high costs are a good thing and Sarah Palin referred to cost control as death panels. The issue with transportation is a little different; while many technicals are leftists, it’s anti-urban conservatives and Koch-libertarians who cancel transit projects, use phrases like “the money tree,” and demagogue about how no rail project is ever affordable. My instinct is to point out that those conservatives have no trouble overspending on road projects and rationalizing highway cost overruns; but if you think in terms of spending, and treat transportation as one program of many stimulus projects, there’s a real not-invented-here issue here.
Ironically, despite Robert’s claim that costs don’t matter and benefits do, much of what I rail against is exactly benefits. I personally am reminded by how awful the turf battles are every time I have to buy an MBTA ticket at the cafe since Amtrak bullied the MBTA out of the Providence station booths, and every time I take the subway to Penn Station and need to change concourses to get my Amtrak ticket. The key for me is to make transit cheap enough that it can be deployed on a large scale, and to make it convenient and pedestrian-friendly, which park-and-ride-oriented commuter rail is not.
Since Robert seems to have my comments on autodelete, I might as well post some criticism of his post in my comment to your post.
Comparing costs to some arbitrary larger some makes absolutely no sense at all. It is a psychological trick at best…and one that is used successfully by gambling addicts against themselves as their primary method of self destruction. Such cost comparisons do not factor into account real world things like risks, opportunity costs, market value. Somehow I don’t think Robert Cruickshank would be stupid enough to buy a house for $1,000,000 when a house that is comparable in every possible way costs $400,000 next door…and yet that is precisely what he is advocating that we do.
His dismissal of neo-liberal political action based on the conversation of like-minded progressives is just hilarious. Neoliberals effectively own the World Bank AND IMF, have been the dominant force in tax policy since Eisenhower. “Starve the Beast” is political theory that originates with Neoliberals in the 1970s and while it has mostly been abandoned by neoliberals today, it is still the primary spending-control philosophy of the American Right. In Europe, they have been the driving force in transportation policy for the last ten years, and they aren’t going away any time soon. Comparatively speaking, the progressive movement has a mere handful of accomplishments, with health care reform being the only economically-focused political accomplishment of the past 20 years…which happens to be slowly unraveling due to, you guessed it, Neoliberals.
Simply put, Robert lives in a world that doesn’t exist. In his world, the financial assets and bank accounts of rich people don’t actually provide capital to the economy…and where an investment that pays high returns at a cost of $x is still just as good of an investment when it costs $3x…and where money spent on something that brings no extra value doesn’t have any alternative uses, such as, say, more HSR.
What I want to know is this: When the project was still supposed to cost half of what it does now, with California’s overwhelming political support, we still politically refused to fund more than 1/4 of the costs. How can he seriously claim that cost escalation on this order of magnitude is not a setback?
“In his world, the financial assets and bank accounts of rich people don’t actually provide capital to the economy”
They don’t, not right now. I’m actually an investor (for a living), and I happen to understand this better than you. Right now, most rich people are invested in, primarily, government bonds. How does this provide capital to the economy? *Only if the government agrees to deficit-spend*. Think about it.
Money invested in stocks doesn’t provide financial capital to the economy unless it goes into IPOs or secondary public offerings, either. (Yes, some rich people are sinking money into public offerings — Elon Musk comes to mind. Exception.)
Money provided to banks doesn’t generally provide financial capital to the economy unless it’s lent out. That’s not happening right now because (for good reason) people don’t want to borrow, and (for various reasons) major banks don’t want to lend. (They’re trying to “shore up their balance sheets”. They really need to be liquidated. Other, smaller, less crooked banks could do a better job.)
Oh, money in banks could go into the real economy if spent on salaries. But the only people in banks who are getting raises are the upper crust, who just sock the money back in, you guessed it, government bonds, stocks, etc…
So Robert is the one living in the real world, when it comes to this particular fact. The money in the bank accounts of the rich is not supplying anything to the real economy, not right now. Elon Musk and various venture capitalist types excepted.
As for the neoliberal agenda, Robert knows as well as you or I that they have had a lot of political power for a while. Because they’re lunatics who don’t understand real world macroeconomics, that power is very slowly fading (once you destroy the world economy a couple of times, people begin to get sick of you).
All of your statements make sense, but it is a bit overarching. Anecdotally, a company I worked with issued new stock this year, invested in major capital equipment, increasing productivity and shifting jobs from China to the US. New issues are huge sources of capital, and because they have already complied with the regulations of public companies, they can do it pretty seamlessly. But even IPOs have picked up pace quite a bit recently, and if we see the passage of the Entrepreneur Access to Capital Act, we will probably see it pick up quite a bit very soon.
But the problem with your comment isn’t that it is overarching…it is that HSR isn’t built “right now”. It would take several decades to build CA’s HSR system. And that means that all of the “right now” situations that you claim are happening are not guaranteed to happen even 6 months from now, let alone 22 years from now.
Furthermore, deficit spending would help the economic situation right now, but it gets made up for (if we actually listen to the economists as opposed to take political advantage of them like we are used to) with higher taxes in the future. Deficit spending is a business cycle solution…not an investment strategy or source of untapped wealth. It is meant to do nothing more than smooth business cycles…takes the hurt out of the dip and takes the top off of the peak.
I know you have already written me off as someone who knows nothing about investing, but ironically I left the one group of investors that you seem to be praising after working in it full time and seeing how idiotic the industry acted. I sincerely hope you haven’t put all your eggs in that basket. Venture capitalists might create more economic value than CHSRA, but not much.
Oh, I didn’t mean that all those statements I made actually called for HSR!
I don’t think economic stimulus is a good argument for HSR.
Venture capitalists? I don’t think, on average, that they’re smart — I agree, they’re idiots! However, they *are* the only rich people such that their money actually *helps the economy*.
As for “Deficit spending gets made up for with higher taxes in the future” — yes, unless the government decides to do inflation instead (which there are some good arguments for). Yes, it’s a business cycle tool, and *right now we’re in a depression*, so we need to use it.
As for the taxes? Right now we *actively require* higher taxes on the extremely rich (billionaires), as their wealth has been giving them dangerous and outsized levels of political influence, as well as suppressing economic activity (because the superrich don’t spend most of their money, making for a critical lack of final demand) so what’s the problem with higher taxes? Nothing!
And yes, to cut out the other usual right-wing argument, the superrich *DO* have enough money to make a huge dent in the federal budget deficit. If we went back to the Eisenhower rates….
Just in case you hadn’t figured it out, the way venture capitalists help the economy is by giving money to people running startups, who promptly spend it all on other goods and services.
Who said anything about creating value? The venture capitalists could help the economy just as much, or more, by simply giving away bushels of cash to poor people, *but rich people do not do that*.
(1) Spending is not a zero-sum game economically. Heard of “money printing”?
(2) Right-wingers, at least the ones who attain higher public office, are mostly severely delusional (drill our way to prosperity! cutting jobs creates jobs! prayer will cure cancer! cutting taxes will raise government revenue!) and there is frankly no point in trying to reason with them. Furthermore, they are now emotionally hostile to anything proposed by someone not of their “tribe”, so there’s no point in trying to win them over emotionally either. Blackmail and bribery are probably the best choices if you *need* to win their support, but it is best to just accept the ones who support good ideas (and not worry about what crazed reasoning led them to do so), and attempt to work around the others.
Trust is important, trust is crucially important, and I’ve actually discussed and thought about trust a *lot*. But the fact is that there are different kinds of trust. Tammany Hall was known to be corrupt and full of graft, but it was trusted to get done what needed to get done. Until the Tweed Courthouse overran its budget by a huge factor — most of which went directly into graft — *without getting finished*. That did them in.
I think most of the “politicals” don’t trust US transit agencies to do a great job, don’t trust them to be incorruptible (well, except perhaps in Minneapolis-St. Paul), but do trust them to “get it done”, at least more than we trust anyone else to. And “getting it done” is a huge priority right now, especially when it comes to “starter lines” — even a half-decent starter line is better, politically in terms of getting future improvements, and technically in terms of getting service, than nothing. (A really badly routed starter line like Austin’s, or arguably Nashville’s, is another matter.) Something to think about.
The thing is, again, the recession won’t last forever. Right now, printing money to fund a stimulus program would work. So would issuing bonds – right now bonds and money are perfect substitutes anyway. But if the $1 trillion in stimulus is spent and the US pulls out, inflationary polic will subsequently lead to, well, inflation.
The get-things-done thing is not the only thing. Remember, Thomas MacDonald rose to fame in part because he built a good road network in Iowa on practically no planning budget and broke the construction contractor monopolies. And earlier, New York’s patrician elite was adamant that machine politics not be involved in the subway (the subway was conceived as a suburbanization project to make immigrants into Proper Americans) – and after the IRT was constructed they were opposed to Parsons’ involvement.
“The thing is, again, the recession won’t last forever.”
With the attitude our elites are showing, it could easily outlast the federal government. Dangerous games they’re playing.
Oh. I guess I left out the *second* reason why “getting it done” is a huge priority, beyond the political one
Peak oil. Failure to get ahead of an unavoidable social/technological change where the US is *already behind the curve* will cause the US to decline even further economically. We’ll simply end up with the economy choked by lack of affordable transportation, while everyone who can moves elsewhere.
Look up the original routing approved by Parliament for the London-Dover line back in the 19th century. It was, frankly, stupid. But it was certainly far, far better for Dover than getting no line at all, which was the alternative at the time.
Was it really “far, far better”? All of the Mania-era lines underperformed initially. They got better over time with the growth of the British economy, to the point that more lines were built, even to areas that were considered so remote in the 1840s that they were used for “They’re building a railway to WHERE?” satire. So if the line hadn’t been built, it would’ve been built later. The question is whether the alignment would’ve improved. Potentially, it could: in the US, some lines were done deliberately on the cheap the first time and then redone better the second time, for example the NEC between New York and Philadelphia. But then again, both doing it wrong the first time and not doing it could lock in a bad alignment if the area develops too much that a better alignment becomes impossible, as in the case of the Shore Line.
Interesting argument. In a country with growing development / suburbanization, which Britain was at the time, the later you built, the more you faced NIMBYism; it became harder to get anything built and the routes got more and more tortured, or more and more ferociously expensive with grade separations (the Great Central mainline, the last, was absolutely loaded with viaducts and earthmoving).
In fact, they *did* get a better London-Dover line (a cutoff) later, but they were unable to fix the segment closest to London (which had developed the most). This is probably typical. Dover, however, clearly benefited from getting a line sooner! Ship traffic was quite capable of relocating.
Now, in a country with depopulating suburbs, it may actually become easier to build new lines over time, so that is something to think about; but this seems highly speculative.
The NEC between NY and Philly isn’t a great example, because the “old route” (later the “Secondary”) was actually pretty good (fairly straight, fairly direct) too. It was considered easier to build an entirely new route through New Jersey than to create an improved Delaware River crossing on the old route (the weak point of the old route), for various reasons. I wonder if, researching, I’ll find NIMBYism again.
Regarding a jobs bill, we’re in a big hole. And our federal government is run by small thinkers.
Sigh. It has been stated that a *trillion dollar* stimulus bill, all of which provides *direct employment*, is about what is needed to get the economy out of recession. And further, that it would be better if funded by *printed money* (US Notes or “greenbacks”, not Federal Reserve Notes) because it would drive private investors to invest in real things instead of sitting on cash.
Is this “politically conceivable”? Apparently not, though you might even get Ron Paul to sign on because it does abolish the Federal Reserve, and it would certainly be popular with the 10% of the US population which is unemployed.
Maybe in 2016 we’ll have an FDR-type candidate willing to make the changes necessary. Or maybe we’ll have a revolution; we don’t have the social safety net Japan has, so I don’t think the US can stagger on in recession and retain peace.
California is in the unique position of having a huge economy which is probably more isolated from the rest of the US economy than that of any other state. California would be quite capable of issuing its own money (to keep it “legal” it could start a state-owned Bank of California and have *them* issue the money).The California economy could probably be taken out of recession with a mere $100 billion. Of course, they have the 2/3 bullshit to contend with, but even if they didn’t, there seems to be nobody in power in Sacramento who is a Big Thinker either. Still, I have higher hopes for CA than for the federal government, or for New York, where Andrew Cuomo is the worst sort of right-winger in Democrat’s clothing (trying to open up our prime farmland to hydrofracking, cutting taxes on millionaires).
The problem, as I see it, is that the High Speed Rail Authority has been a classic example of the “Decide, Announce, Defend” planning and public outreach technique, and Robert’s enthusiasm for the project is all too often conflated with enthusiasm for the Authority and its methods, and instead of just being a cheerleader, he is seen as helping them in the “Defend” stage of that process of crushing the opposition. The opposition, which includes those technicals pushing (sometimes in a not very politically-friendly way) for a better-designed, cheaper, and more useful project, are generally not amused.
Part of the issue is that the perception is true. What started to annoy me about CAHSR Blog was the treatment of the option of a cheaper Tejon alternative. My response was, “CAHSR could have a cost underrun and build an IOS with plausible infusion of federal funds.” Robert’s response was, “Is it worth it?” It was jarring.
Providence station kills me. Four Amtrak ticket windows, three of which were staffed the last time I was there. One MBTA register in a cafe. And the cafe guys actually need to maintain a separate register just for train tickets…
Yeah, I was there yesterday. Amtrak should be the one at the cafe, not MBTA.
Or they could just integrate tickets.
If you look at how MBTA does things, outside the central stations (North, South, and Back Bay), all their commuter rail ticket offices are basically some cafe next to the station. They just applied the same pattern to Providence, probably without even thinking about the Amtrak ticket window. What strikes me as particularly odd is that they haven’t thought to install ticket machines anywhere other than the central stations either (or at least, hadn’t the last time I was in Providence).
They still don’t have TVMs at Providence, despite the fact that the station does have TVMs for Amtrak.
I also find it interesting that the MBTA uses still uses hat checks. Not even Metra does that. I don’t recall them from my rare NYC area commuter rail rides either.
When I was younger (say, 6 years ago?), they started to introduce TVMs for SEPTA’s commuter rail. Eventually they were too incompetent to maintain the machines (or they were bad in the first place, I don’t know), so they no longer have them. Of course, Amtrak has its machines in 30th Street’s main concourse, and NJT has a ticket machine at the SEPTA concourse, but SEPTA doesn’t have machines anymore, period.
Their excuse for taking them out? They couldn’t be converted to accept the “new bills”.
Of course, every arcade game, ATM, bill changer, pop and snack machine, and everyone else figured how to accept the new bills loooong ago. SEPTA really is behind the times.
While we are on the topic of fare payment I have to say I really like that the RTD (Denver) light rail TVMs give you dollar coins.
In New York they don’t accept bills on buses because, to save time, they empty the farebox using vacuum suction, which would tear bills apart. But they accept bills at most TVMs.
Actually, most vending machines only take $1 bills, and the vast majority haven’t been adapted to take $1 coins either. In fact, there are some transit agencies that don’t accept or acknowledge the existence $1 coins at all, despite them being legal tender (BART, I’m looking at you). This is made more ridiculous by Muni having change machines that give out said coins.
In New York at least, the situation is the opposite: you can pay with dollar coins, but not with bills. The only prohibited coins on the buses are half-dollars and pennies.
SEPTA’s attitude towards TVMs is un-fucking-believable.
I even agreed with getting it done with high-speed rail. I’m all too familiar with the infrastructure-building process and its politics to know that you’re caught in the jaws of a dilemma: You either build a project and eat the costs of graft and incompetence; or you don’t build anything and eat the costs of indolence. Either way, you’re wrong.
Then the revised business plan came out, and from reading it, I had known that the CHSRA had pled no contest to incompetence. The guilty plea would be for the authority itself to say forthright that there can be no high-speed rail under any scenario. The revised business plan accomplishes the same thing “Do nothing or go broke getting nothing” and allows the authority to save face.
The battle is lost and gone forever. The only remaining debate for Californians is to decide the method of death. Should it be a state-sanctioned execution (Legislature) or a slaughter (a plebiscite referendum)?
“paying military contractors $1,000 per day”
On a technical, not a political note, this wage is not necessarily excessive. It’s the equivalent of $250k over 250 workdays per year. Contractors are generally paid twice the salary of full-time workers, due to decreased benefits and job security, so this is the equivalent of hiring a full-time worker for $125k. For a skilled and dangerous job far from home, $125k is by no means an excessive wage by market standards.
The problem is not really the wage, but the fact that the military is hiring so many contractors, or indeed the fact that it is conducting so many overseas operations…