Thinking Tech

The economics and politics of supertrains

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There is plenty of demand for high-speed rail in major population corridors. What is lacking is a willingness to share risks, an unwillingness born of politics.

Contrary to what Robert Samuelson may think trains are not boondoggles.

Their economic models are just different, which lead us to treat them as boondoggles.

(Full disclosure. I have lived next to a rail station on Atlanta's MARTA line for 25 years. The picture is of that station, from Wikipedia.)

Trains are a big capital cost. They require track and rolling stock. Track means right-of-way, so we're not just talking about financial capital but political capital as well.

Trains also have ongoing costs people underestimate in calculating fares. Maintenance, cleaning, policing. Some of these costs are easy to avoid, again for political reasons, but putting them off is a false economy.

What trains mainly offer are enormous savings in energy costs. It costs 20 times more energy to get you around in a car than on a train. But you bear the costs of the car yourself. Train costs must be shared.

This is why America does not have many trains moving people anywhere. Americans don't like long-term plans. We don't like sharing costs. It all smacks of socialism and central planning.

But that's not an economic argument. It's a political one.

There is plenty of market demand to sustain high-speed train service in major population corridors, and light rail within cities that will reduce pollution and total energy demand. What is lacking is a willingness to share risks, an unwillingness born of politics.

That is reflected well in the Obama stimulus, which put $8 billion into high-speed train planning. The money was spread around the country, reflecting the desire of Congresscritters that everyone get a taste.

And that's the boondoggle. A single high-speed inter-city link could cost $12 billion. Maybe more. Economists like Edward Glaeser of Harvard believe this cost can't be made up, and the Obama stimulus money is butter spread over too much bread to make a dent in the capital required to do the job.

Rather than spreading $8 billion or $12 billion around the country, a fraction of that money could have been spent within one year -- the intent of the stimulus -- to come up with a priority list of routes. Which make the most sense, in terms of traffic and possible economic payback. Then create mechanisms to build them, and throw what money remains in that pile.

The problem here isn't economic. It isn't technical. The problem is political. And it starts with the attitude "no, we can't."

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Dana Blankenhorn

Contributing Editor

Contributing Editor Dana Blankenhorn has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement and founded the Interactive Age Daily for CMP Media. He holds degrees from Rice and Northwestern universities. He is based in Atlanta. Follow him on Twitter. Disclosure