June 24, 2002
From the desk of Jane Galt:This Washington Post article makes
This Washington Post article makes the good point that we're blaming Amtrak for failing to fulfill the impossible task we've set it: run a bunch of impossibly unprofitable passenger routes through every whistle stop that has ever been served by passenger rail in every powerful Congressman's district, while not losing money like a lottery winner in Vegas.
However, I must take issue with the core assumption that running impossibly unprofitable passenger routes is something that every right-thinking citizen supports. Consider this telling quote:
Just about everybody is in the game: The Office of Management and Budget, the Federal Railroad Administration, several congressional committees, a consortium of banks that extend Amtrak credit, the rating agencies and a crew of auditors. The only constituency without a voice seems to be the hundreds of thousands of passengers in the Northeast Corridor, California, Chicago and elsewhere who will lose their mode of transportation if action to save the rail system is not taken immediately.
As far as I can tell, the only constituency without a voice is the large number of people who have never ridden the train and have no intention of starting, and yet are expected to dole out their hard-earned dollars in support of the abovementioned impossibly unprofitable passenger lines.
Or consider this treasure:
Under a starvation diet of subsidies, Amtrak still has produced the nation's first high-speed rail system [Which would be even better if it, you know, ran at high speeds -- ed.] and has kept a federally mandated unprofitable national route structure in business [Fantastic! There's nothing like keeping unprofitable operations in business to make a nation great -- ed.]. To balance this high-wire act, it has deferred maintenance and leveraged assets within its control. [Journo-speak for "It's mortgaged itself to the hilt to cover current operating expenses", behavior that would land a private CEO in a lot of hot water, if not the pokey. -- ed.] Passenger revenue has grown 44 percent in the past five years; expenses have kept pace with revenue until this year.[If you can't grow your passenger-to-expense ratio in a year when your major competition turns into a gigantic flying bomb, when should we expect improvement? -- ed.]
Or, you could just feast your eyes on this:
Highway users rely upon a highway trust fund generating more than $30 billion a year. Since Sept. 11, the aviation industry has seen a $17 billion loan-guarantee program added to an already significant government investment. Yet Amtrak, requiring a bare minimum of $1.2 billion a year, is budgeted to receive $521 million.
1) The highway trust fund is generated from passengers using the highways, which is how we'd like to see our trains be funded, thank you very much.
2) A loan guarantee is not the same thing as a direct subsidy because it is
a) One time
b) Worth less than $17 billion even in a worst-case scenario because a dollar tomorrow is worth less than a dollar today
c) Probably not going to cost $17 billion, because it is unlikely that every single airline will declare bankruptcy.
3) Go figure? We're not giving Amtrak any money because NO ONE IN THE COUNTRY WANTS TO RIDE THE TRAIN! You've probably noticed this, manifested in the lack of passengers on most of your trains.
Which is, of course, why he wants to hold them up at gunpoint to get more money. Imagine if Johnson & Johnson could do this. "Toothpaste sales are down! Quick, taxpayers, pay us for not making toothpaste!"
Take Amtrak out in the yard and shoot it quietly, then carve it up and give the pieces to teh needy. Or some such. But stop wasting our money.
Posted by Jane Galt at June 24, 2002 6:59 PM | TrackBack | Technorati inbound links