It is not easy to forecast business results, so I would have more faith in the Conference of Mayors’ benefit estimates if the mayors themselves, or businesses or taxpayers in their cities, were to invest some of their own money in passenger rail services. Why should rural taxpayers be forced to pay for these allegedly beneficial urban projects?

Also relevant is the 1850 essay written by the French economist Frederic Bastiat "That Which Is Seen, and That Which Is Not Seen." He pointed out that what are seen are the jobs directly created by the government, but that unseen are the workers displaced by the taxes raised to create these jobs.

Furthermore, is there anything in the mayors’ report to suggest that high-speed passenger rail services are the most effective investments to achieve the forecast benefits? Are there, indeed, more cost-efficient ways to link cities? The federal Department of Transportation has published no relevant analyses. Can other contributors to this blog fill this gap?

DOT Secretary Ray LaHood defined “livability”, as

“Being able to take your kids to school, go to work, see a doctor, drop by the grocery or post office, go out to dinner and a movie, and play with your kids in a park, all without having to get in your car."

How about using some of these funds to test the concept on the Secretary and his DOT colleagues? Apartment blocks could be built within walking distance of the DOT’s main DC offices, to include not only residential accommodation but also doctors’ offices, groceries, a post office, restaurants and a movie house. A park could be included, with a school next to it.

The demand for these facilities by DOT staff could be used to assess the need to replicate more elsewhere. Accommodation not taken up by DOT folk could be offered to HUD or EPA staff, with direct non-stop high-speed rail connections to their own main offices in DC.

Just wondering …

The short answer to this question is that governments in the US should spend nothing to develop and promote electric vehicle technology. Why? First, because most have no money to spend. The federal government is sinking in debt. California, which has probably spent more than any other government on building a network of "charging stations" for electric vehicles, is already paying some of its debts in IOUs. Second, because the focus on "fuel efficiency" results in lighter vehicles and therefore additional deaths on the nation's roads, contrary to the assertion that "Improving safety is DOT's top priority". Existing CAFÉ regulations already cost thousands of additional fatalities each year. Who wants to spill more "blood for oil"? Third, because governments do not have the expertise to identify winners and losers in technical matters. If there were a commercial demand for electrically powered vehicles, private capital would be more likely than governments to finance the necessary research and development. The practical ques

For three reasons, federal funds should not be used to subsidize transit services:

First, because it is, illogical, and unjust, to require national taxpayers to finance local services. Those favoring the subsidies may assume that federal funds are costless, but there are alternative uses for them, including returning them to taxpayers.

Second, the principles of both subsidiarity and responsibility require that local authorities which choose expensive transit systems live with the consequences or correct their own mistakes.

Third, because the services for which subsidies are currently requested generally run at low frequencies and at high cost. In contrast, shared taxis, and associations of minibus owners, offer seated services in many cities at higher frequencies, lower costs and without subsidy. Examples include the “Black Taxis” of Belfast, the Por Puestos of Caracas and the Sherut taxis of Israel. In the US such services are generally illegal but run without subsidy in Atlantic City (legally) and in New York City (legally).

Lisa -

I appreciate the additional expert information on tarmac delays. This indicates that the current systems for controlling aircraft departures are “less than perfect”.

And it suggests that it would have been better for the federal authorities to have studied the problem and recommended improved airport procedures than to impose heavy fines on the airlines, which do not seem to be the principal culprits.

Another point: All respondents assumed that passengers cannot de-plane without a gate. But we all know that movable stairways can enable able-bodied passengers to step down to the tarmac. [That is how people get on and off planes in most countries!] Inconvenient, but better for many than sitting for lengthy periods in full aircraft. Why do not US airports make arrangements to enable passengers to get on and off aircraft, and safely to (and from) a terminal, even when all gates are occupied?

Lisa -

To help answer this question, could an aviation expert please explain why passengers have to be left on tarmacs for three hours or more?

On the face of it, it seems ridiculous. If departures have to be delayed, why cannot boarding be delayed or have the aircraft pull back and require the passengers (and crews) to wait in the terminals?

I know little about aviation but consider even a fifteen-minute delay on the tarmac unacceptable. It just does not make sense for traffic controllers and airlines to treat passengers in this barbaric way. Why does this happen, and so often?

Lisa -

I agree with Bob Poole that the question cannot be answered without establishment of an investment criterion, but I doubt whether the benefit/cost ratio is the right one, as the invention of “benefits” can enable politicians (aided by complicit economists) to justify any project.

We need a criterion that reflects consumer choice and willingness to pay. In market economies that criterion is profitability. We already use it in aviation, shipping and railroads. We now need to apply it to roads, and thus get an assessment tool that can cover all major transportation investments.

You might feel that my answer is not relevant to the US today, to which I would respond that your question is more relevant to Cuba. The recent incursion into “High Speed Rail”, with no analysis to justify it, shows that the US federal government is not organized to assess investment priorities in transportation.

The most useful federal policy would be to not reauthorize highway funding, and to encourage the states to apply to transportation th

I offered no “false choice”. I support both road safety and the commercialization of rest areas.

Lisa Mullings is sure to know more than I do about rest areas, but even her eloquence has not convinced me that a federal ban on commercial activities in rest areas is in the public interest.

Ms. Mullings asks why "new or improved roads can make some locations less profitable." Here is an example: A new by-pass can attract traffic from other routes and thus make locations on the old routes less commercially attractive.

Because tired drivers can cause fatal accidents, the federal government has a compelling — indeed a vital — interest in ensuring the availability of convenient rest areas on inter-state highways. So a federal ban on selling fuel and food at rest stops seems to make no sense.

New or improved roads can make some locations more (or less) profitable for business, and such changes are part and parcel of any dynamic economy. Should not road owners — even when the owners are states — have the right to enhance their facilities?

Whether commercialized rest areas can constitute “unfair competition” would seem to depend on the circumstances. They certainly need not be subsidized, nor be “state-enabled monopolies”, except in the sense that every facility is a monopoly in its own location. Commerce, which should be encouraged by the federal government, is in some respects still regulated by the states concerned.

Should not legal facilities that improve road safety merit government encouragement rather than government bans?

Steve –

It seems to me that our differences are not small, and that the “user pays” principle can be the basis of the strategy you seek that

“documents our needs, designs a program to benefit the passengers and shippers that use our system, and identifies additional revenue sources to support today and tomorrow’s transportation system.”

That strategy is called the free market system, and we rely on it for most of our necessities.

If transportation customers are allowed to pay for what they choose, and get what they choose to pay for, benefits are identified, competing programs are prepared, and revenues sources are found.

Are not the politicized transportation programs and processes you seek to have reauthorized just the ones that lead to the “circular firing squads” you deplore?

Dedicated fuel taxes are an attempt to apply the “user pays” principle. They should be supported, as the alternative of “everyone tries to live at the expense of everyone else” has proven to

If the US Congress were really interested in the efficient development of transport infrastructure, it would get out of the business of trying to finance it. It would decline to re-authorize the federal Highway Trust Fund, and it would abolish the fuel taxes that feed it. Then, the individual states would be fully responsible for financing their roads, and would raise transportation funds in accordance with the wishes of their voters. Some states might even invite private providers to finance the facilities that travelers wish to pay for.

Unfortunately, Congress is likely to prefer to retain its powers, rather than to increase transport efficiency, and will reauthorize something like the present system. In that case I am convinced by Bob’s statement that the “user pays” principle should prevail, and that monies paid into a highway trust fund should be dedicated to highways. Efficient planning would also apply the rule to individual roads.

Robin’s response seems less convincing, especially at a time when Congress has “run out of other peo

I agree with Bob Poole.

President Obama often talks of his support of the market economy. In market economies, investment in essential facilities, such as transport, should respond to customers’ willingness to pay, and not to idiosyncrasies of politicians. The government’s role should be to ensure that charges for the use of transport infrastructure reflect the relevant costs.

The financing of rail infrastructure is a case in point. Why should road users and other taxpayers finance it? Why should those who wish to revert to 19th century technology not pay the costs themselves?

Those who believe that investment in transport is too important to be left to the vicissitudes of politics obviously prefer expenditures relating to policy — such as establishing a transit safety programme — to expenditures on infrastructure, which should be driven by consumers’ willingness to pay, and thus financed commercially.

Priority should have been given to reforming the ways highways and transit are financed. The statement in the budget that

“the administration seeks to integrate economic analysis and performance measurement in transportation planning”

is flatly contradicted by the Secretary of Transportation’s recent announcement that less emphasis is to be put on such measurements in the future.

Is not a “National Infrastructure Bank” needed only to fund unsustainable projects?

Lisa –

On February 9 I took time off from shoveling snow (now my daily tribute to “Global Warming”) to look at The Washington Post. On the front page I saw the story headlined:

Insurer warned U.S. on Toyotas

Acceleration issues cited in 2007

I suggest that the best people to deal with safety matters are neither the states nor the feds, but the insurers, who have compelling financial interests in safety. In maritime transport, where safety is taken very seriously, it is insurers, not local governments, which test and license vessels and crews.

How would Adrian Lund react to a proposal that insurers should craft rules relating to “drivers using phones behind the wheel”? Could they then announce that claims arising from accidents would not be met, or not met in full, if their rules were found to have been broken?

I’ve still not seen any economic or financial analysis justifying expenditures on high-speed rail, but John Horsley helped by writing that

“As AASHTO and its member states work for passage of a multi-year authorization bill, we will also push for a dedicated source of funding that will help to build the nation’s high speed and intercity passenger rail system.”

This suggests that AASHTO analysts have concluded that user fares will be insufficient to fund passenger rail systems, because the revenues will not cover the expenditures.

The required subsidies are likely to make the nation poorer, the surest way for the administration to achieve its transportation objective of reducing vehicle-miles travelled in the USA.

Actually, as John well knows, there is already a dedicated source of funding for high-speed rail. It is called the federal Highway Trust Fund.

In the light of:

(a) President Obama’s early announcement that Peter Orszag, his new budget director, would conduct a thorough review of federal spending programs, "eliminating those programs we don't need and insisting that those we do need operate in a cost-effective way", and

(b) Phineas Baxandall’s interesting recommendations that “any private deals should be undertaken only with full transparency and accountability”, to “Maximize “bang for the buck””.

Would it be in order for a transport economist to ask, before commenting on the proposed investments in “High-Speed Rail”, for a summary listing of their costs and benefits?

Phineas’s recommendations also require the identification of those who benefit and those who pay, and estimates of the costs and benefits of alternative investments in the same corridors, for example, investments in toll roads, possibly including dedicated truck lanes and bus lanes.

Steve –

How right you are to seek transport policies that “maximize the efficient use of existing infrastructure and minimize the need for new infrastructure”! As these are the incentives of the private sector, do you support the privatization of transport infrastructure?

“Measure”, “learn” and ”do” (in that order) indeed seem a useful basis for transport policy, but the transport policies of the current administration, as evidenced by its early and blind support of anything on rails, seem more akin to the reported prayer

“Give me chastity and continence, but not yet”.

My suggested criterion “Maximize miles travelled per Capita”, is “subject to the travelers paying the costs arising from their travel choices”, so your important point about existing facilities not being maintained does not seem relevant.

I confess I do not know how Oregon, or you, or Emil, or Michael, define “accessibility”, but suspect that a policy

Lisa –

I believe I detected in a recent comment of yours some unhappiness with my choice of “profitability” as a performance measure for transport investment. You asked for “a greater diversity of thought … so we could get a real debate going.”

So, allow me to offer another performance measure, to please not only you and Steve, but also the folks at the Bipartisan Policy Center. How about “Maximize miles travelled per Capita”, subject to the travelers paying the costs arising from their travel choices?

Most people seek to maximize their travel within the time and money constraints that bind them. Those who have more money tend to travel more than those who have less, and those who can choose their places of residence tend to live in places where they can travel more, rather than less.

Maximizing travel within constraints of time and money may run counter to the policies of some governments, but those who work for such governments can be seen to choose travel modes that maximize their

Steve –

Thanks for your further challenge, but I find it difficult to agree that it is “critical” — or even appropriate — for government to “to find measurement efficiencies to minimize cost and effort … to reduce VMT, thereby reducing fuel use and GHGs, reducing wear-and-tear and improving safety”.

Most of us have to ration the use of our limited resources to best meet our needs, but it is another matter for others to dictate such choices to us. So long as travelers pay the costs arising from their choices I do not understand the basis for travel choices being restricted by any government — particularly by the US federal government.

Your reference to “maximize policy outcomes” is not convincing. Current federal policies are confusing and conflicting. Fixed rail services, for example, whether “High-Speed” or “Light”, are more likely to increase GHGs than to reduce them.

Steve –

Thank you for framing so neatly the need for performance measures.

In market economies we use profitability as a principal performance measure. We use it not only to enrich investors, but also to please others, as profits can only be made in providing goods and services that customers wish to pay for.

We use profitability as the performance measure in shipping, aviation (with the notable exception of our congested government-owned airports and air traffic control) and freight rail. And we use it for the provision of food, water, telecommunications and other necessities.

The main sector in which we have abandoned profitability is roads. One way of restoring that performance measure to that sector is to establish urban and regional “highway authorities” run on commercial principles, in the manner of public utilities. By being self-financing, they would meet Keith Lauglin’s desire for “meaningful performance measures to ensure that the taxpayer’s transportation dollars are invested wisely”.

R

“But the age of chivalry has gone. That of sophisters, economists and calculators, has succeeded, and the glory of Europe is extinguished for ever.” [Edmund Burke — Reflections on the revolution in France.]

Secretary LaHood, who may have been reading Edmund Burke, seems determined to restore “the age of chivalry” to transportation and have it “succeed” the “sophisters, economists and calculators” who were allowed to run wild under the Bush regimes.

As a side benefit, he would also restore, in the United States, “the glory of Europe”, or at least that part of it involving their failed policies of trying to “coerce people out of their cars”.

Will the change be beneficial? “Narrow cost and performance criteria" have their disadvantages, but do help government analysts to identify beneficial projects. As Ken Orski points out, their dilution by undefined criteria, such as “livability”, would enable “almost any project to be funded and there would be no

The three most important transportation developments in 2009 were:

1. The announcement by the Government of the Netherlands that it wants to introduce in 2012 a new method of road–use charges based on distance traveled. Vehicles would be equipped with GPS devices that record distances travelled and enable the costs to be debited to road users, and credited to road providers, without revealing information about individual trips. GPS-based location systems could offer road users important benefits, such as PAYD insurance, rightly supported by Michael.

2. The discovery of over 1,000 “CRUTape letters” in the files of a major climate research unit, suggesting that the “Global Warming” scene being promoted by cash-hungry governments relies on the kind of junk science that candidate Obama undertook to avoid.

3. The adoption by the US Department of Transportation of policies aimed at reducing vehicle travel in the USA.

The first and second developments can help free-market followers to

Randall Pozdena’s study has aroused interest and some consider that its conclusions merit further review.

But the study should surely be reviewed on it merits, without regard to the policies of “the web site of the organization that published it, the Cascade Policy Institute”.

We try to shed light on controversial issues — if they were not controversial, Lisa would not ask us to discuss them. Is it conducive to our work to describe entities we disagree with as being “blatantly biased”?

Some of my best friends are biased, but I do not call them that, at least not in public. And I hope I try to learn from them.

Governor Glendening -

What data support your assertion that "obesity and respiratory illness are dramatically reduced in more walkable, less car-dependent communities"?

There are far too many "walkable, less car-dependent communities" whose members suffer from appalling health conditions and short life expectancy.

Are you urging the federal government to force Americans to revert to such conditions?

Gabriel

It is not easy to generalize about the costs and benefits of travel. In a command economy one can envisage the government determining what is “good” travel (e.g. walking to work; traveling by public transport) and what is “bad” (e.g. driving children to distant schools).

But societies based on free choices rely on other criteria to distinguish the fruitful from the wasteful: We generally consider acceptable those activities for which users pay all the costs, and less desirable those for which users do not pay the costs. Application of this yardstick to travel leads to the conclusion that travel for which users (or beneficiaries) cover the costs is acceptable, and travel for which users do not pay is unacceptable. Therefore, while seeking to ensure that travelers pay the costs arising from their choices can be a legitimate government objective, “reducing vehicle miles traveled” cannot be.

It follows that the measures listed in this question do not necessarily “improve the efficiency of the existing surface transportation syste

Bill Wilkinson is surely right to ask

“Why do we persist in believing that public information and education are going to change traffic safety outcomes when, after decades of this stuff, we’re still killing approx. 40,000 people every year?”

But Bill’s answers — and those of some others — miss a critical factor – financial incentives. Over a million people are killed worldwide every year, but those to blame are often not held financially accountable.

One way to bring financial accountability to bear would be to require insurers to test and license the drivers and vehicles they insure. Placing this responsibility on insurers is common in maritime transport, where safety is taken very seriously: Ships and ships’ officers are tested and licensed by Lloyds and other insurers.

Insurers have compelling incentives to avoid unsafe drivers and vehicles, and are likely to do a better job than the government departments currently responsible for those vital responsibilities.

For example, an October 2007 repor

How about a federal mandate abolishing safety belts, and legislating that all steering wheels be equipped with sharp spears pointing at drivers' chests?

Governor Glendening is right. The public and private sectors do indeed have “dramatically different goals and priorities”.

The private sector seeks to provide services at a profit. So it has to provide what customers wish to pay for. Is that bad?

But what does the public sector seek? Glendening mentions “reducing vehicle miles traveled and … focusing on transportation to increase walkability, housing affordability and economic prosperity”.

Most of us can walk as much as we want to, without help from government. As for “housing affordability”, there is plenty of evidence that “Smart Growth” policies increase, rather than decrease, accommodation costs. Housing is cheaper in Texas than in Maryland.

As for economic prosperity, there is worldwide evidence that travel increases prosperity by increasing opportunities for employment, trade and leisure activities. Reducing travel is thus likely to reduce economic prosperity and, for that reason alone, does not seem to be a worthy government objective.

Robin Chase raises important issues, but would find it difficult to show that the public sector has an advantage in promoting competition. Not only does the Washington Metro, for example, prohibit competition from outsiders, it actually closed down some of its own popular bus services to force travelers to use less convenient rail services.

And the reason that Comcast can restrict the use of its services is because the public sector gave it a monopoly.

Nor is she right to assert that private providers are interested only in profit. Many of the hundreds of toll roads provided by the private sector in the US and UK in the 19th century were barely profitable, or not at all. They were provided by local people wishing to improve their neighbourhoods.

Robin is however right that both private and public agencies can provide “high quality, well-maintained infrastructure”. The drawback of public sector provision is not the inability to launch splendid services, but the inability to close them down when customers are no longer prepared to pay for them.

For Professor Ellen Dannin:

No! Your generalization is not correct.

You seem to have forgotten about the PFI (“Private Finance Initiative”) contracts executed in the UK in the 1980s and 1990s. The private providers assumed all traffic risks, and all cost risks.

You and your students can read about them in Chapter 17, by Neil Roden, “Development of Highway Concessions on Trunk Roads in the United Kingdom”, in the award winning Street Smart — Competition, Entrepreneurship and the Future of Roads published in 2006 by Transaction Publishers for the Independent Institute and edited by

Gabriel Roth

Mary Peters is correct to identify private investment as

“not just a way to fund projects”, but also “as a program delivery strategy deployed on the right projects.”

But she is too polite to challenge the premise of this week’s question, that “the public interest” needs to be protected from “private investment”.

While private investment can be misguided, even corrupt, the more urgent need today is to protect the public from errors in public investment, which can also be misguided and corrupt.

Private investment in transport projects is generally preferable because it has to respond to customers’ willingness to pay. Public investment, on the other hand, responds to politicians’ preferences, and to their ability to tax and regulate. As federal politicians can tax and regulate more than others, it is their preferences that merit the most scrutiny.

What is the best way for “policymakers” to “ensure that the public gets a fair deal”? How about gett

How right Ken Orski is to distinguish between a federal “interest” and a federal “role”. There is a federal “interest” in food being good for us, but it does not follow that there should be a federal “role” in the actual provision of food. Food stamps can be provided to those unable to afford food, but it does not follow that governments should finance, establish or operate food stores.

Since the completion of the Interstate Highway System, the federal financing role in surface transport has been conspicuous by its irrelevance to “core national priorities”. What has the Obama administration done to justify further federal involvement? Where is the analysis justifying investment in “High-Speed” rail?

As federal money is free to states receiving it, they have incentives to claim as much as possible, so there is no way of knowing whether $500 billion would be too much or to little to meet the needs of transport users. In the absence of convincing investment criteria (which Congress does not provide)

Steve -

Thanks for your constructive suggestion, that the most useful federal role would be to put more federal transportation funds directly in the hands of local officials. Would not the simplest way to achieve this desirable objective be for the states, rather than the federal government, to collect the transportation funds themselves in the first place?

Of all the suggestions (except yours) made for further federal action, I suggest that a uniform carbon tax, carefully calculated to reduce “Greenhouse Gas” emissions, could be the least harmful.

And how many of us would like to see land developers lobbying members of the federal congress for improved “livability”?

Gabriel

Many of the most urgent transport investment needs arise from the congestion of existing roads in urban and suburban areas. These can be dealt with by providing express toll lanes that could be privately financed, without the need for additional federal taxes. The money would come from electronically-paid tolls set at levels designed to provide congestion-free travel. Such “HOT” lanes have been operating successfully on California’s State Route 91 since 1995. They were privately provided without government financing.

Ken Orski, with his usual modesty, omits to remind us that he himself, with Robert Poole, reviewed the possibilities of $40 billion being spent on “HOT Networks” in eight major urban areas which, seven years ago, could have been largely self-financing, and congestion has increased since then. In addition to relieving congestion, such networks could accommodate congestion-free high quality express bus services.

The Poole/Orski “HOT Networks ”study was published as a Reason Policy Study in 2003 but was updated and

It is hard to accept the assumption underlying this question, that earmarks can undermine “good policy”. What “good policy”? Since the completion of the Interstate Highway System, federal involvement in transport has not produced much of it.

Is it not a triumph of hope over experience to expect better from those who, on the basis of no published analysis, want to establish new, heavily subsidized, high-speed rail systems, and to reduce people’s vehicle-miles of travel?

Earmarks, of the kind used by Congressman Jack Murtha to force taxpayers to finance the airport in Johnstown, Pennsylvania (which accommodates just three daily return commercial flights), should stay. They illustrate the absurdity of federal involvement in financing transport infrastructure and services, and strengthen the case for not reauthorizing it.

In market economies infrastructure projects are delivered and maintained by private suppliers, not by governments. The private sector has provided road, rail and port infrastructure projects in the US since its establishment, and can do so now if allowed to.

The United Kingdom’s 1994 “Private Finance Initiative” (PFI) illustrates how private providers, under government guidance, can bid to supply, maintain and operate infrastructure.

The government specified its requirements in detail and invited private consortia to bid for contracts to design, finance, build and operate new roads or road improvements. The bids were for the payment, in pennies per vehicle-mile, to be made to the winning consortium over a long period, typically thirty years. These payments were known as “shadow tolls” because they were paid not by the actual road users but, on the basis of traffic counts, by the government, which became a buyer of road services on behalf of road users.

Eight “shadow toll” projects were successfully delivered in the 19

May I, with respect, be allowed to query the figure given by William Millar, that “transportation accounts for 28% of greenhouse gas (GHG) emissions in the U.S.”? If I am not mistaken, he has been misled by a 2008 EPA report.

According to other sources, (for example, http://www.ncpa.org/pdfs/GlobalWarmingPrimer.pdf ) only 3.6% of greenhouse gases are CO2, and only 3.4% of CO2 is caused by human activity.

If, as I suspect, the EPA figure relates only to GHG emissions resulting from human activity, transportation accounts not for 28% but for 28% of 3.6% of 3.4% which (according to my calculator) is 0.03% of US GHG emissions.

For the benefit of those of us mature enough to face reality, could Mr. Millar ask his climate experts to explain the derivation of the widely quoted 28% figure, which seems to be exaggerated?

How can we achieve the goals of cutting transportation emissions and increasing trust fund revenue? These seem to be separate questions.

As has been suggested in these exchanges before, the most efficient way to cut transportation emissions is to tax the use of carbon, and a tax of $50 per ton of carbon dioxide has been suggested, equivalent to 45 cents a gallon of fuel. To be efficient, the level of carbon tax should be uniform for all carbon uses, and the same nationwide.

As for increasing trust fund revenues, why should they be increased? As Jim Burnley pointed out, the federal Highway Trust Fund has outlived its usefulness, and a new structure is needed to replace it. If common sense were to prevail, the “new structure” would involve the abolition and respectful burial of the HTF, with highway funding reverting to the states, which would be responsible for imposing cost-based charges for road use, and providing the facilities users were prepared to pay for. Under such conditions, much of the financing could come from private sources.