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BNSF boss says transport system nearing crisis

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[quote]QUOTE: Originally posted by up829 Regarding the PNW, I wi***he governor luck, but wonder what he's been smoking. The dominant school of economics for the past 30 years has favored de-regulation, privatization, and little or no interference in pricing or profits. The powers that be have shown no interest in controlling prices of prescription drugs or imposing price caps or profits taxes on oil. The state of California with many times the population and GDP of Montana sued the FERC over electric rates and the Adminstration and Justice sided with the FERC and California lost the case. The former Enron execs are on trial for Investor fraud, not defrauding their customers. One possible end result for the PNW could be the complete elimination of the STB and rate regulation. The new Supreme Court would likely go along. [/quote] Of course, the KEY difference is that when you deregulate a market that has multiple players, you get the public benefit of increased competition and subsequent investment (at least in theory). But when you deregulate a monopoly, you get absolutely no public benefit. Ergo, lobbying efforts to enact Staggers was a con game foisted upon the public by a naive Congress who simply have no perception of what is embodied in natural monopolies such as railroads. Do you really think Congress had any idea that the output of Staggers would result in massive retrenchment, industrial consolidation into a handful of Class I giants, paper barriers that prevent shortlines from effectively competing for online business, bottleneck rate gouging that prevents logical line hauls from Point A to Point B, or that differential pricing would result in 400% R/VC rates for domestic rail shippers while importers would be gifted rates of 106% R/VC? Of course not, which is proof of the con game. The California situation was different, because (1) there were multiple utilities and energy firms involved, thus it can be argued that the price spikes were a result of market conditions and not the typical collusion inherent in monopoly markets, and (2) the consumer side of the California energy markets were still regulated, so consumer prices remained out of kilter with the unregulated supply side prices. Quite simply, the California energy crisis was the result of California politics as usual, and it is incredibly disingenuous for California politicians to blame the entire energy industry for their partial deregulation fiasco. Those energy firms who helped craft California's legal discombobulation are the ones who should have been investigated right along with the politicians who took their bling, not the outside firms who simply took advantage of what California's IPO offered them. The most likely result of the rail situation is an AT&T-style breakup of the rail industry, because there really is no other effective solution.
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