The author of this Washington Monthly article claims deregulating the airlines 30 years ago has been a failure since there's fewer major airlines, airline fees have gotten higher and higher, and there's fewer viable major hubs, with some cities like Memphis getting reduced airline traffic. Of course IMO, the higher airline rates and fees are partly due to increase fuel costs in the last several years.
And smaller regional airlines are having problems too. Just a couple days ago here in the midwest the regional airline Direct-Air canceled all their flights from now and into May, and people who pre-paid are justifiably ticked off.
This is a good reason why the nation must invest more in regional passenger rail travel.
http://www.washingtonmonthly.com/magazine/march_april_2012/features/terminal_sickness035756.php?page=1
I'd like to see any data regarding airfares, including fees, being higher (inflation adjusted) than they were 30 years ago. I suspect the writer included it as an assertion without any underlying data at all and that the reality is just the opposite. Perhaps if one analyzes "fees" as a standalone item that is true, but not the total charge for the flight.
Washington Monthly is a magazine for and about the federal government. I suspect that on almost any subject they would support increased regulation. More regulation = more federal jobs = more readers.
Deregulation, like anything else, has to be measured by expected or hoped for results. If one thought that deregulaiton of airlines would mean a free wheeling anything goes growth, then, no, it is a failure. If one thought that it would mean a weeding out of weaker operations, merging of others, etc., then, yes, it was successful. If one thought it meant major airline service to every airport, cheaper fares for everyone on every route, and freedom from all government rules and regulations, then, no it hasn't worked out that way. If one expected one or two major airlines being fed by much smaller short lines, ..er...airlines, stupid, not trains...much smaller commuter lines, then, yes it is a success. Hmm...deregulated airlines vs. deregulated rail lines vs. deregulated telephone companies vs deregulated banks. Ah! Its all in the perspective from which you started.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
Like everything else, it's a mixed bag.
The initial result was the entry into the system of many small startups. Most failed or were absorbed by the major carriers who couldn't compete so they bought them out or squashed them with predatory pricing. However, over time, several of the major carriers failed, or reorganized under bankruptcy protection.
Now the small carriers mostly function as subcontractors for the major carriers. Like everyone else, all of them are being pressured by the oil company greed.
If you look at what has changed it is the loss of air service at many small city airports. Small communities do not have enough traffic to support air service. All but the largest cities have only commuter level service to a major hub. To fly from one small or medium size city to another you must often go far out of your way through a major city hub. When hubs and plane changes are involved, the speed advantage of air travel is lost.
That is the market that could best be served by rail. Very few people will take a train from NYC to Chicago, but there are many smaller communities along the route between NYC and Chicago. Those people have a need to move around among those communities. Time has proven that air service to small communities is not fiscally feasible.
Dave
Lackawanna Route of the Phoebe Snow
From the consumers side of things, huge success. Just look at the growth of passenger miles before and after as well as the fares! That's a slam dunk. Are there potential anti trust issues from too much consolidation? Probably. A need to regulate some behaviors? Probably. But theses are needs that grew from dereg, not dereg itself.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
That article reads like a Wendell Cox piece, just slanted the other way. Fact cherry picking is the order of the day...
The article is long on rhetoric - language designed to have a persuasive or impressive effect on its audience, but often regarded as lacking in sincerity or meaningful content: all we have from the opposition is empty rhetoric - and short on verifiable facts. There are too many assumptions, fallacies, etc. in the article to go into all of them.
Under the regulated scheme favored by many, including presumably the authors of the article, incompetent airlines were allowed to survive at the expense of consumers, who were forced to pay higher than market fares for air travel, as well as depend on support from the taxpayers to cover operations that could not be sustained in a free market economy. This applies equally well to railroads, trucking companies, telecommunication companies, utilities, etc.
Deregulation weeded out the incompetents. More importantly, however, it opened the market to new carriers, i.e. Southwest Airlines, Jet Blue, etc. that have made air travel possible for millions of folks who otherwise could not afford it.
Numerous studies have shown that when the cost of air travel is adjusted for inflation, it costs less to fly today than it did in 1979, which was the last full year before deregulation.
Airlines have had a difficult time making money. That's part of the idea behind competitive markets. If you cannot offer a product or service and make money on it, you go out of business. And someone else has a go at it. Propping up inefficient businesses, read Amtrak, means that the taxpayers (non-users) have to pay for a money losing operation.
The authors have cherry picked scenarios. For example, they decry the fact that U.S. Airways pulled its Pittsburgh hub, thereby reducing significantly the number of its flights into and out of Steel City. They seem to have overlooked the fact that Southwest Airlines has filled a significant number of the U.S. Airways slots. For April 25th Southwest has six flights from Pittsburgh to BWI, with connecting service to New York. American, Jet Blue, United, Delta, etc. have 12 non-stops and 10 one-stops for the same date. The average fare for the non-stops is $71.80, whilst the average fare for the one-stops is $82.60. Of course, the cost of walk-up and last minute fares will be much higher.
My brother lives in Pittsburgh. I visit him two or three times a year. I have no trouble getting there from Austin on Southwest or American. And he has no trouble traveling from there to a variety of locations, which he does frequently. It is true that approximately 40% of the relatively new Pittsburgh airport is shuttered or under utilized. The reason is because the airport was over built for a city that has been losing population for decades. But the city fathers and mothers did not want to recognize it, so they built an airport for a city that was!
What about Cincinnati? Getting from there to major centers does not appear to be a problem. As examples, there are 12 non-stops and 5 one stops to New York. To Los Angeles there are two non-stops and 32 one stops, with the lowest fare being $89.10. Of course, as is true for many locations, service to smaller communities has been reduced or eliminated, although in many instances it is no more than a couple of hours by car to a major city airport. The service that remains to smaller communities can be pricy. But this has always been the case. Passenger rail service to smaller communities, even in its hay day, was never as good for smaller communities as metropolitan areas.
The only place where passenger rail makes sense is in relatively short, high density corridors where the cost of expanding the airways and highways is prohibitive. In most instances bus service is the best option for smaller communities that need commercial ground passenger transport. The last thing this nation needs, given its tremendous debt burden, is to be locked into a transport system that the users will not pay for and, therefore, must be carried by the taxpayers.
Of course, the author failed to mention the fees imposed by government fiat, to support the police state security that is far more obtrusive than it was when deregulation was begun. Incompetent airport screeners and security devices of questionable technology don't come cheap.
At present, my little neck of the cactus is a hundred plus miles (and a state line) from the nearest rail passenger station, so my choice is either put up with the indignity or pilot my pickup. Fortunately the latter is a notoriously durable brand...
Chuck
Sam1 Airlines have had a difficult time making money. That's part of the idea behind competitive markets. If you cannot offer a product or service and make money on it, you go out of business. And someone else has a go at it. Propping up inefficient businesses, read Amtrak, means that the taxpayers (non-users) have to pay for a money losing operation. ...The last thing this nation needs, given its tremendous debt burden, is to be locked into a transport system that the users will not pay for and, therefore, must be carried by the taxpayers.
Airlines have had a difficult time making money. That's part of the idea behind competitive markets. If you cannot offer a product or service and make money on it, you go out of business. And someone else has a go at it. Propping up inefficient businesses, read Amtrak, means that the taxpayers (non-users) have to pay for a money losing operation. ...The last thing this nation needs, given its tremendous debt burden, is to be locked into a transport system that the users will not pay for and, therefore, must be carried by the taxpayers.
I am new here (though a Trains subscriber since 01/1979) and do not want to stir things up, but I would respectfully disagree with the line of argument made here, which is essentially a paraphrasing of neoclassical economics (something a professor once described to me as "abstract and weird"), Anglo-style neoclassical economics at that. The idea that something is useful only if a profit can be made upon the discrete transaction of selling/purchasing it is a bias common to neoclassical economics, one that if followed throughout history would leave us wandering around on goat trails, and likely using stone knives and wearing bearskins. No less than Adam Smith knew of this fact, his Third Duty of the Sovereign (i.e. of the state/ government ), following internal police and external defense (essentially defense of property rights from both internal and external threats) is this (from The Wealth of Nations (http://socserv.mcmaster.ca/econ/ugcm/3ll3/smith/wealth/wealbk04):
According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.This third purpose of government cannot be more clear: there are things for which no firm can earn a profit but which are useful to society nonetheless and as such should be pursued. Neoclassical/micro economics is useful for allocating funds to a a task society has already determined necessary, in determining say determining the mix of shovels and workers that should be purchased once we have decided to dig a ditch, It is NOT useful in determining what is useful and what is not. I am a former college professor/ political economy specialist.Respectfully, Phil
Phil: I think you you made a great contribution to this thread and forum.
I've just made reservations for four different flights. Anyone who thinks the current system of travel that we "enjoy" in this country is preferable to the regulated state of affairs of some years ago must not personally experience what the rest of us are going through.
Watching proud old companies like American Airlines go the way of the New York Central Railroad sickens and depresses me. Then today we read that Mittens Romney pledges to cut out the Amtrak subsidy. At this rate we'll soon have privately-owned goat trails in the USA.
I loved reading this "Third Duty of the Sovereign" from Adam Smith. Thanks for posting it.
NKP guy Phil: I think you you made a great contribution to this thread and forum. I've just made reservations for four different flights. Anyone who thinks the current system of travel that we "enjoy" in this country is preferable to the regulated state of affairs of some years ago must not personally experience what the rest of us are going through. Watching proud old companies like American Airlines go the way of the New York Central Railroad sickens and depresses me. Then today we read that Mittens Romney pledges to cut out the Amtrak subsidy. At this rate we'll soon have privately-owned goat trails in the USA. I loved reading this "Third Duty of the Sovereign" from Adam Smith. Thanks for posting it.
To equate defense, education, public water systems, etc., all of which serve the general public, with intercity passenger rail services is over the top. It is not a public utility any more than an intercity bus company or an airline is a public utility. It may be the solution to commercial or general transport issues in some areas of the country. In any case its users should pay for the ride. That, after all, is what airline passengers and bus riders do.
I too have read Adam Smith, along with many other economists, including a recent book contrasting Keynes and Hayek. Although I am not an economists, I have completed more than 40 hours of economics at the undergraduate and graduate levels. In fact, I have read Keynes masterpiece, The General Theory of Employment, Interest and Money. I have a good understanding of macroeconomic and microeconomics. I also know that economists are like biblical phrases. You can find one to support any theory or belief that you espouse.
What constitutes the duty of the government (sovereign) in America is debated widely. So it should be. But one thing is crystal clear. It does not matter what the Europeans or the Asians or anyone else does with respect to anything. Americans should do what is best for their country. And that includes solutions to problems that Americans, not Europeans, will have to live with.
It may come as a shocker to many folks, but the founders of this country had a distinct disdain for Europeans, especially George III and his minions.
I have been too close to airline deregulation there fore will not speak of its results on almost all airlines.
However the airport situation is another matter. Deregulated and merged airlines have taken advantage of airport authorities leaving them with nearly abandoned terminals ( by way of bankruptcy ) that cannot be paid for.A few examples:
Colorado Springs
Kansas city
St. Louis
Nashville
Raleigh
Memphis
Tri citys --- Bristol, Kinsport, Johnson City Tennessee
Dayton and Wilmington Ohio freight terminals
St. Petersburgh, Fl
Ft. Meyers , Fl
I think that if the airline regularion had continued as it was in the past, the result of the huge increases in fuel prices and other changes in the USA economy would have been disaster.
blue streak 1 I have been too close to airline deregulation there fore will not speak of its results on almost all airlines. However the airport situation is another matter. Deregulated and merged airlines have taken advantage of airport authorities leaving them with nearly abandoned terminals ( by way of bankruptcy ) that cannot be paid for.A few examples: Colorado Springs Kansas city St. Louis Nashville Raleigh Memphis Tri citys --- Bristol, Kinsport, Johnson City Tennessee Dayton and Wilmington Ohio freight terminals St. Petersburgh, Fl Ft. Meyers , Fl
Are you saying that the aforementioned airport authorities are bankrupt or that airline bankruptcies have cause the airport authorities to declare bankruptcy? Where is the financial data to support your claim?
Not over the top at all since that is exactly what Smith says, neither public safety, national defense nor public transportation makes a profit and yet is still necessary. As for your contention that airline passengers and bus riders pay for their rides, not by a long shot. First off, no system of public transportation anywhere make a profit: highways don't make money, airports don't make money, waterways don't make money. Second, those who use it do not come close to paying the true cost of operating it divided by the number of tickets sold (or in the case of highways, number of cars using them). None of those modes of transport would exist in the first place without government action, and they cannot survive without taxpayer subsidies.
But one thing is crystal clear. It does not matter what the Europeans or the Asians or anyone else does with respect to anything. Americans should do what is best for their country. And that includes solutions to problems that Americans, not Europeans, will have to live with.
Fair enough, but all of us have a say in what that will be, including those of us that believe that in the long run steel wheel on rail transportation is more efficient and safer than single car on pavement transportation or air transportation for travel within the US.
Speaking as someone who taught university-level American government (not my specialty but I did it for a time) If you are trying to say that the founding fathers were stridently nativist and anti-English you are a long way off. It may come as a shock to YOU, but the United States is a country based upon a theory, and that theory, by and large, was developed by John Locke of England.
DwightBranch To equate defense, education, public water systems, etc., all of which serve the general public, with intercity passenger rail services is over the top. It is not a public utility any more than an intercity bus company or an airline is a public utility. It may be the solution to commercial or general transport issues in some areas of the country. In any case its users should pay for the ride. That, after all, is what airline passengers and bus riders do. Not over the top at all since that is exactly what Smith says, neither public safety, national defense nor public transportation makes a profit and yet is still necessary. As for your contention that airline passengers and bus riders pay for their rides, not by a long shot. First off, no system of public transportation anywhere make a profit: highways don't make money, airports don't make money, waterways don't make money. Second, those who use it do not come close to paying the true cost of operating it divided by the number of tickets sold (or in the case of highways, number of cars using them). None of those modes of transport would exist in the first place without government action, and they cannot survive without taxpayer subsidies. But one thing is crystal clear. It does not matter what the Europeans or the Asians or anyone else does with respect to anything. Americans should do what is best for their country. And that includes solutions to problems that Americans, not Europeans, will have to live with. Fair enough, but all of us have a say in what that will be, including those of us that believe that in the long run steel wheel on rail transportation is more efficient and safer than single car on pavement transportation or air transportation for travel within the US. It may come as a shocker to many folks, but the founders of this country had a distinct disdain for Europeans, especially George III and his minions. Speaking as someone who taught university-level American government (not my specialty but I did it for a time) If you are trying to say that the founding fathers were stridently nativist and anti-English you are a long way off. It may come as a shock to YOU, but the United States is a country based upon a theory, and that theory, by and large, was developed by John Locke of England.
Airlines in the United States have covered their costs over the long run and provided a return to their shareholders, although many of them have gone belly up, and none of them make a lot of money. They pay for their proportional use of the airways and airports in the United States through fuel taxes, fees, inventory taxes, income taxes, etc.
Airports in the United States have been construction for the most part by municipal authorities using tax free municipal financing. They recover the cost through fees, rents, etc. The airways have been constructed and are operated by the federal government. For the most part the users, including the airlines, tote the note. The airlines use approximately 1/3rd of the capacity of the airways and airports.
Intercity bus companies in the United States tote their share of the note. They make a profit or they go out of business. the financial reports for FirstGroup, which owns Greyhound, offer insights into intercity bus financing.
Highways, airways, etc. are not intended to make money. Their costs (operating and capital) are recovered through user fees. This has been true for canals, waterways, highways, railways, and airways in the United States. The cost of the federal highway system has been recovered through fuel taxes, fees, etc. From its inception in 1956, through 2007, the Highway Trust Fund ran a surplus, even after allocating approximately 20 per cent of its receipts to the Mass Transit Administration. Unfortunately, since 2007 or 2009, because the Congress has refused to raise the federal fuel taxes to keep pace with the needs, the government has had to transfer monies from the general fund to the Highway Trust Fund. In Texas, where I live, 25 per cent of the fuel taxes are diverted to public education. The intercity bus companies claim that they pay their fair share for the use of the roadways.
The key challenge for advocates of passenger rail is to show how it will recover its costs. In the United States it doesn't, even though Amtrak pays not taxes whatsoever. If there was a remote possibility that it could recover its fully allocated costs, I would be all for funding it. But it doesn't, and based on passenger rail systems throughout the world, it is not likely to be able to recover its costs. By contrast the cost of the highways, airports, etc. are recovered through user fees as per above.
That you were a college professor comes through loud and clear in your tone, i.e. "not by a long shot.", "you are a long way off". In the world of grown-ups, as opposed to college students, we don't put other people down. My earlier reference to it may come as a shock was generic and was not directed to you. Frankly, I don't care whether you were a college professor or a locomotive engineer, although I have more respect for locomotive engineers.
And I don't care what Adam Smith said in Wealth of Nations, although I have read it twice. The issue is now. What is the problem and what are the best solutions for the United States.
Sam1 blue streak 1: I have been too close to airline deregulation there fore will not speak of its results on almost all airlines. However the airport situation is another matter. Deregulated and merged airlines have taken advantage of airport authorities leaving them with nearly abandoned terminals ( by way of bankruptcy ) that cannot be paid for.A few examples: Colorado Springs Kansas city St. Louis Nashville Raleigh Memphis Tri citys --- Bristol, Kinsport, Johnson City Tennessee Dayton and Wilmington Ohio freight terminals St. Petersburgh, Fl Ft. Meyers , Fl Are you saying that the aforementioned airport authorities are bankrupt or that airline bankruptcies have cause the airport authorities to declare bankruptcy? Where is the financial data to support your claim?
blue streak 1: I have been too close to airline deregulation there fore will not speak of its results on almost all airlines. However the airport situation is another matter. Deregulated and merged airlines have taken advantage of airport authorities leaving them with nearly abandoned terminals ( by way of bankruptcy ) that cannot be paid for.A few examples: Colorado Springs Kansas city St. Louis Nashville Raleigh Memphis Tri citys --- Bristol, Kinsport, Johnson City Tennessee Dayton and Wilmington Ohio freight terminals St. Petersburgh, Fl Ft. Meyers , Fl
No what i am saying is that these terminals edficies were built with a guarantee of space being paid for by the tennant airlines. Now the almost all airlines have defaulted thru either getting a reduction in airport fees or thru Chapter 11 bankruptcy. Now governments have to pony up money to pay for revenue bonds that lack of airplane traffic. many authorities may also escape thru bankruptcy now or in the future. Who is the final payee? The Government who now has a tax loss claim for various tax filers.
blue streak 1 No what i am saying is that these terminals edficies were built with a guarantee of space being paid for by the tennant airlines. Now the almost all airlines have defaulted thru either getting a reduction in airport fees or thru Chapter 11 bankruptcy. Now governments have to pony up money to pay for revenue bonds that lack of airplane traffic. many authorities may also escape thru bankruptcy now or in the future. Who is the final payee? The Government who now has a tax loss claim for various tax filers.
Streak,
You were doing fine until the last line. The final payee is some group of taxpayers somewhere. Details depend on details of original arrangement and who is liable for what. Since the government does not pay taxes it makes no sense to talk of a tax loss claim,
Mac
Not even close to true. From Wikipedia( https://en.wikipedia.org/wiki/Airline) :
Historically, air travel has survived largely through state support, whether in the form of equity or subsidies. The airline industry as a whole has made a cumulative loss during its 100-year history, once the costs include subsidies for aircraft development and airport construction.
Here is another article (http://www.johnkay.com/2005/09/27/airlines-and-the-canine-features-of-unprofitable-industries), first printed in the Financial Times that was famous at the time. But it is well known that US airlines lost more just in the months following 9/11 than they have earned as profits in their entire histories.
Finally, I find it ironic that you complain about my tone and then resort to a patronizing name-calling about children and the real world. I don't know what "real world" you live in but suspect that it is operated by the Heritage Foundation or some other pseudo-scientific libertarian group.
It has often been stated that the business of handling people is labor intensive and costly and rarely if ever offers a return on investment. Canal and river boats, airlines, bus companies and railroads all have benefited from grants, bonds, contract, leases, infrastructure ownership and maintenance, traffic control, terminal ownership, easments, tax abatement, tax deferments, land grants and gifts,and direct deposit subsidies from all different governments and agencies from the first post road to today. Sometimes regulated, sometimes not. Deregulation of the airline industry saw the end of the airline industry as we knew it.
And all the above were actually considerd public utilities because of the semi monopoly they held in most places and were regulated under the public utilities or public commerce or other public agency in different states. Pull state and federal support and regulation away and the whole will collapse because no one will venture into the field without back up and direction with the unsureness of return on investmen. At best, they might make it running a taxi, otherwise, they have to put up with government agencies and regulations. COme to think of it, even taxi's are heavily regulated so that they can stay in business and do it safely.
DwightBranch Airlines in the United States have covered their costs over the long run and provided a return to their shareholders, although many of them have gone belly up, and none of them make a lot of money. They pay for their proportional use of the airways and airports in the United States through fuel taxes, fees, inventory taxes, income taxes, etc. Not even close to true. From Wikipedia( https://en.wikipedia.org/wiki/Airline) : Historically, air travel has survived largely through state support, whether in the form of equity or subsidies. The airline industry as a whole has made a cumulative loss during its 100-year history, once the costs include subsidies for aircraft development and airport construction. Here is another article (http://www.johnkay.com/2005/09/27/airlines-and-the-canine-features-of-unprofitable-industries), first printed in the Financial Times that was famous at the time. But it is well known that US airlines lost more just in the months following 9/11 than they have earned as profits in their entire histories. Finally, I find it ironic that you complain about my tone and then resort to a patronizing name-calling about children and the real world. I don't know what "real world" you live in but suspect that it is operated by the Heritage Foundation or some other pseudo-scientific libertarian group.
For the five year period ended December 31, 2011, America's major carriers (gross revenues of $20 million or more) reported combined operating profits of $7.4 billion. These results include the significant losses in 2008 and 2009, which were terrible years for obvious reasons. Net income was $(.5) billion. The combined net income loss was due almost entirely to the losses sustained by American Airlines in 2011. These figures come from the FAA.
I dig out the figures. When you do the same I might take your assertions seriously. An over arching statement from Wikipedia is not likely to carry a lot of weight with me.
Airlines, bus companies, history, and other country solutions are irrelevant to the question of where does passenger rail fit in America's transport scheme. What problem is it addressing? Is it the optimum solution and, if so, under what conditions?
You have no idea of my political views. But you are not the first college professor to accuse me of being a right winger. My true view might blow your socks off, but political views are not a legitimate subject for these forums.
henry6 It has often been stated that the business of handling people is labor intensive and costly and rarely if ever offers a return on investment. Canal and river boats, airlines, bus companies and railroads all have benefited from grants, bonds, contract, leases, infrastructure ownership and maintenance, traffic control, terminal ownership, easments, tax abatement, tax deferments, land grants and gifts,and direct deposit subsidies from all different governments and agencies from the first post road to today. Sometimes regulated, sometimes not. Deregulation of the airline industry saw the end of the airline industry as we knew it. And all the above were actually considerd public utilities because of the semi monopoly they held in most places and were regulated under the public utilities or public commerce or other public agency in different states. Pull state and federal support and regulation away and the whole will collapse because no one will venture into the field without back up and direction with the unsureness of return on investmen. At best, they might make it running a taxi, otherwise, they have to put up with government agencies and regulations. COme to think of it, even taxi's are heavily regulated so that they can stay in business and do it safely.
I have never argued that the government has not or should not play a significant role in developing and maintaining transport infrastructures. I recognize that there have been and will continue to be never ending arguments as to whether users of the common facilities, i.e. highways, waterways, airways, etc. pay their fair share of the cost. My consistant point, however, is that the users have paid for the use of the infrastructure, although in some instances, e.g. local streets, county roads, and some highways, they have paid indirectly through general taxation rather than user taxes. I have also argued that there is little evidence that passenger rail, as projected, will be paid for by the users irrespective of any allocation scheme.
Most if not all the railways in the United States received government support when being built. But not all of them. Most of them paid it back. But that is not to say that there were no defaults, and clearly most of the railroads, at one time or another, filed for bankruptcy.
The problem for passenger rail is that there is little evidence that the users will pay for it. Clearly, they don't tote the complete note in the United States. Moreover, I don't accept the argument that it is a vital public service. There are few places in the United States, outside of several high density metropolitan areas, i.e. NEC, southern California, etc., where buses could not do the job, especially where they can operate in dedicated bus lanes.
The biggest conflict that I have as a train enthusiast is the conflict between wanting a better passenger train system and how to pay for it. I have never seen in these forums any serious discussion of how to pay for an expanded passenger rail system, other than by hitting up the taxpayers. This nation that is more than $15 trillion in debt at the federal level, $3.7 trillion at the state and local level, and facing $46.9 trillion in unfunded liabilities. How to pay for improved passenger rail should be laid out.
DwightBranch It may come as a shocker to many folks, but the founders of this country had a distinct disdain for Europeans, especially George III and his minions. Speaking as someone who taught university-level American government (not my specialty but I did it for a time) If you are trying to say that the founding fathers were stridently nativist and anti-English you are a long way off. It may come as a shock to YOU, but the United States is a country based upon a theory, and that theory, by and large, was developed by John Locke of England.
Anti-English? Look, pal, just because someone snarks at the English doesn't mean they trace their lineage back to Plymouth Rock. Let see, there is Australia, parts of Canada, Ireland, Scotland, Wales to consider. Not to mention if a person's heritage is from Kenya.
Mom and Dad were on a car trip in Maritime Canada over the 4th of July, which is close to a prominent Canadian national holiday as well, when the car broke down. A hotel room could not be had because of a visit by the Queen of England.
The hotel clerk eyes my parents up and down and looks at their blue passports and asks rhetorically, "So what are you American's celebrating over the 4'th, anyway?" Without missing a beat, Mom, in a Yugoslav accent this thick replies, "When we keecked out dee Eeeenglish!" My parents got a room.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
Most if not all the railways in the United States received government support when being built. But not of them. Most of them paid it back.
Evidence? Not only did they not pay for the land, many received subsidies to build the track. The original builders have been said to not be in the railroad business, but in the government grant business. And then you have a railroad like Illinois Central sued for selling land that was given in land grants that was supposed to return to the original owners: http://www.galesburg.com/news/x223017414/RR-pays-back-some-who-bought-land
There are few places in the United States, outside of several high density metropolitan areas, i.e. NEC, southern California, etc., where buses could not do the job, especially where they can operate in dedicated bus lanes.
Ever been passed by a bus on a busy street or highway? Me neither, even in low population density Orlando where traffic moves fast, and certainly not in Denver, where when light rail was started the paper published photos of crestfallen people stuck in buses during rush hour watching as light rail flew by at 70mph. That is why attempts to substitute buses for light rail (in response to the initial higher cost for building tracks) always fall flat with the people who will actually ride them. The right-wing mayor of Toronto got his comeuppance recently when he tried that. And that is why light rail almost always exceeds ridership projections.
I have never seen in these forums any serious discussion of how to pay for an expanded passenger rail system, other than by hitting up the taxpayers.
Nor have I for airports or highways. I lived in Denver when United forced Denver to issue around $5 Billion in bonds for an airport I didn't think we needed. I voted for it, because I understand that I live in a society, not a collection of individual fiefdoms, and that all production is social.
First, I am not your pal. Second, you seem to have missed the point, Sam 1 claimed that the so-called founding fathers were anti-Europe, I dismissed it by offering evidence. The point was about "American exceptional ism", not anti-English bias per se.
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Inasmuch as I go to Fort Myers, Florida, several times a year, I looked at the financials for the Lee County Port Authority. The authority manages two airports: Southwest Florida International (SFI) and Page Field General Aviation (PFGA).
For 2010, which are the latest financials I could find, although the 2011 numbers should be available soon, SFI had a net operating income of $6,417,000 before adjustments. After adjustments, etc., it had a change in net assets of $(8,635,000), due largely to substantial depreciation charges resulting from a significant on-going construction program. PFGA lost $1,589,000 before adjustments. After adjustments, which included capital contributions and transfers, it had a change in net assets of $5,330,000. It too has a major on-going construction program.
The best indicator of how an entity is doing financially is found in the statements of cash flows. These statements, as the name implies, back out non-cash items and present a better picture of how the entity is performing. SFI generated a positive cash flow of $474,000 and PFGA saw its cash position increase by $4,392,000. Part of the PFGA improvement is attributable, it appears, to state and federal grants.
As one might imagine, airport financing is a complex subject. I have not delved into every aspect of the financials, but they showed improvement in 2010 compared to 2009 and, with the economy on the rebound, probably will show better results in 2011.
If the airport defaulted on its bonds, the taxpayers would not be the fall guys. The haircut would go to the bondholders. The airport facilities are funded by revenue bonds. Having said that, if the airport defaulted, the federal, state, local or all three taxpayers may be asked to help resurrect it.
I have neither the time nor the inclination to look at the financials for all the airports that are mentioned. Clearly, some airports are financially stressed because of cutbacks in operations, due in many instances to decreased air operations because of the sour economy, as well as overly ambitious expansion plans blessed politicians who considered only the best case scenario.
Sam1 Most if not all the railways in the United States received government support when being built. But not all of them. Most of them paid it back. But that is not to say that there were no defaults, and clearly most of the railroads, at one time or another, filed for bankruptcy. The problem for passenger rail is that there is little evidence that the users will pay for it. Clearly, they don't tote the complete note in the United States. Moreover, I don't accept the argument that it is a vital public service. There are few places in the United States, outside of several high density metropolitan areas, i.e. NEC, southern California, etc., where buses could not do the job, especially where they can operate in dedicated bus lanes. The biggest conflict that I have as a train enthusiast is the conflict between wanting a better passenger train system and how to pay for it. I have never seen in these forums any serious discussion of how to pay for an expanded passenger rail system, other than by hitting up the taxpayers. This nation that is more than $15 trillion in debt at the federal level, $3.7 trillion at the state and local level, and facing $46.9 trillion in unfunded liabilities. How to pay for improved passenger rail should be laid out.
The definition of paying back what was given is a matter of what is meant by paying back: is it a perscpective or a bottom line item? When a highway, airport, seaport or railroad gives a location an opportunity to set up an economy and social structure and prosper what can be construed as payback or value returned for the,(for lack of better term and to be as broad as possible) subsidey given be it gift, land, financial aid of any kind, for all or part? Is it the chance to grow and prosper? Is it the return to the giver in a bottom line dollar? Part of the answer may be in the question what if the subsidy help was never given? what would have happened? But the real questions has to be asked and answered at the outset: what is expected for the subsidy investment?
So your paragarph, Sam, about users paying for it is in question. If one lives in a town where the local IDA bought a railroad track so that a factory could stay in town, who is the user of the track? If a track is used to move people in and out of town as commuters to and from work, and that town would not exist if there were no train service, who is in debted to the exisitance of the service more and pay for it, the riders or the local grocery and garage and doctors and lawyers, etc.?
As for the term public service...are you referring to two words in the dictionary or an accepted legal terminology for utilities and transportation services?
Sam1,
In these forums, I believe, we have the right to disagree, but not to be disagreeable. IMHO, your ad hominem directed against Phil (DwightBranch) is simply beyond the pale.
Phil, I hope you never feel bullied here by the ideologues. I would hope this is a place for railfans, not bean counters.
I'd be glad to pay more taxes and higher ticket prices in order to have a great Amtrak, or a great national rail passenger system, or a great airline system. What is intolerable is the bare-bones, next-to-useless-because-of-the-bean-counters system which we have now.
When these personal attacks on contributors are published, where are the moderators?
NKP,
Of all the posters on this forum Sam1 is the least prone to personal attack and by far the most likely to cite data to make her point.
Dwight has been far more cranky than all of the others on this particular thread put together. Where is Sam's "ad homenium"?
Mac McCulloch
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