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The subject of Open Access rears its ugly head
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<p>[quote user="Dragoman"]</p> <p>"Sam1" said <strong>(bold inserts are mine</strong>)<strong>:</strong></p> <p>... Government cannot, at least in this country, expropriate property and wealth without due process, which is what they would have been doing if they had forced the railroads to continue running passenger trains that threatened the financial viability of some if not most of the carriers. ...</p> <p><strong>This may be technically true, but it is <em><span style="text-decoration: underline;">not</span></em> exactly "what they would have been doing if they had forced the railroads to continue running passenger trains". They would have been regulating in the (perceived) public interest. Whether it is labor laws, safety regulation, pollution control, or requiring that a common carrier provide, as part of its overall franchise, some service which - though perhaps unprofitable - serves a public interest -- each of these is an example of regulation which cuts into a company's profits for the public good. Let us remember that there is no constitutional right to operate a railroad. It is a common carrier government-granted & regulated franchise, subject to operating in the public interest.</strong></p> <p>... Given the excellent performance of the freight carriers, why in the world would they want to take on a passenger franchise, which does not cover its fully allocated expenses anywhere? </p> <p><strong>Are we so sure this is such a bad idea? Putting aside for a moment the question of just exactly how much was being lost on passenger operations 40-50-60 years ago (and the documented actions of certain carriers, such as the Southern Pacific, to deliberatey drive passengers away and cause that "loss" to increase), isn't it possible that enough has changed in the last 40-50-60 years to make profitable passenger service a possibility?</strong></p> <p><strong>Rail technology is more efficient, aviation is more expense and less "glamorous", ground transportation is more congested, and trains have become -- again -- the exciting "new" thing. There are places where operators apparently make money operating passenger trains, such as Virgin in the UK (oh yeah, they have "open access"!).</strong></p> <p><strong>And, we should perhaps avoid the "fully allocated" issue -- a good accountant can make any operation look profitable or not, depending on which of numerous legitimate allocation formulae are used. Besides, the much-vaunted airlines lose money all the time, and still they carry passengers. People invest in airlines, which make money, lose money, go belly-up, and investors lose all -- and it starts again.</strong></p> <p><strong>Maybe it is time to give US commercial passenger rail another chance. </strong>[/quote]</p> <p>Accountants are amongst the most regulated folks in the country. This is especially true for a public company. Everything an accountant does in a public company is audited by the firm's internal auditors, external auditors, regulators, peer groups, etc. In the Fortune 500 company where I worked the external auditors were on board every working day of the year. Accounting rules in the U.S. allow some room for estimates, etc., but they are relatively narrow. The notion that business organizations are constantly cooking the books to fool the public is without foundation.</p> <p>The earnings of the nation's airlines have nothing to do with passenger railroads. </p> <p>Giving passenger rail in this country or any other country, without significant subsidies, albeit in some instances hidden, another commercial chance would be to lay an egg. Having said that, I am all for giving it a go, but I don't believe any business person in his or her right mind would opt to get into the passenger train business without significant subsidies. Which leads me to the point that I have made time and time again. I favor passenger trains - I recognize the need to subsidize them - in relatively short, high density corridors where expanding the airways and highways is cost prohibitive.</p>
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