High speed rail...why?

[htgguy]

henry6

htgguy

So, Henry, what do you think about the money users have invested in transportation over the last 50 years? Would we be better off if some government bureaucrat had redirected it to buggy whips or heavyweight coaches because they though that's how people should travel?

I have never said that people should travel in one mode or another.  I have always advocated a balance and integrated transportation system based on fuel efficiency, costs, and environmental concerns. I am not afraid of the new but I don't advise abandoning that which is proven efficient and green. 

But lets face it, everyone who has been in this thread, everyone who discusses the government and transportation, the government and HSR, passenger trains, airlines, waterways, highways, et. al., do so with a given political bent.  Therefore there is no reslove. Especially here.

Please allow me one more question. I agree with you in that we need a balanced and integrated transportation system, although I would also include low cost and efficient in the mix. My one question is this:

What is the best way to decide whether a given project contributes to a balanced and integrated (and low cost) transportation system? I think I have been pretty clear that the market will make the best decision, but I'm not sure what your specific view on how these decisions should be made is.

Thanks, Jim

[blownout cylinder]

henry6

But lets face it, everyone who has been in this thread, everyone who discusses the government and transportation, the government and HSR, passenger trains, airlines, waterways, highways, et. al., do so with a given political bent.  Therefore there is no reslove. Especially here

Are you going to say that you have a political bent as well? Or, are you going to place yourself in a 'enlightened' knowing position?

Anything that involves others money will tend to raise eyebrows---even if it is a potential investors. This bent, as it were, will continue to haunt the scene because it is, in a sense, very much a part of any large scale project. We simply cannot avoid it. There are way too many questions regarding costs/benefits/cap and trade things/parties/systemizers/and what all else to put the thing to rest. Unless you are willing to grant someone overarching complete power to do any project that is--then you will have a 'czar'

Intellectual history is full of stories of what happens when people try to complete a project demanding a few decades of work and financial labour into a few days/weeks.There are scurrilous attacks and rumours brought forth and what all else involved. One could ask to slow up the debate but---- Ain't gonna happen.

[henry6]

htgguy

So, Henry, what do you think about the money users have invested in transportation over the last 50 years? Would we be better off if some government bureaucrat had redirected it to buggy whips or heavyweight coaches because they though that's how people should travel?

I have never said that people should travel in one mode or another.  I have always advocated a balance and integrated transportation system based on fuel efficiency, costs, and environmental concerns. I am not afraid of the new but I don't advise abandoning that which is proven efficient and green. 

But lets face it, everyone who has been in this thread, everyone who discusses the government and transportation, the government and HSR, passenger trains, airlines, waterways, highways, et. al., do so with a given political bent.  Therefore there is no reslove. Especially here.

[htgguy]

tree68

htgguy

let's be smart and let the market decide where capital should go

Until you factor in people like Bernie Madoff and the infamous railroad "robber barons", whose take on where the money should go was in their pockets.

Maybe we can get Chris Dodd, William "freezer cash" Jefferson (oh wait, I think he is in prison), Ted Stevens, and Barney Frank to handle even more of our money. They have stolen and wasted many times what Madoff ever dreamt of, and we continue to pay them to do it.

I know a couple of the pols I named are gone-we just haven't caught all the crooks that are currently in office. Both parties.

I never said the market is near perfect, but the bar isn't very high when you are comparing it to career politicians in Washington DC.

[htgguy]

schlimm

beaulieu

But there are something on the order of 30 to 40 flights per day from Minneapolis to Chicago between the various Airline companies, and similar amounts between Dallas and Houston, etc. that could easily be replaced.

 

Hear! Hear!

Similar deal Chicago to St. Louis: 28 non-stop flights per day on a ~300 mile flight that the airlines manage  in 1 1/2 hours.  Add one hour minimum for security and boarding and two hours to and from airports to downtowns.  Even a 100 mph average train would dominate the market. 

Or Atlanta to Charlotte: 24 non-stop flights per day on a 240 mile flight, again in ~ 1 1/2 hours.  Add 3 hours on the ground, etc. and an 80 mph train (not even HSR) would dominate.

Well, then, I guess we have arrived at a pretty easy answer. Minneapolis to Chicago, for instance, if people are going to flock to the new HSR setup, someone who is anxious to make some money should step up and take the plunge. Since you say short haul aviation is hugely fuel-inefficient, it should be easy to offer a better rate on the new trains, with all the energy savings cost. I bet that they could negotiate trackage rights from the BNSF or CP easily-heck, maybe Warren Buffet will volunteer them at a reduced cost out of the goodness of his heart (I would not be a happy BRK-B investor if he did though, and I think he realizes many of his investors wouldn't approve). It would satisfy parties on all sides-there would be no subsidies, and those of you who are strong believers would get to see your dreams become reality.

So why isn't anyone doing it? Because those who are responsible for investing your pension funds know that it won't make money. Because those who have the deep pockets to cover the start up costs know that it won't make money. Because anyone who has taken a serious look at the economics of HSR know that it won't make money. And if you invest in something that doesn't make money, it needs a subsidy to operate. That means it's an inefficient allocation of capital, and the people who have capital didn't get it by allocating it to projects that lose money.

Or we could just insist the government steal the money from our kids and grandkids borrow the money from the Chinese and tax our kids and grandkids to pay it back. Whatever.

[htgguy]

henry6

htgguy

I'm not against HSR-I'm against bad investments, and the need for subsidies is a red flag that an investment is bad. .

Jim

Are you saying, then, that all investment in transportation infrastructure from the National Road to the Eisenhower Highway System plus all grants and charters to railroads, and all airport, airplane, and air traffic development and operations has been a bad investment in the USA?

Henry,

No, that's not at all what I am saying. Any transportation project should be user funded. From what I have been able to determine, highways in the United States come the closest of any transportation system to that goal. This has been discussed at length on the board before: for example, here is some information I posted some months ago showing how highways in my state are at least very, very nearly fully user funded.

These highways have been a great investment for the good 'ol US of A. The users paid for them and our entire society continues to enjoy the benefits, not only of transportation but of commerce that these highways enable.

Railroads haven't received any land grants for a good long time, near as I can determine. When they did, the country was much different that it currently is. If we had a great undeveloped frontier with no transportation, the nation might find that it is in its best interest to repeat that act. We don't have that.

Airports and airplanes-I don't know what the industry-wide subsidy is, but whatever it is, it's too much. I don't approve of it, just like I don't approve of subsidies to HSR or any other mode.

If people didn't drive so much (and thus demand highways be built AND fund that construction) there wouldn't be as many highways built. If investors could see that people would line up at railroad stations with stacks of hundred dollar bills to zip about in new trains, believe me, the backlog for new high speed passenger trains would be years long. It's not. That's because the only people who are advocating them also think government should pay for them.

So, Henry, what do you think about the money users have invested in transportation over the last 50 years? Would we be better off if some government bureaucrat had redirected it to buggy whips or heavyweight coaches because they though that's how people should travel?

[blownout cylinder]

beaulieu

at the distances the airlines are flying they are very energy inefficient, more time is spent climbing and descending than in level flight, and if the flight gets stuck in a holding pattern coming in or on a runway hold for taking off, its all wasted

I've got tripped up a few times on those supposedly much faster 'commute' times between London ON and Toronto's Toronto Island Airport. It does sometimes take just as long to get through all the ticket hassles, et al than if'n I just took my car. VIA is quicker.

And I'm not including the ferry wait or the transit wait just to get downtown. With VIA you go from London ON to Toronto Union Station which is right downtown--there is the TTC there in the station--so there HARUUUMPH

[schlimm]

beaulieu

But there are something on the order of 30 to 40 flights per day from Minneapolis to Chicago between the various Airline companies, and similar amounts between Dallas and Houston, etc. that could easily be replaced.

 

Hear! Hear!

Similar deal Chicago to St. Louis: 28 non-stop flights per day on a ~300 mile flight that the airlines manage  in 1 1/2 hours.  Add one hour minimum for security and boarding and two hours to and from airports to downtowns.  Even a 100 mph average train would dominate the market. 

Or Atlanta to Charlotte: 24 non-stop flights per day on a 240 mile flight, again in ~ 1 1/2 hours.  Add 3 hours on the ground, etc. and an 80 mph train (not even HSR) would dominate.

[beaulieu]

htgguy

(Note-this is the kind of thing that subsidies and central planning lead to. Sure, the Chinese are building these railroads, and sure, they will compete with airlines, but is that a good thing? No-jim)

 

 

This is the one point where I disagree with you, at the distances the airlines are flying they are very energy inefficient, more time is spent climbing and descending than in level flight, and if the flight gets stuck in a holding pattern coming in or on a runway hold for taking off, its all wasted. Whether you believe in peak oil or not, you can not go on increasing oil consumption year after year after year. Obviously no one is going to use HSR to go from the East Coast to the West Coast, and not even Chicago or Dallas to the West Coast. But there are something on the order of 30 to 40 flights per day from Minneapolis to Chicago between the various Airline companies, and similar amounts between Dallas and Houston, etc. that could easily be replaced.

[schlimm]

blownout cylinder

An IPO, for example, of a NEC HSR would be a pretty good bet that there would be a ROI here. But if one tried a Trans-continental HSR that went through low traffic--ie: avoided hubs like Chicago--and tried to put out an IPO on this would you invest in it? I think that there are degrees in risk here

 

Good point and I would hope any HSR, etc. would be for high traffic areas, connecting major metro areas within 200 - 500 miles of each other.  

Germans tend to be pretty conservative and pragmatic about finances and engineering. Even though Germany is a fairly small area, the terrain is pretty rugged.  Hence rail lines there (dedicated HSR routes and older lines) may have quite a few curves and/or tunnels.  Expensive per mile, but they didn't just throw up their hands and cry, "Too expensive!  We're not just going to copy France!!"  etc.

[blownout cylinder]

henry6

htgguy

I'm not against HSR-I'm against bad investments, and the need for subsidies is a red flag that an investment is bad. .

 

Jim

Are you saying, then, that all investment in transportation infrastructure from the National Road to the Eisenhower Highway System plus all grants and charters to railroads, and all airport, airplane, and air traffic development and operations has been a bad investment in the USA?

I think this is more of a case of risk aversion than anything else. An IPO, for example, of a NEC HSR would be a pretty good bet that there would be a ROI here. But if one tried a Trans-continental HSR that went through low traffic--ie: avoided hubs like Chicago--and tried to put out an IPO on this would you invest in it? I think that there are degrees in risk here

BTW--if someone has an issue with a particular investment that does not, nor should it, mean that the US is a bad investment---it is just that that particular investment is problematic. All RR investments at base are hard asset types---unless one goes for riskier things like derivatives and such--

[henry6]

htgguy

I'm not against HSR-I'm against bad investments, and the need for subsidies is a red flag that an investment is bad. .

 

Jim

Are you saying, then, that all investment in transportation infrastructure from the National Road to the Eisenhower Highway System plus all grants and charters to railroads, and all airport, airplane, and air traffic development and operations has been a bad investment in the USA?

[blownout cylinder]

tree68

htgguy

let's be smart and let the market decide where capital should go

Until you factor in people like Bernie Madoff and the infamous railroad "robber barons", whose take on where the money should go was in their pockets.

 

Then someone comes along and thinks that the state should be the one who decides where the capital should go. And around and around the bush we go---

Mad(e)off and his ilk would not have been such a bunch of issues if'n certain people within various regulatory bodies within the government been doing their work.

It really does not matter that much anyways because we are not having the vast majority of business people doin' the Mad(e)off dance----

[tree68]

htgguy

let's be smart and let the market decide where capital should go

Until you factor in people like Bernie Madoff and the infamous railroad "robber barons", whose take on where the money should go was in their pockets.

 

[htgguy]

beaulieu

htgguy

henry6

Its been reported that in China air transportation is already feeling the pinch of competitive and more user friendly, high speed rail!

In other news just in, it's been reported that China has a state-planned economy that does not allow the market to set prices or allocate scarce capital.

Can you provide a link to the story about the Chinese airlines that are suffering from the competetive HSR projects?

 

 

The story is in the South China Morning Post, October 26th, 2009 edition. There is an extract of it in this Blog;

Asia Economonitor

Section labeled  "Infrastructure Spending"  the last paragraph.

And no I am not paying a ridiculous amount of Hong Kong Dollars just to read that story in full.

 

THANK YOU beaulieu! A very revealing column to say the least. I think it needs to be quoted here, at least the section that deals with HSR (I put my comments in blue):

"China will spend $200 billion on railways in the next two years, much of it for high-speed rail. The Beijing-Shanghai line will cut travel times between those two cities from 10 hours to four. The United States, by contrast, has designated less than $20 billion, to be spread out over more than a dozen projects, thus guaranteeing their failure. It’s not just rail, of course. China will add 44,000 miles of new roads and 100 new airports in the next decade. And then there is shipping, where China has become the global leader. Two out of the world’s three largest ports are Shanghai and Hong Kong.

Although Zakaria’s main point may be to insist that the US is failing sufficiently to upgrade its infrastructure (a point with which I and many other people would heartily agree), the idea that therefore, and in contrast, China’s infrastructure spending is a good idea may be very mistaken.  I think China probably already has the best infrastructure in the world for its level of development, and it is not clear that spending a fortune upgrading it makes economic sense, unless you assume that every country at any low level of development has a near-infinite capacity to upgrade infrastructure.  In that light, there is an interesting article in today’s South China Morning Post on this very subject.

(Note-this author thinks the US needs to upgrade infrastructure but does not come out and advocate subsidies to get it done-jim)

China’s high-speed rail network will overtake Europe as the world’s biggest by 2012, posing a threat to the country’s troubled airline industry.

The cheaper tickets and often quicker journeys to be offered by high-speed trains are expected to substantially cut the market share of domestic carriers that already face bruising competition from airline rivals.  Although still in its infancy, the mainland’s high-speed rail system will account for most of the world’s fast tracks by 2020 as Beijing accelerates a mammoth transport infrastructure programme."

(Note: there is no current threat to the airlines, it is projected that in 2012 HSR will pose a threat-jim)

"It is easy to get excited by this building program, but are those high-speed rails, which may be fast, exciting and fun to ride, economically justified?  Even if they were justified in the US or Europe, where the economic value of every hour saved is many times the value in China, they are probably not justified in China.  After all an American might gladly pay $100 a month to cut his daily commuting time by one hour, but for most households in Beijing or Shanghai this would be the equivalent of paying one-third to one-fifth of their income – probably not worth it.  And note that I am not even mentioning one of the sub-stories in this article – that China’s airline industry may be seriously hurt by the high-speed rails even as China is splurging on a massive airport investment program.

(Note-this is the kind of thing that subsidies and central planning lead to. Sure, the Chinese are building these railroads, and sure, they will compete with airlines, but is that a good thing? No-jim)

So does it matter if we waste a little money?  Of course it does.  Remember that if the total economic benefits are less than the cost of the investment, we can’t simply assume away the difference.  We need to figure out who will pay, and it shouldn’t come as a huge surprise if Chinese households ultimately pay for this waste, as they always have, through all the “normal” channels – sluggish wage growth, very low returns on their savings, indirect taxes on income and consumption, and so on.  If they do pay, not only will this make it very hard for them to sustain the consumption splurge that we are all demanding of them, but it represents a transfer of resources from those that must pay for the railway to those that most often use it – all Chinese must pay for benefits that accrue mostly to the wealthier segments of China’s wealthiest cities."

Look at the last paragraph, and substitute "Americans" for "Chinese". The principles of economics apply to all nations, whether they are free market, command economy, or some blend of the two. Capital is scarce. There has to be some method of deciding where it should be directed to generate the most wealth. If it is misallocated, money is being wasted, and it matters. The difference between efficient allocation and inefficient allocation can't be assumed away. There are costs associated with bad investments-costs like sluggish wage growth, low returns on savings, indirect taxes on income and consumption. These are real, and they are the things I have been trying to point out in this discussion.

I'm not against HSR-I'm against bad investments, and the need for subsidies is a red flag that an investment is bad. Doesn't matter if it is for windmills, or airports, or auto companies, or high speed rail lines. We can't afford these things, and if we choose to invest in subsidies for them, we will pay through sluggish wage growth, low returns on savings, etc. Let's not be like the Chinese-let's be smart and let the market decide where capital should go. It's not perfect, but it's the best decision maker the world has ever seen regarding capital allocation.

Thanks again for the link, beaulieu. Very interesting.

Jim

[beaulieu]

htgguy

henry6

Its been reported that in China air transportation is already feeling the pinch of competitive and more user friendly, high speed rail!

In other news just in, it's been reported that China has a state-planned economy that does not allow the market to set prices or allocate scarce capital.

Can you provide a link to the story about the Chinese airlines that are suffering from the competetive HSR projects?

 

 

The story is in the South China Morning Post, October 26th, 2009 edition. There is an extract of it in this Blog;

Asia Economonitor

Section labeled  "Infrastructure Spending"  the last paragraph.

And no I am not paying a ridiculous amount of Hong Kong Dollars just to read that story in full.

 

[blownout cylinder]

schlimm

htgguy

In other news just in, it's been reported that China has a state-planned economy that does not allow the market to set prices or allocate scarce capital.

 

Well, those were your words and there is a difference between economics and the political/social aspects. 

Economics is a branch of the 'soft' sciences known as the 'social' sciences. I took Economics way back in the 1980's when it was still thought of in terms of an 'abstraction' of particular actions in a commercial/business realm. I've noticed that in the last 20 years or so that it has gotten further and further away from those sociopolitical aspects. Hence the current debate about cross-disciplinary courses and such.

This kind of goes into a thing that some are starting to throw around like---taxes are a part of how a states revenue comes together. This revenue then becomes funding for very particular projects/departments and such---which then have (in)direct effects and do affect particular groups of humans that are then called societies as such----

and don't try to say this scabbly stuff too fast------

[htgguy]

schlimm

 

htgguy

Can you provide a link to the story about the Chinese airlines that are suffering from the competetive HSR projects?

 

I saw something on that in a financial link earlier today but I couldn't find it later after I saw henry6's post.. 

BTW, China has not been a purely centrally-planned economy in years.  In some sectors, market forces are as strong as here, maybe stronger because there is often less regulation. In those sectors, it's more like the 19th century robber-baron America.  How do you think China has gotten so many multimillionaires in the last ~15 years?

I'm no expert on the Chinese railway system. Here's what I found looking around these interwebs.

Wiki has an article about the Ministry of Railways of the People's Republic of China, which says that agency is responsible for passenger operations, regulation of the rail industry, development of the rail network and rail infrastructure, and is in charge of operations of China Railways, which manages the railway bureaus and companies in the provinces. This Ministry is a member of the State Council of the People's Republic of China, the chief administrative authority (cabinet) of the PRC, which is chaired by the Premier of the nation.

There may be strong market forces at work in China, but they have not yet been loosed on the rail industry.

Here's a site that goes into some detail explaining that the Ministry of Railways is the designer and operator of the new HSR project, although it does state that foreign investment will be "allowed". Kind of a strange choice of words in a society where there are rampant free market forces at work, no?

What's my point? HSR in China is being designed, built, and operated by an arm of the national government. This is not a free market project.

And c'mon, surely you and Henry can find links to the stories you are referring to. The links for this post took me less than 5 minutes to find.

Jim

[schlimm]

htgguy

In other news just in, it's been reported that China has a state-planned economy that does not allow the market to set prices or allocate scarce capital.

 

Well, those were your words and there is a difference between economics and the political/social aspects. 

[Dakguy201]

htgguy

Can you provide a link to the story about the Chinese airlines that are suffering from the competetive HSR projects?

It is in the Trains Newswire for November 13th.

[henry6]

htgguy

Can you provide a link to the story about the Chinese airlines that are suffering from the competetive HSR projects?

FOX NEWS

[blownout cylinder]

schlimm

blownout cylinder

Although, in some ways there are still a lot of social controls in place---hence the issues of human rights -----

 

You were talking about their economy; politically China is still a one party dictatorship withsevere restrictions on free speech, etc.

This whole topic was about economics of HSR ---- and, in this case, I was refering precisely to this social, as opposed to, economic aspect. This political aspect is frequently forgotten in these HSR things

[schlimm]

blownout cylinder

Although, in some ways there are still a lot of social controls in place---hence the issues of human rights -----

 

You were talking about their economy; politically China is still a one party dictatorship withsevere restrictions on free speech, etc.

[blownout cylinder]

schlimm

 

htgguy

Can you provide a link to the story about the Chinese airlines that are suffering from the competetive HSR projects?

 

I saw something on that in a financial link earlier today but I couldn't find it later after I saw henry6's post.. 

BTW, China has not been a purely centrally-planned economy in years.  In some sectors, market forces are as strong as here, maybe stronger because there is often less regulation. In those sectors, it's more like the 19th century robber-baron America.  How do you think China has gotten so many multimillionaires in the last ~15 years?

Although, in some ways there are still a lot of social controls in place---hence the issues of human rights -----

[schlimm]

 

htgguy

Can you provide a link to the story about the Chinese airlines that are suffering from the competetive HSR projects?

 

I saw something on that in a financial link earlier today but I couldn't find it later after I saw henry6's post.. 

BTW, China has not been a purely centrally-planned economy in years.  In some sectors, market forces are as strong as here, maybe stronger because there is often less regulation. In those sectors, it's more like the 19th century robber-baron America.  How do you think China has gotten so many multimillionaires in the last ~15 years?

[htgguy]

henry6

Its been reported that in China air transportation is already feeling the pinch of competitive and more user friendly, high speed rail!

In other news just in, it's been reported that China has a state-planned economy that does not allow the market to set prices or allocate scarce capital.

Can you provide a link to the story about the Chinese airlines that are suffering from the competetive HSR projects?

[schlimm]

blownout cylinder

I believe that it is part of the problem. There are several HSR advocates who are pushing for a transcontinental run.

Leaves me kinda going ---eh? 

Like who?  I'm mostly hearing 200-500 miles, which makes sense.  Even 1000 miles is senseless, at least with "current" technologies.

[RudyRockvilleMD]

I also agree. There is a market for high speed rail at distances of anywhere from 250 to 500 miles. (I'm raising you guys by 100 miles If I may be serious, the TGV runs non-stop between Paris and Marseille in 3 hours for an average speed of 160 mph; with stops, that  travel time is 3 hours 20 minutes, and I wouldn't be surprised if the door-to-door travel time, even on a train that stops, beats the door-to-door travel time by plane. My point is the same can happen here. California is planning a high speed rail system between San Francisco and Los Angeles a little over 4 00 miles with a 2 1/2 hour travel time. 

[blownout cylinder]

tree68

Sam1

Air travel is the only practicable form of transport for business travelers, as well as many others, for distances greater than 250 miles. 

I believe that there is a market for rapid, frequent passenger rail in high density corridors up to 250 miles, but beyond that most people who are time constrained - most of us are - will fly.  

Exactly.  And this is why there is a disconnect on HSR.  I believe far too many people are thinking coast-to-coast, when the 250 mile number is far more realistic.  Look at the hue and cry raised when the first maps showing targeted corridors for HSR first surfaced - "where's the rest of it?"

This is probably something HSR advocates really need to address - making sure that people understand the target.

I believe that it is part of the problem. There are several HSR advocates who are pushing for a transcontinental run.

Leaves me kinda going ---eh? 

[tree68]

Sam1

Air travel is the only practicable form of transport for business travelers, as well as many others, for distances greater than 250 miles. 

I believe that there is a market for rapid, frequent passenger rail in high density corridors up to 250 miles, but beyond that most people who are time constrained - most of us are - will fly.  

Exactly.  And this is why there is a disconnect on HSR.  I believe far too many people are thinking coast-to-coast, when the 250 mile number is far more realistic.  Look at the hue and cry raised when the first maps showing targeted corridors for HSR first surfaced - "where's the rest of it?"

This is probably something HSR advocates really need to address - making sure that people understand the target.