ICLandUnion Pacific is a reasonable example. Taking 1965 as a representative year prior to merger efforts, in a relatively lackluster economy as far as railroads were concerned, UP had an operating margin in 1965 of 26.5%. Today? 26.9%. Profit margins? 1965: 14.4%. Today: 14.8%. Given the huge productivity increases since 1965, that's not an improvement. Debt to Equity ratio, 1965: 9%. Today? 55%. That isn't good; risk has increased substantially. Return on Equity, 1965: 5%. Average Return on Equity, Union Pacific, 1996-2007 (from memory, here), 4.8%; so far in 2010, it is a little over 6%. Considering how debt has replaced equity in UP's capital structure, the return on equity should have improved dramatically. It hasn't. In general, the Union Pacific has substantially increased its risk, with little if any real improvement in key operating statistics. Using averages, overall, UP has reduced its return on equity as a result of its mergers. And who bears that risk? The shareholders, not management. And, in 2010, we are talking about a Union Pacific Railroad 28 times the size of the 1965 Company in terms of revenue. What, really, "improved"? Well, you could argue that in today's climate, the 1965 UP wouldn't be viable, but that underscores the comparison of 40 years later, with nearly all railroad mergers which resulted in deteriorated financial metrics, to at least some extent, within five years of the merger. In that context, the economic environment appears to me to have little significance, short term or long term, since the results are consistent. KCS is arguably better on most metrics, notwithstanding its lack of mergers on the scale of other US roads, than it was 40 or 50 years ago. The fact that it isn't 28 times larger than it was 40 years ago seems to have worked in its favor, rather than supporting the alternative view. And the fact that it isn't "too big to fail" arguably positions its attitude differently.
Union Pacific is a reasonable example. Taking 1965 as a representative year prior to merger efforts, in a relatively lackluster economy as far as railroads were concerned, UP had an operating margin in 1965 of 26.5%. Today? 26.9%. Profit margins? 1965: 14.4%. Today: 14.8%. Given the huge productivity increases since 1965, that's not an improvement. Debt to Equity ratio, 1965: 9%. Today? 55%. That isn't good; risk has increased substantially. Return on Equity, 1965: 5%. Average Return on Equity, Union Pacific, 1996-2007 (from memory, here), 4.8%; so far in 2010, it is a little over 6%. Considering how debt has replaced equity in UP's capital structure, the return on equity should have improved dramatically. It hasn't.
In general, the Union Pacific has substantially increased its risk, with little if any real improvement in key operating statistics. Using averages, overall, UP has reduced its return on equity as a result of its mergers. And who bears that risk? The shareholders, not management.
And, in 2010, we are talking about a Union Pacific Railroad 28 times the size of the 1965 Company in terms of revenue. What, really, "improved"? Well, you could argue that in today's climate, the 1965 UP wouldn't be viable, but that underscores the comparison of 40 years later, with nearly all railroad mergers which resulted in deteriorated financial metrics, to at least some extent, within five years of the merger. In that context, the economic environment appears to me to have little significance, short term or long term, since the results are consistent. KCS is arguably better on most metrics, notwithstanding its lack of mergers on the scale of other US roads, than it was 40 or 50 years ago. The fact that it isn't 28 times larger than it was 40 years ago seems to have worked in its favor, rather than supporting the alternative view. And the fact that it isn't "too big to fail" arguably positions its attitude differently.
You can make similar comparisons of NS before and after Conrail, but the alternative at that point was to let CSX have all of Conrail and risk becoming a "large regional" railroad with much eroded shareholder value. NS paid a super-premium price and it sure didn't go well for a few years, but I'd bet they are in a better spot today than if they hadn't pulled the trigger.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
oltmanndThe RR mergers that went badly at the start all had good reasons to be done. What went poorly was the RR's ability to integrate the two properties. This was not because it was intrinsic in the nature of the merger. It was because the operational complexity of doing it exceeded the abilities of the employees to manage it - and this was unforeseen. You can rightly call this poor management, but it ain't greed! RRs are not, and never have been "too big to (allow to) fail." Everything a RR does can be replaced by a truck, wire or pipe. There would be little economic disruption if done slowly, but there would be an erosion in standard of living as the RRs lower costs were replaced by higher cost arrangements. But, wanting lower costs is just greed talking, I guess.
RRs are not, and never have been "too big to (allow to) fail." Everything a RR does can be replaced by a truck, wire or pipe. There would be little economic disruption if done slowly, but there would be an erosion in standard of living as the RRs lower costs were replaced by higher cost arrangements. But, wanting lower costs is just greed talking, I guess.
I've had the good fortune over a long period of time to be able to discuss merger theory with both railroad and non-railroad managers involved in merger efforts. And that points instantly to the general weakness in mergers in general: they are management initiated.
And, while merger theory isn't my general cup of tea, and my life isn't going to rise or fall on anyone else's incomprehensible exposition of what they think it all means, here's my understanding:
Cynics charge that the motives for mergers are obvious: ambitious people tend to be empire builders, and managers of larger companies can command higher compensation than managers of smaller companies. Around those motives are built highly artificial constructs of purported merger benefits marketed by management insiders to shareholders who generally don't have the insider's knowledge of their own company, let alone the other company involved in the merger.
And railroads, by and large, have followed the results of the business world in general: up to 80% of mergers fail -- absolutely fail -- to meet the primary "announced" goals or metrics justifying the merger effort.
http://www.allbusiness.com/buying-exiting-businesses/mergers-acquisitions/104661-1.html
"Too big to fail," isn't a service concept. Nothing is going to be replaced by a truck or a pipeline. What it means is that the relative size of a corporation, and the relative political influence of its owners, unions and bankers is such that government can be "persuaded" to "bailout" those at risk. It has little or nothing to do with the ongoing activities of the corporation itself; which generally continue in bankruptcy under a "debtor in possession" plan.
"Too big to fail" is a political concept and it is a real one.
It's economic damage is what is called the "moral hazard" in which ultimate risk is transferred from investor to the government and instead of being able to rationalize physical plants, operations, or change managements, instead inefficiency, poor management, bad investment-making, including mergers, are rewarded by the bailout, instead of punished by being allowed to "fail" invoking a bankruptcy reorganization.
"Too big too fail" is the worst thing that can happen in a genuine free enterprise system.
Are railroads "too big to fail"? You bet they are.
If and when the good times are no longer rolling as a reasonably permanent feature of the landscape, there is not a politician in the country who would not feel compelled to offer a life preserver to his friends, his Wall Street campaign contributors and his constituents by insulating them from the risk of their private enterprise: risks which, as in the case of the Union Pacific, are far, far greater than they were in the old days before its merger era.
oltmanndIf GM becomes a solid, profitable automaker at the end of this, and the gov't stock can be sold at a decent price, it may have been worth the bailout. It just may have kept the recession from deepening and quickened the recovery. I think the jury is still out, though. I also wonder if Ford looks at this the same way.... They were the "ant", not the "grasshopper" and they've been watching the "grasshopper" be fed. Were they completely rewarded for their prudent behavior?
I agree that if GM becomes profitable, the bailout may have been worthwhile. Hopefully we will be able to judge the result. But with GM seeminly pinning their hopes on the Volt electric car, we ought to get a rather striking result one way or the other.
Ford's refusal of public bailout money is just as interesting GM's begging for it. I would love to hear what Ford executives say to each other about the Volt.
Paul_D_North_Jr "Too big to fail" merely ossifies and perpetuates the existing entity, and all that's wrong with it - be it management, markets, employees, equipment, location, business plan, etc., etc. Allowing a business to fail and then salvaging the viable pieces - regardless of whether that is accomplished by or called a "reorganization" or a "liquidation", or something else - is the business world's/ ecosystem's rational method of recycling and renewing itself - kind of like how in in the natural world, death and decay gives birth to new life by reusing the constituent materials. - Paul North.
"Too big to fail" merely ossifies and perpetuates the existing entity, and all that's wrong with it - be it management, markets, employees, equipment, location, business plan, etc., etc. Allowing a business to fail and then salvaging the viable pieces - regardless of whether that is accomplished by or called a "reorganization" or a "liquidation", or something else - is the business world's/ ecosystem's rational method of recycling and renewing itself - kind of like how in in the natural world, death and decay gives birth to new life by reusing the constituent materials.
- Paul North.
Paul,
That is very well stated, and sums up my way of looking at it. It is what I meant when I said that failure and re-organization is a law of nature.
Paul_D_North_JrNote also that as Bucyrus says, in each of these instances the physical operations and finances of the organizations were heavily modified - the worthwhile operations were kept, the unprofitable and marginal ones were discarded, the investors and creditors took serious losses, the union contracts were modified over the next decade, etc.
Conrail ultimately would up being a successful resurrection of PC. If GM becomes a solid, profitable automaker at the end of this, and the gov't stock can be sold at a decent price, it may have been worth the bailout. It just may have kept the recession from deepening and quickened the recovery. I think the jury is still out, though. I also wonder if Ford looks at this the same way.... They were the "ant", not the "grasshopper" and they've been watching the "grasshopper" be fed. Were they completely rewarded for their prudent behavior?
Convicted One Perhaps an apt "red flag" might be when you see viable, parallel railroads merging, then ripping up one of the lines just to prevent any future competitor from ever getting their hands on it (and at the same time proving that the acquired capacity was not even needed)
Perhaps an apt "red flag" might be when you see viable, parallel railroads merging, then ripping up one of the lines just to prevent any future competitor from ever getting their hands on it (and at the same time proving that the acquired capacity was not even needed)
Thanks to Chris / CopCarSS for my avatar.
Interesting discussion so far.
Note that Section 77 of the very old - pre-1978 - US Bankruptcy Act pretty much presumed that all railroads were indeed too big and important to fail - although exceptions were made for smaller railroads from time to time - up until it ran into the reality of the multiple NorthEastern US railroad financial collapses of the early 1970's. The principle held there and then, though - that's how we got ConRail, but in comparatively quick succession afterwards the Rock Island and the Milwaukee were liquidated. Note also that as Bucyrus says, in each of these instances the physical operations and finances of the organizations were heavily modified - the worthwhile operations were kept, the unprofitable and marginal ones were discarded, the investors and creditors took serious losses, the union contracts were modified over the next decade, etc.
Even now, the policy and processes of Chapter 11 - Corporate Reorganizations of the current US Bankruptcy Act prefers to try to salvage the business as a 'going concern' for the benefit of all involved, if possible - but none is viewed as "too big to fail". Although, somewhere in it the "public interest" is given special consideration and added weight in the context of the financial reorganization of railroads.
In the free-market system, there is no such thing as, “too big to fail.” It is a made-up term that is used to advance a political agenda. As such, too big to fail means that the public should accept the premise that the government must use public money to bailout a particular entity that is on the verge of financial failure. The public will be told that the failure of the entity will be more painful to the public than the expenditure of public money to save the entity—hence the entity is “too big to fail,” which actually means “too big to let fail.”
But this, of course is economic nonsense. It is a government-advanced ruse on the public trust. Failure is exactly what should be allowed to happen. It is a law of free market economics. It is also a law of nature.
Take General Motors, for example. The public was told that GM was too big to fail because of all the job losses that would occur. In conjunction with this premise, the public was led to believe that a failure of GM would mean that all of the physical capital of GM manufacturing and sales would simply vanish with the bankruptcy of GM.
But the truth is that the physical structure would have continued on much like before. Employees would have continued going to work, making and selling cars. The bankruptcy would have merely rearranged the organization of the company by causing sufficient financial sacrifice of employees, unions, pensions, investors, and management to make it solvent.
Bankruptcy would have been a healthy adjustment. But it would have required financial sacrifice, and the ones who would have suffered the sacrifice ran to the government and complained that they were too big to fail, and the government bailed them out. It is precisely in that transaction where the term, greed is best applied.
Murphy SidingConvicted One Perhaps beyond the scope of this thread, but since you ask, maybe a good litmus to be considered at such times would be weighing the potential cost of failure agaist potential stockholder gain before allowing mega mergers to happen? Perhaps require that a percentage of the "rosey nosed" projected savings (availed by such a merger) be placed in escrow for a period of time...to offset any unforseen down side. Do you agree or disagree that UP, BNSF, NS, and CSX are "too big to fail", in the classic sense?. Wouldn't you need a cystal ball, of the calibur not yet invented, to be able to weigh the potential cost of failure agaist potential stockholder gain? As far as your last sentence, how, or who, would decide what is to big to fail? If a guy was to be honest about it, aren't corporations formed for the express purpose of being "designed to line the pockets of the stock holders" ?
Convicted One Perhaps beyond the scope of this thread, but since you ask, maybe a good litmus to be considered at such times would be weighing the potential cost of failure agaist potential stockholder gain before allowing mega mergers to happen? Perhaps require that a percentage of the "rosey nosed" projected savings (availed by such a merger) be placed in escrow for a period of time...to offset any unforseen down side. Do you agree or disagree that UP, BNSF, NS, and CSX are "too big to fail", in the classic sense?.
Perhaps beyond the scope of this thread, but since you ask, maybe a good litmus to be considered at such times would be weighing the potential cost of failure agaist potential stockholder gain before allowing mega mergers to happen? Perhaps require that a percentage of the "rosey nosed" projected savings (availed by such a merger) be placed in escrow for a period of time...to offset any unforseen down side.
Do you agree or disagree that UP, BNSF, NS, and CSX are "too big to fail", in the classic sense?.
But, I don't think corporations looking out for their owners best interest are any more greedy than I am - which is not at all. The only difference is the scale.
The RR mergers that went badly at the start all had good reasons to be done. What went poorly was the RR's ability to integrate the two properties. This was not because it was intrinsic in the nature of the merger. It was because the operational complexity of doing it exceeded the abilities of the employees to manage it - and this was unforeseen. You can rightly call this poor management, but it ain't greed!
oltmannduphoggerWhen one understands that the name of the game in politics is power and NOT governance per se, then one will understand the situation we find ourselves in. OTOH, if we did not have at least some kind of regulatory body, we would likely have total confusion in the economy with equally discordant side effects in other sectors. The trick is having that government that governs and doesn't spend its time worrying about re-election. Term limits, anyone?They might spend their time preparing a cushy landing zone after their term is up. Perhaps some industry board positions in return for favorable legislation? They would be lame ducks at the beginning of their last term - constituents be "darned". ...devil and the deep blue sea....
uphoggerWhen one understands that the name of the game in politics is power and NOT governance per se, then one will understand the situation we find ourselves in. OTOH, if we did not have at least some kind of regulatory body, we would likely have total confusion in the economy with equally discordant side effects in other sectors. The trick is having that government that governs and doesn't spend its time worrying about re-election. Term limits, anyone?
When one understands that the name of the game in politics is power and NOT governance per se, then one will understand the situation we find ourselves in. OTOH, if we did not have at least some kind of regulatory body, we would likely have total confusion in the economy with equally discordant side effects in other sectors. The trick is having that government that governs and doesn't spend its time worrying about re-election. Term limits, anyone?
The term limits would probably take a Constitutional amendment. So just throw in there that once a person has been in the legislative branch, said person cannot go into the executive branch, and vice versa. It would probably be a good idea to extend that restriction to the judicial branch to avoid judgeships as a reward.
"No soup for you!" - Yev Kassem (from Seinfeld)
Murphy Siding What's the difference between "all in service to greed", or increasing the return to stockholders, while remaining competitive in the market? Isn't this just a case of 20/20 hindsight?
What's the difference between "all in service to greed", or increasing the return to stockholders, while remaining competitive in the market? Isn't this just a case of 20/20 hindsight?
I'll be frank here and confess that my first choice of words in place of "all in service to greed" was instead a more simple "designed to line the pockets of the stock holders" but had second thoughts because I knew there were a few stockholders here who I didn't want to risk offending.
Thanks Murph, you "caught" me on that one.
As far as your "remaining competitive in the market" observation, perhaps you AND oldtmann should sit down with a few of the shippers that were made captive by the mergers and seek their POV on the concept?
And "20/20 hindsight"?....(?) I think not. there is ample past precedent both inside (don't forget the contemplated marriage of SP/UP has come up before, then also there was PC) and outside (Chrysler) the industry
Paul_D_North_JrNote that buried in the middle of Don's subject column this month is an recounting of the FRA's current unilateral (= ex parte) attempt to establish new rules for higher speed passenger trains on freight railroad tracks, such as maximum delays, financial penalties for same, forcing the railroads to pay for corrective improvements, etc. All of that seems to have kicked open a hornet's nest with the Class I managments, judging by even Don's account.
I have been expecting this. I think the imposition of public HSR onto the private freight railroad corridtors will lead to major friction, and tend to blur the line between public and private.
dakotafredWould anybody besides me rather see another columnist or two at the expense of (often-old) "news" and all those departments? (If you're not interested in the department itself, that page is a monthly waste.) I personally miss Ed King and Larry Kaufmann.
Yes, especially Ed King (I'm not that familiar with Kaufmann's work). I used to really like listening to the scanner when King was dispatching on the CP C&M sub--he had a unique way of talking on the radio, and he really knew his stuff!!
Although I can imagine quite a 'lively' discussion regarding which features could be replaced.
dakotafred "I'll save the details for a future column." -- Don Phillips, in Sept. Trains. [snip]
Don has been saying that for many years about several topics, usually related to Amtrak, passenger trains in general, USRA, Conrail, politics and other government involvement/ interference of various kinds with the railroad industry, etc. By my recollection, he has usually failed to deliver, at least in a recognizable link to my dull mind - other topics seem to come up that grab his attention instead for those future columns.
Note that buried in the middle of Don's subject column this month is an recounting of the FRA's current unilateral (= ex parte) attempt to establish new rules for higher speed passenger trains on freight railroad tracks, such as maximum delays, financial penalties for same, forcing the railroads to pay for corrective improvements, etc. All of that seems to have kicked open a hornet's nest with the Class I managments, judging by even Don's account. To me, there seems to be an inconsistency here - the same government that Don expects to be reasonable about re-regulation was caught of being manifestly unreasonable - both in 'process' and 'result' - on the issue of passenger rail rules. Sure, they're different agencies - FRA vs. STB - but the political and legal masters of both is Congress . . .
I wonder if a worthy counter as 'damage control' to the re-regulation movement is to concede and grant 'open access' for the 'captive' shippers' I don't have the time this morning to write the economics essay that underpins my thought, but it essence it is that in an oligopoly = only a few competitors, which would be the case even with open access, the slightly higher level of competition won't depress prices much - it would be either BNSF vs. UP, CSX vs. NS, or CP vs. CN in most cases. But with serious re-regulation, the regulators could govern all rates - not just those pertaining to the captive shippers. Further, regulators are not constrained by the self-interest of survival to the extent that a competing railroad would be. For example, UP is not going to cut it's own economic throat to compete with BNSF for a particular move - but a regulator doesn't have to care about that as much, and might go lower than either would. Hence, conceding 'open access' might be a worthwhile negotiating ploy. Or not . . .
uphogger - your point about going back to JGK's old columns and articles and seeing how right he was is one that I share. Maybe some day . . . In general, I believe that he was more right than wrong, and some of his predictions/ recommendations have yet to come to pass or to be given an honest trial. He didn't forsee everything correctly by any stretch, but on this issue, he was right. If you go back and read the ''Railway Post Office''/ Letters To the Editor column in Trains from back in the late 1960's and early 1970's, you'll see that he - together with Prof. George Hilton - were widely ridiculed when they each started advocating abolishment of the ICC and especially its rate regulation function. Well, that essentially occurred with the 1980 Staggers De-Regulation Act, and formal abolishment of the ICC occurred in the early 1990's when it was replaced by the STB and its new rules. Gotta run now . . .
In reply to samfp1943 above, a much-younger Phillips did in fact run contemporaneously with Kneiling a million years ago. His column was called "The Potomac Pundit." Then editor David P. Morgan dumped both columnists on the pretext of freeing up more space for "news." I always suspected this was simply cover for getting rid of Kneiling, who was certainly angering many readers, maybe to the point of non-renewed subscriptions. Phillips was thrown out with the bathwater.
Would anybody besides me rather see another columnist or two at the expense of (often-old) "news" and all those departments? (If you're not interested in the department itself, that page is a monthly waste.) I personally miss Ed King and Larry Kaufmann.
Murphy SidingConvicted One...................in a nutshell the government has allowed the railroads to combine to the point that they've become "too big to fail" ...all in service to greed.............. How would the government, the railroads, or any business for that matter, be able to tell what is the *right* size for a business to be? What's the difference between "all in service to greed", or increasing the return to stockholders, while remaining competitive in the market? Isn't this just a case of 20/20 hindsight?
Convicted One...................in a nutshell the government has allowed the railroads to combine to the point that they've become "too big to fail" ...all in service to greed..............
And, wasn't PC "too big to fail"? That's how we got Conrail! First, the government chokes the industry to the point of passing out and now once they've let go and the industry has managed to a take a breath or two, we should choke them again?
greyhounds Several things came up on the google. Is this what you mean? http://www.prophetwithoutprofit.com/tag/tarp/
Several things came up on the google. Is this what you mean?
http://www.prophetwithoutprofit.com/tag/tarp/
Tarp is just the latest (albeit a good one) example of how big business owns our government, this problem goes back quite a ways.
As it applies to dakotafred's curiousity, in a nutshell the government has allowed the railroads to combine to the point that they've become "too big to fail" ...all in service to greed.
Anything the gov't might try to do that would "harm" the viability of the railroads would just precipitate another bailout. Perhaps the gov't should have seen this coming back when approving all those "mergers of efficiency"...the stockholders enjoy the savings of expense elimination, and then when it finally unravels.... guess who gets to pay to put Humpty back together again?
samfp1943 Does anyone else, besides me remember the Columns that appeared monthly in TRAINS back several years by Don Phillips? The column was called the 'Professional Iconoclast' He always seemed to have a contrarian position on his subjects. They were always thought provoking , but to my mind mostly from a negative perspective...
Does anyone else, besides me remember the Columns that appeared monthly in TRAINS back several years by Don Phillips? The column was called the 'Professional Iconoclast' He always seemed to have a contrarian position on his subjects. They were always thought provoking , but to my mind mostly from a negative perspective...
Sam,
That was not Don Phillips, it was John Kneiling. I usually found John's columns and articles interesting and refreshing, even though I was in my teens and early 20's when I read him. Don's columns seem to be affected by his time spent in Europe, a little to much exposure to a society where government is looked at as the end-all, be-all in the lives of its citizens.
Jay
You're thinking of John G. Kneiling, aka "The Professional Iconoclast". Those were good columns even if one didn't agree with all of them. It would be interesting to go back over them and see how accurate he was.
My mistake...Sorry. I gues it was the right church, but the wrong pew!
Bucyrus Has Phillips been telling us that the railroads have nothing to fear from the relentless Democrat effort to re-regulate the railroads because the relentless effort will not succeed, or because new regulation will not hurt the railroads? I am guessing it is the latter, but if it is, I then need to know why Phillips believes that.
Yes, it is the latter -- in so many words a couple of years back. Yet the explanation has always awaited "a future column."
I'll admit the purpose of my post was to tweak Don. If I had to explain the logic for re-regulation to the railroads and to TRAINS readers, it would take me five years, too.
greyhoundsThe railroads are a largely a self supporting and self financing industry that pays its own way, generates wealth for the nation's people, requires no significant subsidies (despite what Zardoz says), pays a union work force well, and pays taxes instead of using taxes.
How did I get dragged into this? I have no knowledge about subsidies, railroad or otherwise.
But if I had to choose, my uninformed opinion would be that the railroads deserve MORE in subsidies, at least equal in percentage to the level that the airlines and highways get subsidized.
oltmanndI get the sense he thinks it will be "not that bad" and that the RRs are just inflaming the issue to draw a line in the sand a this point, lest it get worse later.
That is what I would expect Phillips to believe. I think the railroads’ current success story renders them to be a very juicy plum, just ripe for picking in a way that invites government regulation and “partnering” in many new ways. When you read what the FRA wants to do with railroading through the public sector, it seems to total more than what the railroads are doing now in their private role.
I agree with Greyhound’s point that everybody in the supply chain wants a bigger piece of the action and would like the government to step in and redistribute the revenue. But the government itself has a powerful self-interest that constantly seeks fulfillment as well. So they are motivated to step in even if nobody wanted them to.
BucyrusdakotafredDon has been promising periodically for at least five years to tell us why railroads have nothing to fear from relentless Democratic efforts in the Congress to re-regulate. Question: Has Phillips been telling us that the railroads have nothing to fear from the relentless Democrat effort to re-regulate the railroads because the relentless effort will not succeed, or because new regulation will not hurt the railroads? I am guessing it is the latter, but if it is, I then need to know why Phillips believes that.
dakotafredDon has been promising periodically for at least five years to tell us why railroads have nothing to fear from relentless Democratic efforts in the Congress to re-regulate.
Question:
Has Phillips been telling us that the railroads have nothing to fear from the relentless Democrat effort to re-regulate the railroads because the relentless effort will not succeed, or because new regulation will not hurt the railroads? I am guessing it is the latter, but if it is, I then need to know why Phillips believes that.
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