Chicago drowning in trains

[METRO]

Metra wants to extend the Kenosha branch up to Milwaukee yes, but the problem becomes that the current UP corridor to Milwaukee (old CNW) bypasses downtown and the airport, so the Metra trains would have to cross over to the parallel CP line (old Milwaukee Road) and the problem with this line is that it runs through some of the most historic and dense wards of the city, mainly in cuttings and high-lines.

One advantage of the CP line though is that there are far fewer grade crossings than the UP line, and most freight cuts off through yards just south of Downtown, leaving only through freight and passenger trains to go over the bridge into downtown.

The plan that I heard mentioned in the paper here had Metra almost building a entire second commuter system here in Milwaukee. One of the stipulations that Mayor Barrett imposed upon any northward expansion is that Metra must also act as a regional commuter railroad for Milwaukee. So instead of just extending a single route up to Milwaukee Metra is also working out how to impose a seperate hub-and-spoke system in South Eastern Wisconsin linking all of the suburbs as well.

I've also read a report that Chicago's Mayor Daley was quite pleased with the new proposals as Milwaukee's airport could handle any overflow from O'Hare and Midway since Wisconsin just spent a few million to build a new Amtrak (and eventually Metra) station at the airport with service only to Chicago and Milwaukee.

O.S. ~ Glad to hear that there is some centralization within the smaller feeder lines, as for EJ&E well, railroads have always been prone to delusions of grandure.

~METRO

[greyhounds]

QUOTE: Originally posted by O.S.



Greyhounds: I'm suprised to see you advance this argument. Your other posts show great awareness of complexity. You would propose that all the intermodal traffic reaching Chicago should simply be rubbered from one side to another, each truck paying a fuel tax that is penny or so on the dollar of its actual use of roadway resources, and that the air pollution and subsequent impact on everyone else's health care, building maintenance costs, etc., should be foisted onto the people paying for the health care and building maintenance?

Is there ANY government expenditure you think justified? National defense -- shouldn't that be paid for in user fees, too? I realize that your insistence on belittling those who disagree with you by calling it "gubermint" means you're probably not open to different opinions, but I'll give you the benefit of any doubt.

I agree, in the long run, the free market will work just fine. Traffic and pollution will drive people out of Chicago, real estate prices will collapse, and the railroads will find it easy to build connections across the deserted land once occupied by a thriving metropolis. The loss of wealth will be enormous, the loss of productivity will be enormous, but measured against the threat to a sacred ideology, a trillion dollars here or there seems a cheap price indeed.

OS

I have a little problem with this OS. I did use the word "Gubernmint". From this point forward, I promise to refrain from any and all attempts at humor in responding to you. I will be totally serious.

But by labeling my an idealouge you avoided dealing with my arguments.

Government allocation of economic resources, aka subsidies, is not a good thing because:

1) In order to subsidize anything the government must take the money away from some other economic activity

2) They can't identify what they're taking it away from - they can't identify the opportunity costs

3) Because of this they can't possibly do a cost/benifit analysis of providing a subsidy

Subsidies are generally political and harm the overall population.

Now some activities have to be done by governmetns. National security, police, courts, etc. But economic activity is best left in unsubsidized private hands because of the above. It's not a "cherished belief", it's sound reason and experience.

[bjc77]

While working for CP and taking trains onto the BRC I couldn't believe the bottleneck that is at Cragin. You'd think when Galewood was rebuilt they would have spent the money and made that a double main connection.

I'm sure somebody has already thought of this one though here is another idea, why doesn't CP and WSOR get ahold of the old CNW (UP) line that goes south from around Mayfair down to Cragin Jct to get to the BRC? I know the diamonds are gone at Cragin and I don't know what kind of shape that line is in now but it sure has to beat the WSOR going around A-5 then running around their train at Galewood or CP trains holding at B-17 or Bensenville because of "Curfew". What will happen if 'O Hare gets their expansion to the west by Bryn Mawr, where will UP and CP go?

[Anonymous]

Greyhounds: I completely agree with you on the broad principle. While government intervention into the market is often touted as a broad benefit to the public, in reality it's usually an intentional wealth transfer from one set of pockets to another set of pockets. If I'm wrong about that, than all those lobbyists in D.C. are figments of our imaginations!

But the real world is messy and complicated, and I think history shows that a policy of 100% hands-off markets is as unproductive as a policy of 100% hands-on markets. Even the military, which some think is a markets-free institution, plays a huge role in markets. The causes of World War II were not divorced from market access and market control, e.g., Japan thought it should have its own economic colonies, too. And the free market, while it will impartially allocate resources, will not always deliver the results the owners of the market (us) desire. I don't know about you, but my goal in life is not to die comforted by the satisfaction that hey, we're all as poor as church mice, but we saved the free market. The free market is a good tool to that end: I defend it so we can use it, but only if it brings us benefits. If an alternative tool brings us more benefits, it would be rather strange to resist using that tool.

After all, if we had left it up to an unregulated free market to decide the fate of North America, it would all still be a colony of Great Britain, France, Spain, and Russia, and a rather undeveloped and ruined one, too. The market would ALWAYS reward the immediate benefit of remaining a colony, and puni***he unknown and over-the-horizon benefit of independence. The patriots who declared independence were the biggest offenders of an unregulated market in this country's history. They had no idea if it would all work out. The very same philosophy is used by the government to loan money to build a transcontinental railroad rather than waiting for capital markets to take that risk -- a bet that it would all work out later. Is the CREATE project any different?

I think the argument between us can be clarified to a question of where to draw the line on government intervention into the allocation of transportation resources, the regulation of transportation charges, the regulation of transportation safety, and the adjudication of transportation disputes. But we already have the government deeply entangled into transportation, and while I respect your desire to not further that entanglement, it only serves ideological ends, not practical ends, to simply stand aside on something like the CREATE project while simultaneously ignoring the existence of all the other transportation involvements. This is not an argument for "modal fairness" but an argument for practical outcomes, in this case, an outcome that I believe will enrich all consumers with reasonable impartiality.

I fall on the side of pragmatism. My concession to you -- one that I think not a lot of people are willing to make -- is that future government involvement in transportation should be entertained only as one-time projects for narrow and limited ends. Open-ended programs, which we frequently see as prescriptions for "modal fairness," are the other side of the coin: they also serve ideological ends, not pragmatic ends.

If you look back, I think you'll find that the question of whether railroads should be economically regulated was never resolved one way or the other. The issues that created regulation simply became moot. We did not deregulate because those on the side of deregulation finally won the field, but because we woke up one morning and realized that those on the side of regulation had abandoned the field.

OS

[gabe]

Really interesting analysis O.S. But if those on the side of regulation didn't abandon the field because of the strengths of a deregualtion position, etc., then why did they?

Gabe

[Anonymous]

Because they were dead, had moved on to something else, had forgotten about railroads completely, or had shifted around to the other side of the field. Technological, geographic, and economic change had rendered the entire issue of 1880 completely moot by 1980.

Regulation benefited small shippers such as farmers, coal dealers, lumberyards, grocers, etc. It harmed large shippers. Many of these small businesses, such as coal dealers, were dead, wiped out by technological change -- homes had converted to natural gas or electric heat. Others, such as grocers and other consumer-goods retailers, had leveraged up through mergers and acquisitions, and regulation now did them a positive disservice -- they wanted the lower rates to which they were entitled by their larger market power. Still others, such as the preponderance of manufacturers and farmers, had converted to truck for all the short-haul moves and a lot of of the long-haul moves too, and they didn't even know what a railroad was anymore. They had left the stadium completely.

OS

[zardoz]

QUOTE: Originally posted by METRO

Metra wants to extend the Kenosha branch up to Milwaukee yes, but the problem becomes that the current UP corridor to Milwaukee (old CNW) bypasses downtown and the airport, so the Metra trains would have to cross over to the parallel CP line (old Milwaukee Road) and the problem with this line is that it runs through some of the most historic and dense wards of the city, mainly in cuttings and high-lines.

One advantage of the CP line though is that there are far fewer grade crossings than the UP line, and most freight cuts off through yards just south of Downtown, leaving only through freight and passenger trains to go over the bridge into downtown.

I've also read a report that Chicago's Mayor Daley was quite pleased with the new proposals as Milwaukee's airport could handle any overflow from O'Hare and Midway since Wisconsin just spent a few million to build a new Amtrak (and eventually Metra) station at the airport with service only to Chicago and Milwaukee.

Just to clarify, the Metra expansion to Milwaukee would be on the Kenosha Subdivision, which goes through all of the shoreline cities (Racine, South Milwaukee, Cudahy, St. Francis). The UP line you mention (old CNW route) is mostly single track, TWC territory, with manual sidings. Passenger service on that line was not considered. In addition, the Kenosha sub is not in the greatest shape. All that run on it now are the occasional Oak Creek coal train. The line is single-track dark territory. And when the new power plant is built in Oak Creek, the coal train traffic will increase greatly.

The problem is that there is not a good connection south of Milwaukee for a passenger train to go from the Kenosha subdivision to the downtown station. There is a connection track at Washington street just south of Milwaukee, but it is at the end of a long 10mph track that connects at the UP St. Francis interlocking. If the trains were of the push-pull type, a train could run north from Kenosha to St. Francis, then the crew would have to change operating ends for the southbound trip to the airport (only a few miles), then reverse the process for the return trip.

There is a connection from the Kenosha subdivision to the Milwaukee division (of which you speak) throught the city of Kenosha (the old KD subdivision). It crosses the city on crappy 10mph track, with many crossings, some of which still require flagging.

The only grade-crossing advantage is through Milwaukee, where the CP runs through the valley, whereas the UP runs at ground level through West Allis towards Butler.

[Valleyline]

QUOTE: Originally posted by BaltACD

OS - well presented


Wall Streeet and it's mind set that the railroads are an archaic and dying form of transportation have directly caused the capacity constraints by pricing capital dearly. Railroads and not like the Dot.Com industry that can turn paper profits from minimal investment; railroads require real investment into real objects (Engines, Cars, Tracks, Signals, and employees to operate and maintain it all)....such investment in the Wall Stree World doesn't return itself 5 times over in the first year and is thus percieved tobe a poor investment and rated accordingly.

I find little evidence that Wall ST. discriminates against railroads when it comes to capital investment. Railroads must compete for capital just like any other business. To be competitive for capital funds any business must demonstrate earnings growth commensurate with capital growth. As John Kneiling often said, "railroads would get a better return on funds left in their checking accounts than they would by reinvesting it in the business of railroading." This isn't Wall Street's fault.

[Anonymous]

Yes, Valleyline, you're right, it's not Wall Street's fault. John Kneiling is correct, too. But that actually affirms BaltACD's argument. It does not deny it.

Your observation goes right to the pathos of this problem. Wall Street has no choice but to think in terms of minimum risk/maximum reward, and as the time required for return on investment lengthens, the risk rises through the roof. Transportation investments are inherently durable, so they are long-term and high risk. You've just agreed to one of the fundamental flaws of the free market as it's currently construed in the U.S.: it can't accept long-term propositions -- it can't deal with transportation, electric power, oil refining, steel making, or anything else that doesn't turn the money in 90 days.

OS

[gabe]

Alas, I think it goes right to the bathos of the problem for myself—as I have neither invested in railroads nor championed the political ideologies necessary to direct more investment in our rail infrastructure.

I suppose the days of one person, or a few people—who might be more willing to invest with an eye toward the distant future—owning a railroad are behind us?

Gabe

[METRO]

Another problem with the Milwaukee line is that there is a plan to run commuter out to the western suburbs by way of the CP line and branches. Again this track gets kind of gnarled once you get out of the city proper.

A few years ago Amtrak did a trial run of commuter service in Milwaukee while I-94 was being repaved. I remember riding the train out to the end of that line and it also drops to single track as well.

Also, any word on upgrades to the UP line when the new powerplant is finnished? I remember the days when CNW's old FM powered transfers would bang along the line and has always been great for train watching, especially where it crosses the CP line in Wauwatosa.

~METRO

[Anonymous]

Gabe: Those people are still there, and there will be more of them as the opportunities afforded by deregulation are realized. When I think of Denny Washington (MRL), Henry Posner, Ed Burkhardt, Phil Anschutz, and Mike Haverty, the word that comes to mind is "entrepreneur."

Of course, for every James J. Hill there's at least one Jay Gould.

OS

[greyhounds]

QUOTE: Originally posted by O.S.

Greyhounds: I completely agree with you on the broad principle. While government intervention into the market is often touted as a broad benefit to the public, in reality it's usually an intentional wealth transfer ...

After all, if we had left it up to an unregulated free market to decide the fate of North America, it would all still be a colony of Great Britain, France, Spain, and Russia, and a rather undeveloped and ruined one, too. The market would ALWAYS reward the immediate benefit of remaining a colony, and puni***he unknown and over-the-horizon benefit of independence. The patriots who declared independence were the biggest offenders of an unregulated market in this country's history.

I think the argument between us can be clarified to a question of where to draw the line on government intervention into the allocation of transportation resources, the regulation of transportation charges, the regulation of transportation safety, and the adjudication of transportation disputes.

If you look back, I think you'll find that the question of whether railroads should be economically regulated was never resolved one way or the other. The issues that created regulation simply became moot. We did not deregulate because those on the side of deregulation finally won the field, but because we woke up one morning and realized that those on the side of regulation had abandoned the field.

OS

OK - let's take the last one first. The issue was, in fact, resolved - the good guys (The "Deregulators") won on merits.

The farmers and small busineses that you cite didn't go away. Farmers are still PO'd about railroad rates. (See previous discussions on North Dakota and Montana grain). Small business may have shifted to truck transport, but they still used regulated motor freight rates.

One of the most politically active large firms in the country, ADM, actively organized opposition to branch line abandonments - they sure haven't gone away. And if you had ever tried to quit service on a MIssissippi branch line serving a wood yard, you'd know the opposition to economic freedom was alive and well when deregulation occured.

It is important to realize that it was not just "Railroad Deregulation", it was the economic deregulation of all transportation that was implamented. Airlines and trucking companies were also deregulated with respect to routes, rates and service. That didn't happen because people lost intererst in railroad regulation. It happened because PhD economists, such as George W. Hilton, produced enough evidence to carry the argument.

If you need an example of how complete the merit win was, you just need to look at Texas. The feds initially only deregulated interstate motor freight. States were perfectly within their powers to regulate rates on shipments within their own borders. A majority of states, led by Florida, simply followed the Federal lead. But Texas held out. A politically connected trucking company, Central, didn't want compitition. (Rumor was that Lady Bird was a major shareholder.)

It was so bad that UPS was not allowed to handle shipments originating and terminating within the state of Texas. Mary Kay Cosmetics, of Dallas, had to ship to its Texas customers by trucking everything out of state to Shreveport. Then they tendered the shipments to UPS in Louisiana for Texas delivery.

Anyway, so complete was the merit victory of deregulation that the Federal Government removed the right of states to regulate rates within their own borders. Now that didn't happen because there was no opposition, there was significant opposistion. It happened because convincing rational economic reasoning had overcome political connections.

As to the colonial thing, no. The Founders were basically men of property and commerce. They saw that their lives could be destroyed on a whim by the actions of a government (aka a King - yetch, ick, terrible) that had few limits on its actions. So they risk their lives (and property) to get The Hell away from that. They esablished a government of specifically limited powers. A government that recognized "the inherent rights" of its citizens. The uncertanty of being colonists was replaced with the inherent rights of a US citizen.

And besides, there are things such as liberty that exist outside the economic sphere. "Live Free Or Die" is not a rational economic posistion. But it sure makes sense to me and it came out of the Revolutionary War.

And I'm not against CREATE (a project to improve rail freight transit of Chicago). I'm against Federal funding of CREATE - that's a big difference.

[Anonymous]

For years the "J", the EJ&E, has been underutilized and has never lived up to its name as the Chicago Outer Belt. If it doesn't interchange with, it crosses EVERY other railroad entering Chicago. It is double tracked from Gary, IN on the east to Joliet and maybe on to Elgin. From there it continues the rest of the way AROUND Chicago to Waukegan on the north. I don't know who owns the "J" today but it was originally a US Steel subsidiary connecting their Gary steel mills with their other subsidiaries, American Bridge & Iron and US Steel & Wire in Joliet and Waukegan, respectively. As a US Steel subsidiary they weren't particularly interested in being a route around Chicago for through rail traffic. Also all the major roads classification yards were located closer in to Chicago than the arc followed by the "J". It sounds like the "J" might finally be close to realizing it's potential as a bridge route around Chicago.

[Anonymous]

Grey, what do you think changed between 1883 and 1980 that regulation could be imposed in one and deposed in the other? Are you voting for human nature? That is, people blind to the merits of a free market in 1883 were enlightened by 1980?

If a railroad builds a bypass, and that coincidentally benefits a city by reducing traffic and pollution, should the city be allowed to partake of those benefits without charge? Isn't that an illegal taking?

OS

[daveklepper]

No government funding for CREAT? What about the benefits to all the citizens of Chicago by lower pollution, far less time being blocked at grade crossings, less overall business diverted from the city. As well as the surrounding suburbs.

[Anonymous]

Let's not forget that the pupose of the former ICC was to limit the power of the railroad companies. Railroads were prohibited from owning trucking companies. The highway acts were enacted to construct and preserve the noations road network. Many now consider the roads as a right of the people, and rails as those "robber barons". The purpose of the highway departments is to build, maintain and keep for the public good a road system. Only when this arrangement is reconciled will any rationalization of transportation occur.

[gabe]

Greyhounds,

You are, in effect, asserting the people of Chicago cannot contract with railroads for mutual benefit. Federal, state, and local government have always contracted with private enterprise. So long as both contracting parties have the right to refuse, I fail to see how sacrosanct notions of classical liberalism are intruded upon.

I seem to remember BN giving the Iowa Interstate Railway low-interest loans to improve certain segments of track because BN believed the money returned by IIRR's interchange traffic would justify the expenditure. I don't see CREAT any differently.

Cities are no less of an economic entity and market participant than ADM—and they are treated that way by courts. If you don’t believe me, watch the next time there is a problem with such a project and there is legal action. The city’s claim of “sovereign immunity" will be laughed out of court before you can say “Adam Smith.”

This is not a recent phenomenon and it has paid dividends in the past. Without the federal government "investment" in the form of land grant railroads, would your former employer the IC ever have come into existence?

I see your argument as counter to classical liberalism. The absolute bedrock of a classical liberal economic system is freedom to contract. CREAT is not government regulation; it is a contract between two parties that are free to say “yes or no.”--Capitalism in its purist form.

Nonetheless, very interesting comments and I hope you don't stop offering your opinion on this subject. I am learning a great deal from both you and O.S.

Gabe

[greyhounds]

QUOTE: Originally posted by daveklepper

No government funding for CREAT? What about the benefits to all the citizens of Chicago by lower pollution, far less time being blocked at grade crossings, less overall business diverted from the city. As well as the surrounding suburbs.

OK, I didn't say no government funds now did I. I said I am opposed to Federal funds.

[greyhounds]

QUOTE: Originally posted by O.S.

Grey, what do you think changed between 1883 and 1980 that regulation could be imposed in one and deposed in the other? Are you voting for human nature? That is, people blind to the merits of a free market in 1883 were enlightened by 1980?

The University of Chicago happened. Seriously - knowledge and understanding of all sciences advanced, including economics. As you said, people didn't understand the merits in 1883, but had come to understand them in 1980. Just as doctors didn't know about germs back then but had an understanding of infections in 1980.

The original purpose of Federal economic regulation of the railroads was to stabilize the rail cartells - the railroad companies welcomed the regulation. The original act creating the Interstate Commerce Commission was writen by a lawyer employed by the Philadelphia and Reading railroad. The law served the puposes of "Big Business" - not the "little guy".

In the late 1800's the railroads were constantly involved in "rate wars" that drove their prices and profits down. They hated this. In response they would attempt to form cartells and stabilize their pricing. Cartells rarely, if ever, work. Somebody's gonna cheat. So they had it written into law. They thought they were stabilizing prices and guanteeing themselves a profit. They didn't count on the development of motor freight. The regulation of their prices (and services) prevented them from meeting this new compitition.

By 1980 or so there was enough understanding and proof that economic regulation of transport was harmful - and it was driving railroads bankrupt.

QUOTE:
If a railroad builds a bypass, and that coincidentally benefits a city by reducing traffic and pollution, should the city be allowed to partake of those benefits without charge? Isn't that an illegal taking?

OS

No, it's not a "taking" if the railroad voluntarily built the bypass. I wouldn't even be opposed to the city providing funds. But the beinifits would be local so the funding should be local, not Federal.

[Anonymous]

Are you saying that it is wrong for a state or municipal government to engage in a taking of private property without due compensation, but it is right for the federal government to do so? Do you think it is acceptable for a state or city to participate in a project that benefits interstate commerce, but it is unacceptable for the federal government to encourage interstate commerce?

OS

[Anonymous]

QUOTE: Originally posted by greyhounds

The University of Chicago happened. Seriously - knowledge and understanding of all sciences advanced, including economics. As you said, people didn't understand the merits in 1883, but had come to understand them in 1980. Just as doctors didn't know about germs back then but had an understanding of infections in 1980.

Now I'm really confused by your argument. Germ theory was a discovery. What was discovered by economists after 1883 that changed everything? Weren't the benefits of a free market described 117 years earlier by Adam Smith in The Wealth of Nations, and published to broad acclaim in 1776?

Earlier I understood you to say that farmers opposed deregulation in 1980. So the farmers that didn't understand the merits of free enterprise in 1883 and agitated for regulation came to understand its merits by 1980 and supported deregulation? Or are you saying that farmers' never got it right, but their views commanded votes in Congress in 1883, but in 1980 Congress ignored this constituency? (You're saying that Congress, for once, got it right? Wasn't the House controlled by the Democratic Party then?)

Or are you saying that railroads had the power to self-regulate themselves in 1883 to bring legal protection and authority to their cartels, AKA rate bureaus, neglected to return to Congress, once it became apparent this was a mistake, to tell them to turn the switch off, and then had the power to deregulate themselves in 1980? Was I mistaken when I read all those statements about the evils of regulation in Railway Age, Railroad Gazette, and Railway Record beginning in the 1870s when states startted to regulate railroads, and continuing unabated to 1980?

If that's not what happened, exactly who did become educated by 1980? Congress?

And to return to an earlier statement by you, when you said that small businesses opposed deregulation of motor trucking in 1980, how is it that their views didn't carry the day? What about the small businesses advantageously situated that wanted deregulation so they could beat down their rates at the expense of their less advantageously situated competitors? Where did they fall in all this?

OS

[daveklepper]

Again, I maintain that it is fair for the Government to contribute to the Chicago project.
Did the Big Dig in Boston come entirely out of highway user fees? Even so, it no way does for Boston the advantages that the general population of Chicago will derive from the rail improvements there. Far less waiting at grade crossings. Less pollution. Less possibility of business and employment leaving because of congestion. It is established that local and federal support (more than operating costs) for commuter rail is valuable and proper. Part of the improvement in Chicago will be for the commuter rail network. I think a very good case can be made.

Hasn't the government already spent money on maglev research? Why?

And then there is the fuel cell Hydrogen boondogle, and it is a boondogle, there is NO chance of a SAFE Hydrogen economy. One big Hindenburg flying ship.

[gabe]

QUOTE: Originally posted by O.S.

Originally posted by greyhounds
Now I'm really confused by your argument. Germ theory was a discovery. What was discovered by economists after 1883 that changed everything? Weren't the benefits of a free market described 117 years earlier by Adam Smith in The Wealth of Nations, and published to broad acclaim in 1776?

Indeed,

France SIC 1847--before the 1848 revolution--is almost certainly the most pure form of a lassie faire economic system in the history of the world—it would probably make most adherents at the University of Chicago blush as they are complaining about gas prices while filling up their SUVs.

Stated differently, the historical engine driving the 1980’s regulatory changes was Marxist rather than Hegelian. Economic circumstances and changes (stagflation) proved fertile ground for pre-existing anti-regulatory economic ideologies.

Gabe

P.S. What is eponym form of Adam Smith? Smithian?

• Reply

[Anonymous]

"The farmers and small busineses that you cite didn't go away. "

"But the percentage of the population living on farms was drastically lower in 1980 than in 1880 - they had lost some political clout."

"I never said farmers opposed dereg. I said they hadn't gone away and were still upset about railroad rates."

Grey, I'm trying to find the merits in your arguments -- it strikes me as important to see if you're right. But among other things, I can't even get past the foundational facts you're using, because they seem to say one thing in one place, and something else in another. For instance, how do I reconcile these three statements of yours in reference to farmers? Did they or didn't they go away? Did they or didn't they lose political power? Did this loss or lack of loss of power effect different outcomes 97 years apart? Could you help me out here?

OS

[greyhounds]

QUOTE: Originally posted by O.S.

"The farmers and small busineses that you cite didn't go away. "

"But the percentage of the population living on farms was drastically lower in 1980 than in 1880 - they had lost some political clout."

"I never said farmers opposed dereg. I said they hadn't gone away and were still upset about railroad rates."

Grey, I'm trying to find the merits in your arguments -- it strikes me as important to see if you're right. But among other things, I can't even get past the foundational facts you're using, because they seem to say one thing in one place, and something else in another. For instance, how do I reconcile these three statements of yours in reference to farmers? Did they or didn't they go away? Did they or didn't they lose political power? Did this loss or lack of loss of power effect different outcomes 97 years apart? Could you help me out here?

OS

I'll try.

"Somewhat reduced" is not synonymous with "Gone away"

While the farm population has declined relative to the rest of the country, the agri business sector - ADM, Cargil, ConAgra, Tyson, etc. is huge. These are the entitites that actually ship the grain. Couple this up with states such as Iowa where farming is still a huge sector of the economy and you've got significant political power.

To say that the farmers have had their political clout "somewhat reduced" does not mean that they don't still have significant political influence. There is nothing contradictory in the statements you cite.

And no, I don't think it would have made any difference if they had even more political power. As I stated, economic deregulation of transportation won the day based on its merits. There were entities against it, entitites with real political power such as the Teamsters Union.

Besides, today's farmers are not the same as their predicessors of the 1880's. The guy who was best man at my wedding (why didn't he stop me?) farms several thousand acers in central Illinois. He's got a degree in agrcultural economics from the University of Illinois. He also spent 30 years in the air guard and reached the highest enlisted rank possible in the Air Force. He's not going to buy the snake oil of economic regulation. He understands economic reality. Sometimes he doesn't like that reality, but he understands it. There are plenty of other farmers with those university ag degrees.
That doesn't mean they are above pushing for regulation if they think it will increase their income - it just means that at least the better educated ones will recognize that it's not a viable long term solution.

Contrast that with the experiences of my parents. My father lost his farm the year I was born, 1950. He spent most of his life without electric lights. He was born in 1907, got electricity 40 years latter, and died in 1977. 40 years without electric lights, 30 years with 'em. He was in the first class in town to go through four years of high school. Didn't have a four year high school before that. He was a good man, but he didn't have a clue as to what made an economy go. Nobody ever taught him economics.

My mother started teaching school when she was 17 in 1928 in a one room school house out in the country. Her students not only didn't have electricity, they'd never been to town. Now keep in mind that this town had all of about 900 people living in it, and the children were growing up having never seen that many people living in one place.

It isn't like that anymore, those kids have cable TV, this here internet, and a good shot at going to college.

So the farm population is better educated and more experienced today. They're not going to see the world as their predicessors saw it. They can understand economic priciples much better. So no, given the changes in rural America over the past years, I don't think the farmers would have stood in the way of deregulation.

But some of 'em are still going to gripe about railroad rates. It's a rural tradition.

[greyhounds]

QUOTE: Originally posted by gabe

Greyhounds,

You are, in effect, asserting the people of Chicago cannot contract with railroads for mutual benefit. Federal, state, and local government have always contracted with private enterprise. So long as both contracting parties have the right to refuse, I fail to see how sacrosanct notions of classical liberalism are intruded upon.

I seem to remember BN giving the Iowa Interstate Railway low-interest loans to improve certain segments of track because BN believed the money returned by IIRR's interchange traffic would justify the expenditure. I don't see CREAT any differently.

Cities are no less of an economic entity and market participant than ADM—and they are treated that way by courts. If you don’t believe me, watch the next time there is a problem with such a project and there is legal action. The city’s claim of “sovereign immunity" will be laughed out of court before you can say “Adam Smith.”

This is not a recent phenomenon and it has paid dividends in the past. Without the federal government "investment" in the form of land grant railroads, would your former employer the IC ever have come into existence?

I see your argument as counter to classical liberalism. The absolute bedrock of a classical liberal economic system is freedom to contract. CREAT is not government regulation; it is a contract between two parties that are free to say “yes or no.”--Capitalism in its purist form.

Nonetheless, very interesting comments and I hope you don't stop offering your opinion on this subject. I am learning a great deal from both you and O.S.

Gabe

Gabe,

I'm not saying the city can't contract. Of course it can contract. I'm not even saying it shouldn't assist CREAT. There can be local benifits from reduced congestion and the city can contract for the "mutual benifit" of its citizens. (Although in Chicago, the city contracts tend to be less than "mutually benificial" from time to time.)

I'm saying that the Federal Government shouldn't (not couldn't) put money into the project. If there are national benifits those benifits can be captured and changed to the entitities benifiting, the private railroads and the shippers. Those are the ones who should pay.