Legislation intoduced to make railroads subject to antitrust laws.

[Anonymous]

Gabe,

"Compeition" in the Green bill refers to head to head competition between railroads. As you know (or should know), each transport mode has it's own advantages and disadvantages in comparison to the others. As has been explained, the railroads niche is to move bulk commodities at speed. Barges move bulk commodities at a relative snail's pace, trucks move product at speed but not in bulk, pipelines only move one or two specific commodities, airlines move light select products at max speed, etc. Therefore, certain product groups will tend to gravitate toward one of the modes as it's main tranporter. When these product groups are subject to only one transporter within each mode, you get captive shippers and monopolistic characteristics. Since all other modes have intramodal competition, the only mode left within intramodal monopolistic power are the railroads. Thus, when you have a representative government that is charged with maintaining a competitive free market, you are bound to get this type of legislation when certain monopolistic actions take place.

An easily understandable comparison is the antitrust action against Standard Oil. Using your logic, you can argue that Standard Oil wasn't a monopoly, because there were other forms of energy available for oil consumers. Coal was widely available at the time, I guess you can argue that coal was the competition against oil. But of course, that argument is flawed because the usage for oil is unique in transportation fuel consumption compared to coal. Oil had a niche, and Standard Oil had a monopoly on this niche. The antitrust action against Standard Oil was appropriate by the analysis of most historians and economists.

Trucks can only be seen as an alternative of last resort to railroads, just as coal is only an alternative to oil if we start building steam cars again, e.g. an alternative of last resort. Maybe if oil runs out we'll see coal fired steam powered autos again, but until then if oil is available we sure do want it coming from a competitive array of providers, right?

You seem to not want to comprehend the difference between the Green bill and the Burns bill. The Green bill is long overdue, the Burns bill is a regrettable attempt to return to the days to which you refer in the body of your post. It's pretty straight forward: Antitrust is good, reregulation is bad.

Then of course you apparently misunderstand open access. Under most open access proposal, you pay as you go, and you don't own one set of tracks but use someone else's. Instead, you split rail companies into independent infrastructure and transporter companies, ergo no co-management of tracks and rolling stock (although I'm sure you could own stock in both entities). This socialist misconception of open access as a "taking" of property is laughable when you consider past antitrust actions against monopolists. Do you really consider the Standard Oil or AT&T split ups as a "taking" of private property?

BTW, railroads are nowhere near to earning their cost of capital, and never will under the closed access system. Under the current system this goal is impossible, because to achieve it we'd have to kill our economy to pay for the comprehensive monopolistic rates required to achieve this cost of capital recovery in the first place. That's the Achilles Heel of Staggers - it made no realistic attempt to provide a competitive playing field to go along with the rate deregulation, thus creates monopolistic situations. It's half cocked, just like California's partial deregulation of their energy markets. If Staggers had been done correctly, we wouldn't even be discussing things such as antitrust potential against railroads, or the spector of reregulation of railroads.

A free market economy simply cannot function under widespread monopolistic control of key markets, nor can it blossom under govnerment price controls.

[gabe]

Just when I thought I was going to walk away from the forum . . . You have got to be kidding me, right? I don't know where to begin . . .

First, the contention that railroads are not subject to competition is about as fascicle as the media coverage of the newly selected Supreme Court Justice. It is very interesting to see that a transportation industry that transports far less than half the tonnage in the United States (and even less in terms of profit) can be classified as not subject to competition.

Second, why is it that we are going to target an industry that isn't even earning the cost of capital? What happened to the industry when it was subject to this regulation? Regulating this industry will end up producing one of two eventualities: (1) no railroads—as would have been the case were it not for Staggers—or (2) massive taxes so our country can either bail the rail industry out or run it publicly—which I assert would cost the voting public even more.

Railroads are getting close to earning the cost of capital; it would be such a waste to all parties—including the shippers--if we reversed course and went back to the days when lines were falling like flies. Did shippers really feel secure in their service in the late 70s and early 80s? Is that really preferable to right now?

Third, how would we implement this? Are we going to build new lines or have a public taking by forcing open access over tracks that will eventually fall into disrepair because everyone knows it is cheaper to run your trains over someone else's tracks rather than maintain your own.

Of all the nonsense and drivel . . .

Gabe

P.S. For what it is worth, I radically oppose a further round of mergers and am radically in favor of short line and regional spinoffs. But, what is suggested above is overkill.

P.P.S. "Kill" in "overkill" modifies the rail industry and those shippers who depend upon it for service.

[daveklepper]

Very appropriate comments. The only real problem with this legislation is a stupid but powerful court (Like the court that forced power companies to sell their street railways under antitrust) could interpret this that single billing for interline shipments is out, shich would definitely cut into rail traffic. Particularly short lines. Some short line originated or teminated shipments see passage over as many as four different railroads. This should be an objection to the legislation by both shippers and railroads. At least an amendment should tackle the problem.

[Anonymous]

What about all those DHL Trucks loaded on flat cars whipping by the UPS and FedEx trucks stopped at the grade crossing? With gasoline headed for $5.00 a gallon, why not finish killing of all the more economical means of transportation, and pour more $s into those conservation, non poluting modes of transportation like airlines and truckers. I am glad to see the electorate has wised up since the fifties, when the politicians slogans were "Vote for me and I'll raise your Social Security checks" before every retirement comunity that they could eat chicken with!

[CSSHEGEWISCH]

The Burns bill looks like re-regulation to me and is obviously an attempt to gain the votes of Montana grain farmers. The Green bill is smoke and mirrors and has a similar ulterior motive. As pointed out above, railroads already have major competition, known to most shippers as trucking companies.

[csxengineer98]

QUOTE: Originally posted by Lotus098

How are they going to enforce this Railroads don't hold a monopoly (truck lines)? As long as railroads stick to their agreements nobody should mess with them. Why does the government always stick their nose into every thing, except my fist? If it didn't cost so dang much I would have thrown the computer out the window. Give me a break don't they have something better do to, even take a vacation is better than this.
James[C):-)]

becouse thats what government dose best... they have to "justify" there jobs by making sure they always have work by writing more and more laws
csx engineer

[jeaton]

Mark Green has to do something to ensure that money continues to flow into his campaign fund from the paper manufacturing industry. Otherwise he might be looking for a job in his old occupation-5 & 10pm news reader on a local Green Bay TV station. People in Wisconsin do not demand high standards of intelligence for their elected government officials. The winner is usually one having the money to run the "cut taxes, family values, guns for everyone" smoke machine for the longest.

I was not able to vote for or against Green. I live in a different district. Our guy wins by promising save Social Security without cutting benefits or raising taxes paid to the Social Security fund. (You're trained in economics, tell me how that works). He is an expert on that subject because he recieved survivor benefits when he was growing up.

Any way my comment on making the railroads subject to Anti-Trust is "Whatever". If I was a shipper in Green's distrtict, I wouldn't be expecting three or more "railroad" companies to show up at my door anytime soon.

Jay

[Anonymous]

How are they going to enforce this Railroads don't hold a monopoly (truck lines)? As long as railroads stick to their agreements nobody should mess with them. Why does the government always stick their nose into every thing, except my fist? If it didn't cost so dang much I would have thrown the computer out the window. Give me a break don't they have something better do to, even take a vacation is better than this.
James[C):-)]

[Junctionfan]

I guess this is a punishment against CN/WC. I think it would be safe to say that Montana would also support this (BNSF).

[Anonymous]

QUOTE: Originally posted by bobwilcox

QUOTE: Originally posted by futuremodal

I was going to wait for LC to post this, but it may be he's having a hard time removing his fist from the wall in reaction to this.....

http://www.progressiverailroading.com/freightnews/article.asp?id=7225

Introduced by Congressman Mark Green of Wisconsin.

Two questions:

1. Can someone tell us why railroads should remain exempted from normal antitrust laws?

2. Hey, jeaton, did you vote for this guy?

I can not think of any reason the railroads should continue their anti-trust exemption. Of course, Burns legislation has nothing to do with anit-trust.

I'm glad you mentioned the other legislation, because I am curious as to which proposal would be seen as the lesser of two evils to the railroad industry. I can tell you from an economist's perspective, I would definately prefer the Green antitrust legislation over the Burns reregulation legislation.

[bobwilcox]

QUOTE: Originally posted by futuremodal

I was going to wait for LC to post this, but it may be he's having a hard time removing his fist from the wall in reaction to this.....

http://www.progressiverailroading.com/freightnews/article.asp?id=7225

Introduced by Congressman Mark Green of Wisconsin.

Two questions:

1. Can someone tell us why railroads should remain exempted from normal antitrust laws?

2. Hey, jeaton, did you vote for this guy?

I can not think of any reason the railroads should continue their anti-trust exemption. Of course, Burns legislation has nothing to do with anit-trust.

[Anonymous]

I was going to wait for LC to post this, but it may be he's having a hard time removing his fist from the wall in reaction to this.....

http://www.progressiverailroading.com/freightnews/article.asp?id=7225

Introduced by Congressman Mark Green of Wisconsin.

Two questions:

1. Can someone tell us why railroads should remain exempted from normal antitrust laws?

2. Hey, jeaton, did you vote for this guy?