Why Trains Don’t Work in America

I can imagine taking the train to New York on vacation, because I am a train nut and the trip would be fun in itself. But let’s think about this as a business trip: taking the train would not only cost about 1.5 times as much — or four times as much with a compartment, and I’m just sure I’d be all set to go right to work in New York after two full days in a coach seat — but it consumes four working days in travel time. I can manage a one-day business trip by plane, but a one-day trip to New York by train is a five-day trip. Subsidies won’t help: counting in the lost time, Amtrak would have to pay me $4,000 to make up for the time difference. The travel time difference is so large that Amtrak couldn’t compete if train tickets were free.

I’ve had the same experience. I love trains and a couple years ago I was planning on taking the train to Boston for a weekend, but Amtrak was more expensive than the train and would take three to four times as long. I have to go to Cleveland for a wedding right after Christmas this year and the train ride is three to four times as long as a plane flight and twice as long as driving would be. (Plus, we’d need to rent a car while in Cleveland to get around.)

When in Europe two years ago, I took the train between cities and loved it but trains just aren’t time-efficient for the distances we need to travel here in America. While over there I discussed with a friend of a friend that Europeans also had an advantage in building public transportation because we assumed much of the demolition costs for them during World War II. We paid to clear the space they needed to build their subways and light rail systems, but having to bear the costs of demolition and construction, it becomes economically infeasible to repeat that over here. Plus, as noted the distance and the fact our cities tend to cover a larger geographic area than theirs. Comparing our use of public transportation and Europe’s really is comparing apples and oranges.

Health Care

We had our annual benefits meeting today at work and after hearing about all the various health care options and tax ramifications, I left with a headache. I told our own after the meeting: “I have never been more convinced of the need for a flat tax or decoupling health care from employment than I am right now.” Turns out both of those are interests of his. (I knew about his position on health care, but the flat tax was new.)

Our current health care and tax structures are insane. We need to start over on both. Let people decide what’s best for themselves rather than continually carving new rules at the ferderal level. Set my people free!

God Bless Jim Bunning

Not only was a Hall fo Fame pitcher for the Phillies, but now, as a US Senator, he’s fighting hard to stop rewarding the dishonest and/or incompetent who made or took mortgages they couldn’t afford:

According to a summary of all the amendments, Sen. Bunning wants:

“to stop the bailout of the rich”
“to prevent the bailout of illegal aliens”
“to prevent the bailout of homeowners who used their homes as a credit card”
“to stop the bailout of sex offenders”
“to stop the bailout of drug offenders”

Another of Sen. Bunning’s amendments would change the name of the bill from “The Federal Housing Finance Regulatory Reform Act of 2008” to the “Bailout of Irresponsible Lenders and Borrowers Act of 2008.”

“Mr. Obama seems to think he can repeal the laws of economics.”

Windfall Profits for Dummies – WSJ.com

We tried this windfall profits scheme in 1980. It backfired. The Congressional Research Service found in a 1990 analysis that the tax reduced domestic oil production by 3% to 6% and increased oil imports from OPEC by 8% to 16%. Mr. Obama nonetheless pledges to lessen our dependence on foreign oil, which he says “costs America $800 million a day.” Someone should tell him that oil imports would soar if his tax plan becomes law. The biggest beneficiaries would be OPEC oil ministers.

There’s another policy contradiction here. Exxon is now under attack for buying back $2 billion of its own stock rather than adding to the more than $21 billion it is likely to invest in energy research and exploration this year. But hold on. If oil companies believe their earnings from exploring for new oil will be expropriated by government – and an excise tax on profits is pure expropriation – they will surely invest less, not more. A profits tax is a sure formula to keep the future price of gas higher.

This tiff over gas and oil taxes only highlights the intellectual policy confusion – or perhaps we should say cynicism – of our politicians. They want lower prices but don’t want more production to increase supply. They want oil “independence” but they’ve declared off limits most of the big sources of domestic oil that could replace foreign imports. They want Americans to use less oil to reduce greenhouse gases but they protest higher oil prices that reduce demand. They want more oil company investment but they want to confiscate the profits from that investment. And these folks want to be President?

Political campaigns usually feature economic illiteracy, but Obama seems to raising it to a new level.

Why do conservatives cheer increased government revenues?

An article at NewsBuster about government revenues setting an all-time record sparked the title question. I’ve actually been pondering this question for a while. What this means is that the government is now taking more money from the people than ever before. Why is that something to celebrate?

My hunch is that conservatives have spent so long arguing that the people are overtaxed, they rejoice at being proven right: tax cuts can spark economic development which will increase government revenues. But in focusing so narrowly on that one issue, they lose sight of the larger: we’re working to reduce the size of government, and giving it more revenues is not the way to do that. They might win this battle, but the rhetoric undercuts our ultimate objective: smaller government. This increased revenue is not a cause for celebration in and of itself, but rather a call for further tax cuts.

Keep your eyes on the ball, guys.

Reports of the economy’s demise are greatly exaggerated

BBC NEWS | Business | US grows by 0.6% in first quarter

The US economy grew by 0.6% in the first quarter of 2008.

The first quarter figure exceeded analyst expectations of a 0.2% growth and eased expectations of an economic slowdown.

Somehow, I doubt the media will be trumpeting these results. To the extent they’re covered, it will be with a “yeah, but…” attitude. Because good economic news under a Republican presidency is no news.