Month: November 2013

How A Simple Train System Lays Bare Our Impending Decline

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Recently I was riding on the Metra, the commuter rail system that connects the suburbs to downtown Chicago.  I picked up “On the Bi-Level”, the flyer that Metra management makes available to riders and was browsing through it when I came upon this innocuous sounding statement:

I certainly will not argue that Metra is without challenges.  Perhaps the biggest challenge, and one that will impact many of our plans, is our needs for more capital money to invest in our system.  We estimate Metra will need about $9.7 billion over the next decade to achieve a state of good repair on the system, and we expect to receive about a fourth of that amount from traditional federal and state sources.  Riders need to understand that fares help us cover our operating costs but have never been a significant source for capital expenses – we must rely on Washington and Springfield for that funding.

Within the utility community there is a concept called “generation equity”.  This implies that you need to spread the burden of replacement and renovation across the life cycle of users, rather than hitting them all on the first riders, such as in the case of a train line.  On the other hand, you cannot just ignore ongoing capital costs and let the system run into ruin by paying the minimal upkeep costs every year.


In this article, Metra lays bare the facts that:

  • Fare costs (riders) only “help” them cover their operating costs
  • Funding from other sources (and debt) helps them cover the rest of their operating costs
  • Then they rely on largess from the state or Federal governments for about a fourth of their capital costs
  • And who knows where they are going to get the rest of the funds for capital replacement


In fact, it would be impossible for Metra to re-build the train lines that they have today in the current regulatory and legal environment.  Permits, lawyers, litigation, politically favored contractors, and a welter of archaic tools and practices would make the costs impossibly high and the deadlines incredibly long.  By “capital” costs, they are generally talking about replacing bridges, stations and sections of existing track rather than “true” expansion, although they do occasionally add some incremental lines or stations.


It is important to understand that things have gotten more EXPENSIVE but they haven’t gotten BETTER.  The infrastructure that we take for granted might as well have been built by the ancient Egyptians given how herculean the task would be to replace them.  Americans will never see another major dam built in the USA and likely few to no additional incremental nuclear or coal plants in the next 25 years.  Even major transmission lines are going to be few and far between, which will only be built because it is absolutely necessary to get electricity to new population centers.  This is all due to the layers of process and regulations and lawyers that we have overlaid atop the simplest tasks, and you can see the contrast when you go to China and see cities being built overnight. 


At some point we are either going to need to radically re-structure how we build and pay for things or go to a completely private system where you pay for what you receive in terms of capacity, reliability and performance.  States and cities that make it impossibly expensive to build and expand will inevitably suffer relative to other locations that are freer in terms of rules and regulations, unless (as is likely) the entire US is burdened with Federal regulations that make it impossible to escape this yoke.


Cross posted at LITGM

“Three things to keep in mind about Obamacare”

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A great post by J. E. Dyer:

1. The problem with Obamacare is that it fundamentally changes the relationship of government to the people. The change is wholly malign. There is no way to operate the Obamacare system and also force the government to respect the people’s rights. Obamacare will, at every step, increase the risk at which government holds our rights.
 
We’re already seeing that with the roll-out, which has promptly violated the president’s best-known and most categorical promises – an indication of his complete lack of respect for us – as well as the people’s rights to decide what to do with their own property (in this case, their earnings), and to execute private contracts according to their own preferences.
 
What matters about Obamacare is that it has forced so many people to do so many things involuntarily. It will continue to do so. Obamacare is about government force, about limiting people’s options, and about constraining the people to do or not do certain things. That’s what government is about, which is why it’s what Obamacare is about. Government is incapable of being about anything else.
 
The public debate right now treats the Obamacare fiasco as if the central proposition is that taking over one-sixth of the economy is a technological challenge. The reality that matters is that government taking over the network of human decisions involved in “health care” is a moral outrage. Doing that is applying the model of regulatory force to a vast complex of human questions that have no universal, “right” answers. We might as well let the government tell us what to eat, what to wear, where to live, and what God to believe in – and if Obamacare stands, our government will eventually do just that.
 
[…]
 
Quite frankly, I think the advice to Republicans to simply stand silent and “let Obamacare implode” is foolish. There is no hope of Obamacare imploding. It’s not a malformed bomb, governed by physical principles. It’s a man-made political arrangement. Its defenders will keep moving the goalposts and changing the rules to keep it on the field. It will get all the overtime it needs. The only way to defeat Obamacare is to actually counter it with a plan and a principled argument.

Read the whole thing.

“Can You Hear Me Now? Another Health Market that Really Works”

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John Goodman:

It has taken a long time, but the price of hearing aids is in the process of falling dramatically. How has this happened? Technological innovation, of course, but there is more. There’s no shortage of technological innovation in U.S. health care. However, because third-party payers, that is, health insurers and governments, determine prices, there is no mechanism for customers to signal value to providers.
 
This is not the case for hearing aids: Although some states have mandated insurance coverage for hearing aids, this is usually limited to disabled children. The big market for hearing aids is seniors, and Medicare does not cover hearing aids.
 
This is another case of a phenomenon observed elsewhere by NCPA Senior Fellow Devon Herrick: Where patients pay directly for medical care, prices fall like they do in every other market.

(Via Leif Smith on Twitter.)

History Friday: The Great Adventure of Captain McNelly

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(I’m off to a book event today – the Christmas Market, or Weihnachtsmarkt, at the conference center in New Braunfels, for the launch of The Quivera Trail. In the mean time, another thrilling frontier adventure. The details and the quotes are taken from Walter Prescott Webb’s history of the Rangers, which is so powerfully testosterone-laden that I have to keep it sectioned between a couple of … milder-themed books which have a sedating effect.)

After the debacle of the Civil War, the Texas Rangers barely existed as an entity – either in Indian-fighting, or law-enforcing. The Federal government would not countenance the organization of armed bodies of volunteers for any purpose. Combating Indians or cross-border bandits was the business of the regular Army; interested semi-amateurs need not apply. But a Reconstruction-Republican governor, E. J. Davis, did institute a state police force in 1870, the existence of which was lauded as necessary for the preservation of law and order – such as it was. The state police under Davis was relatively short-lived and unadorned by laurels during its brief term, being dissolved at the end of his administration – but one of their officers had such a sterling reputation that when the Texas Rangers were formally reorganized, he was charged with heading one of the two divisions. One was the Frontier Battalion, dedicated to the Ranger’s traditional mission of fighting hostile Indians. The other – the Special Force – was charged with generally upholding law and order, shortly to become the Ranger’s modern raison d’être. Leander Harvey McNelly served for only a brief time in the interim of the change from Indian fighting to upholding law and order – but his leadership inspired many of those Rangers who took note of his personal example to heart.

Read more

History Friday – The Fisheries Disputes and America 3.0

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For as long as I can remember this little book has been moving with me from home to home. I have had it for a long time.

“History of the United States Illustrated, Volume IV, 1861-1888” by E. Benjamin Andrews. Printed in 1903.

Having put a stop to most of my book buying until I read my current stack, this one was next. I am glad I hung on to it. Knowing the way I operate I am sure that I got it from a garage sale or something.

Mr. Andrews, and I would suppose that most people around the turn of the century, were intensely proud of what America had accomplished up to this point. This was made pretty clear after the Civil War and Reconstruction portions of the book. The public works and transportation projects that were completed were astounding given the technology of the time.

One portion of the book in particular caught my interest over all the rest, and that was the section on the Fisheries Disputes. Oddly, there isn’t even a wiki entry on this, as a whole subject.

Basically, these disputes were between the US, Great Britain and Canada over fishing rights. Many treaties had been drawn up over the years, but due to wars, some treaties were considered null and void, and typically one side would have one strong position with their legal points, and the other side would do the same. I don’t want to bore you with too many details in this footnote of history, but I found it fascinating how the author of a general history of the United States during this time found the Disputes so important to include them in the volume.

I had never even heard of the Fisheries Disputes before, and I have been reading history books all of my life.

Which brings me back to the main point of this rambling post. I remembered part of America 3.0 while reading the part about the Fisheries Disputes. This from page XXV of the Introduction:

However, the focus of this book is on the longer term, centuries into the past and decades into the future. Over such a large span of time our current political struggles, as engrossing as they are now, will mostly sink into history as mere noise around a discernible signal. Only the passage of time will confirm what that signal is, and whether our hopeful predictions were well grounded.

Does anyone remember the Dubai Ports Scandal? I am sure some of you do, but in a few years there won’t be too many left that do. Interesting how history keeps teaching me.

Cross posted at LITGM.