Solution to Bullet Train Nightmare: Socialism or Capitalism?

Dear Friends,

Calls being heard to “fix” wasteful Bullet Train by selling it to Amtrak, would be like fixing fraud-ridden

COG by selling it to fraud-ridden VTA. Like throwing gasoline on a fire to extinguish it.

          What would that be like for taxpayers?

         Q: Amtrak as a buyer of an insolvent railroad? In 1970, during the debate on creation of the North

American Passenger Train Corporation (a/k/a Amtrak), advocates stood on the floor of the House and proclaimed, “It will be self-sufficient in three years.”

Never happened. By 9-11-01, Traffic World reported that taxpayers’ subsidies to Amtrak, in $100 bills, would be a stack taller than the World Trade Centers stood.

And the hemorrhaging of taxpayers’ money by Amtrak continues apace, condoned by every Session of the Congress. If it was a horse, we would do the humane thing. Instead, we kick the can down the road.

If Amtrak, in deep red ink, bought the Bullet Train, already in deep red ink, the outcome is obvious.

The red ink would be deeper, taxpayers losses greater. That is not a solution that taxpayers want or need.

As I said to then Senator-Judge Quentin Kopp in 1996, sound, sustainable railroad solutions are only found in the private sector. As I repeated in testimony before the Assembly Transportation Committee

in the State Capitol in 2010. And as I said to the joint Gilroy & Morgan Hill Chambers of Commerce in 2008 at the Gilroy Chamber’s Conference Room during their pre-election debates.

Bailing-out an insolvent railroad with another one would yield a worse train wreck that you started with.

Railroads need profitable freight to haul. Passengers don’t pay remunerative (cover all costs) fares on public sector carriers, e.g., Amtrak. Can you haul enough high revenue freight to offset your losses moving passengers?

Wells Fargo’s stages did it; moving US Mail & bullion shipments to offset losses sustained moving their passengers.

The bellies of jumbo jets are crammed full of high value air freight to help make their operations moving passengers more profitable.

Even the French HSR started moving FedEx freight to offset their losses moving passengers.

For a time, Amtrak added high value California produce cars to the back of their passenger trains to generate more revenue. In past decades, Railway Express Agency (REA) high value express freight moved on the passenger trains; combining the high freight revenue with loss-leader passenger fares.

History of railroads in the USA teaches us that private sector railroad solutions are preferable.

Lincoln knew that in 1864 when he rejected Congressman & Civil War General Grenville Dodge’s urging to make the transcontinental railroad government owned.

After the Woodrow Wilson Administration nationalized the railroads during WWI, Congress denationalized them in the Transportation Act of 1920 because all knew that government could not run railroads.

Can we learn from our history? Or are we doomed to continue our mistakes with socialism?

Today, we ought to see high value freight diverted from highways to COFC & TOFC intermodal service (Doublestacking of containers: Container on Flat Car; COFC, Trailer on Flat Car; TOFC) with the added advantage of not having to carry a trailer) in sufficient volumes to offset the losses of moving passengers on high speed rail. The tonnage flows on I-5 and Hwy. 99 in California today are amenable to switching to intermodal service, where freight rates for shippers average 40% lower, and where fuel savings are about 75% per ton/mile when you compare steel wheels rolling over steel rails with rubber tires on concrete and asphalt.

The Class Ones, UPRR and BNSF, ought to have the Stonehenge II, in exchange for intermodal service in each of California’s ag shipping Counties. CAHSRA ought to be in a Ch. 9 Bankruptcy, where the sale could be approved by the Bankruptcy Court, and the Bankruptcy Trustee able to recover all the fraudulent transfers for the taxpayers.

In my opinion, that would be a better solution than selling Bullet Train to Amtrak.

Joe Thompson