Home > Primacy of Society, Public Service, Solution-Problem > Minnesota’s billion dollar mistake with light rail

Minnesota’s billion dollar mistake with light rail

After reading approvingly about Florida Governor Rick Scott turning down a $2.4 billion federal earmark for a high speed rail line from Tampa to Orlando, my own home city of Minneapolis severely disappointed me just the other day.

You see, Florida turned down the money, wisely citing (1) the fact that ridership estimates were wildly overestimated, and (2) that like Amtrak and others, the project had absolutely no chance of succeeding without massive subsidies, which (3) would not come out of the federal earmark, but would instead be levied on Floridians and their kids and their grandkids. Minnesota was not so smart.

Just the other day, I noticed that Washington Avenue by the university has been closed off for the construction of the “Central Corridor” light rail line. This is 11 miles of stupidity.

First of all, getting 11 miles by car is no herculean task requiring a billion-dollar capital project to achieve. And when going from Minneapolis to St. Paul generally, chances are that one would like to get to more places than downtown-to-downtown. I realize, of course, that the “smart-growth,” “green,” “sustainable,” whatever-you-want-to-call-it voodoo of urban planners requires people to cram themselves like sardines in major downtown areas. Do they actually do it? Given that I live in the real world, I am somewhat skeptical.

And you won’t be selling me on the idea that you can connect by bus from the central line, either. I have even less desire to get on a bus than I do to get on the light rail, and unlike seemingly everyone else on mass transit, when I am going somewhere, I actually have somewhere to be. Waiting forever and a half for the bus to show up and then stopping 28 times within the next couple miles is not my idea of efficient transportation. And let’s leave out for now the type of person one is forced into close proximity with on the bus, but suffice it to say I find my car’s empty passenger seat better company in every case that I can remember.

Unfortunately, Minnesota, by which I mean “I,” am paying a billion dollars for this useless tin can on rails. And that’s if it comes in on budget. Since I am a betting man, I am willing to lay a hundred that it won’t. I’ll even give you odds.

Add it up – a billion dollars for 11 miles of track that nobody will use, from one destination to another that is already connected by a wealth of better transit options, most notably the freeway. If you were issuing revenue bonds backed only by ridership on this thing, what new category of junk do you think Standard & Poor would have to come up with to grade you out? FFF? ZZZ?

And so I found it quite interesting to read G. Pascal Zachary’s new article on Reason.com, entitled “What Sub-Saharan Africa Can Teach San Francisco.” For all its vaunted and expensive trains, the fact is that ridership on San Francisco’s BART is trending downwards, despite a poor economy and the fact that parking in San Francisco can easily cost $50 per day.

And adding that to the fact that the average BART employee (average!) makes $110,000 per year, that fares do not cover the cost of service, and that taxpayer subsidies have been required for years and will continue to be required indefinitely for a service that fewer people are using, it is starting to seem as though the Bay Area (Not-So-)Rapid Transit is not quite such a good deal after all.

This is not to say that we should be rushing out and setting up a system of pedicabs (I hate those things), but it absolutely is worth thinking about the kinds of transportation that would be available if the government did not insist on spending my money on unsustainable transit projects to serve an unproven interest – which, of course, inevitably fail.

A little-known fact about “public transportation” is that it all used to be private. My line of work involves the wealth management arena, and in law school one of the major cases I studied was SEC v. Fifth Avenue Coach Lines. It was a seminal decision regarding what kinds of companies are regulated under the Investment Company Act of 1940. It involved a former city bus operator with a huge pile of cash and no business activities but investment.

More interesting to this discussion is how the company got that way. How was it that a business had no business? Well, prior to what we now think of as “public transit” being imposed, Fifth Avenue Coach Lines ran the same type of bus service. That is, until it was forced out of the market by the New York Omnibus government-provided bus system, a top-down monopoly imposed by local government.

A private “public transportation” system? Yep. And not just buses either. Trains, trolleys, streetcars, taxis, gypsy cabs, and pedicabs were all operated by private carriers until the government, more often than not, came along to put them out of business on the theory that they could provide better and cheaper service. City operation, however, doesn’t seem to be anything to brag about.

And I would be remiss if I did not include other examples of private transportation that work the world over. During the Troubles in Northern Ireland, the Catholic community could not trust the bus service, and a network of “black cabs” was set up to run on jitney routes, with shared rides, fast service, and wide coverage.

City planners must have found it odd that, in the midst of the chaos of the Troubles, Catholics found no serious difficulties getting around through private transportation that was emphatically not run by the Protestant-dominated English government.  It’s as if people – horror of horrors! – could take care of themselves.

 Consider also the “tuk-tuk,” the ubiquitous southeast Asian passenger moped. More stable than a Ugandan bicycle taxi, perhaps, but not by much. Nevertheless, in rapidly urbanizing city centers in Vietnam, Thailand, and Cambodia, these modern-day rickshaws get ordinary folks where they need to go without government fiat.

All in all, transportation is merely another example of the futility of top-down government planning. Despite highly-trained experts and the best of intentions, our billion-dollar government megaprojects fail far more often than they succeed. Meanwhile, with backyard mechanics, a simple profit motive, and minimal startup capital, fast, cheap, and effective private transportation networks are cropping up all over the world quite simply because the government removes itself from the process.

Hayek would be proud. But not of Minnesota.

**Update: I suppose I should take a moment to remind my readership of this post.  Becomes a bit more interesting now, doesn’t it?


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