"Politics versus Economics" Quote of the Day
“We cannot depend entirely on airplanes and roads.”
–Senator Frank Lautenberg (D-NJ) in calling for even more subsidies for Amtrak.
Here’s the thing: we most certainly can rely entirely on airplanes and roads. We do it every single day.
How much more remedial can one make it: Amtrak loses money because people don’t use it. People don’t use it because people neither need nor want to use it. People are — gasp! — relying entirely on airplanes and roads.
(I don’t know whether Lautenberg was being slick or stupid, but I find it interesting that he said “airplanes and roads” rather than “airplanes and cars.” The response to the lament that “poor people can’t afford to fly” is, of course, Greyhound and its competitors — which, to my knowledge, receive no direct federal subsidies.)
So when Lautenberg says, “We cannot depend entirely on airplanes and roads,” what he really means is “I get a warm fuzzy feeling from the thought of having Amtrak, and that’s more important than any other use that you might have for your tax dollars.”
Oh, and speaking of warm fuzzy feelings, I’m sure Lautenberg, the “selfless public servant,” is getting all tingly over the new Secaucus transit hub that was recently named after him. “Selfless” indeed.
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Except people do use it, at least on the Northeast corridor. Which probably makes people think it mints money. Which it doesn't.
The Northeast Corridor doesn't receive the subsidies — only the money-losing routes do. That's the whole point.
You know why no one uses them? After checking into a business trip I need to take this summer (Cincinnati to San Diego) I checked my options. I could go by air for about $530 and be there in 6 hours. I could rent a car for about $200 and be there in about 30 hours. Or I could take Amtrak for $435 and be there in 83 hours.
I'll pay the extra $100 to save 3 days, thank you.
The Northeast corridor looks like it's the only route that earns a profit, at least according to these 2001 figures which were the first thing I found online. I somehow doubt that this $50 million per year profit is worth the price of construction but I can't find that figure. I guess since that's a sunk cost, there's no point worrying about it now.
Even the Northeast corridor is subject to competition now. The US Airways operations from New York/Philadelphia/DC, and JetBlue flights from JFK and Boston, and United in DC can all get you to smaller cities in the Northeast faster and for less money than Amtrak.
Travel beyond 500 miles is especially silly with Amtrak. Expensive, slow, uncomfortable, unreliable and rather dodgy (goodbye, valuables) compared to a quick hop on a decently run airline (legacy or low cost).
Unfortunately, it looks like we're moving towards the Amtraking of the airways, too. After paying billions to cariers in subsidies to "survive," there are still two airlines that couldn't reorganize and make money — Northwest and Delta.
US Airways, which did reorganize successfully and now makes money, is trying to buy Delta (which is still a loser and in bankruptcy). After having its standalone bankruptcy plan throttled by a much richer offer from US Air, Delta has lined up promises from Congressional Democrats to block a merger on "antitrust" grounds (and also is supposedly discussing a merger with Northwest — not caring that loser plus loser equals BIG loser).
Even worse, when Delta does collapse back into insolvency in a couple of years after the Dems block a merger with US Air to "protect competition," there will be new demands to bail out Delta to "keep America connected." Perhaps Delta will be the new Amtrak?
Roads are clearly subsidized, as is air travel. To make the argument you are making, you would have to show that Amtrak subsidies are somehow much more than road or air travel subsidies. Clearly, you wouldn't compare raw dollars, so there can be endless debates about how to define "more", but you can't ignore the other travel subsidies while criticizing the rail subsidies.
Personally, I doubt that most of the lines are worth supporting, but in honesty that is just a guess as I haven't seen the relevant numbers.
[Kip replies: I think you're playing a bit fast and loose with the word "subsidize." Roads are a public good financed by tax dollars, but that is not a "subsidy" in the Amtrak sense (but cf. "Bridge to Nowhere").
As for airlines, those who fly pay taxes rather than receive tax breaks. So that analogy is off too
So I think the comparisons are, overall, not particularly useful.]