Coyote Blog

Last year, there were about 3.2 trillion passenger miles driven by urban drivers in cars in the US.  My point about light rail is that we can barely afford it for just a few people, given that we spent $1.3 billion to build a rail line for just 17,000 daily round trip riders in Phoenix.  If it were truly a sustainable technology, it could be applied to all commuters.  But at a national average taxpayer subsidy per light rail passenger mile of about $2**, this means that to roll light rail out to every urban commuter would cost $6.4 trillion a year in government spending, almost half our annual GDP.  If it required the subsidy rates we have in Phoenix per passenger-mile, such a system would cost over $12 trillion  year.  In fact, the numbers would likely be even higher in reality, because light rail in most cities is almost certainly built on the highest populated corridors with the most bang for the buck (though some of the diminishing returns would be offset by network effects).

Light rail only works today because we drain resources from millions of taxpayers to benefit just a few generally middle class commuters.    This is not a model that will scale.

** This includes both service on the debt, which is payment for the original construction costs, as well as annual operating losses.  This subsidy is required essentially forever.  After 20-30 years when the original bonds are paid off, by that time systems generally have to be rebuilt in their entirety   (as folks in places like Washington DC are learning).  There are probably only 5-6 cities in this country that have the urban population densities to make rail systems come even in the ballpark of working financially, and places like Phoenix, Seattle, Houston, Portland and LA are NOT among them.

I return to an old favorite topic of mine this week, government subsidies for business relocation, in my column at Forbes.com.  An excerpt:

To see this clearer, lets take the example of Major League Baseball (MLB).  We all know that cities and states have for years been massively subsidizing new baseball stadiums for billionaire team owners.  Let’s for a minute say this never happened – that somehow, the mayors of the 50 largest cities got together in 1960 and made a no-stadium-subsidy pledge.  Would baseball still exist?  Sure!  Teams like the Giants have proven that baseball can work financially in a private park, and baseball thrived for years with private parks.  But would baseball be in the same cities?  Well, without subsidies, baseball would likely be in the largest cities, like New York and LA and Chicago, which is exactly where they are now.  The odd city here or there might be different, e.g. Tampa Bay might never have gotten a team, but that might in retrospect have been a good thing.

The net effect in baseball is the same as it is in every other industry:  Relocation subsidies, when everyone is playing the game, do nothing to substantially affect the location of jobs and businesses, but rather just transfer taxpayer money to business owners and workers.

Kevin Drum wonders whether the proposed $700 million bid by Farmers Insurance for naming rights on a prospective LA NFL stadium makes any economic sense.   It is an interesting question.  I wrote:

This has always struck me as one of those agency problems, where the executive's incentives are different from the shareholders. Executives get a ton of benefits personally from this -- higher profile for the company which improves their profile and marketability, they get a prime box for the games, parties, etc.

Before the audience here slips into a round of corporate executive bashing, my sense is that the same perverse incentives are working for municipal leaders who have a mismatch with taxpayer interests when they shove huge amounts of taxpayer funds to owners in stadium deals (deals which economists speak with one voice on -- they never pay off for the community in full). One of the dirty secrets of these deals is that they generally include a sort of kickback in the form of boxes and club seats for the Mayor and city council's use (and sometimes multiple boxes for leaders of other government agencies in the town).

Apparently, Congress just before the election appropriated $900 million to build part of a high speed rail line in CA.  Rather than focusing either on LA or SF, Congress apparently appropriated the money for a mostly rural district that just coincidentally had a Democratic Congressman embroiled in a difficult election.  So now Congress has dedicated a billion dollars of your money for this high speed rail line, from Borden to Corcoran:

I am not kidding you.  More here from the AntiPlanner.

I discussed the CA high speed rail project here and here.  I discussed the practice of building even one useless section as a way to commit the public to building the whole thing here.  An excerpt of how this is done the Chicago way:

But what is really amazing is that Chicago embarked on building a $320 million downtown station for the project without even a plan for the rest of the line "” no design, no route, no land acquisition, no appropriation, no cost estimate, nothing.  There are currently tracks running near the station to the airport, but there are no passing sidings on these tracks, making it impossible for express and local trains to share the same track.  The express service idea would either require an extensive rebuilding of the entire current line using signaling and switching technologies that may not (according to Daley himself) even exist, or it requires an entirely new line cut through some of the densest urban environments in the country.  Even this critical decision on basic approach was not made before they started construction on the station, and in fact still has not been made.

My new column is up this week at Forbes.  This week it discusses the regulatory burden on small businesses.  Here is an excerpt:

Typically taxation issues get a lot more attention than these regulatory issues in discussions of government drags on the economy. But these small regulations, licenses, and approvals consume management time, the most valuable commodity in small businesses that typically are driven by the energy and leadership of just one or two people. If getting a certain license is a tremendous hassle in California, large corporations have specialized staff they throw at the problem. When a company like ours gets that dreaded call that the County wants a soil sample from under the parking lot, odds are that the owner has to deal with it personally.

So the ultimate cost of many of these silly little regulations is that they each act as a friction that wears away a bit more available time from entrepreneurs and small business owners. The entrepreneur who has to spend two hundred hours of her personal time getting all the licenses in place for a new restaurant is unlikely to have the time to start a second location any time soon. Since small businesses typically drive most new employment growth in the United States, can it be a surprise that new hiring has slowed?

Incredibly, after the column was in the can, I experienced another perfect example of this phenomenon.

In the camping business, July 4 is the busiest day of the year.  This year, on July 3, I got a call from one of my managers saying that the County health department had tested 20 ground squirrels in the area and found one with the plague.  I know this sounds frighteningly medieval, but for those of you who live out west, you may know that some percentage of all the cute little western rodents, from prairie dogs to chipmunks, carry the plague.  Its why its a bad idea for your kids and dogs to play with them.

Anyway, in the past, we have usually been required to post warnings in the area giving safety tips to campers to avoid these animals, what to do if one is bitten, etc.  At the same time, we then begin a program of poisoning all the lairs we can find.  It's about the only time any government body anywhere lets us kill anything, because only the hardest core PETA types will swoon over rubbing out a rodent carrying the black death.

But apparently, in the past when these mitigation approaches applied, the county health department was not in a budget crunch and in need of high-profile PR stories that would reinforce with taxpayers the need to fund their organization.  This time the health department marched out and closed the campground on July 4 weekend, kicking out campers from all 70 sites.  We spent the day dealing with angry customers, refunding money, and trying to find them new lodging on a weekend where most everything was booked up.  Fortunately we have a large overflow area at a nearby campground and offered everyone a special rate over there.

It is hard to imagine that, given the whole year to test, they just suddenly happened to find a problem at one of the busiest sites in the LA area on the busiest weekend of the year, particularly since they simultaneously changed their mitigation approach from notification to closure.   I have tried hard to find the original time stamp on the press release they sent out.  I can't prove it, but it sure seemed like a lot of media had the story before we (operating the campground) had been informed of a thing.  Incredibly, the health department was directing the campers to a nearby campground that was easily close enough to our campground to share the same rodent populations.  But that campground had not had a positive plague test.  Why?  Because that campground has not been tested recently, at least according to the official who brought us the news.  We're in very good hands.

California high-speed rail advocates are already backpedalling on the numbers, and from experience with other such projects, it will only get worse.

In the face of the state's perpetual budget crisis, some Californians are beginning to regret their votes in favor of the $9.9 billion high-speed rail bond last year. Even though proponents of the train have now admitted the bond was only a down payment on the actual cost to build the system, the numbers that were projected are changing"”and all in the wrong direction.

The business plan released by the train's advocates last month show the dramatic differences in what the voters were told and what reality is. For example, the price of a ticket from San Francisco to Los Angeles is now projected at $105, up from the previous $55 estimate.  That new number changed the ridership predictions: now 41 million annual riders by 2035, down from last year's prediction of 55 million passengers by 2030. The cost for building the train system has also grown.  The proponents had been thinking $33.6 billion (2008 dollars) but have revised upward to $42.6 billion.  Recently, the Obama administration announced $2.25 billion in funding for the project. Proponents said federal money would be used to close the gap between the voter-approved bond and the ultimate cost, but
this is a drop in the bucket and still will not work.

Do not expect a true LA to SF high speed rail line for less than $75 billion and the ridership numbers are still absurd, as discussed here.  By the way, Southwest's advanced fair from LAX to SFO is $114 right now.  If you are willing to go Burbank to Oakland, the fair is $90.

Every one of these members of the House Subcommittee on Commerce, Trade, and Consumer Protection voted to pass this absurd law out of committee except Rep. John Barrow, D-Ga.

Bobby L. Rush, Illinois, Chairman

Jan Schakowsky, IL, Vice Chair	George Radanovich, CA, Ranking Member
John P. Sarbanes, MD	Cliff Stearns, FL
Betty Sutton, OH	Ed Whitfield, KY
Frank Pallone, Jr., NJ	Joseph R. Pitts, PA
Bart Gordon, TN	Mary Bono Mack, CA
Bart Stupak, MI	Lee Terry, NE
Gene Green, TX	Sue Wilkins Myrick, NC
Charles A. Gonzalez, TX	John Sullivan, OK
Anthony D. Weiner, NY	Tim Murphy, PA
Jim Matheson, UT	Phil Gingrey, GA
G. K. Butterfield, NC	Steve Scalise, LA
John Barrow, GA (voted NO!)
Doris O. Matsui, CA
Kathy Castor, FL
Zachary T. Space, OH
Bruce L. Braley, IA
Diana DeGette, CO

Hat tip: Don Boudreaux

I consider winning the Olympics for one's town to be roughly equivalent to army choosing to quarter itself in my house.  So I am pleased that this particular financial locust will go someplace else to pig out.  I am happy to watch it occur in some exotic locale to which I do not pay taxes.

I am reluctant to pile on Obama, though he certainly would have claimed credit had Chicago won.  I will say that the US managed to win an Olympic bid during even the Carter administration, though because the Montreal Olympics were such a financial disaster, LA really didn't have any competition when it was bidding in 1978.  One other city expressed interest that year - Tehran.  What a disaster that would have been.

Please don't tell me the LA Olympics "made money."  The city of LA and state of California subsidized the games in all kinds of ways that never hit the income statement of the organizing committee, starting with police and congestion costs.  Only in comparison to the financial disaster that was Montreal could the LA Olympics be called a financial success.

There is just so much wrong with this news blurb, entitled "LA Mother Who Beheaded Son Was Allowed To Keep Him Despite Signs of Mental Illness."  Here are just the first four I have thought of:

• Isn't the boy dead, and if so, why is custody an issue?
• Why would a mom who assaults her child be allowed to retain custody?
• Does the "despite signs of mental illness" clause apply to the son or the mother?
• If the mental illness question applies to the mother, can it even be in question?

The article clears some of this up, barely.

John Stossel has a post on Dan Rather's really bad idea to have the government restructure and, presumably, fund the media.

A press that is financially dependent on the government cannot be free. Even if it had formal protections against micromanaging by elected officials, socialized journalism would inevitably be compromised journalism. It would be no more independent than a subsidized farmer or a defense contractor.

Perhaps an even better example are state governments.  There are explicit protections - not just legal, but Constitutional - of state's authority vs. those of the Federal government.  Theoretically, it should be impossible for the Federal government to impose, say, seatbelt laws or restrictions on drinking age, as those are clearly in the purview of states.

But enter Federal highway and education money.  Time and again, states are threatened by the Federal government that it will withold money from a state -- money collected from taxpayers in that state -- unless the state passes legislation of its choosing.  If the Feds can use funding to push around California and Texas, what hope does the LA Times or the Houston Post have of avoiding such control, if their survival becomes dependent on federal funds.

If it's almost December, it must be time for the Trans-Siberian Orchestra tour.  My son describes them as the "rock electronic Christmas band," and that is as fair a label as any.  Many tend to compare TSO to Mannheim Steamroller, the other band that has created a niche for themselves with modern takes on Christmas music, but TSO tends to skew more towards heavy rock than Mannheim Steamroller.  I think TSO is similar in many ways to Emerson Lake and Palmer, both with their tendency to cover classical songs as well as their flirtations with pretentiousness in some of their productions.  For those unfamiliar with TSO, probably their most famous work of late was "Wizards in Winter," parts of whose music video I think was included in a beer commercial last year.

My son and I got tickets to the concert because we had a couple of TSO albums (we tend to like the instrumentals and think less of the vocals).  What we had not realized is that TSO has quite a cult following.  Most of the folks around us in the audience had been to 3,4,5 or more of their shows.  Many go every year, in a ritual similar to how other folks might go to the Nutcracker every year.

There is no doubt that TSO delivers value to its fans.  We saw their second show of the day (!) and they played for a full three hours.  Members of the band at different points went all through the audience, down aisles and up stairs while playing some of the final tunes -- far more intimate contact than you will get in most other bands.  The key band members all were present after the show in the lobby for a meet and greet with their fans. 

OK, so what about the show?  Well, I was a little disappointed.  To be fair, their leader had a knee injury which forced him to play sitting down, and this tended to reduce some of the band's energy.  The music was generally good to very good.   The keyboard solos and the high-energy songs at the end were terrific. 

The problems were twofold.  First, the opening half of the show was stitched together with a narration that was just painful.  The poetry was Touched by an Angel meets Dr. Seuss.  It was a Night Before Christmas crossed with LA noir.  It just did not work for me, and I know it was weak because my 14-year-old son was laughing at it.  We both thought we were watching Spinal Tap 2.

The other problem is one that TSO fans will call me out for, but the light show through all the songs was just too much.  Don't get me wrong, I have never, ever seen anything to rival the floor show here - 6 trillion lights on the fastest-changing programming I have ever seen, zillions of lasers, flames, more flames, a ten-minute snow storm, band members descending from the sky, band members ascending to the sky, etc. etc.  You can get an idea of about 1% of it with this video  but any digital camera image of the show is worthless because the ccd can't possibly keep up.  Seriously, this video grossly understates the full effect.

The problem was that my eyes could not keep up either.  I have walked away from concerts thinking I had a perforated ear drum, but never before thinking I had a burned-out optic nerve.  My son said he needed to wear eye-plugs.  90% of the effects would have been OK had it not been for the direct audience facing lights at about 6 trillion candle power they kept insisting on flashing in my face.  Anyway, we both are quite experienced with loud, heavy metal concerts and we both walked away with a headache from this one.

Anyway, it was interesting and I am glad I went.  And I may even go back next year, but I will be prepared - I am bringing my RayBans next time.

Incredibly, it looks like Proposition 1A in California is going to pass.  This act authorizes a $9 billion dollar bond issue to start a high-speed rail passenger line from the Bay Area to the LA Area. 

Why do I say "start."  Because even the line's supporters put the minimum cost at $40 billion, so the taxpayers have authorized 22% of the line.  And this is by supporters numbers.  By my numbers they have likely authorized less than 10% of the line. 

I wonder if voters knew they were authorizing either a) $40-$100 billion, in effect, rather than $9 billion; or b) a $9 billion white elephant of a rail line that ends up incomplete and going nowhere or c) something that is not really high speed rail and therefore not different from Amtrak service that already exists.  (What are you talking about Coyote, government transit people would never begin a project without full funding and leave an orphaned white elephant in place.)

The state that makes up a huge percentage of the current mortgage and
foreclosure problem seems to not have learned its lesson about
borrowing.

I am generally an optimistic guy, but I wonder if we have gotten to the point where there is a large subset of the population for whom voting is solely for the purposes of boosting self-esteem.  I feel good when I support public transit, so I vote for Prop 1A, despite the fact there is no possible way it will ever deliver any public transit.

The Arizona Republic had another of its cheerleading articles on light rail this morning.  In it was a chart that, contrary to the intent of the article, summarized exactly why Phoenix light rail is doomed.  Below is a chart of the employment density (top chart) and population density (bottom chart) at each stop along the first rail route.  Note that this line goes through what passes for the central business district of Phoenix and the oldest parts of town, so it was chosen to run through the highest density areas - all future extensions will likely have lower numbers.  Unfortunately, they do not reproduce this chart online so here is a scan:

Take the population density chart.  As a benchmark, lets take Boston.  The average density for all of the city of Boston is 12,199 people per square mile.  Phoenix's light rail line cut through the highest density areas of town has only one stop where density reaches this level, and most stops are less than half this density.  And this is against Boston's average, not against the density along its rail routes which are likely much higher than the average.

Rail makes zero sense in a city like Phoenix.  All this will do is create a financial black hole into which we shift all of our bus money, so the city will inevitably end up with a worse transportation system, not a better one.  Cities that build light rail almost always experience a reduction in total transit use (even the great God of planners Portland) for just this reason - budgets are limited, so since rail costs so much more per passenger, other transit is cut back.   But the pictures of the train will look pretty in the visitor's guide.

Postscript: Phoenix's overall average density is around 2,500 per square mile.  Assuming that the 12,000 in the chart above is one of the densest areas of Phoenix, this gives a ratio of about 5:1 between peak and average density.  This same ratio in Boston would imply peak density areas of 60,000 per square mile.  This may be high, but indicates how much higher route densities on Boston rail should be.  Oh, and by the way, Boston rail is losing a ton of money.

Other city densities here from 1990.  People think of LA as spread out, but LA has a density over three times higher than Phoenix!

The Anti-Planner has more on the California high speed rail proposal I wrote about earlier.  My guess was that the first $9 billion bond issue, on the ballot this fall, would not get the train out of the LA metro area.  Well, I was right and wrong.  The smart money thinks the line will start at the other end, in San Francisco.  But the betting is that for $9 billion the line won't even get out of the San Francisco metro area, making it perhaps as far as San Jose. 

But we have a second data point -- there is a proposal on the table to extend BART from Fremont to Santa Clara for $4.7 billion, a distance (as shown on the map below) about a third of that from San Francisco to San Jose.

I am not sure what high-speed rail technology that they are considering, but a true high-speed line requires special alignments, track, and signaling that should make it FAR more expensive per mile than a BART line (just as an example, a true high-speed line could take miles to make a 90 degree turn, eating up land and reducing alignment flexibility in a very congested and hilly area).  And remember, the BART cost estimate is probably low.

No way these guys get to San Jose for $9 billion, much less to LA for $40 billion.  Just what Californians need with their massive budget deficit:  a brand new white elephant.

A few weeks ago I was amazed at the story of the city of Chicago spending hundreds of millions of dollars to build the terminal rail station of a rail line that had no plan, no route, no approval, and no money.  Why spend hundreds of millions on a station that could well be orphaned?  The reason, I supposed, was to make a toe in the water investment where the public could later be shamed into voting more funds for building a rail line to actually connect to their fabulous new station.

It appears that California may be doing the same thing. This November, voters in that state will have the chance to approve a $9.95 billion rail bond issue.  $9 billion of this is earmarked for building a high-speed rail line from Anaheim to San Francisco.  But current estimates for this line's cost, which are always way too low, are for $30 billion.  Who in their right mind would proceed with a $30 billion (or likely more) project when only $9 billion of funding has been obtained?  Only scam artists, Ponzi schemes.... and the government.

Update:  Wow!  Boy, I must be dumb or something.  The website supporting this bond issue says that this project will create 450,000 permanent new jobs.  How can anyone oppose that?  This is really amazing, since the entire US railroad industry currently employs 224,000 people, but this one rail line will create 450,000 jobs! 

Update #2:  I like to make predictions about government rail projects, so here is mine for this one:  I don't know what end they are starting with, but if they start from the south, I will bet that $9 billion does not even get them out of the LA area (say past Santa Clarita or Santa Barbara), much less anywhere close to San Francisco.

Reason has been on top of the LA crackdown on bacon-dog sales from mobile carts for some time.  Recently, the police stormed in and confiscated a number of vendors' inventory and push carts.  OK, its bad enough that bacon product sales have been deemed a threat to the Republic.  But what freaked me out is that the police did not impound the carts but rather junked them (pictures here).  So where is the due process?  If the police are found to have acted precipitously in arresting these folks, if they are found to be not guilty for whatever reason, their property is still gone forever.  This is roughly equivilant to having your car crushed in a mobile hydraulic press within minutes of being given a speeding ticket.  I wonder how many of these carts, which likely represent a huge investment relative to the investment capital these small business people possess, are collateral for loans?

I remember it was not that long ago that the main issues for many urban politicians vis a vis the poorer parts of their city were

• to encourage more and free-er mortgage lending
• to encourage more retail businesses that would, through competition, help eliminate the retail price premium charged in many poorer areas

When I say I remember back to these things, I am not talking about 2 generations ago, for God sakes, I am talking about the 1990's.  Just one presidency ago.

Now, politicians are looking to punish bankers who provided easy mortgages for poorer borrowers, and are seeking to shut down payday loan companies, the last resort for ready cash before once goes to Tony Soprano.  Now, the LA city council wants to ban certain new retail establishments in South LA merely because they are too low cost and easy to use.

JD Tuccille has a roundup on the state boondoggle that won't die, the proposed 3/4 of a Billion dollar state subsidy for an amusement park. 

Now, this seems like an awful lot for an amusement park, particularly considering that the Arizona desert has been the death of many theme parks.  The reason is that no one wants to be outside for extended periods of time in June-Sept in the Phoenix or Tucson areas.  Because it is freaking hot.  The average daily forecasts is generally for 108-112F for these summer months.  But theme parks live and die in the summer, when kids are out of school.  Even though they have milder weather and a large population base at Magic Mountain in LA, they still only open for weekends and holidays during the non-summer months.  My guess, from running a similar seasonal business, Magic Mountain loses money most of the year and make 100%+ of their profit in the summer.

So spending $750 million of taxpayer money on a theme park in the Arizona heat would be a bad idea if located in Phoenix.  But what happens when we put it in Eloy, Arizona?  Eloy is just as hot, but is in the middle of nowhere, as shown below at the point of the "A" balloon.

People will come here, from where?  Tucson folks in the summer will want to go someplace even hotter than Tucson?  Phoenix folks will want to drive 2 hours to spend their time in the hot sun, when the same distance north puts them in the cool mountains?  And here is beautiful downtown Eloy, brimming with wealth enough to repay over a billion dollars of principal and interest.

This project is absolutely guanteed to fail, leaving the bill with taxpayers.  I mean, seriously.  Never have I seen such a lock.  I wish there was a way to short this.

This is only the most eggregious of a laundry list of proposed government pork being pushed under the banner of "job creation" at a time when the state budget is over a billion dollars in deficit.

There are two America's:  The one that is trying to steal my freedom from the top down (wiretaps, proscutorial abuse, expanding executive power) and the one that is trying to steel freedom from the bottom up.  Reason, as quote by TJIC, has a nice piece on one of the bottom-up fascists:

Amid the hustle and bustle of downtown Los Angeles, there exists
another world, an underground world of illicit trade in - not drugs or
sex - but bacon-wrapped hot dogs. Street vendors may sell you an
illegal bacon dog, but hardly anyone will talk about it, for fear of
being hassled, shut down or worse. Our camera caught it on tape. One
minute bacon dogs are sold in plain view, the next minute cops have
confiscated carts, and ordered the dogs dumped into the trash.

Elizabeth Palacios is one of the few vendors willing to speak
publicly. "Doing bacon is illegal," she explains. Problem is customers
love bacon, and Palacios says she loses business if she doesn't give
them the bacon they demand. "Bacon is a potentially hazardous food,"
says Terrence Powell of the LA County Health Department. Continue
selling bacon dogs without county-approved equipment and you risk fines
and jail time.

Palacios knows all about that. She spent 45 days in the slammer for selling bacon dogs,
and with the lost time from work, fines, and attorney's fees, she fears
she might lose the house that bacon dogs helped buy. She must provide
for her family, but remains trapped between government regulations and
consumer demand. Customers don't care about safety codes, says
Palacios. "They just want the bacon."

TJIC, as he often does, captures a number of the best comments.  The full reason video is below:

John Scalzi has what looks to be good advice for writers.  Why?

Because it very often appears to me that regardless of how smart and
clever and interesting and fun my fellow writers are on every other
imaginable subject, when it comes to money "” and specifically their own money
"” writers have as much sense as chimps on crack. It's not just writers
"” all creative people seem to have the "incredibly stupid with money"
gene set for maximum expression "” but since most of creative
people I know are writers, they're the nexus of money stupidity I have
the most experience with. It makes me sad and also embarrasses the crap
out of me; people as smart as writers are ought to know better.

Beyond really liking Scalzi's work, he does an amazing amount of work promoting other writers.  Just skim his blog for the last several months.  A hell of a lot more of it is about promoting other authors than it is about promoting his own work.  Here is an example of his advice.

8. Unless you have a truly compelling reason to be there, get the hell out of New York/LA/San Francisco.

Because they're friggin' expensive, that's why. Let me explain: Just
for giggles, I went to Apartments.com and looked for apartments in
Manhattan that were renting for what I pay monthly on my mortgage for
my four bedroom, 2800 square foot house on a plot of land that is,
quite literally, the size of a New York City block ($1750, if you must
know, so I looked at the $1700 - $1800 range). I found two, and one was
a studio. From $0 to $1800, there are thirteen apartments available. On
the entire island of Manhattan. Where there are a million people. I love that, man.

The Anti-Planner has an absolutely fabulous article about a Wisconsin passenger rail proposal, but in fact what the article really is about is how government decisions get made.

According to RTA's latest newsletter,
the KRM would cost about $200 million to start up and would require a
$6.3 million annual operating subsidy. For that it would carry about
1.7 million trips per year, which translates to 6,700 per weekday.

In other words, RTA wants to spend $200 million to take 3,350 people
to and from work each day. The Milwaukee-Racine-Kenosha urbanized areas
have about 750,000 commuters, so RTA's proposal would take less than
half a percent of them to work. But they would all have to pay for it
in the form of some local taxes plus a diversion of a share of federal
and state gasoline taxes to fund the rail line.

By the way, though this post isn't meant to be entirely about rail itself, let's use Coyote's test on this rail proposal.  As a reminder, here is Coyote's test:

Take the total capital charge and compare it to the cost of buying every projected rider at $22,000 Prius.  Then, take the operating subsidy (which is always higher than projected) and see how it compares to the average gas consumption in a year of said Prius's.  If the projected capital charge and subsidy could have bought every rider a car and all the gas they need to drive it, then the rail line is not only an average run-of-the-mill government boondoggle, but a total and complete ripoff.

And, the KRM... FAILS.  And fails miserably.  The $200 million charge would have bought every rider TWO Prius's and still have some money left over, and the operating subsidy, sure to be larger in reality, would buy each rider about 627 gallons of gas a year, which at 30mpg would get them 19,000 miles per year.  But don't worry, KRM, every single new rail system to which I have applied the test has failed (Phoenix, Houston, LA, Albuquerque).

But lets continue:

The planned commuter line would run 14 round trips per day, which
means each train would have about 240 people on board. That's about
five bus loads. So why not just buy five buses for each planned
trainset and move people by bus instead?

The newsletter explains that RTA considered a bus alternative, but
it would attract only a third as many people as the rail line. It would
also cost only an eighth as much to start up, so I always wonder why
don't they just invest three-eighths as much in buses and carry as many
people as the rail line.

But then I noticed that the rail line was projected to have seven
stops between Milwaukee and Kenosha, while the bus line would stop 27
times. As a result, the bus would take almost twice as long as the
train. No wonder it attracted so few people!

The train would average just 38 miles per hour and RTA admits that
it would not go significantly faster than motor vehicles, so there is
no reason why buses could not be run on schedules similar to the train.
So why didn't they consider an alternative in which buses stopped only
seven times?

It turns out they did. The report
from the consultant hired by RTA included a bus-rapid transit
alternative that stopped fewer times than the regular bus alternative.
It included some exclusive busways, so it cost a lot more than the
regular bus alternative, but it would cost only half as much as the
train. Moreover, it was projected to carry as many riders as the train.

Naturally, RTA told the consultant to drop this alternative from further consideration.

The Anti-Planner shoots back what to me looks like a really good proposal:

The consultant had also estimated that the bus-rapid transit
alternative would disrupt traffic more than the trains. But if the
busways (which would move no more than about 5 buses per hour) were
opened to low-occupancy vehicles that pay a toll, they would actually
relieve congestion. Plus, the tolls would pay for most if not all of
the new lanes, and by varying the toll, the lanes would never get
congested so the buses could meet their schedules. This would result in
transportation improvements for both auto drivers and transit riders,
and at a very low cost to taxpayers

People have been defaulting on mortgages for all of recorded history.  In Roman times, such a default could well result in the mortgage-holder getting sold into slavery, so things have improved a bit.  But seriously, people default on their mortgages all the time.  So what makes those currently in default more deserving of taxpayer aid than those before them or after them?  I mean, other than the fact that the press is paying attention to these particular defaults?  A similar question was reasonably asked of 9/11 victims who scored government compensation when victims before or after of other transportation accidents and building fires have not been so rewarded.

I challenge any politician to answer this question with an answer other than "well, these people are in the media spotlight right now and as a politician, I want to be in the spotlight with them."

Update: More analysis here, including the bright side of the burst housing bubble:

Countrywide wants to be
able to take its loans that the market won't accept and refi them under
FHA or FNMA. That's what this is all about. Don't forget that.

It's
not about homeownership. Let's look at the latest 25th percentile
(starter homes) list prices for a range of CA cities, compared to the
price in January 2007:

LA: $365,000/ $429,920
OC: $414,900/ $499,000
Riverside: $259,900/ $335,000
Sacramento: $229,900/ $316,477
San Diego: $325,000/ $392,279
San Francisco: $380,000/ $468,376
San Jose: $489,950/ $580,589
Santa Cruz: $489,000/ $577,400

What
you see above is great news for all the people who would like to buy
homes without going bankrupt a few years down the line. It's VERY bad
news for banks and financial companies that made the original bad loans
without bothering to check whether the borrowers could pay the danged
loan. You figure out who this country should reward - responsible
aspiring home owners or stupid banks.

The Anti-Planner has a series of posts of late on light rail that in total point to a perverse moral hazard in public transportation funding that helps to explain why states and cities are building so many rail projects, when the numbers almost never make any sense (as I blogged for LA, Phoenix, and Albuquerque).  Though the Anti-Planner does not state these rules, from his recent posts I have inferred three rules:

• A city can get capital construction dollars from the feds, but you can almost never get maintenance or operations money (similar story in recreation)
• The feds will fund big, expensive, sexy rail projects.  They will not fund purchases of buses and are unlikely to fund something so prosaic as a bus stop or terminal  (general rule of thumb:  federally funded projects must be large enough to justify being named at some future point after the local Congressman or Senator who earmarked the project.)
• It is very easy to de-fund bus systems -- you just don't replace aging buses and cut routes over time.  It is hard to de-fund, or, god forbid, abandon a rail line, since the thing sits out there so visibly.  Sunk costs can also be a political issue if rail lines were to be closed.

For most public transportation goals, particularly in spread out western and southern cities, buses are a cheaper and higher service solution than rail.  They can carry the same passenger traffic for far less total dollars (capital plus operating costs) and they can cover far more routes.  In fact, one can argue that rail lines are inherently regressive, as they tend to serve commuting corridors of the middle and upper classes rather than the typical routes of the poor, for whom the systems are nominally built.

So what can one expect by the application of these three rules?  Well, we would expect local authorities to favor large, expensive capital rail projects rather than refurbishment or expansion of bus systems.  As operating costs rise for the trains, we would expect bus service to be cut back to pay for the rail operating deficit.

Which is exactly what happens.  In fact, rail tends not to increase total ridership at all, at best shifting ridership from inexpensive buses to expensive trains, and at worst decreasing total ridership as rail lines with just  a few stations and routes replace more extensive webs of bus transport.  And, in twenty years, when these rails systems need extensive capital overhauls, we find cities with huge albatrosses on their hands that they are unable to maintain or update.

One of the things I have observed in the past is that our poorest 20% would be upper middle class in most countries of the world, and would be far richer than 99.9% of people who have ever lived.  Somehow the following burning concern in the LA City Hall seems to bring this message home quite clearly:

To protect the character of neighborhoods being dwarfed by the
construction of oversized homes, Los Angeles officials are weighing a
law that would radically limit the square-footage of new or remodeled
houses across the city's flatlands.

The proposed
anti-mansionization measure would stem a trend fueled by the meteoric
rise in home values and address a backlash from residents who complain
that the spread of large, boxy homes is spoiling the architectural
flavor of established single-family neighborhoods.

Somehow, I don't thing "mansionization" is a major problem in most countries of the world.

Portland is the poster child for light rail "success," but this is an interesting definition of success:

"Many (Portlanders) use their public transportation system," says
Weyrich. In fact, 9.8 percent of Portland-area commuters took transit
to work before the region build light rail. Today it is just 7.6
percent. In a story repeated in numerous cities that have built rail
lines, rail cost overruns forced the city to raise bus fares and reduce
bus service. That's a success?

A lot more money for fewer total transit riders.  This is absolutely predictable.  Light rail creates huge investment along one single route.  The assets created are totally inflexible -- unlike buses, they can only run one single route.  For most western cities with low density and literally hundreds of different commuting routes this way and that, light rail is silly.  Here are a couple of analysis I did for Albuquerque, LA and Phoenix.  Here is more about Portland.