So Jerry Brown won–the California legislature voted to approved $4.7 billion in bond sales to start high speed rail construction. I’m worried, because Brown has played a fairly big budgetary gambit to win this thing: a state budget based on the voters approving tax measures I doubt they will pass, a bunch of federal pork for transit to pay off Democrats around the state.
I have to say, it’s not often I agree with the National Review, but this time I do, as this project is a big expense. Here’s John Fund:
It was wrenching to watch the California state legislature — for which I worked in the 1980s — as it led California over a fiscal cliff. The high-speed-rail line that was approved on Friday is a train to nowhere. And it’s offering Californians a nonstop ticket to their future as residents of a homegrown version of Greece.
A bit overstated, perhaps, but still.
However, there are reasons to take solace. The most recent business plan isn’t the steaming pile of poop that previous ones have been. They’ve been forced to tell people the truth about how much the project is going to cost, so bond buyers know what they are getting into, as do California voters in the fall. If Obama wins in the fall, there will be more money because he loves the trains, so there may be more billions from Washington. And it will be an experiment in Keynesianism, that nice billion-dollar-spit-in-the-ocean idea that, when the state is in recession, the state should stimulate demand by handing billions to Parsons Brinckerhoff.
2 thoughts on “Well, maybe California will prove Keynes right with their high speed rail experiment…”
I was the source for the story that ran in the LA Times today on the rejection of an offer two years ago by the French National Railways, SNCF, to build the system between LA and San Francisco. The California High-Speed Rail Authority turned them down flat, but kept the offer secret. Had the Authority been operating in the public interest, we would have had a real HSR project by now, instead of a steaming pile of political favors.
LA Times Story:
High-speed rail officials rebuffed proposal from French railway
While I was glad to see the article published, it suffered from serious flaws. Here is the letter I sent the LA Times, in response to today’s article:
To the LA Times:
Your otherwise excellent story “High-speed rail officials rebuffed proposal from French railway” was far too kind to California High-Speed Rail Authority officials. At the time of its proposal, SNCF had the investment backing to actually build the LA-SF line, in a deal that sheltered the State from the risk of subsidizing an unprofitable project.
The Authority’s 2012 Business Plan covered up this offer, instead insisting that no private capital would be willing to invest until the first high-speed line showed a profit. The $6 billion Central Valley project approved last week by the Legislature thus exposes the State to unlimited operating losses. Worse yet, before that line can be completed, it will need an additional $27 billion from the federal government–quite unlikely in today’s political climate.
I’d sure like to understand the thinking behind the rejection of the French offer.
It’s unfortunate the story didn’t run earlier. It would have informed the Legislature’s debate.
What a dismal outcome for what promised to be a new beginning. This ought to increase the number of cynics among us. Too bad.
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