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Republican Support Also Necessary

I rambled a bit in this e-mail reply, but I guess the conclusion is that we are going to need Republican support in the present political climate to save passenger rail and there are good reasons why the Republicans should support an effort to save rail transportation.

> Steve,
> I appreciate your very thought provoking response, and look forward to
> reviewing your articles on the web site indicated.  I too generally dislike
> government intervention in the private sector, but I am increasingly fed up
> with the arrogance of the UP, CSX, NS, Conrail, and to a lesser extent BNSF
> top management's.  There was a reason behind the push for the development of
> heavy government regulation of the railroads in the last century, leading
> to the ICC, and these guys seem to have forgotten that lesson.  At some
> point the responsibility to the public has to be acknowledged and
> balanced with the obvious need for the corporation to make a reasonable
> return on investment. This growing antagonism toward Amtrak (like sharks
> circling a wounded swimmer) is pushing the line.
> Thanks again for the response.
> Bill Pollard


Thanks for your feedback! Yes, I was aware that the railroad companies
were a great contributor to their own problems. They certainly often used
the virtual monopoly franchise they were granted by the government over
the routes they were given to exploit their clients (manufacturers, mining
companies, ranchers, farmers and other shippers), many of who the
railroads had lured to move their homes and operations to the new land
owned by the railroads along the sides of the tracks.  I haven't gone
into those details in my posts as yet, but even there I feel the original
source of the problem is with the government policies. If the government
had build and then continued to maintain and operate the railways, but
allowed private companies to operate the trains over the railways, then
the monopoly situation would never have developed. The private
freight train companies would operate similar to today's trucking companies
where no individual company controls enough of trucking services to be
a monopoly and thus could not set arbitrarily high prices. Without that
power, the government regulatory backlash against the rail companies
would never have been generated. I believe it was those punitive
retaliatory measures which eventually bankrupt many railroads. Many
were left in such a weak financial state compared to other modes of
shipping that the only way to remain profitable is to combine resources
with other weakened railroads or to be absorbed by one of the giants
that has fared better through the decades of regulation. That is why
we see today's frenzy of mega-mergers.

From what you have read or will read in my posts, you will see that I
think the way to back out of the problems created over the last
century and to put the railways on par with highways, airways and
waterways, is for government to play the same role in rail as they do
in the other modes of transportation. That is, for the government to
embark in a major project to upgrade rail so that it meets the needs
of our nation, for both freight and passengers, and then to continue
to maintain and operate those railways. Just like in others modes of
transportation, I do not believe that the government should be
involved at all in the operation of the vehicles used to transport either
freight or passengers. Private companies should market these
services and operate the vehicles used to transport both freight
and passengers over the government operated rail infrastructure.

The problem will be how to accomplish this. The government
probably can not take over the existing rail infrastructure without
a constitutional amendment which I don't think would ever get
to first base. I don't believe eminent domain would apply, but
even if it did, the government could not afford to pay the rail
companies for the value of the property "taken". On top of
that, I don't think the government should enter such a project
with the rail companies in the opposition. Such an endeavor
is going to require the long term cooperation of the rail companies.
Thus, a large problem is going to be to show how such an
undertaking would be of benefit to the rail companies, which
I absolutely believe it would be.

I think the solution there is to use the Amtrak model. That is,
let each company voluntarily turn over their railways to the
government. In exchange, the rail companies relieve themselves
of the responsibility to maintain and operate those railways.
The government could give the railroad company a "credit" for
the market value of the property turned over to the government
and that railroad company could use that credit to pay for its
operating costs over any of the railways operated by the
government. If this is done right, little by little, railways will find
they can tremendously boost their bottom line profits by turning
responsibility of their railways over to the government and then
paying for use of the railways by a combination of cash and
credits. Those railways that hold out will gradually find
themselves at an economic disadvantage to their competitors.
Thus, I believe it will only be a matter of time before all the
railroad companies voluntarily join and support the plan to
have the government own and operate the railways while
they continue to market and operate the rail vehicles to
move the freight.

Under such an arrangement, I think a model can be designed
where private companies would find it profitable to operate
private passenger service over these government owned and
operated railways. Then, even the responsibility for rail
passenger transportation can be turned over to the private
sector and the rail will hold a position that is at parity with the
other transportation modes.

I generally don't write to Congress except when their are
bills that need my urgent support. I'm probably going to make
an exception at this time and put these views forth both to
my own congressman and any others that play important
roles in committees related to rail transportation.

Politically I am a Libertarian but almost always vote
Republican and contribute financially to both parties. As
you are probably aware from the writings and speeches
from both these entities, their views seem to be that
passenger rail is dying of its own accord because it is an
outdated and unnecessary mode of transportation. They
have little awareness that government intervention itself,
something that Libertarians and Republicans themselves
are aware distorts the economy, has made a large
contribution to the destruction of passenger rail.

In the current political climate, it is necessary to obtain the
support of many Republicans in order to save Amtrak in
the short run and the entire passenger rail system in the
long run. We won't be able to get the support that we
need unless we can convince Republicans that it is
dying because of government policies and not because
it isn't a viable mode of transportation. If they can be
made to see that rail is a perfect example of what they
have been preaching for years, that government intervention
distorts the economy and usually harms in unseen ways
more than it helps, then the Republicans might start to
look at the help they give to rail is to undo the damage
the government has done rather than giving undeserved
support to an outdated mode of transportation.

I was shocked when an organization that I support
both philosophically and financially, the Cato Institute,
came out with their scathing attack on Amtrak. They,
of anyone, should have dug a little more deeply in
their research to see how anti-libertarian politics in
the government support given to the highways and
airways coupled with the crippling regulation and
taxation of rail brought about the demise of passenger
rail. I certainly could not expect them to come out in
support of funding for Amtrak, but I would have 
expected a paper that instead showed how government
intervention distorted the entire transportation market
and would have expected Cato to support removal
of all economic and political supports from all modes
of transportation, not just rail. That would be the kind
of paper that should be issued by a libertarian think
tank like the Cato Institute!

Sorry to be so long winded, but I sometimes find it
hard to stop once I get going. If you don't mind, I'm
going to add a copy of this e-mail to the items 
posted at: "". Thanks again
for your feedback!

Steve Grande

> Steve,
> I like you approach and you have some compelling arguments.  When I got
> to the point you were making about the railroads being convinced to
> cooperate, I was thinking.... yeah, when Hell freezes over or one of
> the companies looks in the corporate mirror and sees the Rock Island,
> but not before.  However, your idea of the gradual transition might
> actually work... the motivation to the carriers being an improvement
> to their bottom line.  
> It would seem that your philosophy about involving Republicans through
> greater understanding of the evils of government involvement in other
> modes is already taking place to a small extent.  More of the same is
> certainly needed.
> Bill Pollard

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