There tends to be cost overruns when the government undertakes a grand infrastructure project. This is exactly what happened when the government contracted companies to build the railways across the United States in the 19th century. Randal O’Toole stresses that with the introduction of the automobile to America, it allowed everyone to travel. Prior to the automobile boom, only the middle-class & the wealthy could afford to travel via railways. Today, there is a misperceived notion that European passenger trains run more efficiently than American trains, but that is not actually the case. Even though trains are not more energy efficient than cars, the United States actually has the most effective rail system in the world because it is privately owned.
What was the biggest financial & political scandal of the 19th century? Did the First Transcontinental Railroad help settle the West? When was the golden age of railroad travel? Have train rides always been overpriced? What role does nostalgia play in maintaining our rail systems?
Romance of the Rails: Why the Passenger Trains We Love Are Not the Transportation We Need, written by Randal O’Toole
Why Passenger Trains Don’t Work in Europe, written by Randal O’Toole
The Coming Transit Apocalypse, written by Randal O’Toole
Is Public Transportation Worth It?, Free Thoughts Podcast
Randal O’Toole Discusses Privatizing Transit, Capitol Hill briefing held on July 14, 2011
00:08 Trevor Burrus: Welcome to Free Thoughts, I’m Trevor Burrus. Joining me today is Randall O’Toole, Senior Fellow at the Cato Institute and author of the new book, Romance of the Rails: Why the Passenger Trains We Love Are Not the Transportation We Need. Welcome to Free Thoughts, Randall.
00:21 Randall O’Toole: Hi, glad to be here.
00:23 Trevor Burrus: I’m gonna start with a little bit of a facetious question that you address in the introduction to some extent, but I’m sure you get asked this all the time, especially by your opponents, why do you hate trains?
00:33 Randall O’Toole: Well, I don’t hate trains. I love passenger trains and I’ve loved them ever since I was five years old when I took my first train ride from Grand Forks, North Dakota to Portland, Oregon. I once owned five railroad passenger cars. And I think you could actually say, I’ve been obsessed with trains my entire life. What I’m not obsessed with is making other people pay for my hobby. Trains are really a hobby. I love riding passenger trains whenever I get a chance, but that doesn’t mean I should expect other tax payers to pay so that I can ride more passenger trains.
01:04 Trevor Burrus: And that first trip you took, you mentioned in the book is on the Great Northern Railroad, which has the distinction of being privately-created without subsidies, originally.
01:15 Randall O’Toole: Yes, and that’s actually true of most of our railroads. In fact, we have about 150,000 miles of rail lines in this country, and only less than 20,000 miles of them were subsidized. So the ones that were subsidized were the First Transcontinental Railroad, and then actually, the second and third and fourth transcontinental railroads. Those were the big subsidies. And the Great Northern was the first transcontinental railroad to be built without subsidies. So that made it particularly appropriate for me to be riding in when I was five years old in, 1957.
01:51 Trevor Burrus: But we learn in school about the great peopling of the West and the importance of the transcontinental railroad, and how the railroads made the west possible. And you seem to think that that’s a little bit over-played.
02:04 Randall O’Toole: Well, the problem with the First Transcontinental Railroad is that it was built too soon. The government gave private companies an incentive to build by giving them low interest loans of $40,000 per mile. And so the companies essentially created phony construction companies, billed the government $40,000 a mile to build the railroad, and then the railroads went bankrupt afterwards. And eventually the railroads eventually, did pay the government back that money, but it wasn’t the people who made the money in the first place. If you built the rail line for 20,000 miles and billed the government 40,000 miles, you got a $20,000 profit and the people who earned those profits didn’t… Weren’t the ones who ended up paying the government back for the railroads.
02:48 Randall O’Toole: So that ended up being the biggest financial and political scandal of the 19th Century. It was called the Credit Mobilier because one of the private companies that was… Construction companies that was started was called Credit Mobilier. And it ended up bribing lots of members of Congress, and going to court and all kinds of problems. So the curious thing is if you look at the root of that First Transcontinental Railroad, it goes through some of the loneliest parts of America, some of the places that have the least settlement, the lowest population densities. So it is not at all clear that building that First Transcontinental Railroad and completing it in 1869 really helped settle the west. The places that have been settled were places that were served by later railroads that were built to earn a profit not to cheat the taxpayers out of their money.
03:47 Trevor Burrus & Randall O’Toole: What was the golden age of railroad travel? If there was a time when rail made the most sense, or at least some of it made the most sense and people were using it the most, when was that time?
03:58 Randall O’Toole: Well, if you look back at what people think of as the Golden Age, nostalgia bus, it was from about 1895 to about 1925. At that time there were thousands of passenger trains every day. You could make it to every little town in the country on a passenger train. Every city of 15,000 people or more had a street car line. Every single city of 15,000 or more had a street car line in the country and the biggest cities had rapid transit lines, like The New York City Subway and the Chicago Elevated lines. And at the same time, even though that was the golden age, the average American only rode those trains a few hundred miles a year. Maybe 1000 miles when you account both urban rail transit and intercity trains. And so, most what that means is, some people rode it a lot, but most people didn’t ride it at all. Probably as of 1920, more than half of Americans had never been more than 50 miles from their home because the trains were just too expensive for them to ride. And that’s really the problem today, is trains are very expensive. Henry Ford’s mass-produced automobile turned out to be cheap, and it’s also cheap to build roads, and so thanks to the automobile, everybody in America gets to travel. But back when we had only trains, only the wealthy or the middle class got to travel.
05:28 Trevor Burrus: Now, you mentioned the street cars within the cities ‘cause your book deals with both intercity rails and also the kind of rails that we’ve built for the commuter, so to speak. And the street cars, one of those, but you also mentioned some of the horse-drawn bus or carriage of some sort, was that on rails of some type that was very popular in the 19th century it seems?
05:49 Randall O’Toole: Well, the book goes back to about 1825 to look at the history of urban transit and the history of inter-city rail. And initially, somebody got a covered wagon, essentially, and had it pulled by horses through New York City, and went from essentially what we would consider to be downtown to midtown. It was about a mile and a half, and it just went on the ordinary city streets. After a few years, somebody developed a rail system where the rails were set into the streets and didn’t obstruct other traffic, and they put these rail cars that were drawn by horses, and they were the main form of urban travel other than walking until about 1870 or so. So they were popular for 20 or 30 years and then came the cable car and then came the electric street car. The electric street car was so much better than everything that preceded it, and not very expensive to build that, as I say, almost every city of 15… Every city of 15000 and most cities of 5000 to 15000 had electric street cars by 1905.
07:09 Randall O’Toole: So we went through an evolution and the curious thing is there wasn’t anybody saying, “Oh my God, we’re getting rid of the horse cars, replacing them with street cars. We need to have a multi-billion dollar federal program to preserve horse cars and keep horse cars going and not let electric street cars replace them everywhere.” And yet when the electric street cars were replaced by buses, suddenly today, we need to have a multi-billion-dollar federal program to preserve street cars, and help build new street car lines instead of let the buses run them, which are much more efficient.
07:42 Trevor Burrus: Now, were the cities when they had these different methods of transportation, were they the ones running it or the ones mostly paying for it?
07:50 Randall O’Toole: No, it was all private until 1904 when New York City built its first subway line. The subway line was built by the city but then it was leased out to a private operator who it turns out, never paid back the whole cost of construction. But until 1904, virtually all urban transit was private. The private companies got franchises to build rails, and have the horses or electric street cars run on those rails. And to get the franchises, they had to agree to pay to pave the roads and maintain the roads as well as the rail lines but they were profitable enough that they could afford to do that. And there was really no thought at all of the public running it until the early 20th century.
08:44 Trevor Burrus: Now, you mention or you discuss a lot in the book in your other work too, about how much transportation and the possibilities and costs of transportation create or helped create the cities as we perceive them even the term downtown, which I think originally comes from the fact that Manhattan down the island was the sort of center in Manhattan, all had to do with transportation costs. So we’re in these different times when you had this evolution from the horse-drawn to the electric trolley car, how did that change how people lived, where did people move to because of those transportation possibilities?
09:21 Randall O’Toole: Well, it was really a co-evolution. There was an evolution of jobs in where jobs were located at the same time as there was an evolution of transportation. The job evolution had to do with manufacturing. Initially, manufacturing depended on water power to move the belts and pulleys and things like that to enable manufacturing to take place, but with the development of steam power, manufacturing companies tended to locate in one part of a city. And as you noted, in New York City, they all located at the lower end of Manhattan, and so that was called Downtown. When other cities ended up getting concentrations of manufacturing, people started calling it downtown even if it wasn’t down either physically or down on a map, it was just a place where all the jobs were located. And so then the question became, how do you move people to those jobs?
10:18 Randall O’Toole: Well, the street car answered that for middle class and wealthy people, but the typical workers had to walk to work. Even with the development of the electric street car, it cost too much for workers, unskilled workers, especially, in factories to take the street cars, and so they typically walked to work, and they lived in really high density housing near the factories. So that high density housing was considered to be a scandal ‘cause you’d have four families living in a single apartment and sharing a bathroom with four other families living in the apartment next door. And it was considered unhealthy, it was considered unsavory. And so urban planners tried to figure out, how do we get people out of these dense apartments? And they thought if we could just build more street cars and more rapid transit lines, that would work, but the problem was they couldn’t afford it.
11:18 Randall O’Toole: It wasn’t until Henry Ford made his mass-produced automobile, which did two things. It increased worker pay because he was able to pay, afford to pay workers twice as much as they were getting paid before and it cut the cost of cars by so much that workers could afford their own cars. So by the 1920s, workers were driving to work. The second thing that happened though was that in order to have a moving assembly line that Henry Ford developed for making cars, you needed a lot of land. And so you couldn’t afford to put that factory downtown. And so, the factories of moving assembly lines all moved out to the suburbs and so people bought cars so they could get to work, they could afford single-family homes, low density housing, because they could buy them at the urban fringe where land was cheap and both jobs and people moved to the suburbs.
12:13 Trevor Burrus: It’s interesting when you, in the story, you tell in your book is that with, especially, the rails aspect ‘cause you have people moving and the car coming in, which, of course, is not on rails, but it seems that there was always a problem when you lay down rails, when you lay down infrastructure, that creates sort of a vested interest in a high capital intensive cost with businesses and governments and property owners who say, “Well, I have laid down this rail. It needs to be preserved in some way.” And that maybe… Is that like… Do you think that’s a back story of a lot of what’s going on in the book, is that they didn’t wanna just sort of take these things up and go to buses or something that was less capital intensive?
12:54 Randall O’Toole: Actually, no. It wasn’t until 1927 that the first buses were developed that were not only cheaper to buy but cheaper to operate than street cars. Street cars were expensive to buy and they’re expensive to build rail lines, but they were cheap to operate. But in 1927, this bus came out, it was called the Twin Coach bus and it was cheaper to operate than street cars. Within six years, hundreds of cities, hundreds of transit companies in hundreds of cities, tore out their street car lines and replaced them with buses. Within 10 years it was well over 500. And by 1970, it was over 1000.
13:36 Randall O’Toole: And so the private companies that own these rail lines were very quick to tear them out when something that was cheaper came along. The same thing is true with the inter-city railroads. We built close to 300,000 miles of inter-city railroads in this country and under strict regulation, it was very difficult for a railroad to close a rail line because local shippers would say, “Oh, we buy… Depend on this.” And so, even though the railroad is losing money and we’re not willing to pay enough for them to make money, they should be required to keep it open. And the government would force them to do so. But in 1979, we deregulated the railroads and within a couple of decades, the number of miles of railroads shrunk to about 140,000. They just ripped out railroads all over the place because they didn’t need them. And that 140,000 miles of railroad carries more traffic today, far more traffic today, than the 300 miles of railroads we once had, because we operate them a lot more efficiently and have new technologies, can move more freight per day than we could ever could before.
14:49 Randall O’Toole: So the railroads, the private operators are very efficient and they’re willing to switch to other modes when necessary. It’s the public that tends to cling to obsolete technologies. And you have to wonder, we’ve replaced manual typewriters with word processors, and we’ve replaced slide rules with pocket calculators. And we’ve replaced landline telephones with smartphones. And we don’t see anybody demanding multibillion-dollar programs to preserve the manual typewriter industry or the slide rule industry. And yet, for some reason, we have these big lobby groups that exist solely to preserve inter-city passenger rail and urban rail transit. And part of it comes from the fact that building and maintaining rail transit costs a lot of money. And so there’s a lot of construction firms that are vested in doing this. And they wanna see their profits continue so they wanna see the government continue to subsidize it. And part of it is nostalgia and there’s other factors involved, which I get into in the book, but I think those are the two big ones.
16:00 Trevor Burrus: Well, I went to… I’ve been to Europe a lot and I’ve zipped around on extremely clean, efficient, high speed rail trains throughout in different countries in Europe, and very good public transportation systems. And people who try to come here from Europe and try to do that, they often complain ‘cause you can’t really effectively do that in the United States. So why don’t we just put the money in the problem-solving that Europe has evidently figured out and Japan and places like that, and do that here?
16:32 Randall O’Toole: Well, the problem with that is that we go to Europe, and we see the trains and they seem to go everywhere ‘cause they’re going everywhere we go. And we we’re on the trains, there seems to be a lot of people on them, so it seems like everybody is riding them. But the truth is passenger trains don’t work in Europe much better than they do here. There’s a lot of them, but you look at how much people ride them and it turns out it’s not that much. Americans rode trains in 1920 more than Europeans ride trains today. And I already pointed out that Americans in 1920 only rode trains about 1,000 miles a year.
17:08 Randall O’Toole: The average European rides trains about 600 miles a year. Not very much. And yes, it’s a lot more than we ride trains, but the difference between 600 miles and 100 miles is only 500 miles. On the other hand, in order to get people to ride trains, Europe has heavily penalized auto-driving. So the average European only drives an automobile about 6,000 miles a year. We travel by automobile about 15,000 miles a year. So there’s a 9,000 mile difference. So the trade-off is, we take the train 500 miles less than they do, and we drive our cars 9,000 miles more. I think that’s more than an acceptable trade-off. We end up being far more mobile than anybody else because we rely on mobility that’s inexpensive, and they’re relying on mobility that’s very expensive and not very many people use it.
18:03 Trevor Burrus: But what about the… There’s the environmental cost with all the driving. Even aside from questions about global warming that some people may have but aside from that, just pollution in the air, air quality problems, all that comes from driving cars, that seems to be a good reason to switch to trains and other types of mass transit.
18:23 Randall O’Toole: Well, guess what? It turns out mass transit and inter-city passenger trains use energy too. And it turns out that most of that energy comes from burning fossil fuels. Most intercity passenger trains are diesel powered except for the ones between Boston and Washington, and most mass transit is either diesel-powered buses or many of the trains are electric powered, some of them are diesel powered but many of the trains are electric powered but they get their electricity from burning fossil fuels. And so as far as energy consumption goes, mass transit actually uses far more energy than driving in almost every urban area in America. There’s only four urban areas where mass transit is used enough that it uses less energy than driving a car. And in most of those urban areas, the greenhouse gas emissions are proportional to energy consumption. And so the greenhouse gas emissions are greater than driving too. So if you want to use the green form of travel, get in your SUV and fire it up and drive to where you wanna go. It turns out driving an SUV uses less energy and emits less greenhouse gases in transit in all the four, five urban areas in America.
19:42 Trevor Burrus: One of the more surprising lines in your book which people… Which might shock people is, the United States actually has the world’s most efficient railway system. So even despite zipping around Europe and seeming like it’s so efficient, what makes our system more efficient as it is now?
20:00 Randall O’Toole: Well, basically, we decided to keep our system private and private companies try to earn profits and so they do things that are A, reducing cost, and B, increasing revenue to earn the maximum profits. And so they are very efficient. They’ve decided that freight makes a lot more sense on rails than passenger because freight doesn’t complain about being late. Freight doesn’t care about jostling and things like that, and they can move large amounts of freight from point A to point B, like from a coal mine to a coal-fired power plant or from a grain elevator to a port, or from a port they can move container trains to some interior city like Chicago or Kansas City or Saint Louis, and then put the containers on trucks for their final destination. And that’s very efficient. It saves lots of energy over moving that stuff by truck. And it saves a lot of money.
21:02 Randall O’Toole: Europe on the other hand, moves only 11% of their freight by rail and they move about 60% by truck. And they move a lot… They move 5% of their passengers by rail and they move 75% by car. We move 85% by car and only less than 1% by rail. But really is that difference big enough to save a lot of energy? Is it big enough to make justify A, spending the billions of dollars it would take to get people out of cars and on to rails and B, shifting a lot of freight from rails to trucks? And the way I see it is all European railroads, almost all European railroads are publicly owned. And politicians don’t go for efficiency, they go for something that’s highly visible so that they can get re-elected by saying, “Look, I did this for you.” And so, they go for passengers, because passenger trains are a lot more visible than freight trains. But that doesn’t mean they’re efficient. They’re actually very inefficient. Almost all of them lose money. They require huge subsidies and in some cases such as Spain, the debts that they’ve incurred building high-speed rail lines in particular, and operating all of their trains are threatening their entire economy. Their government may collapse because the debts are so great that they can’t afford to pay them back.
22:36 Trevor Burrus: One of the shocking statistics you cite is that, America’s rail system is the envy of the world carrying more than six times as many ton miles of freight each year as all of the EU 27 nations combined. That’s a lot. That’s a huge difference. But when it comes to these cost overruns, that seems to be just the name of the game when the government is involved in funding transportation is, it’s hard to find something that doesn’t cost more, whether it’s in Spain or in Washington DC, than it was predicted to cost and being much less efficient than it was predicted to be.
23:16 Randall O’Toole: Actually, I can find a lot of projects that don’t have cost overruns and they tend to be road projects. On average, road projects have cost overruns of only about 8% and road projects that are funded… In Texas, for example, there are county toll road authorities that get their funding exclusively from tolls and they spend those tolls to build new roads. And of course, they can borrow money and then pay back the bonds, they tend to build roads really efficiently. They don’t have cost overruns ‘cause they have huge incentives not to have the overruns. On the other hand, rail transit in the United States has an average of 40% cost overruns and it’s very difficult to find any rail transit project that didn’t have a cost overrun. Many have cost overruns of 100% or more. And the reason appears to be, because the tax payers are paying for it and the construction companies are also the same companies that do the preliminary engineering to estimate the cost.
24:20 Randall O’Toole: So they all come in with a low ball cost and then get the politicians to sign off on it. Then they’ll come back later and say, “Oh, but it cost twice as much, but we’ve already committed so much towards it, we can’t stop now. We have to keep building it.” So the politicians will find the money and keep building that much more expensive project. Light rail costs an average of $200 million a mile. On average, the average light rail line carries about a third as many people as a single freeway lane, and you could build a 20-lane freeway or better yet, 10 miles of four-lane freeway for that single mile of light rail line. And that four-lane freeway, 10 miles of four-lane freeway, will not only move a lot more people than the light rail line, it will also move a lot of freight which the light rail line will not move at all.
25:11 Trevor Burrus: And you use the term “light rail” which you attack in the book. I don’t really know and really thought about what that meant. I always sort of seemed that it didn’t mean a big locomotive or a classic heavy train. And so, we have light rail. It also seems to mean that it wouldn’t cost as much to the, maybe, the voter but they, “Oh, it’s just light rail. It’s not a big train.” So what is light rail?
25:35 Randall O’Toole: Well, light rail, originally in England, light rail was a low-cost rail system. They had light railroads all over England, and one of the things was you didn’t have to get permission from Parliament to build a railroad if it was a light railroad. And they were cheap to build, cheap to operate and there are still some light railroads in various parts of England today. They tended to be really narrow gauge. Oftentimes, if you held passengers, they were just little teeny cars, you couldn’t stand up in them and stuff like that.
26:09 Randall O’Toole: When… In the United States in 1973, Congress gave cities and it started giving cities incentives to build rail transit. And somebody said, “Well, we can’t just call them street cars so let’s call… That’s old fashioned, let’s come up with a new name.” And they came up with light rail. And in this case, light did not mean light weight. In fact, light rail cars actually weigh more than heavy rail cars. Heavy rail is subways and elevators like the Washington Subway or Chicago Elevated or the New York City subway, that’s heavy rail. But it’s not heavy. Heavy rail cars way less than light rail cars. What the light and heavy refer to is capacity. Light rail cars are light capacity or low capacity transit. Heavy rail cars are high capacity transit. And yet you see transit agencies essentially lying about this all the time. They’ll say we wanna build a light rail line that’s heavy… High capacity transit. No, it’s not high capacity transit. You even see them call… Building or calling street cars high capacity transit.
27:11 Randall O’Toole: But buses can move more people, they have higher capacity than either street cars or light rail and even many subway systems. And that’s because… Not because the buses are so big, but because you can safely move a lot of buses per hour. You can only move about 20 light rail trains an hour safely. You could only move about 30 heavy rail trains an hour. The heavy rail trains may have eight cars, the light rail trains may have three cars. But you do the math, you’re moving, for light rail, you’re moving about 12,000 people an hour if you fill up all those cars. With a heavy rail train, you might be able to move about 32,000 people an hour for the Washington Subway system if you fill up all the cars. Buses, you can move, well, there’s a bus way in the Lincoln Tunnel in New York City that move 700 buses an hour at rush hour. And those buses may only hold 50 people but that’s 35000 people. So it’s moving more people per hour than the Washington Subway system. So buses are high capacity transit, subways are medium capacity transit, light rail is low capacity transit. And it’s just absurd to see cites spending 200, 400, even $600 million a mile building this low capacity transit system that’s not gonna really serve their needs if they actually have a need for a lot… To move a lot of people.
28:41 Trevor Burrus: It struck me as I was reading your book that one of the points of light rail for some of the people who advocate for it might be that it’s low capacity because they’re trying to change how the cities look. You have a quote in the book from California Senator James Mills, who says “Freeways build sprawl, transit build cities.” And if we’re talking in the way we’re discussing right now about what can move the most people for the most efficient cost, some people will hear that and say, “Well, that’s how you get suburbs. That’s how… That if we’re gonna make it really efficient and easy to get into the city, then people are gonna live way outside and we’re not gonna have the kind of cities that we want.” And that’s why they want something like light rail ‘cause maybe it doesn’t actually move people as fast as the highways.
29:32 Randall O’Toole: Well, that’s what they say. And first of all, I have to question, why people want density? I don’t think most people really want to live in really dense conditions, especially since it’s a lot more expensive. You’ll say to people, “Do you want to live in a neighborhood where you can walk to shops and take transit to work, or do you wanna live in a neighborhood where you have to drive to get to the store and take transit to… And drive to get to work?” And people might say they’d rather walk to shops than drive. But if you put the question more specifically and say, “Would you rather live in a $400,000 condo that’s got only 1000 square feet in it, and you pay huge monthly condo fees as well as the initial price of the condo in order to be able to walk to shops, or would you rather live in a 2000 or 3000 square foot house that only cost $200,000, you’ve got a nice yard to play in, for your kids and pets to play in, and you’ve got a two-car garage and there’s not much congestion between you and the grocery store?”
30:39 Randall O’Toole: Most people would say, they’d rather live in the $200,000 house than the $400,000 condo, not just because… And I know that’s true, not just because of surveys, but because that’s how people actually live when they’re given the choice. They would rather take the one that’s cheaper and bigger than the one that’s more expensive and smaller. And yet we have these urban planners saying, “We think density is better, so we’re gonna try to force people to live in 1000 square foot condos or even smaller.” Portland was funding the construction of a high-density affordable housing place in which the average apartment was only gonna have 600 square feet. That’s affordable only because it’s tiny, but it’s not anything that I would wanna live in.
31:29 Trevor Burrus: Where do theses urban planners come from? There’s one point in the book where you mention that Congress passed a law, whose name escapes me, that actually required some amount of urban planners to deal with the federal funding in the transportation. I guess my question is two parts, where do they come from, and do all of them kind of share the same vision of a city looking a specific way, especially now, the high density stuff you’re talking about, is that some sort of urban planning school, that they all go to to say that this is the way cities should look?
32:02 Randall O’Toole: Well, I actually discussed this in a lot of detail in my previous Cato book, The Best Laid Plans. And I looked at where urban planners come from, and most of them come from urban planning schools that are associated with architecture schools. And architects have this idea that they can shape human behavior by designing a house and make you live the way they think you should live. And urban planners extend that to thinking that if they design a city to look a certain way, it’ll make people live a certain way. And they’re taught that cars are bad and transit is good and density is good and low density is bad because low-density encourages people to drive and cars are bad. And density is good because it encourages people to take transit and transit is good. And so they come out of school thinking that we can recreate the 19th century cities that had rapid transit and street car lines and people will stop driving.
33:00 Randall O’Toole: Well, that’s not really true. You look at Chicago, which was really built in the 19th century and the vast majority of travel there is by automobile. You look at San Francisco and the same is true. The only city that comes close to being a 19th century city is New York, and even there only 22% of the jobs are downtown. It’s not the kind of city where most of the jobs were downtown as they were 100 years ago. So we can’t recreate 19th century cities. And yet this is what urban planners are taught that they can and should try to do.
33:35 Randall O’Toole: I don’t get it at all, but you’re right. What happened was Congress, in the 1960s, passed a law requiring every state and urban area to write a Long Range Transportation Plan for their urban area or state. And initially, those plans were written by transportation engineers. And I have a lot of respect for engineers, because they don’t do anything without testing it extensively. For example, somebody got the idea that maybe one-way streets would have less congestion than two-way streets, ‘cause we could synchronize the traffic lights easier. So they tested one-way streets for years to see whether it increased traffic congestion or reduced congestion, whether it increased accidents or reduced accidents. So they discovered that one-way streets allowed faster travel of cars but at the same time, it made it safer for pedestrians because pedestrians only had to look one way before crossing the street. So you got a win-win situation. It was better for pedestrians and it was better for cars.
34:39 Randall O’Toole: Today, urban planners have taken over the transportation planning process. They’ve edged out the engineers and these planners go follow fads. And one of the fads, for example, is to convert one-way streets back into two-way streets, and they say, “It’ll make the streets better for pedestrians because the cars will be going slower, and so the pedestrians won’t feel as unsafe as they would be when the cars are going faster on one-way streets.” So they convert one-way streets to two-way streets, and what happens, you get more pedestrian accidents, but they feel safer. And so you end up with unsafe roads, but they don’t care about that. They only care about what people feel.
35:25 Trevor Burrus: Now, in terms of inner city transportation, another thing that people who have been to Europe or just urban planning-type people seem to have high hopes for is high speed rail, that we could… I know that President Obama had a lot of hopes for high speed rail. They’re considering or building it, I’m not sure what the status of the California High Speed Rail system, it keeps getting more and more expensive, it seems at every new story. But what about changing that around? Could we get people back into trains, or at least give them an option for trains if we have really, really kind of bullet trains like they have in Japan to go between, say, Chicago and Green Bay, or maybe Chicago and Detroit? That’s a pretty quick trip if you could go 250 miles per hour. And then also airlines are subsidized by airports and cars are somewhat subsidized by at least the building of streets that you don’t have to pay for. So if they all could play on a level playing field, maybe we could get people back into trains with some high speed rail.
36:26 Randall O’Toole: Well, I agree with the level playing field idea. I think we should end all subsidies to airports, highways and rails. But when you look at what those subsidies are, they’re actually very small to airports and highways. Our airports are used a lot. And most of the subsidies go to the little used, out-of-the-way airports that some member of Congress is deemed to have essential need… As an essential service need to benefit members of his constituency. But the big airports get very little subsidies. And in fact, when you buy your airline ticket, a large part of your ticket goes into ticket fees that go to the airports that you land at. So if you fly from Washington to Chicago to Los Angeles, each of those airports, the Washington Airport, the Chicago airport, and the Los Angeles airport gets a fee from you. And that money is used to subsidize those airports. Plus the federal government collects a fee that it then distributes out to the airports. Most of the federal fees, go to the little used airports not to the big airports where the fees are collected. On average, air fares are about 14 cents a passenger mile, and the subsidies that actually do go to airports, which as I say, are mainly the small airports, add up to another penny and half to two cents a passenger mile. So flying cost about 16 cents a passenger mile.
37:54 Trevor Burrus: How could that…
37:54 Randall O’Toole: Driving, Americans spend about 25 cents a passenger mile driving their cars. And subsidies to driving are another penny, most years it’s less than a penny a passenger mile. In the last couple of years, it’s been up to two cents a passenger mile. Because I would argue because of federal Congressional mismanagement of the Highway Trust Fund. By comparison, Amtrak charges about over 30 cents a passenger mile, more than twice as much as the airlines charge. And subsidies to Amtrak are another 25 cents a passenger mile. So the total cost of taking a train is about four times the cost of a plane.
38:33 Randall O’Toole: Urban transit, the fares average about 25 to 28 cents a passenger mile, but the subsidies average another 89 to 90 cents a passenger mile. So again, traveling by urban transit costs four times as much per passenger mile as traveling by car. So what we have are these bloated government programs that that are partly expensive ‘cause they’re government and partly expensive because they’re relying on obsolete systems that are really expensive such as light rail and intercity rail. And high speed rail does not solve any of those problems. High speed rail is really expensive. If low-speed rail is expensive, high speed rail is really expensive because everything has to be precisely built and precisely maintained, ‘cause if you’re going at 250 miles an hour, a little teeny bump can run you off the track, so you don’t want any imperfections at all. That cost a lot of money.
39:32 Randall O’Toole: California has started construction, even though they don’t have anywhere near full financing for it. They’ve only got enough financing to build the first 100 miles or so, they’ve started construction and they’re spending $89 million a mile building high speed rail out on the flat lands. When they start getting in the hills between the Central Valley and the Bay Area or the Central Valley and Los Angeles, we’re gonna have to do a lot of tunneling and that’s gonna be in the hundreds of millions of dollars a mile. And that’s never gonna be paid off. Why not? Because, yes, they might be able to run trains at 250 miles an hour, but guess what? We have these new fangle inventions called airplanes that go 500 miles an hour. So we’re building something that’s already obsolete ‘cause the replacement technology was invented and developed in the 1950s.
40:26 Randall O’Toole: So if you look around the world and you look at Japan, they built their high-speed rail line at a time when almost all travel in Japan was by conventional rail. So the high speed rail was successful because it got people out of slower trains onto faster trains. But it was not successful in getting people to stop driving, instead driving vastly increased. It went from about 10% of travel in 1964 when the high speed rail line opened to about 60% of travel in Japan today.
40:57 Randall O’Toole: The same thing is true in Europe. They’re building high speed rail, all over France, all over Spain, Germany, and other countries are build… Spend a lot of money on high-speed rail and yet the percentage of travel by rail is staying about the same. So most of their customers are getting… Coming from low speed rail, some of their customers are coming from buses. In Spain, for example, the percentage of people taking high speed rail or taking all trains increased by 1% and the percentage of people taking buses decreased by 2%. And the percentage of people driving increased. So they didn’t get anybody out of their cars, they did shut down some for-profit bus lines in order to get people onto loss making trains.
41:47 Randall O’Toole: When I look at America, I don’t see a lot of low-speed train riders who could then jump on to the high speed trains. I don’t see enough to pay for it, at all. And there aren’t enough bus riders either. And when we have these planes that are going twice as fast as the trains and plane service is cheap because it requires almost no infrastructure compared to the extremely expensive, extremely precise infrastructure needed for high-speed trains, I don’t see why we should go for essentially a mid-20th century technology when we have planes that are so much better and cheaper.
42:26 Trevor Burrus: It seems like another thing that tends to happen when they build one of these rail systems, or at least this is true of subways, I don’t know if it will be true of the high speed rail if they ever get it done in California, but with subway systems, they have a difficult time maintaining these things where… I commuted to Cato today on the DC Metro and after having just read the part of your book this morning talking about how many repairs are needed, not just on the DC Metro but essentially, every subway system it seems like in the country, how does that work out, how do those politics and the fact that they never maintain them, why does that occur?
43:05 Randall O’Toole: Well, I mentioned that street car lines were built by private interests but most of the subway and rapid transit lines in New York, Washington, San Francisco and Boston were built by the government. And then it was a question of how do we pay for operating and maintaining them? Basically what happened with the Washington Metro is that the federal government paid to build it. Local governments paid to operate it. But the rail systems wear out after about 30 years, the rails wear out, the electrical systems wear out, the signaling systems wear out, the cars wear out. And when the Washington Metro system got to be about 30 years old, they said, “Well, we spent $12 billion building it, we’re gonna spend another $12 billion replacing everything.” And everybody just ignored it. This was in 2002. Everybody just ignored it. Nobody came up with any money for maintaining and rehabilitating the system. And then you had the 2009 crash that was caused by a maintenance failure that killed nine people, you had the smoke in the tunnels that eventually killed somebody in, what was it, 2015? And almost daily problems with delayed trains and things like that.
44:25 Randall O’Toole: The Washington Metro system now says that it needs $15 billion over the next 10 years to restore the system and even after it’s done, it’ll still have a $10-billion maintenance backlog. The New York City Subway System is worse. They already have a $40 billion debt from the last time their real system wore out and they borrowed money to repair it. They succeeded in repairing it, but they haven’t paid back the debt, so they have a $40-billion debt. And now here it is 30 years later they have another $40-billion maintenance backlog, they’re gonna need to spend $40 billion repairing the subways plus another $20 billion repairing the commuter trains. And they have, not to mention a $20-billion pension and healthcare unfunded obligations. So right there, we’ve got $80 billion not even counting the $40-billion debt from the last time they repaired the system. They don’t have the money to do it, and they don’t know where the money is gonna come from. They’re looking around to see if they can find somebody who’s got a lot of money and no political power and tax it from them. Unfortunately, it turns out most people that have a lot of money also have a lot of political power so that kind of suck.
45:38 Randall O’Toole: The Boston system is in the same boat, Chicago is a little better off, Philadelphia is not very well off, San Francisco is not very well off. And then we have all these light rail systems that were, most of which were built about 30 years ago, the first lines were built about 30 years ago, and they’re starting to wear out. And again, in most cases, the transit agencies have not planned ahead and have not created a sinking fund to rebuild these systems and so they’re gonna start having breakdowns and things like that.
46:14 Trevor Burrus: And into the future, this could get really interesting when new technologies come on board, particularly driverless cars, which you’ve written about extensively, but if the rail… If the subway commuting rail gets worse, which it seems almost inevitable that it will given how much these shortfalls are, and then people will ride it less, because they’re sick of delays and they’d rather take Uber. And then in 10 years if we get driverless cars that could change entirely how we commute, while we still have these obsolete old rail systems that are trying to maintain their pension funds and their workforces and the people who take those. What do you see happening in that situation? It seems like things could get pretty ugly as technology changes and we’re still tied to these rails like some sort of woman in an old 1930 serial with the train coming and it could really create some problems.
47:09 Randall O’Toole: Well, we’re already seeing the problems today because transit ridership is declining nationwide. 49 of the 50 largest urban areas are seeing significant declines in rail… In transit ridership, both rail and bus ridership. And that started when Uber started. And if you look at the growth of Uber and Lyft and the other ride-hailing services and compare it to the declines in transit, it turns out ride-hailing is responsible for about 90% of the decline we’re seeing. And as you say, when we start getting driverless ride-hailing, which Waymo which is the Google spin-off that’s doing driverless cars, says it’s going to start on a commercial basis this year in Phoenix. And General Motors says it’s gonna start next year, and Ford says it’s gonna be starting not soon after, we’re gonna see huge fall-offs of transit ridership because driverless ride-hailing is gonna cost a lot less than Uber and Lyft cost today.
48:15 Randall O’Toole: So price-wise, it’s probably gonna be cheaper to take a driverless car, a ride-haling car than it would be to take a commuter train or even a subway train in many cities. So what I think is gonna happen is by about 2030, we’re gonna have a lot of these transit systems out there are gonna be zombie agencies. They might still be running transit just to justify their existence, they’ll probably give away rides because nobody’s gonna be… Not [48:46] ____… Gonna be riding them because they’re gonna be so slow and inefficient compared to taking a driverless car. But they’re gonna exist mainly to pay back all the debts that they built up to build their rail systems and to pay their pension and healthcare obligations.
49:05 Randall O’Toole: And it’s not gonna be very pretty. It’s gonna be a question of, “Why are we funding this when nobody’s riding it and all we’re doing is paying back debts. Why don’t we just not pay back the debts or just stop running everything?” That’s gonna be the question. And I think if I were on that board of the transit agency now, I would be saying, “Let’s prepare for this. Let’s, first of all, pay down our unfunded pension and health care allocations. Let’s pay down any debt we have because of rail transit as fast as we can. And be ready for when nobody’s gonna be riding it.” If people do still ride it that’s fine, but at least we’re paying it down rather than building new which is what so many cities are doing. We see cities like Durham, North Carolina desperately wants to build a $3-billion dollar light rail system that weaves around from place to place but never really gets anywhere. We see places like Portland saying they wanna build two or three new light rail lines both of which are gonna cost multi billions of dollars and the ridership is declining. Their heads are in the ground. They’re not looking at reality.
50:18 Trevor Burrus: Thanks for listening. Free Thoughts is produced by Tess Terrible. If you enjoy Free Thoughts, please rate and review us on iTunes. To learn more, visit us on the web at www.libertarianism.org.