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Do enough people benefit from public transit considering the amount of money poured into these politically‐​driven transportation endeavors?

Do enough people benefit from public transportation considering the amount of money poured into those politically‐​driven endeavors? Peter Van Doren joins us this week to break down this issue.

The percentage of people who use public transit on a daily basis is higher, for obvious reasons, in urban areas. However, even in a city like Washington, D.C., only “700,000 people use the public metro rail system in comparison to the 5 million who commute downtown by car.” Van Doren argues that mass transit spending grew the most under the Nixon presidency because it made the most political sense. Unfortunately, that mindset tends to persist today.

How would you define public transit? What does all the money we spend on public transit actually do? Why are there always more calls for public transit? Why are we fixated on public transit options like trains? Why is there a negative connotation associated with public buses?

Further Reading:



00:07 Trevor Burrus: Welcome to Free Thoughts. I’m Trevor Burrus.

00:09 Aaron Ross Powell: And I’m Aaron Powell.

00:10 Trevor Burrus: Joining us today is Peter Van Doren, Senior Fellow with the Cato Institute and editor of Regulation Magazine. Welcome back to Free Thoughts, Peter.

00:19 Peter Van Doren: Thanks again for having me.

00:21 Trevor Burrus: Now, I hold in my hand, hot off the press, is an Onion article from 2000 of which, the title is…

00:27 Aaron Ross Powell: It’s not hot off the press then.

00:28 Trevor Burrus: Yes, it’s off the printing, the printer, at least. And the title is: 98% of US Commuters Favor Public Transportation for Others. What does that say about public transportation politics?

00:42 Peter Van Doren: Well, oddly enough, well, maybe not oddly. The Onion finds the truth and then tells it to us in a satirical way. And in this particular case, they’re actually quite right. I’ll shift ahead to some data. There’s surveys every year of the habits, the transportation habits of US citizens or US residents. In the Trump era, I don’t know whether they’re citizens or residents but anyway, there’s a Department of Transportation survey and they ask people, “How do you get to work?” And I have, in 1989, drive self. Then there’s ride with others, which I didn’t include, but drive self, a 76.3% in 1989. 2016, guess what?

01:38 Trevor Burrus: 76.2%.

01:40 Peter Van Doren: No, 76.3. That’s exact…

01:42 Trevor Burrus: Oh wow, that’s pretty amazing.

01:43 Peter Van Doren: It’s exactly the same. What does all the money we spend on transit do? It allows most people to still drive themselves to work.

01:55 Trevor Burrus: Now, when did you first get involved with public transportation policy?

02:00 Peter Van Doren: Forty‐​one years ago, I was, I had… I graduated from MIT in 1977 and the summer of 1977, I spent as a research assistant for a professor named Alan Altshuler and he had a contract with the Department of Transportation to write a classic MIT consulting report on the urban transportation system. They wanted a big think big piece to talk about transit and cars, and the environment and cars versus transit and energy and congestion and all of those things rolled into one. He submitted the report to the… My task was to read everything out there on energy. And one reason I did energy in my PhD program later was because I started out in 1977 reading a lot of books on energy. And I said, “This is interesting.” But this experience with Alan Altshuler also got me interested in urban transportation and in my scholarly career before Cato, I taught courses on Urban Policy Analysis for 20 years and a component of that class was always a transportation component, and it got started with this summer research experience in 1977.

03:32 Aaron Ross Powell: One of the interesting things you notice when you look at articles about public transit or calls for more public transit is public transit can mean a whole lot of things. Right? I mean, any vehicle you can hop on that’s not yours and it’ll take you where you wanna go is public transit, if it’s run by the state, but when we see… We need to spend, we ramp up money, we need to put more infrastructure in. They don’t mean things like buses. They never mean things like buses. They mean things like…

04:02 Trevor Burrus: Light rail.

04:03 Aaron Ross Powell: Light rail, trains, things that you first have the effect that you have to figure out exactly where they’re gonna go, and then they’re gonna go in exactly that spot forever and ever till the end of time, unless you wanna dig another tunnel under Washington DC, or whatever. And buses, buses not only get excluded but buses are like looked down upon, cause that’s… They’re the cheap seats. We wouldn’t want more buses. What’s going on there? Why do we seem so fixated on trains, on things with obviously much higher infrastructure costs, and so on?

04:38 Peter Van Doren: Well, two things: One, in this book or… Well, let me continue. The DOT consulting project that Alan Altshuler and his team wrote and then submitted to the DOT was so down on transit subsidies and expenditures that, and in its book, the call was… If you’re gonna do something, what makes sense is buses. Buses are flexible, buses are cheap. Light rail, heavy rail are capital intensive, very costly to build and to maintain, and not very flexible. Once the route is there, you can’t… It’s hard to move train tracks. And so, even way back then, the intellectual position was that if anything makes sense in denser settings to get people out of cars, it’s to do something to aid buses, I.e., dedicated lanes where they don’t have stop lights, or they have stop lights that are sequenced, and they get to where people wanna go faster and they’re flexible and they can be rerouted.

05:42 Peter Van Doren: A, what you talk about is old and all transportation scholars have called for such options a long time ago, but B, the politics and the social reality of transit is that middle class people who pay taxes think of buses as something for poor people, and no one wants to talk about that. I’ll give you even where I live, Montgomery County, Maryland, which I affectionately call The People’s Republic of Montgomery County. It’s very, very liberal, and it’s known nationwide as being a transit leader and where urban planning density is required, all of those things in the liberal land use playbook are epitomized by Montgomery County. And yet, in my own county, this is an article from 2009 in The Washington Post. Council, Montgomery County, Council also picks Light Rail over buses for transit way project. This is the Corridor Cities Transitway. This is up county where I live, to link upper upper county with denser parts of middle county.

06:54 Trevor Burrus: You mean, closer to DC parts? Yeah.

06:56 Peter Van Doren: Yes. Light rail for the Corridor Cities Transitway on a route that would begin at Shady Grove swing west to the proposed Science City, north to the COMSAT building near Clarksburg, would cost about 900 Million to build. About twice that of a bus rapid transit line. Okay, so and the county council staff recommended to the council that they have a bus plan rather than light rail. Now, I’m reading you a quote from Michael Knapp D up county, I.e., he was my representative on the county council at the time. This is a quote, “Montgomery County, Maryland. I’ve not had a lot of conversation with folks who wanna get on a bus, no matter what you call it, whether it is a pretty bus or not, said council member Michael Knapp who represents much of the area the transit way would serve. He said, his constituents expect light rail.” I mean…

07:54 Trevor Burrus: There you go. Was the conclusion of the study which was done for DOT, buses, yay buses all the way or maybe buses?

08:07 Peter Van Doren: Oh, totally buses.

08:08 Trevor Burrus: But I mean, that buses should be subsidized a lot or just if you’re going to do it, you should do buses?

08:15 Peter Van Doren: I’d have to go back and check the exact language. The sort of libertarian concerns that we’re now discussing inanimate our discussion certainly weren’t part of my world back in 1977, nor in Alan Altshuler’s world probably ever. Rather than misquote what the book does or doesn’t talk for, it’s just that my memory is that we adamantly said, heavy rails, very expensive, make sense maybe only in Manhattan. And that’s if it makes sense somewhere, it would be the New York City context. And in everywhere else, buses because they’re flexible, they can change. You can adapt to whatever reality happens, and then the problem is, their buses and middle class people. My own view is, they go to Europe, they see the trams in Amsterdam, and they come back and they say… And they read the New Yorker, like I do, and they say, “We gotta have trams and look like Amsterdam.” I mean, to be honest, I think it might be as simple as that. And it’s very class‐​related, I.e., the help rides the bus, we don’t.

09:31 Aaron Ross Powell: I wonder if that’s now exacerbated by the changing cultural place of cars in America because there was a time when everyone, you aspired to have a car. A car was a symbol of freedom. A car was the quintessential American object after maybe a baseball, but that has changed quite a lot. Younger people are less likely to drive or have less interest in driving. And the car is now seen as this thing we have to figure out how to get rid of because it’s the source of global warming, of congestion, of traffic noise, of fatalities, of whatever else. And so, a bus is simply a bigger car. Even if a bus doesn’t have some of these same problems, even if it’s better than trains in all sorts of ways, it still is admitting defeat and in the crusade against the automobile.

10:29 Peter Van Doren: Two… One, there certainly has been a discussion in the literature of whether auto behavior and autos in US culture have changed. There was a decrease for the first time ever, there was a decrease in vehicle miles traveled after the Great Recession. And urbanists and pro‐​transit and anti‐​car people and environmentalists, and young… And there was this proclamation that the US has changed. We’ve gotten over the hump and we’re now going towards Amsterdam. Everyone’s gonna have bikes and trams, and blah, blah, blah. Trying to disentangle the Great Recession from actual changes in goals, which would, if people’s incomes got back. Subsequently, the VMT has come back and as I gave you new data, the transit share has not changed. Well, it’s gone up a little, but driving self is remarkably constant over time. The breakdown by age is not available in the transportation statistics. I don’t think… I could be wrong, but I don’t know of data where driving self by age is available. It may be, but I’m not aware of that.

11:53 Peter Van Doren: Anecdotally, I have a nephew who lives in Seattle and “was reluctant” to own a car. He didn’t care about it, and I said, “What do you mean?” I guess we all may have younger nieces and nephews in which the alleged change exists, but in the aggregate data about the US as a whole, it still seems very auto based, and I don’t have enough information to know whether this youth trend is or is not, was recession induced or whether it’s actually going to sustain itself as they enter middle age.

12:31 Aaron Ross Powell: I’ll just… As further anecdotal data. My father worked for 35 years in the auto industry for General Motors, and retired a few years ago and towards the end of his career, we would talk about the state of this stuff. One of the things he mentioned is that all of the auto industries, one of the big problems that they had was figuring out how to market to young people because they were all concerned. And whether this is borne out in the numbers or just a gut feeling that was the direction they would go, that young people were not interested in buying new cars anymore.

13:06 Trevor Burrus: What?

13:06 Aaron Ross Powell: That if they got a car they were perfectly happy to buy, this is more just like a commodity. It’s…

13:13 Trevor Burrus: Not cool anymore?

13:14 Aaron Ross Powell: Not cool. I can buy a used car. I don’t really care about the kind of American Graffiti lifestyle was gone. And so they were trying to figure out how to basically how to market like new General Motors cars to millennials and we’re very worried about this.

13:29 Trevor Burrus: I think that I saw a stat, I’m pretty sure this is correct, that I think in the last 15 years… So 15 years ago, 90% of people over 16 or over driving age had a driver’s license, and now it’s 75% of people. And I know a fair amount of people who do not have driver’s licenses who are in the early 20s, for example. Now, we live in an urban world so that’s a big difference.

13:51 Peter Van Doren: There’s a certain DC New York flavor to this conversation and if we were in Phoenix, I don’t… I mean, I think it’s possible in certain… In Seattle, in San Francisco, DC, in New York, in Boston, it’s certainly possible to live and not have a car. I mean, even back when, I didn’t have a car till I was 30, 31, something like that, because I was in academia and lived in college towns. And you can wander around by bike or whatever, but outside of those locales, it’s, I suspect that what we’re talking about is not true.

14:39 Aaron Ross Powell: I also wonder about the… You said that the number of miles driven per person has not decreased.

14:49 Trevor Burrus: The number of people driving.

14:50 Aaron Ross Powell: The number of people driving or the number…

14:51 Trevor Burrus: Alone to commute, the percentage.

14:53 Aaron Ross Powell: Yeah. But I think you had mentioned something else about total number of…

14:56 Trevor Burrus: Passenger miles?

14:57 Aaron Ross Powell: Passenger miles.

14:57 Peter Van Doren: I didn’t mention that data yet, but I can.

15:02 Aaron Ross Powell: I wonder if there’s also that the people who… I mean, I know that this is the case for me. When I first came to DC, my family has a car but I never drive. My kids are actually always astonished when I do drive, and they’ll tell their mom. If I drive them somewhere, like when mom gets home, they’ll tell their mom that dad drove them and they always say it in this way that… “And can you believe we’re not dead?” sort of way, but… So I didn’t drive much at all, and so I took a lot of public transit, but then over the last five, six years, I personally, don’t drive, but my Uber driver does a lot. And that still is counting as… And so I wonder how much of public transit time had shifted in these urban areas, and especially in DC, New York, San Francisco, back to cars, but in the form of ride sharing.

15:56 Peter Van Doren: I did not… I can look.

15:57 Trevor Burrus: It’s hard to say.

15:57 Peter Van Doren: I’m not prepared. I can look up the data, actually. We could supplement it, put it up on the website associated with the broadcast. I am…

16:09 Trevor Burrus: But I think it’s important that that puts it in the context of alternate ways of commuting, alternate things to do that have come up into existence, Uber, the scooters that are everywhere in DC, that the metro…

16:22 Aaron Ross Powell: Abominations.

16:23 Trevor Burrus: The metro ridership has been going down. You have the numbers for DC, I think, on how many people commute via car versus metro.

16:31 Peter Van Doren: Well, even in DC, again, that the transit use is very, very associated, not with actually total population density, but with downtown employment. Transit is good at getting people from dispersed areas to one central place. If that’s not the design of the urban area, then it’s of very little use. DC is a large employer, it’s called the Federal Government and a lot of those jobs are downtown. And yet in DC, you’d think… Just off that, I’ll ask you guys, what do you think the percent of commuters in the Washington DC area, that’s the whole metro area, that use transit, what percent of work commutation occurs by transit in DC?

17:16 Trevor Burrus: 20… 27%

17:18 Aaron Ross Powell: 50%.

17:18 Peter Van Doren: It’s 14.

17:22 Trevor Burrus: That’s astounding.

17:23 Peter Van Doren: It’s only 14. It’s just a…

17:28 Aaron Ross Powell: How much does that shift? The DC metro area is very large and it gets more spread out on the periphery and the jobs get more spread out. If you took just the area around like downtown downtown…

17:43 Peter Van Doren: Obviously, as you get further and further in, the percentage of commuters that are transit increases, and as you get further and further out, it decreases. If such data exists, you’re gonna ask me, inside the bell‐​way, inside the city limits, I don’t know. But I’ve always been stunned by, again, it’s the concentration of downtown employment, which is very high in DC relative to other cities. And yet, just listen to WTOP every day and listen to traffic. It’s despite the 700,000 people a day who use metro, that is a small percentage of the five million people in DC, a lot of whom commute from lots of places to downtown by car.

18:34 Trevor Burrus: I wanna take a step back. Going back to your study, when you were a grad student. It was for the Department of Transportation, but you…

18:44 Peter Van Doren: They refused the report by the way. They wouldn’t accept it. It was so contra, ’cause it went against everything they wanted to do, so it ended up being published as an MIT Press book in 1979.

18:55 Trevor Burrus: Well, it was this radical libertarian position, correct?

18:57 Peter Van Doren: Well, not… It was just… It may seem that way to us now, but at the time, and certainly, my whole career in this area, there’s been a distinct difference between what transit and transportation intellectuals say when they appraise the system, regardless of their political affiliations, in that Brookings and Cato and AEI and all… I mean, Alan Altshuler, very straightforward, straight ahead classic bureaucracy, political scientist, public administration sort of person, who taught at MIT and then the Kennedy School at Harvard not flaming libertarian enclaves of, by any means, that the transportation intellectual consensus, over time, was that transportation subsidies for transit probably made little sense. And yet, actual transit transportation behavior over time by the political system and which is responding to constituents has been totally the opposite.

20:02 Peter Van Doren: You can rank order policy areas as to how large the difference is between what intellectuals think about what policy should be in an area, and what policy is. My number one area for discrepancy is agriculture policy, where the overwhelming elite consensus is that agriculture subsidies are totally, totally unnecessary, particularly now that we have markets, futures markets, for everything farmers grow in this. They can hedge and do whatever they want to insure themselves against price swings. The second area in my second worst compliance between what, or difference between when intellectuals think, and what policy really is, may be urban transportation, in which light rail and heavy rail and transportation subsidies are politically desirable and favored by constituents, as I described in the quote about Montgomery County, and the consensus. Cliff Winston at Brookings wrote a book 20 years ago that called for the end that US consumer welfare would be enhanced if mass transit subsidies were, go to zero and we became a much more auto‐​based system, and then transit would indigenously arise and be priced at whatever it took to relieve congestion, which is what it might be very useful for that. But in the absence of congestion pricing on the roads, you also wouldn’t get that. Quite frankly, what intellectuals call for is zero transportation subsidies, but congestion pricing.

21:46 Trevor Burrus: And better pricing on that side.

21:46 Peter Van Doren: Better pricing on roads, which would reduce their use at peak time, which would in turn change where and why people live where they do and change their work patterns, etcetera, etcetera. We’re back to Econ 101, which is we need good prices for stuff rather than subsidies for certain things that are seen as good because the other thing that isn’t subsidized is somehow evil.

22:12 Aaron Ross Powell: You said the transit really only works when you have a area of dense jobs and people going into and and then out of that area. And we’re talking dense urban centers and then it doesn’t work well in any other situation like people moving around in the suburbs or…

22:32 Peter Van Doren: Phoenix.


22:35 Aaron Ross Powell: My question then is, does political support for transit track that? Do people who live in the suburbs or live in Phoenix, and the politicians who represent them, are they less keen on transit than the people who live in these urban centers, or imagine that they do?

22:55 Peter Van Doren: I’ll give you an answer to that question that may not directly address what you were saying, which is, originally, mass transit subsidies at the federal level, they all went, or half of them, it all went to New York City and Chicago. 1970 Urban Mass Transit Administration, so‐​called UMTA grants, all was New York City and Chicago. Well, that’s not an equilibrium in Congress. You’ve gotta… So what’s happened over time is transit subsidies now go everywhere. And so, my little, that city near where I grew up in northern New York, Watertown, New York, 25,000 people now has a bus system. [chuckle] And the buses go around from nowhere to nowhere and no one’s on them.

23:44 Peter Van Doren: And so over time, if you look at the productivity of transit employees, so you do passenger miles per transit employee in the United States, it’s just a steep curve linearly going down and the reason is that the margin… What mass transit subsidies have done is expanded mass transit to less and less dense settings, I.e., Watertown and Phoenix, because politically, if you’re gonna have a federal subsidy system, it can’t just go to where it might be economically efficient. It has to go everywhere, or where it’s politically efficient. And so, Martin walks, who teaches Urban Planning at USC. He’s now emeritus. I used to use an article in my class written by him in Science Magazine that said, it just documented all these trends I’m talking about, which is transit expansion went after middle class voters in the suburbs to gain political support and that meant in effect declining productivity and increasing inefficiency because transit was going in settings where it wasn’t very useful, because those places were automobile‐​based and could be easily, and thus buses run around empty without anybody in them, using diesel fuel and capital expenditures.

25:11 Aaron Ross Powell: Okay, but then, so someone who is a fan of transit in the on‐​rails sense of it might say that all sounds great. And yeah, like setting up new light rail tracks might not be the most economically efficient thing, and adding more buses might be more efficient or expanding driving, but having congestion pricing and so on might be more economically efficient, but cars are and buses, they’re burning… The buses are burning that diesel fuel. They’re all contributing to global warming, the environment matters. And rail, even if it looks inefficient on paper, is zero emission. It’s better from an environmental standpoint, which is, I guess, a longer term perspective. We’re looking ahead.

26:01 Peter Van Doren: It actually depends on the source, how the electricity is generated. Until recently, this Mid‐​Atlantic region, the dirty little secret is new… We had much cheaper power prices than New England and New York. And Maryland and Virginia, and DC always touted. We’re in the northeast and it’s allegedly anti‐​business and all that, but Long Island electricity prices are outrageous., 15 cents a kilowatt hour, 17 cents a kilowatt hour. And Maryland is eight. You know why? We had coal.

26:38 Trevor Burrus: Proximity.

26:38 Peter Van Doren: Half of, until recently, just the past few years.

26:43 Trevor Burrus: Do you mean coal is closer to Maryland or just they use coal?

26:46 Peter Van Doren: No. Half of electricity in the Pepco electricity system… I know, because twice a year, the electricity bill has to send out an emission’s report to every customer, and so you all throw ‘em away. I read them.

27:03 Trevor Burrus: This is why Peter’s our favorite guest.

27:06 Peter Van Doren: I always was amazed that in this liberal right in Maryland and DC liberal, liberal, liberal, etcetera, half the electricity comes from coal‐​fired power plants and so electricity was cheap here because we burned coal. When you went on the metro and you used electricity, you were burning coal.

27:23 Trevor Burrus: And that doesn’t even include the energy when they built it, which also can be a lot of fossil fuel. If you’re running earth movers around that are running on diesel fuel, and shipping in rails, and all that stuff.

27:34 Peter Van Doren: In the book I talked about earlier, the Alan Altshuler Urban Transportation System book, there were calculations done in the book about whether the construction of BART in San Francisco, the Bay Area RapidTransit system, the energy used to construct BART, if you assume that it actually saves energy operating relative to cars and make some assumptions and how full the cars were and how empty passed. If you rig it, you still came out with, it might never ever recover the energy used to build BART because it’s underground, it’s very expensive and energy intensive to board tunnels.

28:17 Aaron Ross Powell: But it’s also, it’d also be expensive to you wanna get… Okay, we wanna let people drive into DC to, instead of the routes that they’re taking on the metro, you’re gonna have to, there’s no highways that run through DC. Putting a highway through is going to kick up a lot of stuff into the atmosphere as well. How does it compare to building road?

28:40 Trevor Burrus: Building a road?

28:44 Peter Van Doren: Again, the book, I didn’t read that part of the book.

28:47 Trevor Burrus: It’s been 41 years.

28:48 Peter Van Doren: Yes.


28:49 Aaron Ross Powell: Come on, Peter, recall off the top of your head. Not that I would be surprised.

28:52 Peter Van Doren: I don’t wanna mis‐​state what… The book had a long discussion about total life cycle cost of transit versus highways and things like that. And so I think there are answers to your questions out there, and again, I’d have to go dig a lot more to figure out.

29:12 Trevor Burrus: It would have to be, if you’re not digging tunnels into the earth, maybe if you build the Big Dig in Boston cost about as much as a metro line, but most highways, you just…

29:25 Peter Van Doren: That was a big deal.

29:25 Trevor Burrus: Put them on top. That was a huge deal.

29:27 Peter Van Doren: The Boston thing was a big… Never would have happened without federal subsidies and those wouldn’t have happened without Tip O’Neill being Speaker of the House. That’s the Tip O’Neill subsidy to Boston, was the Big Dig. I forget how many billion dollars.

29:41 Trevor Burrus: I can’t even remember, and how much longer and how many overruns. But this is a good segue to go in to talk about highways in the city and all this stuff. Going back, we had discussed earlier before we went on air about the evolution of these transit subsidies, how they came about. And you pointed out Nixon to some degree, but…

30:00 Peter Van Doren: I think people, again, particularly for our younger listeners, the reason that transit has no intellectual or transit subsidies have very little intellectual support, but great political support, has to do with the 60s, and the riots, and Nixon. And I’ll read you a quote from the book. And I’d forgotten this quote. This is a page, oh I don’t have the page, page 36 of the Alan Altshuler book. Altshuler’s explanation of why in his estimation, even though transit makes no sense from an economic point of view, why is it so popular? And the answer was as follows.

30:46 Trevor Burrus: Whether one’s concern was the economic vitality of cities, protecting the environment, stopping highways, energy conservation, assisting the elderly and handicapped and the poor,” Or as The Onion article said, simply, and I’m inserting that. That wasn’t in this book. [chuckle] “Or simply getting people off the road so I can drive faster, transit was a policy that would be embraced. That is, it wasn’t that transit was actually an effective way of serving any of those objectives. It’s simply that everyone believed that it would be so.”

31:23 Peter Van Doren: And that’s politics. Right? Transit was the Republican answer for what to do about cities that were burning without bringing up race. And particularly, since highways are the urban interstates were the last to be completed in the system and they were expensive and they were always associated with slum removal and black neighborhoods resisted. They said, Why are you knocking down cheap housing for us when this road is gonna serve white commuters who don’t even live here? In Boston and in DC, so you know the… Is it the 395 that stops?

32:02 Trevor Burrus: Yeah.

32:02 Peter Van Doren: Right down here from Cato? That was supposed to be I95, through DC.

32:07 Trevor Burrus: Oh, cut right to the middle of the city?

32:09 Peter Van Doren: Right through, right? And then there were protests and so they stopped. In Boston, if you take 95 from the Tobin Bridge down and you have that big left‐​hand turn in the middle of the air, and you go next to Boston Garden, if you look to your right, there’s this exit that goes off into the air and then stops. And again, people don’t realize there was gonna be an interstate between MIT and Harvard right through Central Cambridge, going right by the BU Bridge, right by Fenway Park, and then through Roxbury, and then hooking up with 9395 south of, in the south end of Boston.

32:48 Peter Van Doren: There were protests, there were… And the governor of Massachusetts at the time was an MIT graduate, and Alan Altshuler was the Secretary of Transportation for Massachusetts and so Alan Altshuler invented the solution, which was the urban interstate highway trade in, which is, if a governor asserted that we needed to not build these highways that were part of the interstate system, we could convert that money into mass transit projects. And Altshuler says this was a decentralized conflict, Congress could reassemble the coalition that was for transportation, that the anti‐​highway protests would stop ’cause if you didn’t want it, you could get your subsidy, and do something else with it. And the rest is history.

33:37 Peter Van Doren: Mass transit spending grew the most under President Nixon. It was a political solution to a series of conflicts that makes no intellectual sense but it makes perfect political sense. And it got rid of all the conflict from a congressional point of view and put it back at the state level, which is what they wanted.

33:58 Trevor Burrus: How did this look? I mean, the New York City subway and the Boston subway, I don’t think the DC subway, but the New York and Boston predate these subsidies, these federal ones, correct?

34:10 Peter Van Doren: But expansion, so the Boston system, the red line of all these, the DC expansion, so believe it or not, the red line that I ride. Do you ever wonder in DC, why the other line stopped short of the Beltway mostly? And then the red line goes so much further out? Maryland traded‐​in interstate highway money and made the red line a lot longer. And it fits with the politics of Maryland. The reason the orange line historically stopped at the Beltway, and and both ends, right, is that money was used by Maryland for the red line to extend it. And again, interstate highway, so feds like to spend money. It’s popular, but this spending money in this way in certain constituencies led to hassles for those constituencies so they said to the constituencies, you can use the money for other stuff.

35:12 Trevor Burrus: But New York City is private, right? The subway is what I meant, but, at one point.

35:15 Peter Van Doren: Sort of. Initially, yes, but even after… But by 1913, they were built with city capital money, but then operated and owned privately.

35:30 Trevor Burrus: It’s a hybrid.

35:32 Peter Van Doren: A hybrid model, total conversion to the sort of MTA running everything is post‐​World War II. Boston, the system went bankrupt in 1905, so.

35:45 Trevor Burrus: A privately created like hybrid system.

35:47 Peter Van Doren: That was really private, and that went bankrupt early. In both New York City and Boston, the subway systems were very much the proponents were real estate developers in the outer boroughs. Queens and Brooklyn were developed because subways allowed people to get there and get to work in Manhattan quickly and real estate interests didn’t want the fares to be high. They wanted the fares to be low so that people settled. And then one settlement occurred, then you could have bankruptcy or subsidies, ’cause once you’ve got people using it, it’s then unthinkable to shut it off. And you and I have had conversations about how, with certain public services, there’s this long run game in which…

36:41 Trevor Burrus: Get enough interested parties involved in it and…

36:45 Peter Van Doren: We get a very un‐​Cato like equilibrium, where lots of people have a vested interest in being subsidized. And even though it looked private to start with, it really wasn’t sustainable, given what they were charging for the service.

37:03 Aaron Ross Powell: How do we address this then? I mean, and this is a question isn’t limited just to transit, but transit now, as you’ve described it, seems to encapsulate all of these problems, which is you’ve got a policy or a service or subsidies or whatever else that comes in, not because people who know about this stuff think it’s a good idea but for purely political reasons that then becomes popular, because constituencies love subsidies or services or whatever else. Then, in the case of transit becomes culturally embedded so that people come to see, not just like a moral case for light rail, in terms of the… We’re gonna have environmental effects, but also there’s a status thing that your city is on the map if it has light rail, and the politicians then, you get the cycle of now, the politicians have to double down because it’s a great way to fire up. And so we’re spending all of this money, we’ve got this obvious solution that is more effective, cheaper potentially, and more environmentally friendly, could service all of these people better, namely buses, and they could be electric buses if we didn’t want… We want to get rid of emissions. But you’ve got the constituency of…

38:24 Peter Van Doren: You can’t get there from here.


38:27 Aaron Ross Powell: Right. You got all of these people now, and cultural attitudes and beliefs…

38:30 Trevor Burrus: Don’t forget property owners.

38:31 Aaron Ross Powell: Property owners, right.

38:33 Trevor Burrus: Anyone who has a property on a metro line, how much of their property value is related to that, all the businesses that are related to that. The stakeholders here get vast.

38:43 Aaron Ross Powell: How do you get out of this? Is there any way to, or do we just say, “Well… ” Do we just have to give up?

38:52 Trevor Burrus: You can say yes, it’s okay. I think we do.

38:54 Peter Van Doren: You have just stated extremely eloquently all the properties that, of what an economist used to describe an equilibrium, I.e., there are enormous forces that have got us to where we are. It started out as an accident. You have a Republican president in the 60s and the cities are blowing up and the highway coalition’s falling apart and he and his supporters have to figure out what in the heck are we gonna do. His answer? Subsidized transit. And it has worked like crazy in ways that appall classic Republicans, probably, unless they wanna be elected and you…

39:45 Peter Van Doren: So getting from where we are now to the world that the Brookings scholars have described as optimal, that the Cato scholars have described as optimal, etcetera, etcetera, etcetera. Extraordinarily difficult. And I don’t know. The intellectual in me agrees with you 100% and there are no easy ways to get from what you described to where we need to go. And in the end, it’s usually budget crises, budget constraints. Eventually, somebody somewhere is going to not wanna pay the taxes that make this thing hum, but the same thing was true with Ag, great Ag. You could say the same thing about agriculture subsidies, and guess what Ag did? I mean, we had reform in Ag, and then it all went away, and now it’s gotten even worse because instead of explicit crop subsidies, we now have subsidized crop insurance.

40:50 Peter Van Doren: Well, that sounds much better to vote. Who’s against insurance? Yes, it’s just Ag subsidies dressed up in new clothing. If you wanna be very, very, very glum about things, think Ag and maybe transit. And so, do I have any great answers about how to get out of this? And the answer is, I’ll give you even a bigger puzzle. The silver line in DC. Do you know what’s paying for it?

41:28 Aaron Ross Powell: This is a new expansion of the metro, for those of you.

41:31 Peter Van Doren: Oh sorry.

41:31 Trevor Burrus: Yeah.

41:31 Aaron Ross Powell: Those Americans, who for some reason live outside the beltway.

[overlapping conversation]

41:34 Trevor Burrus: I’m gonna say airport taxes maybe.

41:37 Peter Van Doren: Well, there’s some federal subsidies but you know, a lot of what’s paying for this silver line? Excess toll diversion from the Dulles Greenway, which is a private road, so we have a Cato approved road and it goes from Dulles to Leesburg. It’s a private concession, but it’s governed by Virginia. And so, what Virginia has done is there’s now a surtax on the tolls on the Dulles Greenway that’s gonna go up and up and up and up in the future. And I’ve been betting with myself. One of the motorists on this road, gonna understand that their tolls are not, even though it’s private, are not just paying for the debt service on this road. All the toll increases that they’re incurring now are going to subsidize the construction of the silver line.

42:30 Peter Van Doren: And you’d think some Loudoun County officials would say, “Enough, just stop. Just, we’ve had enough.” Kind of a network. That’s an old movie where some guy peeks out the window and yells.

42:44 Trevor Burrus: I’m mad as hell and I’m not gonna take it anymore. Yes.

42:47 Peter Van Doren: And, so eventually, the cross subsidy game that keeps all of this going, which is in radio, too, our own scholars talked about as the diversion of gasoline taxes from roads to transit and bike ways and every other thing under God’s green earth, right? Do motorists understand that they’re not only being taxed for the roads, but the taxes are being diverted to things they don’t use? If motorists understand that. And I thought this Loudon County thing would blow up. So far I’ve been wrong, right?

43:23 Peter Van Doren: The Post reports the tolls are going up because it’s paying for the silver line and like crickets, I don’t hear any motor, AAA saying, “This is outrageous” or something. No, but eventually, I think things like that, which is gas tax diversion will eventually get, because the majority of people drive cars, even in DC.

43:50 Trevor Burrus: What about reliability? The reliability of the metro system because…

43:55 Peter Van Doren: It’s just, look what’s happened in the last year. What did the Metro Chief do? He played a big game of chicken with Maryland and Virginia and DC, over what? Not to make the users pay more, instead it was, it’s a shame that Maryland, Virginia, DC are ponying up. We needed a dedicated source of public revenue, because all other transit systems have it. DC is the only one that’s not. That’s our problem, we don’t have a dedicated source of revenue. The Republican Governor of Maryland, sort of reading the tea leaves, held up for a while, but then he realized, “You know where all the voters are? They’re not out on the eastern shore where the chickens are grown. They’re in Montgomery County.” And you know what?

44:46 Trevor Burrus: They like their Metro.

44:47 Peter Van Doren: And they want the purple line. He caved, and let the purple line go through, even though it’s $1.4 Billion and it’s going from nowhere to nowhere, and it took away a bike lane from all the people in Chevy Chase that loved the old railroad path that was their little recreational trail. But he still did it because they’re good at reading what wins elections and my sense is this is gonna go on until I think it’s diversion of the gas stuff will eventually… People would say, “I thought I was paying for the roads.” And well, you sort of are but we’re taking a third of it and we’re using it for things you don’t believe in or use. And…

45:25 Trevor Burrus: Is there an ultimate lesson here? We might have said some weird things to people listening today where you say, “Oh public transportation is an important thing. It’s so great, I love it. How would people get from South Brooklyn to Manhattan or how would people get from Arlington to DC or how would people get from Roxbury to downtown Boston or anywhere else? What is the lesson that you generally should take away from how these public transportations arose and then the difficulty…

45:56 Peter Van Doren: Or how about a meta. We could go above this, was what unites Ag and transit and all of this stuff? And the answer is politics is a combination of belief systems that justify things, combined with diffused taxes on a lot of people redistributed to a much smaller set of people in a concentrated way. So the gas tax diversion is on a majority of transportation people are auto users and they don’t know there’s diversion and the gas taxes, they may not even realize what they are and all that, ’cause they’re embedded in the price.

46:38 Peter Van Doren: Small taxes on a lot of people diverted to purposes that also have philosophical or normative intent support who could be against transit or against farmers or whatever… That’s a pull. That’s a winning coalition and that’s very sustainable over time until either the philosophy goes away and those people are now abhorrent for whatever reason and I don’t know how… That’s what sociologists and historians figure out. How do you go from being in to being stigmatized? And then two, eventually the group of people that are taxed somehow wake up and realize it, and there’s some incident or something that causes a crisis in the political support of those taxpayers.

47:34 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​.lib​er​tar​i​an​ism​.org.