High-speed rail as "a test of character"

From Amazon

Paul Krugman considers how those writing about public affairs should deal with it when they've been wrong on an issue:

You don’t just want to look at whether people have been wrong; you want to ask how they respond when events don’t go the way they predicted. After all, if you write about current affairs and you’re never wrong, you just aren’t sticking your neck out enough. Stuff happens, and sometimes it’s not the stuff you thought would happen. So what do you do then? Do you claim that you never said what you said? Do you lash out at your critics and play victim? Or do you try to figure out what you got wrong and why and revise your thinking accordingly?...At that point this becomes more than an intellectual issue. It becomes a test of character.

The SF Chronicle editorial writers, who have supported the high-speed rail project all along, fail that test:

California needs a high-speed-rail system to ease traffic, direct growth and to knit a sprawling state and its economy together. But a Sacramento judge says the $68 billion plan must also follow its own financial rules in a decision that could slow the project and drive up its costs.

This begs the essential question: How much does the state really "need" this project? Good place to start finding out is by reading this study. 

Yes, the project must follow the law in the legislation 2704.8 (J) that accompanied the project. And, just as important, it must adhere to the promises made during the campaign to pass Proposition 1A in 2008, which, by the way, only passed with 52% of the vote.

The Chronicle:

What happens next will be critical, not only for the 500-mile line connecting San Francisco to Los Angeles but for the future of high-speed rail. The world of 200-mph trains has taken hold in Europe and Asia, where the ultra-fast systems flourish.

The high-speed rail systems around the world were built with public money and are then subsidized by governments after they are built. See this study comparing the finances of the California project with European and Japanese systems. 

It's important to understand that, unlike systems in other countries, Prop. 1A prohibits any public subsidy to operate the California system if/when it's built. Voters were promised that those who use the system would pay for it, not state taxpayers:

“High-speed rail is good for society and it’s good for the environment, but it’s not a profitable business,” said Mr. Barrón of the International Union of Railways. He reckons that only two routes in the world---between Tokyo and Osaka, and between Paris and Lyon, France---have broken even (NY Times, May 29, 2009).

The folks at the Community Coalition on High-Speed Rail comment:

It should be pointed out these two routes were implemented on top of existing slower speed rail systems, so the right of way was more easily available and the ridership was in place. Additionally, the local and regional rail systems at both ends of each route had been in place for years. This is the exact opposite of the situation in California. The DG’s letter and the IUR’s position also contradict the US Congress Research Service report of April 18th 2007 of three high-speed rail operators---France, Japan and Spain. Their national governments paid the capital costs, or in Japan shared them with local government on a two-to-one ratio. And the governments subsidized their operations about $2-3 Billion annually.

The Chronicle:

The judge also told the rail authority to come up with a fuller picture on how it plans to find billions in private money to complete the plan along with full environmental approvals.

"Private money"? Why would anyone invest in the California high-speed rail project? Why has there been no private investment in this project so far? Because investors require a return on their investment. 

Of course companies---and even governments---are willing to sell California train cars and bullet train technology, but Prop. 1A prohibits any government subsidy to operate the system once it's built, unlike systems in Europe and Asia, which are built with public money and subsidized with public money after they're built. Collecting interest on the bonds authorized by Prop. 1A is the only profitable role that can now be played by private money.

Look at the 2009 California high-speed rail business plan to see how wildly unrealistic this project always has been:

Federal Grants: $17-19 billion
State Grants (Prop. 1A bonds): $9.95 billion
Local Grants: $4-5 billion
Private Funding: $10-12 billion

The Feds have already chipped in $3 billion, and no one seriously thinks there will be any more from that source. "Local grants" refers to cities and counties, but no one can seriously claim that even prosperous cities like San Francisco are going to contribute on that scale to the project, which is why big city mayors---including Ed Lee---support the boondoggle; it's free state and federal money for them.

The Chronicle:

Some critics are determined to send the project back for another statewide vote, noting that it has changed in some respects, such as adjusting the Peninsula stretch to use Caltrain tracks...The northern end will also take shape using a "blended" approach that will put high-speed trains on Caltrain commuter tracks to save money...But it would be a mistake to start over---any plan of this magnitude is going to require adaptation.

The "blended" system was proposed to get political support in Northern and Southern California by spreading the money around to local governments. 

The problem: sharing tracks with other systems results in a slower system that no longer qualifies as the high-speed rail promised to state voters in 2008, not exactly a minor "adaptation" in the project. This is why previous supporter Quentin Kopp turned against the project. (See also Kopp's later declaration in support of the successful litigation against the project.)

High-speed rail must go forward, judiciously and expeditiously.

Onward "expeditiously" to state bankruptcy!

The high-speed rail project is also a test of Governor Brown's integrity.