Monday, March 25, 2013

Eyesore of the Week: 300 Cornwall

Photo by Matt Fuller


Democrats try to save high-speed rail

The Democrats in the state legislature are trying desperately to save the dumb high-speed rail project, which is disappointing to Democrats like me. Randal O'Toole today on the unfolding economic consequences of China's high-speed rail project:

Restructuring will not save China from that debt, which either taxpayers or creditors will have to cover–--it certainly won’t be repaid out of rail fares. The debt is roughly $73 million for each of the 5,840 miles of high-speed rail lines built by the Ministry. This suggests that China got off cheap considering that California is planning to spend close to $300 million per mile for its high-speed rail, while Amtrak wants to spend $345 million per mile ($151 billion divided by 438 miles) building a new Boston-to-Washington high-speed rail line. (emphasis added)

This is the same danger the high-speed project poses for California, which is what the folks at the Community Coalition on High-speed Rail have been telling us in great detail for years. O'Toole argues that Japan's high-speed rail system is what ruined its economy:

Still, that $428 billion debt could prove crippling for China’s growing economy. It happened in Japan, which in the late 1980s was much more prosperous than China is today. But an extensive high-speed rail construction program had left the state-owned Japanese National Railways in debt to the tune of 28 trillion yen–--about $300 billion in today’s money. Japan responded by privatizing the rail lines, but the government took over most of the debt. Government plans to pay off the debt by selling the railway land that had been the collateral for the loans were halted by (and may have precipitated) the collapse of Japan’s property bubble. The result of that collapse has been more than two decades of a stagnant economy.

Both Melissa Griffin in the SF Examiner and Kathy Hamilton discuss the partisan HSR vote in the state legislature on a proposed audit: Democrats were against it and Republicans for it. Of course it's politically easy for Republicans to oppose a project backed mostly by Democrats, liberals, progressives, Governor Brown, the unions, and President Obama. I hate to say it, but the Republicans are right on this one, regardless of their political motives.

O'Toole refers to Spain's over-built high-speed rail system that has also seriously damaged the Spanish economy.

In the latest poll, public opinion in California is against the project, as it was in 2011 and 2012. The project has never had solid public support, since voters okayed the project with only 52% of the vote in 2008.

Hamilton tells us how Governor Brown deals with critics of his pet project:

Back in 2010, there was a state office called the Inspector General whose duty was to monitor the spending of statewide stimulus funds for all projects, some $50 million back in 2010. The Inspector General, Laura Chick, found critical issues with the high-speed rail project. The department was abolished by Governor Brown as a cost cutting measure.

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