Night Train: Transporting a Lame Duck with the Oil Independence Tariff

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Burning the Midnight Oil for Living Energy Independence

We are in the Lame Duck Period. We have real unemployment rates of approximately 14% (counting headline unemployment, marginally attached, and involuntary unemployment as roughly 50% employed, 50% unemployed), and if the economy still sucks this bad in November in two years times, all manner of absurdly idiotic reactions could be elicited from an angry electorate by skillful corporate marketers.

And if the the Republicans are willing to sabotage the security on loose nuclear bomb making material for political gain, surely they will sabotage the economy, as they have been doing.

And with transportation from the Recovery Act creating 630,000 direct and indirect jobs ~ a larger share of jobs than share of funding ... attacking transport funding is a critical step in sabotaging the economy.

So, an idea on what can be done about it.
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The Highway Trust Fund needs money

The central problem facing transport is "revenue" or, to use a five letter word, taxes. We have a Federal gas tax that has been frozen at under $0.19 over the last decade, with no adjustment for inflation, while on the other hand, the Federal Highway Trust Fund is facing escalating demands on its funding.

The problem is more than just the lack of an inflation adjustment, but its still fairly straightforward. When the Highway Trust Fund was launched, it was to be directed to Interstate, US, State, County and Township Highways ~ in other words, to most roads used in suburban and rural areas, but excluding most roads used in urban areas.

Of course, when it was launched, we had a dominant share of motorists doing most of their driving on unfunded city streets. So there was a tremendous cross-subsidy provided from urban street driving miles to rural and suburban roadworks.

And as we are all aware, this cross-subsidy is one of the things that promoted the growth of new rings of suburbs, and then outer suburbs.

So the share of the driving on subsidized roads has been increasing while the share of driving on subsidizing roads is shrinking. And the growth in use of the subsidized roads implies a delayed-fuse financial time bomb in terms of a growing maintenance cost over time.

And while the cost of maintaining our road system will be growing over time, a fixed dollar value Federal gas tax implies a shrinking amount of resources that can be devoted to the maintenance.

And each oil price shock that hits will:

• Generate inflation, reducing the maintenance resources that can be bought with a given Federal Gas Tax dollar
• Promote greater fuel efficiency, including pluggable hybrid electric vehicles that with care can get much of their driving done on electricity alone, and
• Encourage use of oil-independent vehicles, such as all electric cars, which pay no gas tax at all.

So the roads need a new source of revenue.


Oil Independent Transport Needs Money

In January, a new Republican House is coming into place, elected on a platform of running the country out of the fantasy and science fiction section of a particularly understocked Barnes and Noble, and as reported at The Transport Politic (hint: bookmark) may be:

A New Political Reality Settling In For National Transportation Financing
Tanya Snyder of Streetsblog Capitol Hill broke the news last Friday that House Republicans are planning to push to "stabilize" the Highway Trust Fund by cutting back expenditures to meet revenues without raising any taxes in the process. The result would be a large decrease in overall federal transportation funding — a potential reduction in spending by $7 to 8 billion a year from around $50 billion today. According to Snyder’s sources, transit financing would be hit especially hard, seeing its annual appropriation cut from $8 billion to $5 billion.
...

Of course, investment in oil-independent transport is required by the objective situation we are facing ~ on national defense and business development grounds, as well as on ecological sustainability and Climate Chaos ground ~ and investment in oil-independent transport at this point in time would also generate much needed fresh employment in the short term. And since it insulates the economy from oil-price-shock inflation over the long haul, that is short term stimulus combined with long term inflation reduction and increased national standard of living.

Now, if it were for long term benefit at substantial short term pain, the House Republicans in the next session might allow the Democrats to pursue it. But long term benefit combined with short term gain absolutely contradicts the priority number one of sabotaging the Obama administration going into its re-election campaign.

So if we are going to have any funding for oil-independent transport over and above the just under 3 cent Federal Transit portion of the Federal Gas Tax, we need to get that funding lined up during the Lame Duck.


The Strange Politics of an Crude Oil Import Tariff

An increase in the gas tax during the Lame Duck is not going to get done.

However, there is an alternative source of oil-tax funding that has rather peculiar politics. That is the tariff on oil-imports.

We import roughly twice what we produce, so crude oil prices in the US are driven by the price of import oil. Therefore, a tariff on oil-imports provides windfall gains to oil produced in the United States, equal to the size of the tariff.

And the US oil producers are part of the entrenched opposition to an increase in the gas tax. ... But windfall gain ... but opposed to gas tax ... but windfall gain ...

... Louisiana oil production, Texas oil production, Alaska oil production, Montana oil production ... windfall gains ...

I don't know if it can be pushed through, but looking at that list of windfall gain recipients above, its the only form of oil revenue that I can see having a prayer of a chance.

And the Republican Party has invested massive rhetorical resources into the bullshit "Drill Baby Drill" frame ... but an import crude oil tax slides right into that frame, "encouraging exploration for our own domestic oil".


Split a Penny in Half

So, this is the idea. Add a 1% tariff on imported crude oil. Crude oil is not a "scheduled commodity" in the WTO system, so we are free under the WTO to put any tariff rate we want to.

Split the proceeds in half:

• Half goes to a special "maintenance fund" in the Highway Trust Fund, distributed by standard formula, but restricted to maintenance of existing Interstate, US, State, County and Township Highways
• Half goes to an Oil Independence Infrastructure Bank, to finance infrastructure projects that offer a demonstrable reduction in the oil dependence of our transport system

What is an Infrastructure Bank? Well, the way originally described, its like a piggy bank: put money into it, take money out of it. No leverage at all. However, ideally, the Infrastructure Bank would be set up along the following lines:

• Half of revenue can be committed to long term finance
• Long Term Finance can be interest rate subsidy for loans to self-funding public authorities
• Long Term Finance can be interest rate subsidy for loans refunded through reduced operating costs
• Long Term Finance can be up front grants refunded by a ten year commitment of Infrastructure Bank funding
• If less than half of the revenue from a year is committed, the Infrastructure Bank can provide new Long Term Finance funding
• The balance left after long term commitments are satisfied are provided to "shovel ready" annual oil-independence project funding

Now, suppose there is an oil price shock. Long term, the Oil Industry as a whole would prefer that we maintain our oil addiction and just hand over an ever increasing share of our national income to the Oil Industry. However, short term: windfall to US-based oil production.

Its a strange politics, a logroll that offers

• the Progressive Caucus secure long term funding for oil independent transport, including a substantial increase in funding in the face of an oil price shock to start offsetting the recessionary impact without the recession having to hit first ~ and if the US Department of Transport is aggressive enough in funding projects out of the Infrastructure Bank, quite possibly preventing the oil price shock recession, and
• the Domestic Oil Production lobby windfall gains that only get bigger in the event of an oil price shock

What kind of employment impacts are we talking, here?

Consider the nation's oil import bill for 2009: ~$188b (pdf: p. 9). 1% of that is $1.88b.

Half of that goes to roadworks, half goes to oil-independent transport, half of the oil independent transport funding is annual grant funding. So:

• $1.41b = 3/4 of $1.88b to annual grant funding, and
• $0.47b for long term finance

To keep things simple, assume half the long term finance is interest rate subsidy at 5%, and half is forward funding at 5%. The leverage on the interest rate subsidy is 20x, and the leverage on the forward funding is a bit over 8x, so the average leverage on a 50:50 split is about 14x, leaving:

• $1.41b = 3/4 of $1.88b to annual grant funding, and
• $6.58b in finance from $0.47b funding for long term finance
• For a total of $7.99b in funding in the launch year

Estimates of the employment impact of public transport investment understates the impact of oil-independence investment, since it ignored the stimulus effect of diverting billions of dollars from oil imports into domestic spending. However, taking the American Public Transport Association modeling, the impacts of public transport investment are:

• 8.2 jobs/$m direct job creation
• 7.8 jobs/$m indirect (upstream) job creation and
• 7.7 jobs/$m induced (downstream) job creation, giving
• 23.7/$m total job creation

That is about 190,000 jobs, just from the spending itself. Its only a drop taken from the 14.8m bucket of unemployed, but on the other hand, non-farm payroll employment grew in September by ~150,000, so its more than one extra month of job growth added to the economy before the next election.

The real job impact kicks in when we have an oil price shock. In the face of an oil price shock, the proceeds of the tariff jump upwards, allowing a substantial increase in funding on oil-independent transport. And while the impact on gas prices is current, the impact on transport funding is front-loaded, so that the Oil-Independent Infrastructure Bank adds more to income than the oil price shock takes away.

How many jobs do we get from preventing an oil price shock recession? Hundreds of thousands from preventing the mildest of recessions ~ millions from preventing recessions as severe as the Reagan Recession of 1981 or the Bush Recession of 2007-2009.


Conclusion: Can It Be Done?

I have no idea if it can be done. But its definitely worth a shot.


Midnight Oil ~ The Power and the Passion



You take all the trouble that you can afford
At least you won't have time to be bored.

Half A Century of Empire: A Progress Report

Burning the Midnight Oil for the Arc of the Sun

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We are sabotaging our main labor resource with mindless rote learning to pass "achievement" tests to avoid being punished for not being full of kids of upper middle class households, we are allowing our equipment resource to collapse through lack of demand and we are sabotaging our natural resource through treating nonrenewable resources as an excuse to destroy renewable resources and treating renewable resources as non-renewable resources, which is a self-fulfilling prophecy.

In fifty years we have gone from technological leadership on all fronts to technological leadership only in some of those areas under the umbrella of War Department Industrial Policy, and from massive trade surpluses that demanded recycling via overseas investment and imports to maintain international liquidity, to massive trade deficits to allow the Chinese to export their unemployment to us.

In forty years we have gone from energy independence to importing twice as much oil as we produce.

And thirty years, we have shifted our record on land wars in Asia from 0-1 with one draw, to at best 0-2 with two draws, and at worst 0-3 with one draw.

If this damn Empire collapses soon enough, we might have a chance to start rebuilding from the catastrophe it represents, but an equally plausible outcome is falling apart into a squabbling series of small and mid-sized nation states, many harboring revanchiste dreams of re-establishing the Empire.
________________________

We built this Empire out of immediate and temporary needs, some of them in service of public interests, some of them in service of vested private interests. For the good of the Republic, it is long past time to tear it down.

The life of one American service man or woman is not worth all the profits that have been made by all the Imperial War profiteers in the last half century. And it has been about nothing but Imperial War Profiteers profits for decades now.


Burning the Midnight Oil ~ Forgotten Years

Night Train: Losing HSR Battles while Winning the Transport War

Burning the Midnight Oil for Living Energy Independence

Last week I raised the certainty that Kasich will return $375m of Ohio's $400m grant for laying the 110mph 3C corridor track and running 79mph trains on them ... and the likelihood that Wisconsin's Governor-elect Jobs Walkabout will return all or most of Wisconsin's $810m for the Milwaukee to Madison Emerging HSR corridor.

Just today, I read that Governor Jobs Walkabout was a big recipient of road lobby money during the campaign, so after conning them into thinking that the $810m could be shifted into Wisconsin roads, the fact that its not possible, that another state gets the money, that Talgo may leave the state after its current contracts are finished ... that is being used to try to reverse his decision.

I do not have high hopes that he will reverse himself, but the stronger the fight against him, the greater the prospect of getting the connection between Rapid Rail HSR corridors and jobs implanted into people's minds. And it might result in a push to get some of the funds spent on the Hiawatha line to Chicago.

And the status of the Express High Speed Rail project in Florida ~ the Express HSR system that would have been completed before a prospective second Obama term could finish ~ seems to be up in the air: Despite "Cloud of Uncertainty," FDOT, Contractors Prepare to Move Ahead on HSR.

Thing is, even if the opponents of HSR killed three: they had to kill them all. Every HSR line that gets finished will undermine their case, and raise intra-regional and inter-regional jealousies as a force ensuring that HSR funding is provided at the Federal level and matching funds are raised at the state level.

Of course, RepubliCorp has control of the House of Representatives, and with it the purse strings, for the next two years, and even if there is a HSR authorization in a lame duck transportation bill ... that money is not going to get appropriated for two years. But as long as some corridors get finished, and the demonstration effect starts to take hold, the tide will turn back.


Where Should the Republican Rejection Money Be Recycled?

For my part, as a Buckeye, where I want the $375m 3C Quickstart Design Money to go is to the Wolverine Line in Michigan. Michigan applied for $830m in the round of funding that saw Ohio awarded $400m, while Michigan only got $40m. Then when $2.5b of money requiring at least a 20% state match was available, Michigan applied for $385m in projects, with a Federal contribution of $308m.

Well, give them Ohio's money. Nothing will do more to ensure that there is not "missing link" between the Eastern Seaboard HSR systems and the Midwestern HSR systems than the former Ohio money ending up in Michigan. Heck, since its ARRA money, which is allowed to be no-match, give them the $308m they asked for, and as much of the matching cost as the Ohio decision allows.

As for the Wisconsin $810m (it might only be $740m, if the Governor is clever enough to figure out a way to hold onto the $70m to be spent on the Hiawatha corridor), I'd say start by putting it at the other end of the Empire Builder line, in the Pacific Northwest. Washington applied for $850m for the Portland/Seattle/Vancouver line, and got $590m, so $260m could go to the Cascade Corridor.

That leaves $550m. First, ask Georgia if they still want the full $472m capital cost of their Atlanta to Macon line, and if the State Legislature is willing to guarantee operating costs, give it to them. That spreads the projects east to west and north to south across the country.

Now, if the Tea Baggers scare them from taking the money, then it'll have to go somewhere else. Someone is sure to want it, of course, but a southern project would be a fine thing to have as part of it.

If anything is left over, there are lots of individual projects included in the applications for the $8b ... there shouldn't be any trouble sorting out the smaller individual grant request, selecting the most shovel, and then awarding the balance to the best bang for the buck individual projects (excluding, of course, states that say they don't want the money after all).


What about the California HSR System?

I figure that the Express HSR corridor money was split between Florida and California, both in the $8b in ARRA funding and in the $2.5b of annual transport funding. So if Florida gives its money back, I think it ought to all go to California. Indeed, Florida should be told that up front: they got the largest chunk of Express HSR funds, and if they don't want it, the other Express HSR applicant, which promised 50:50 matching funds to boot, they get it.


Anyway, that's my re-allocation ...

... but the key thing is, there still are rail projects going ahead, and as long as some get finished, the demonstration effect is going to take hold. Even if it is a dry two years for further HSR funding ... as long as that two years is spent building systems, it will not be an unproductive two years.

So, what's your re-allocation?


Midnight Oil ~ Truganini

The Night Train: The Path for Ohio High Speed Rail

Burning the Midnight Oil for Living Energy Independence

One of the consequences of the 2010 General Elections was the election of RepubliCorp Governors in Ohio and Wisconsin who politically neutralized the success of sitting Democratic state administrations in landing $400m and $800m High Speed Rail funding by demonizing the High Speed projects that were funded.

What that means for Wisconsin seems likely to be cancellation of the project but its certainly worth pushing back (and see below for further).

Ohio was completing the final Design this year, so never committed to the Build funds, so while Kasich is handing ~8,000 jobs to another state, there's no immediate budget impact to hit him with. Indeed, given the new make-up of the state board that would have to approve taking the Build money, after demonizing the "Quickstart", Kasich couldn't take the money now if he wanted to.

So where next for Ohio High Speed Rail?
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The Wisconsin Republican Rail Cancellation Boondoggle

Whether stakeholders pulling the string of Wisconsin Gov. Jobs Go Walkabout balk at handing that money back and taking $100m out of the state budget to boot, or whether the Governor sticks to his Modern No-Nothing guns and gets a black eye for the egregious fiscal irresponsibility, its a fight worth fighting.

That is, the cancellation of the Federal Funding for the Madison / Milwaukee rail corridor will cost Wisconsin [http://www.wisgov.state.wi.us/docview.asp?docid=20612 cost $97.65m], versus the commitment to the start up rail subsidy of any amount required up to $7.5m/yr, which was the original promised state contribution to the project.

That promise of a $7.5m annual operating subsidy if required was the basis for the Republican charge that the rail corridor was a boondoggle. Yet canceling the project will cost enough for over three full Governors terms worth of that operating subsidy. And on the other hand, the actual need for the subsidy will drop over its first five years, as patronage is built on the new corridors ... and at the same time, speed upgrades to Milwaukee/Chicago anywhere in that dozen years would surely make allow the Madison / Milwaukee segment of the route to generate an operating surplus.


Why is it necessary to kill these projects?

And that is what these cancellations are about. It is not a high priority emergency for the Oil Lobby to kill these projects in their cradle because of a risk that they will fail to reach operating surpluses. Its a high priority emergency because of the much greater likelihood that they will succeed in reaching operating surpluses as they reach maximum speeds at or greater than Interstate Highway driving speeds, via raising the maximum corridor speed limits of 110mph and a combination of corridor and equipment that allows the train to be operating between 90mph and 110mph for the bulk of the trip.

What operating surpluses means is that advocates can push for operating surpluses to be dedicated to capital improvements of a state network. And then if there happens to be a source of Federal funds requiring a state match, banked operating surpluses can be offered for smaller grants, and revenue bonding can be used to generate state matches for larger grants.

And it is very hard for state legislators to say to constituents, "no, sorry, too expensive" when advocates can say, "oh, just make it self-funding".

Killing a transport system that generates operating surpluses and can provide the state/local matching funds to help finance its own extension and upgrade is something best done before those operating surpluses show up.


But, Wasn't the 3C Going to be a Permanently Subsidized Rail Corridor?

Ah, so what about the 3C Quickstart? Why did the State Legislature have to promise to provide up to $12m in operating surpluses over the next 20 years in order for the USDoT to give Ohio $400m to build the 3C Quickstart?

The Ohio Hub has always been planned in terms of a 79mph alternative and a 110mph alternative. And those speed are maximum speeds, not averages: a 79mph corridor can have a "transit speed" of 40mph~55mph, while a 110mph can achieve transit speeds of 60mph~80mph.

Population density is important for reaching operating surpluses. But not population density per mile: population density around the corridor stations, per hour travel time. So entirely independent of anything else, that speed upgrade to 110mph improves the demand for the service. And for cities too close together to have a large number of air passengers, "higher speed than driving" means that the service occupies the "high speed" segment of the market as well.

However, the flip side is capital cost. Broadly speaking, the infrastructure for a 110mph level HSR service can be divided into the track, signaling and level crossings required to operate passenger rail at 79mph, the additional track required to operate passenger rail at 110mph, the additional signaling for 80mph+, and the upgraded level crossings for 110mph+. And if you plan ahead, there is little extra cost in doing that by stages: for instance, if the new track required by the 79mph services are built at sufficient distance from the freight track, they will work perfectly well for the 110mph services.

So the idea of the "3C Quickstart" was to apply for enough money to build enough of the 110mph corridor to be able to run 79mph trains. Then over time, it was hoped that the state would be able to get Federal Funds with state matching funds to upgrade that corridor to 110mph. And once enough of it was upgraded, the schedule could be upgraded, additional services provided with the same number of trains, the system would hit operating break even, and attention could turn to the next stage of the Ohio Hub.


The Achilles Heel of the 3C Quickstart Strategy

Now, the Quickstart strategy was fine-tuned for the fact that $8b in no-match HSR money was in the offing. With the filling in of population in the middle of the 3C corridor since the Penn Central bankruptcy, which killed the prior passenger rail service, Ohio would be getting a quite substantial number of passenger-miles for less than the cost of its highway mowing budget.

And with $8b in the offing, Ohio could not hope to get the 3C corridor built as a 110mph corridor from the outset. That would cost between $1b and $1.5b, and 1/8th to 1/5th of the total national appropriation for a Rapid Rail level HSR corridor would be overly ambitious.

But opting for the "Quickstart" strategy opened the proposal up to partisan attack at the outset. The preliminary timetabling by Amtrak, had a transit speed of ~40mph ... widely publicized as 39mph to benefit from the "$3.99 magic number" effect ... and partisan opposition seized on that number to argue that it was a useless waste of money. Of course the final Design timetable has turned out to be substantially faster than that, at over 50mph ... but as unimpressive as 50mph+ sounds, that had very little hope of being heard over the din of a state gubernatorial election campaign.

Independent of the technical merits and demerits of the 3C Quickstart strategy, it has been successfully demonized, and a different line of attack will be required next time.


The 2C to 3C Strategy.

The 3C rail corridor is very much a corridor of two halves. As [http://www.thetransportpolitic.com/2010/11/04/understanding-representative-john-micas-transportation-agenda/#comment-102003 Drewski comments at The Transport Politic]:

You don’t know much about the 3C corridor. The northern half of the 3C–Cleveland to Columbus–has great bones. It has good gradient, most freight traffic is on a parallel line to the west, and there’s strong traffic volume. If the 3C were funded for a first phase only between Cleveland and Columbus, the planned number of trainsets would’ve allowed for at least 7, maybe 9 or even 10 roundtrips per day. Also, remember that Cleveland-Hopkins is one of a very few American airports located on an existing rail corridor already identified for HSR potential. Adding a station at Crestline would’ve opened up connection to north central Ohio without wrecking the schedule.

The problem really lies with the alignment south of Dayton. The track is in poor condition, both the existing trackbed and the alignment. In honesty, this corridor might be better viewed as a strong conventional line, but true HSR might do better by using a largely abandoned r/w which runs southwest from Columbus, roughly parallel to I-71. Ultimately, at average speeds of 125-150 mph, the schedule from Cinci to Cleveland would allow for a 2-hour trip time or less.

Of course, there are two reasons this will only be a concept. One is that stopping the 3C at Columbus would be politically unacceptable to both southern Ohio and the state GOP (which is based in Cincinnati’s northern suburbs). The other is that incoming Gov. Kasich is hell-bent on killing this plan. Yet another example of Ohio becoming a shadow of its past.

Now, as far as bipartisanship, the Ohio State Republicans have pissed in that particular punch bowl. Any construction over the next ten years will start because the Ohio State Democratic party has gained the clout to push it through. So take that as the outset. And then remember why the Republicans had to be so creative in Gerrymandering Franklin Country (Columbus) and even then lost one and nearly two of their three gerrymanders in Democratic wave elections: swing Central Ohio and you swing the state.

A partisan advantage will be temporary unless it is parlayed into results. So we have to be ready to strike at any time. And the above should inform the planning ahead:

• Give Columbus a 110mph rail service, to somewhere, no matter what else happens in Stage 1

That means Stage 1A of the Ohio Hub includes 110mph Cleveland/Columbus: strictly speaking, 79mph Cleveland Lakefront to Berea, then 110mph to Columbus.

What else? There are a package of "Stage 1B" improvements that can be spread through the state:

• We will have a conventional rail corridor design for Dayton / Cincinnati, and with Cincinnati / Dayton at 1:36 or better on a three stop schedule, that is a 1:50 schedule even with additional stops. So a conventional rail corridor can be established with hourly service each way on the basis of basically two commuter trains and a spare.
• Finalizing the preferred Youngstown alignment of Pittsburgh / Cleveland can put the Capital Corridor through Youngstown / Warren / Portage County / Summit County / Cleveland
• Building the Toledo / Detroit link allows the Cleveland and Toledo to benefit from the ongoing upgrades to the Wolverine line in Michigan.

So, what good is that?

The State of Ohio (somehow) comes up with the operating subsidy to extend one Wolverine each way on the Erie Lakeshore to Pittsburgh, and to connect the Pennsylvanian through to Detroit. This gives one daytime and one evening connection to through Pittsburgh / Cleveland / Toledo / Detroit each way, with one running through to Chicago and one running through to New York.

The State of Ohio also needs to offer the required state subsidy to keep a Dayton/Cincinnati conventional passenger rail service operating. In formal transport terms, this conventional rail service is "independent utility" for a corridor developed looking ahead to linking up with the "2C" corridor. In political terms, this conventional rail service is a hostage: take away the Lakefront funding and lose the Cincinnati/Dayton commuter train.

And finally, the 110mph Cleveland / Columbus service. As the 110mph Cleveland/Columbus schedule from the Ohio Hub is 1:50, and the 110mph Cleveland / Youngstown is 1:17, I will assume that the 79mph Cleveland / Youngstown can operate in 1:50 as well. Then, with the three trains, the following seems possible (note that Youngstown / Warren / Portage County / Summit County also have one additional daytime, one additional evening and two late night connections to Cleveland per day each way via the Erie Lakeshore corridor):

• Northbound
• Columbus 6:50 / Cleveland 8:40
• Columbus 9:20 / Cleveland 11:10
• Columbus 10:50 / Cleveland 12:40
• Columbus 11:50 / Cleveland 13:40
• Columbus 13:50 / Cleveland 15:40
• Columbus 15:50 / Cleveland 17:40 / Youngstown 19:30
• Columbus 17:20 / Cleveland 19:10
• Columbus 19:40 / Cleveland 21:20 / Youngstown 23:10 x
• Columbus 21:20 / Cleveland 23:10 x

• Southbound
• Cleveland 6:50 / Columbus 8:40
• Youngstown 6:50 / Cleveland 8:40 / Columbus 10:30
• Cleveland 9:20 / Columbus 11:10
• Cleveland 11:50 / Columbus 13:40
• Cleveland 13:20 / Columbus 15:10
• Cleveland 14:50 / Columbus 16:40
• Cleveland 17:20 / Columbus 19:10
• Cleveland 19:20 / Columbus 21:10
• Youngstown 19:40 / Cleveland 21:20 / Columbus 23:10 x

This is only a notional schedule, and a detailed timetable for the Erie Lakeshore service would have to be determined to ensure convenient transfers with sufficient leeway for reliability ... but it gives an idea of the opportunity. Obviously if there are certain services in higher demand than others, Senior Citizen, Family, and Student discounted fares can be focused on the services that would otherwise have empty seats.


Cost? ... What Benefit do you want?

The Cost of each segment of the plan will go up with the pursuit of stronger benefit.

For example, the cost of the Cincinnati leg is heavily influence by the way that the corridor arrives in downtown. If it operates along the Boathouse alignment, slightly east of downtown along the waterfront, then extending the Streetcar out along to reach a Boathouse terminal station is cheaper than extending the heavy rail to terminate by the downtown transit terminal (which was deliberately designed to prevent use as a heavy rail station). If it operates along the Cincinnati Union Station alignment, then terminating north of the Cincinnati Union Station would be cheapest, perhaps by extending the Streetcar via the never-used Subway and operating as a Rapid Streetcar to reach the terminal. Terminating at Cincinnati Union Station, including works to avoid interfering with the heavy freight traffic in that section of the corridor would cost more, and extending from Cincinnati Union Station to terminate just west of the downtown transit terminal would be still more expensive.

I've already indicated my preference on that front: have Hamilton County vote on it, and do that. As far as the cost, the faster the access the closer to downtown, the better the patronage of the corridor, so capital investment up front will reduce the operating subsidy required.

For the northern Pittsburgh/Detroit corridor, the biggest bottleneck is the lack of a connection at all between Detroit and Toledo. Then improvements on the lightly used branch line connecting Youngstown to Cleveland to allow Cleveland/Youngstown service to mirror 110mph Cleveland/Columbus times. Then improvements between Cleveland and Toledo to improve reliability of both the daytime Erie Lakeshore and the overnight Capital Corridor service. Then upgrade of the Cleveland/Toledo section to 110mph. Then upgrade of the Cleveland/Youngstown corridor to 110mph. Then upgrade of the Youngstown/Pittsburgh corridor to 110mph.


Phasing of Stage One

110mph Cleveland to Columbus first. Then Toledo / Detroit. Then all that other stuff: at the same time if possible, in sequence if not.

This is, after all, about funding in a Ohio state administration four to eight years in the future, under an unknown White House, and unknown combination of Ohio Legislative and Congressional majorities and, therefore, unknown Federal HSR funding levels and unknown Federal/State matching fund splits.

But there are a number of things that are clear:

• There will be at least one and possibly more 110mph Rapid Passenger Rail corridors operating somewhere on our side of the Appalachian Mountains before this comes into the frame ~ it won't be seen as "just for the East Coast" anymore
• There will have been one and maybe more oil price shocks between now and then, since more oil price shocks are coming.

So assuming that the 2010 electoral victories spells long term postponement of HSR projects would be silly. Sometime down the track, there will be an opportunity, and Ohio progressives need to be beating the drum on "why do Republicans insist Ohio cannot have the good stuff other states have" so that campaigning on restoring the HSR program and providing "real faster-than-driving HSR" is the path of least resistance for the Ohio Democratic Party.


Stage Two: Connect to Cincinnati

With this system in place, then the incremental completion of the 3C corridor is straightforward. Sooner or later, the Cleveland/Columbus route will hit break-even, and to prepare for that day, the initial legislation that launches the project dedicates future operating surpluses to capital funding for completion of the 3C. If need be, that would include finishing the Cincinnati / Dayton conventional passenger rail corridor first.

Then the 110mph Columbus/Dayton link is completed. That enables the first full 3C services to run, albeit at conventional rail speeds between Dayton and Cincinnati, picking up the role of a Limited Flyer between Cincinnati and Dayton, supplemented by the conventional passenger services.


Stage Three: The Crystal Ball gets cloudy

Then where to next? From here, I would depart from the Ohio Hub script. I firmly believe by the time we get to the point of Stage Three ~ which is, after all, 2018 or later ~ there will already be momentum for a 220mph or faster HSR corridor between New York and Chicago. And the direct route for a 220mph HSR corridor or faster between Chicago and New York is the Fort Wayne alignment, then across the middle of Northern Ohio, then across Northern Pennsylvania on a general I-80 alignment to New York. Looking at that, and given State of Ohio and State of Pennsylvania balance of power politics, I would not be surprised if the 220mph corridor is pulled down from central PA to connect into Pittsburgh, then run along the old National alignment to Columbus, and then up to the Fort Wayne alignment.

With the routes already sketched above, a Toledo / Fort Wayne corridor would connect the Express HSR alignment to the Erie Lakeshore and to Detroit, while 110mph connection from midway along the Columbus / Dayton to Indianapolis would Connect Indianapolis into the Express HSR system via Rapid Rail HSR corridors to Chicago and Columbus.

But suppose that the Express HSR is actually through the center of northern Ohio? That implies a different alignment for the Ohio Hub Stage 3.

And supposed that the Express HSR is actually generally along an I-80 alignment all the way, so that it runs along the Lakeshore. That implies a different alignment for the Ohio Hub Stage 3 as well.

So given that, I'll worry about about Stage 3 if I should live so long.


Conclusions ...

Conclusions? Aint no ending here. We are not at the end. We are not at the beginning of the end. We are not even at the end of the beginning.

We have, in other words, just begun to fight.


Midnight Oil ~ Blue Sky Mining

If I yell out at night there's a reply of blue silence
The screen is no comfort I can't speak my sentence
They blew the lights at heaven's gate and I don't know why

But if I work all day on the blue sky mine
(There'll be food on the table tonight)
Still I walk up and down on the blue sky mine
(There'll be pay in your pocket tonight)

The Fight Ahead is the House Caucuses and the Senate Filibuster

Burning the Midnight Oil for Progressive Populism

So, what is a Progressive Populist to make of an election when with a 14% real unemployment rate (see below), where the House changes parties?

Is a Progressive Populist supposed to be surprised that a House Majority that fails to accomplish substantial jobs legislation for over a year in the face of a clearly Depressed recovery and real unemployment stuck in the neighborhood of 14% loses its majority in the next election?

Back in 1934 was the closest analogy, but back in 1934 the Majority in the House was clearly fighting for jobs bills, the President was clearly fighting for jobs bills, Republican Obstructionists and Nine Old Men were clearly fighting against jobs bills. The stakes were clear, and the result one of two first midterm swings to the President's party in the past century.

This is not blaming the House membership so much, of course: its the Senate that let us down, early in 2009, when they wimped out on filibuster reform on the "a bird in the bush is worth two in the hand" theory. Its not a matter of blame, just of what the situation was. A big House loss was guaranteed, and the only betting was how big.

Add in Citizen's United, probably worth an extra 10 seats for the RepubliCorp, and the winning bet was, "huh, that big."

Since the next election is in the future rather than in the past, the question is, what to do about the massive Corporate win last Tuesday.
__________________________________________

14% Unemployment Rate? The Newspaper says 9%

Note that people do not vote the newspaper headlines when it comes to their own standard of living, they vote life as they experience it.

So the headline unemployment rate is not the one to use. In the headline unemployment rate, if you are not working and haven't applied for a job in the last four weeks, you do not count either way. That includes a lot of discourage workers and a lot of people following the help wanted but not finding anything they are qualified to apply for. When the headline rate is extended to "interested in gaining employment" and "have applied for work sometime in the last year", that is called "marginally attached", and that unemployment rate is 11%.

And of course, if you want full time 40 hours a week work and have 4 hours a week work, you are 36/40 unemployed, but count just as "employed" in the headline rate. The rate including people marginally attached and those working part time who want full time work is about 17%.

17%-11%=6% working part time who want full time work.

To be cautious, I take the people working part time who want full time work as "half employed, half unemployed", and add half of that number to the marginally attached:

11%+(6%/2)=11%+3%=14%

That's where the "14%" came from above.


One Thing Not To Do: Primary The President

Y'all probably know that I am not now nor have I ever been President Obama's biggest fan. In terms of economics, I view him as a Hedge Fund Democrat, or what is known in the rest of the English speaking world as a "neoliberal" (remembering back to 1800's Liberalism, not the mid-1950's Social Liberalism of the US).

If faced in a primary with a challenger even slightly better that I view as equally likely to win, heck, I might vote in favor of that challenger.

But there's nobody on the Democratic side who can win the nomination and have an equally strong chance of winning the 2012 election who is any better than Obama. The fact is that a primary challenge will open a fight

If you're recruiting me for your candidate of choice for the 2016 Presidential Primary season, I'll listen ~ but just don't waste your time with me, either on the pro or con, on the "Primary Obama in 2012" argument.

See, in my own personal view, fighting on either side of that fight is a massive waste of time and effort as far as achieving any progressive result, so its not something I am going to bother with.

In my view, the Progressive Populist President who achieves tremendous successes and goes through eight years righting wrongs and breaking the chains of the past is a bedtime story for children.

In my view, the way that Progressive Populist change happens is that a Progressive Populist coalition is formed and through fighting and struggling, grows, and based on how well put together it is and how well it executes and, in part, on luck, it achieves some of what it sets out to achieve.

Given that view, I don't see a Progressive Populist movement that can decide between now and March of next year that its time to replace Obama with standard bearer "X". Indeed, I expect that getting all tied up into the pro or con of whether to Primary Obama is more likely to tear apart the small beginnings of the movement we need to have than to help grow the movement.

Mind, if I could support a primary challenge to Eric Holder, I would, but we don't have directly elected Attorney's General at the Federal level, so no opportunity there.


Right Now, Pass the Blue State Jobs Bill

This one is a little subtle. There is this regulation called a "feed-in tariff" that can be used to give much more certainty about investment in domestic renewable energy generation, both at the household level and at the utility level.

And the regulation works by setting a price that the power company has to pay.

And under US Federal regulations, states are not allowed to set prices like that any higher than "avoided cost".

As presently handled by regulators, that means the current spot price, which is the oppposite of providing the certainty required for high up front cost, low operating cost energy harvesting.

Now, there's no real chance of getting Federal feed-in tariffs passed: but that is not the lame duck target here. The lame duck target is passing permission for states to set feed-in tariffs if they so desire.

All that is required is legislation that defines "avoided cost" for long term stable feed in tariffs as the average cost of power over the recent past. In particular, I'd say anywhere up to the middle of the annual average cost of power over each of the past five years.

Further, for household feed-in tariffs, for levels of electricity that can be consumed within the local substation, that avoided cost can include the generator-to-substation transmission charges.

No Federal spending, no Federal taxes ... just a small dose of states rights to go into the sustainable energy future a bit faster if they so desire. Of course, it is a jobs bill, since any state that adopts it will see increased investment in both utility grade and household level renewable power, and that investment will come with people doing the installing and manufacturing and, for the utility grade power, maintenance and oversight.

Then to a growing extent in 2012 and 2014 and 2016, it will be possible to ask the residents of the states that do not have those jobs, well, why not? And why not will be because they have Republican Governors and/or State Legislators.


At the Same Time, time to start on 2012 House and State Legislature races

Not today of course. We can take our time to start. 9 November 2010 is soon enough.

We need to do an inventory of:

• The surviving Blue Dogs at the State and Federal Level that are up for primaries in 2012
• The seats lost in this election that will be up for primaries in 2012
• The seats that were only narrowly lost in 2006 and 2008 that will be up for primaries in 2012

And we need to pencil in which seats are opportunities for social liberals, which are opportunities for economic populists, which are opportunities for rural progressives, and so on.

Step 2: ???

Step 3: Profit!

Seriously, after that is all the political tactics and strategy in identifying and encouraging likely candidates and identifying and recruiting possible candidates, and how in the hell would I know how to do that? I'm a fracking academic economist, after all, not a partisan strategist.

But it seems that we could get started by identifying former incumbents and challengers who we wished were holding those seats, and finding out if they intend to run again.

This is a one year task, since for a progressive populist campaign, if they don't know that they are running by Thanksgiving the year before the election, how are they going to be able to knock on all the doors of their district?


In January, Fix The Filibuster

Best is to eliminate it. Just ax it. But with 50 votes plus Biden to break a tie, the votes are not likely to be there.

So instead, make the filibuster real. Anytime 24 houra or more after a cloture vote has been taken, while a filibuster is in process, and after a quorum call has successfully concluded, then a motion for an immediate cloture vote is in order, and cloture requires 60% of those who answered the quorum call.

Force the filibustering minority to stay and sleep in cots and defend their filibuster night after night, and allow the majority to go back to their office and sleep at home, and leave a couple of night watchmen to keep tabs on how many filibuster defenders are there and to organize the strike for 60% of members voting if their numbers have dipped.

See, that is the big difference in the rules of the Senate that eliminated the "Mr. Smith Goes to Washington" filibuster: the change from a fraction of Senators voting, to a fraction of the Senators in the Senate.

Force the Minority to sleep in their cots for seven nights in a row, unable to go attend fundraisers, unable to dial for dollars, unable to get wined and dined by K-street lobbyists, while the majority gets to do all of that and wait for the will of the minority to flag ... and the "routine filibuster" can be beaten out of the toolkit of the Minority Party.

A real filibuster is dramatic. Its like reality television. People start to choose sides. And, hell, since it allows the majority to go home and sleep in their DC beds while the minority are chained to the Senate chambers ... what's not to vote for, for the majority?

Its not like the lily livered "New Dem" wing Democrats are going to filibuster anything minor when they are in the minority, so its not giving away any real power that the Democrats in the Senate would ever really be able to exercise in minority. The Democrats would only filibuster if they figured a majority were on their side and would stay on their side, and in those circumstances, sleeping in the cots for a week could be worth months of dialing for dollars.


And in conclusion ...

Just kidding. There aint no conclusion two years minus a few days from the next big fight. We haven't even finished the beginning yet!

This Blog Isn't Dead, its just Pining for the Fjords.

Between a new prep this quarter, doing a little last minute election volunteering (phonebanking, poll observing), pitching in with the Tram-Train proposal in Newcastle, NSW, and other ins and outs (like the cold I am just recuperating from) ... the blog has been quiet.

But its not dead, its just resting. Regular service will resume sometime after Tuesday's election.

It is not, however, bereft of life, resting in peace, or IOW an EX-blog.

Its just pining for the fjords.

Sunday Train: Northeastern HSR Alignments & The Move to Tuesdays

Burning the Midnight Oil for Living Energy Independence

For the Daily Kos edition of this essay, I wrote:

This is a fairly short Sunday Train, but I thought I better get something posted, so I had somewhere to put this scheduling announcement:

• Due to a new prep on Monday Morning this coming Fall term, the Sunday Train is temporarily moving to Tuesday Evenings until the end of year Holidays, starting next week (19 October)

... but, hell, given the haphazard scheduling of the crossposts (eg, posting on Sunday and crossposting on Wednesday evening), y'all likely won't notice the change.

The actual Sunday Train portion is about one element of the Amtrak proposal for a High Speed Rail corridor for the Northeast: the alignment. At the preliminary proposal stage, an alignment must be selected for study so that preliminary cost and patronage estimates can be performed. However, if the decision is made to go ahead, a range of alignments will be (and, indeed, must be) studied.

So tonight I take a brief look at the alignment options from the report.

______________________________


Amtrak in the NEC: The Next Generation

For those who missed last week's Sunday Train, the "Next Generation" proposal aims to build on the NEC Master Plan to provide Express High Speed Rail service in the Northeastern region, from DC to Boston via NYC.

The Master Plan aims to bring travel times on the highest speed Acela services down by a noticeable amount, but the main priority is on increasing service reliability. The NG-HSR plan aims to bring:

• NYC/DC times down from 2:42 to 1:55 on the Express and 1:36 on the Flyer;
• NYC/Boston times down from 3:31 to 1:46 on the Express and 1:23 on the Flyer; and
• DC/Boston times down from 6:33 on the Acela to 4:06 on the Express and 3:23 on the Flyer.

The Northern Alignments

In the Northern alignments, there are three strategies for getting out of New York City:

• the Long Island alignments, which then tunnel across and arrive in Connecticut running toward the north by northeast;
• the New Rochelle alignment, which runs alongside the existing NEC through to New Rochelle, and then either runs along existing NEC shore or along the Air Line (with the modifications required by Express HSR, of course); and
• Up the Hudson River valley toward Poughkeepsie (forcing me to finally learn to spell Poughkeepsie, Tough Keep Sie except with a P)

There are two basic ways to get into Boston:

• along the existing NEC, either from Providence or joining the NEC near the boarder at Route 128
• in from Worcester toward the west by southwest.

And then, depending on the alignment out of New York, there is a wide range of rail and highway alignments to get through Connecticut.

One option that is not in the scope of the preliminary planning is more than one alignment: that is to say, one Regional HSR corridor, similar to the NEC, and focusing on the additional populations connected with Boston on one side and New York City on the other, and one Express HSR corridor, focusing on connecting metro Boston and metro New York.


The Southern Alignments

There are a similar set of southern alignments, but I expect that the alignments to the east of the NEC can be set aside, which leaves the main contenders as being the "Allegheny" alignment and paralleling the existing NEC. Note that for the Allegheny alignment, the Emerging HSR Philadelphia/Harrisburg or "Keystone" corridor takes on added significance, since a Semi-Express could run NYC/Philalphia and then onto the Alleghany Express HSR via the Keystone corridor.

Further, the Keystone corridor could be used to connect the (informal) Appalachian Hub to NYC. Long time readers will recall that one backbone of the Appalachian Hub is a Steel Interstate on the Shenandoah Valley & Tennessee corridor. From the northern end of this backbone at Harrisburg, a service could continue down the Keystone corridor to the Alleghany NG-HSR corridor at Westchester PA (see map) and then on to NYC.


Alignments and Connecting to the Rest of the Country

As already suggested above, the choice of alignment in the Northeast can affect how easy it is to integrate into the Express HSR corridors from outside of the Northeast. And the map of potential emerging Mega-Regions in the United States gives one indication why that is important: the Great Lakes / Midwestern Mega-Region and the Piedmont-Atlantic Mega-Region are immediate neighbors to the Northeast, and at distances where Express HSR is a viable competing transport option under current energy prices ~ and where even 110mph Emerging HSR will be a viable competing transport option at the energy prices that we may well see in the decade ahead.

In my view, the westernmost alignments give the best connections. For New York and Massachusetts, the Hudson to Massachussets Highway alignment provide excellent benefits. For Pennsylvania, there are pluses and minuses to the Allegheny alignment ~ a major plus being the opportunity to split a train from Pittsburgh at Harrisburg, with one service heading to Philadelphia and south to DC and the other service heading express to NYC and beyond.

And of course, the western NY/MA alignment provides a substantial headstart both on an Express HSR corridor from NYC to Montreal via Albany and a Regional HSR corridor from Boston to Albany and the upstate New York region of Syracuse / Rochester / Buffalo.

However, for Connecticut, the westernmost alignment mostly bypasses the places they would most want to connect, and so if the western alignment is adopted for the Northern segment, we would want to be serious about pursuing a Regional HSR connecting the center of the state to both NYC and Boston.

The trick will be working out a system for funding. The 10 cents per gallon tariff on imported crude oil that I have previously suggested, with 1/4 of the proceeds to go to HSR funding, would only be a start toward funding any substantial number of miles of Express HSR corridor. However, if focused on 110mph Emerging HSR and 125mph Regional HSR, it seems like it could certainly support a 110mph or 125mph alignment to extend the Northeastern intercity route matrix.


Midnight Oil ~ King of the Mountain

Sunday Train: 1:36 NYC/Boston, 1:23 NYC/DC, $117b, 30yrs

Burning the Midnight Oil for Living Energy Independence

As The Transport Politic reported earlier this week: Amtrak Unveils Ambitious Northeast Corridor Plan, But It Would Take 30 Years to be Realized

After months of sitting on the sidelines as states and regional agencies promoted major new high-speed rail investments, Amtrak has finally announced what it hopes to achieve over the next thirty years: A brand-new, 426-mile, two-track corridor running from Boston to Washington, bringing true [Express] high-speed rail to the Northeast Corridor for the first time.

Some questions and answers, over the fold.
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Why HSR for the Northeast?

The argument that the [http://www.amtrak.com/servlet/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1249215312103&blobheader=application%2Fpdf&blobheadername1=Content-disposition&blobheadervalue1=attachment;filename=Amtrak_NECHSRReport92810LR.pdf report (pdf)] presents for doing this at all can be summarized in three pictures. The one to the right is "Emerging Megaregions" view of US social geography in the century ahead. Connecting together these megaregions is conceived of as a major task that will be facing intercity transport in the coming half century.

The report projects growth trends. Now, as shaky as any projection is, the alternative to doing them is to just wait until stuff happens and then start planning to fix it, and the risk there is what can be done as an emergency response is far inferior to what can be done if we plan ahead. And these projections lead to capacity projections for both Highway and Rail systems. And those two pictures (highway above, rail below) summarize the balance the of rationale:



On highways local trips crowd out intercity trips. So people will want an alternative. Nowhere is it more likely than the Northeast that much of this demand will spillover into demand for rail transport, but the existing Northeast Corridor is projected to have six main congested segments: north DC, Baltimore, North MD / Delaware, urban Philadelphia, Trenton, Newark/NYC/New Rochelle, and Providence/Boston.



When you need new rail capacity, and the existing corridor is approaching its capacity, a new corridor is one solution to that problem. Given the cost of roadbuilding in the Northeast, where most easy road capacity expansion projects have already been done, $117b is likely to be substantially cheaper than trying to provide the same transport capacity by road, even assuming a fantasy world of ongoing cheap oil.

After all, that was the impetus for the first two bullet train systems, in Japan and France: existing mainline passenger rail corridors reaching capacity. When faced with that problem, build an all new Express HSR corridor, pull existing longer distance intercity passengers into the new corridor, and that frees up capacity on the existing corridor.


Why does it take 30 years?

This also explains the "takes 30 years". It could be done in substantially less time, but the planning study looked to provide for two segments to be completed by 2030:

• Baltimore through Wilmington, in red, and
• North of Philadelphia through New Rochelle in yellow.

These initial segments are anchored on the existing NEC, so that on completion, they can be used immediately by Acela trains to accelerate Acela services will reducing congestion in these sections. Then the balance of the corridor is finished by 2040.

Indeed, the study assumed completion of the NEC Master Plan over the next ten years, which would lead to a baseline growth in ridership on the NEC from 11.8m in 2010 to 16m in 2020. It is in 2030 that the Master Plan projects to hit new capacity constraints at a ridership of 21.3m, and then grow at a slower rate from then on, reaching 25.3m by 2050. With the HSR corridor included, the baseline projection is 25m by 2030 and 37.5m by 2050.

So within the scope of the planning study, one can say that it is projected to take 30 years because that is when the full system is projected to be required to meet the transport needs of the Northeastern Mega-region. If a quicker completion date were required, it could be accommodated, but this can be seen as a three phase plan:

• 2020 (or earlier): Complete Amtrak NEC Master Plan
• 2030: Complete two priority segments of the "Next Gen" HSR corridor
• Complete the balance of the "Next Gen" HSR Corridor

On other other hand, in a Western Democracy, completing an all new alignment takes time. We might expect to complete a project of this magnitude fifteen to twenty years after we commit to starting, but it still does require substantial planning ahead. So if we were to adopt a "full speed ahead" approach, we might complete work on the NEC Master Plan over the next six years, by 2016, and then roll out a DC/Boston HSR corridor by 2025.

Of course, under the current political climate, we are not going to be doing any such thing.


Why introduce this plan under this political climate?

The way I put it in the comment thread at The Transport Politic is:

If the Master Plan is going to ease immediate capacity bottlenecks by 2017 and capacity is projected to be hit over far more of the corridor by 2030 even in the conservative projections that Amtrak makes, which ignores the effect of Peak Oil, then that would suggest that the Transport Authorization circa 2016/2018 would need to include provision for addressing that capacity constraint, since it takes a decade or more to build an all-new corridor.

That suggests that it would be useful to get a preliminary outline of the shape of that kind of system rolled out in advanced of the preceding Transport Authorization.

Which is now and this.

As shown above, for the section of the corridor that runs the furthest from the NEC, the NEC is an integral part of the transport system, and the Express HSR corridor provides an additional piece for that system.

And of course, I don't expect to get this in the next transport authorization. But I expect that by the time the next transport authorization has expired, if there is a proposal out there, and we have had some experience in various parts of the country with both Regional and Express HSR systems, then we could well see an effort go ahead.

And under that kind of time horizon, if there are is a brand of political propaganda being pushed at the present by an Australian smut merchant and a Saudi Oil Prince, well, so what? With two or more severe oil price shocks highly likely between now and then, the durability of the Texas Tea Party (oil, that is) political strategy is not something to take for granted: we got to keep on planning for the future even if a radical right wing 20% of our population wants to toss this old Republic on the garbage heap of history in service to oil industry interests.


What Can We Do To Help?

There are a number of things we can do to help pursue this. First, completion of any Emerging, Regional, or Express HSR corridor and the launching of services will undermine negative propaganda (being bankrolled in part by oil interests). Second, support for funding of the Amtrak Master Plan for the NEC is a critical element for making this plan possible, since if local rail and shorter-range intercity rail can be made into rivals to Express HSR, it undermines both. Third, go visit the newly established Northeast HSR blog and give it the activity and links that such a site needs to thrive. And, of course, join Transportation for America, to network with people pushing for progressive transportation solutions coast to coast.


Midnight Oil ~ Truganini

Sunday Train: Sustaining Our Suburbs

Burning the Midnight Oil for Living Energy Independence
___________________
Discussion at:

• The Hillbilly Report;
• ProgressiveBlue;
• Docudharma; and
• Agent Orange

___________________

As Dean Baker reported on the (bookmark worthy) Real World Economics Review Blog, new home sales figures for July are out, and they are exactly as would have been expected when the Mortgage Brokers Association reported a slump in mortgage applications in May.

The stronger figures earlier in this year, in other words, included more than a normal rebound from a recession:

People who might have bought in the second half of 2010 or even 2011 instead bought their home before the tax credit expired. Now that the credit has expired, there is less demand than ever, leaving the market open for another plunge in prices. The support the tax credit gave to the housing market was only temporary

This does not mean that all policy response is futile: what it does mean is that the policy response must address the problem we are experiencing, not the problem we wish we were experiencing.
______________________

Treating Solvency Problems as Liquidity Problems Only Delays the Reckoning

Just as the months between the time the Housing Bubble collapsed and the Panic of 2008 exploded, we been focused on providing a liquidity fix to a solvency problem: but this solvency problem is the sustainability of 20th Century Sprawl Suburban Development.

Both Liquidity and Solvency are about assets and obligations, but Liquidity is about the ability to meet obligations presently due with cash on hand and other liquid assets.

Solvency is about whether the value of your assets is greater than the total amount of your obligations.

In the lead-up to the Panic of 2008, part of the multi-dimensional incompetence in economic management that greatly aggravated the severity of the Panic was the policy of the Federal Reserve Board, which addressed the collapse of the Housing Bubble as if it was a liquidity crisis.

Here, for example, is a defense of the Federal Reserve policy of the summer of 2008 by Thomas Palley (June 2008)

The bottom line is that current criticism of the Bernanke Fed is unjustified. Whereas the Fed was slow to respond to the crisis as it began unfolding in the summer of 2007, it has now caught up and the stance of policy seems right. Liquidity has been made available to the financial system. Low interest rates are countering the demand shock. And the Fed has signaled its awareness of inflationary dangers by speaking to the problem of exchange rates and indicating it may hold off from further rate cuts. The only failing is that the Fed has not been imaginative or daring enough in its engagement with financial regulatory reform.

This is precisely the stance you need to see off a liquidity crisis ... or even a "soft" solvency crisis, where the solvency is restored at lower interest rates, shifting the balance between shorter term liabilities and longer term assets. However, a Brad DeLong noted in 2007, there is a more severe solvency crisis:

The third mode is like the second: A bursting bubble or bad news about future productivity or interest rates drives the fall in asset prices. But the fall is larger. Easing monetary policy won't solve this kind of crisis, because even moderately lower interest rates cannot boost asset prices enough to restore the financial system to solvency.

When this happens, governments have two options. First, they can simply nationalize the broken financial system and have the Treasury sort things out -- and reprivatize the functioning and solvent parts as rapidly as possible. Government is not the best form of organization of a financial system in the long term, and even in the short term it is not very good. It is merely the best organization available.

The second option is simply inflation. Yes, the financial system is insolvent, but it has nominal liabilities and either it or its borrowers have some real assets. Print enough money and boost the price level enough, and the insolvency problem goes away without the risks entailed by putting the government in the investment and commercial banking business.

There was, however, a third option: force banks to get their books into order so that they are in a position to weather the coming storm. And this is not just a hypothetical. Following the Asian Financial Crisis, which impacted on the Australian financial system, there was a restructure of financial system, with prudential regulation for most of the financial system, including banks, placed into the hands of the Australian Prudential Regulatory Authority (the Wikipedia machine). And unlike the Federal Reserve prudential oversight of US commercial banks, which was unmasked as incompetent by the Panic of 2008, the [http://www.bnet.com/article/how-australia-ducked-the-crisis/352693 Australian system performed far better]:

Ask an Australian what he or she thinks of the World’s Worst Financial Crisis Since the Great Depression and the response just might be, “What crisis?” Sure, the Aussie stock market lost 59 percent peak to trough and some people lost their jobs, but relatively speaking, Armageddon gave Australia a free pass. Down Under was the only developed country to avoid technical recession. The stock market has bounced back almost 30 percent since mid-July. And housing? Home prices are actually higher now than in the summer of 2007. Last week, the Reserve Bank of Australia (RBA) increased its benchmark interest rate by 0.25 percent, a clear indication that in the central bank’s opinion the danger has passed.
...
Australian banks proved to be more resilient during the crisis because they hadn’t exposed themselves to as much toxic debt as other nation’s financial institutions. The big four banks (Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Bank of Australia and Westpac Banking Corporation) stayed profitable, maintained their top credit ratings and wrote down less than US$4 billion between them. In 2007, non-performing loans were 0.2 percent of all Aussie bank loans, far lower than the U.K. (0.9 percent), U.S. (1.1 percent), and Germany (3.4 percent).

And part of the reason that Australian banks did not lose their minds is that their chief prudential regulator kept engaging in prudential regulation, rather than giving them close to a free pass.


The Suburbs and the More Serious Solvency Crisis

Now, this was a financial solvency crisis, and it has had the devastating real economy impact that it has had because we decided to let it do so ... in addition to not pursuing serious prudential regulation, once the financial solvency crisis hit, we pursued an the under-weight Stimulus II policy, addressing an output gap of $1,000b with a Federal spending stimulus targeted to peak at $250b and which, at present, is only allowing total government spending to tread water, because of a slightly larger drop in state and local government spending.

Had the US, like Australia, been able to implement a serious and aggressive Stimulus, we would be experiencing a faster recovery now.

However, we continue to face the real solvency crises that underlay the financial solvency crisis.

What we have been doing over the past twenty years has been to allow gradually easing credit on new home lending to serve as an economic growth engine, in lieu of the income-driven growth that the US pursued in the 50's and 60's.

Not just houses, either: easing consumer credit was part of the system of encouraging households to lock down into nearly decade long car loans to allow the purchase of massive trucks masquerading as family cars. Since no other oil-importing nation in the world has such suicidally low gas tax rates, the US had the inside position for manufacture of massive piles of metal requiring massive amounts of gasoline to push around to work, soccer practice, the big box store, and etcetera.

But none of this was on the basis of growth income ~ since median income growth slowed in the 90's (it took until 1997 to recover the 1989 level, so we only has two years of net growth in the 90's), and stalled in the 2000's, ending the decade lower than it started for the first time since the end of WWII.

And the easy consumer credit clearly overshot. Far from wondering if it can return, we need to hope that it does not, since the long term of the "cheap" consumer credit turns out to be far more than we can easily afford.

That is the one side of the Sustaining the Suburbs dilemma: the Rock of Stagnant Income Growth. In terms of solvency, the "Benefit" of the suburb has been driven by income growth, and the share of rising income that people are willing to allocate to their home ... and that benefit was fading in the 90's and vanished in the 2000's.


The Long Term Cost of Sprawl Development

Many people confuse "sprawl development" with one of its primary symptoms, of low density housing. But Sprawl Development is a very clear and distinctive approach to property development that means far more than whether people are living in inner urban areas or outer suburbs.

Sprawl Development is greenfield development in large tracts by type of activity. One tract is commercial, and is developed for one or more shopping malls, big box stores, strip malls, and free-standing drive-in establishments. One tract is industrial, and is developed for activities ranging from warehouses and manufacturing activity to office campuses and two-year Student Loan fueled business colleges. One tract is residential, and is developed into lot after lot of single-use, single-family residences.

Sprawl Development is mandated by the zoning systems in place in much of the United States, which required special zoning approvals for anything deviating from travel-maximizing development.

And travel maximization is a principle side-effect of Sprawl Development. While its primary purpose may be to continue to recirculate financial assets used by property developers into acquisition of new tracts to qualify for tax-sheltering of previous capital gains, forcing people to make distinct trips for distinct purposes is the primary side-effect.

And that is only financially prudent in an era of cheap energy. Forcing people to live at densities too low for public transport to serve effectively, and to organize their lives around trips that are too dispersed for public transport to serve effectively, requires an energy hungry private motor vehicle transport system.

But the most effective private motor vehicle fuel source is Petroleum, and we are either reaching or have reached Peak Oil. The US, producing a massive tenth of the world's petroleum supply but consuming about a quarter of the world's petroleum, cannot afford the transport system we have.

When, not if, gas returns to $4/gallon in real terms (corrected for inflation), that will be about one hour's minimum wage work for two gallons of gas. When, not if, it reaches $8/gallon in real terms, that will be about one hour's of minimum wage work for one gallon of gasoline.

People who cannot afford to get to work, shopping, school and other activities from a house cannot afford to live in that house, even if the house were to be given to them for free.

And that is the other side of the Sustaining the Suburbs dilemma: the Hard Place of escalating Resident+Transport costs.


We Can Either Make Suburban Transport Sustainable, or Watch Suburbs Become Slums

The "value" of Housing cannot be higher than what people can afford to pay. What people can afford to pay cannot be higher than their income minus their other necessities. And Peak Oil ensures that the real cost of other necessities will rise so long as we continue Business As Usual.

But a conclusion based on a premise of Business As Usual implies that there is an out, if we are willing to abandon Business As Usual. In this case, there are two, intimately related, outs:

• Housing that reduces the real cost of other necessities will rise in value
• If we can restore income growth, housing can rise in value

I have been mostly focusing in the past month on the second of these two: sustainable transport policies that can help generate a Brawny Recovery involving more real work for long-term sustainable economic benefit, leading to long-term sustainable income growth rather than the boom and crash approach of stagnant income and easy consumer credit.

But independently of the employment and income benefits of the four Steel Interstate, High Speed Rail, Electric Transport and Active Transport funds, to be financed by A Dime A Gallon on Imported Crude Oil ... they also offer the opportunity to establish suburban transport systems that can anchor a Sustainable Suburban Retrofit.

I do not come, in other words, to Bury the Suburbs, but to Save Them. Sprawl Development ~ yes, that can be buried. But the material waste of abandoning the suburbs and building all new residences for half of the US population is something that we can most definitely avoid.


Suburban Retrofit and Sustainable Transport

The key to Suburban Retrofit is the Suburban Village Center. Focused around a stop on a main sustainable regional transport corridor, a Suburban Village Center erases the government restrictions that forbid sustainable development: within a quarter mile radius around the designated primary stop, single-residence, single-use restrictions are removed and replaced by an allowance of at least four occupants per lot including at least one ground floor commercial or professional occupant. An easement of street set-back is allowed, in return for a urban width sidewalk. Minimum parking requirements are eased, allowing for the provision of as much auto-independent residences as the market will bear.

And, of course, a portion of incremental property tax revenue from all additional property value due to the easement is allocated to the funding of the transport system that is responsible for the easements.

The suburban village is like a pebble dropped in a pond: its impact ripples out from the suburban transport stop. The immediate impact is that any business that wishes to intercept people bound or returning for the transport stop is in the market for a location within the easement. Property developers can develop in the easement by buying out single-use, single residence properties and building multi-use buildings such as a street front shop with townhouses stacked on top.

As the suburban village develops, it becomes the transport center of the surrounding area. There is an immediate surrounding area of those in the surrounding suburban homes who can easily walk to the Suburban Village. There is a vicinity around that of people who can readily cycle to the Suburban Village. And there is a vicinity around that are those who can drive, whether present generation gasoline and neighborhood electric vehicles or a next generation of electric vehicle ... combining local trips, and replacing longer trips with trips on the common carrier.

Three of the four funds in the Dime Per Gallon on Imported Crude Oil policy can contribute to establishment of this system. The Electric Transport fund can contribute to the establishment of a wide variety of common carrier transport corridors, from prioritized Quality Trolleybus Transit through to Rapid Streetcar to Regional Stopping Rail.

Of course, a regional transport corridor needs anchors, and there is a catch-22 on establishing the regional transport corridor if all of the potential anchors will be Suburban Villages that will not exist until the corridor has been established. The High Speed Rail corridors, and in particular the 110mph Emerging HSR corridors, provides opportunities to provide those anchors:

• Siding platforms for regional trains along the HSR corridor allow the corridor to be shared between regional trains and HSR
• Outer suburban HSR stations provide an outer-anchor for Urban/Suburban routes challenge by the problem of steadily dropping load factors the further they run from the urban center
• And outer suburban HSR stations provide a central target for a cross-cutting corridor ~ which may be a trolleybus if the patronage will not support development of a rail service

Note that the Suburban Village can be located in any single use tract. Thus one approach to a Suburban Village is to provided a regional Rapid Streetcar lines that operates primarily on a dedicated alignment, but leaves the alignment to pass through a commercial shopping center. The commercial shopping center then becomes the target for development of the Suburban Village. Common pool parking at the opposing ends of the Streetcar segment allows a reduction in parking available at each establishment, which frees up land for Suburban Village development, including housing.

And finally, the Active Transport funds can provide the benches and drinking fountains and other pedestrian amenities, dedicated pedestrian walkways, cycle parking and cycleways to both maximize the car-independence of the Suburban Village itself and to more effectively leverage access to the Suburban Village from the surrounding suburban development.


Oh, and about that "Slum" remark

Many people confuse "slum" with "central city ghetto". The "ghetto" is a reference to the "white flight" from central cities that accompanied sprawl development and the growth of the suburbs, where former middle class white central urban and former streetcar suburban neighborhoods "flipped" to primarily African American neighborhoods.

But just as we cannot confuse Suburb and Sprawl, we cannot confuse Slum and Ghetto. A Slum is an area where property value has dropped below replacement cost. In a slum, it literally costs "too much" to keep the existing buildings in a state of good repair.

But that does not mean that there is no way to generate income from those buildings: what it means is that the way to generate income from those buildings is to allow them to depreciate and find occupants who will pay to occupy them anyway.

In a certain sense, the poor residents are not what makes it a slum: rather, the fact that it is a slum means that the owners seek out the poor to offer them poor quality places to live at a price that they can afford.

So "suburban slum" is no hyperbole. Suburban slum is the natural end point of the path that we are presently treading.

However, there is a choice. If we provide a suburb with a sustainable transport system that allows residents of the suburb to continue to get around in the face of oil price shocks, then we maintain the value of that suburb as a place to live, and provide it with the opportunity to avoid the status of suburban slum that will come to many car-dependent outer suburbs in the coming twenty years.


Midnight Oil ~ Dream World

Hey, its Boehner v Pelosi, Obama aint on the Ballot

Burning the Midnight Oil for Progressive Populism

Really, not as intense a tragedy as Kent State, but if he gets the Speaker's Gavel in a wave election, another tragedy from my home state, Boehner of Orange.

Versus Nancy Pelosi.

People, its the midterms. I understand that many had their hopes stoked by the Presidential campaign, and many had their hopes satisfied, at least somewhat, and many had their hopes dashed, at least somewhat ... but this aint Presidential Primary season. Its the General Election Midterms.

Where are the YouTubes telling young Hispanic first time 2008 voters in Spanish "Poder para el Pueblo / Nadie Silente! Vota!" ... where's the Green fightback against Republican scorched earth ... is it all lost in naval gazing in the middle of General Election season?
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We don't vote in the Midterms to celebrate the choice in front of us.

We vote to shout back, to make the SOB's in DC and their corporate paymasters unhappy with the fact that we are voting.

We don't vote in the Midterms to place a bet on which team will win.

We vote to be in the game.

Its only one weapon in our armory. But if we don't exercise it, it blunts the edge of all the others.

ITS SEPTEMBER PEOPLE. SET THE PRO-ANTI-PRO-ANTI OBAMA ASIDE FOR TWO FREAKING MONTHS.

Its Pelosi versus Boehner. That's the contest.

It aint lofty fine inspiring speeches time, its the midterms.

Its political trench warfare. And we let the other side dig the trenches ... so, yeah, we are going to take some political casualties.

But even though its the other bastards who lit the oilfield, its our dirty job to put them out.


Gotta get down to it. Should have been done long ago.



Aint no guarantees in the fight for freedom, except:

Find the cost of Freedom. Buried in the Ground.
Mother Earth will swallow you. Lay your body down.

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