Populist movements don't build themselves ...

... It doesn't matter what the "horse race" outcome of the campaign is, if we fight the campaign. Fighting it, we learn how to fight. Learning how to fight political battles, we become citizens again. Becoming citizens again, we reclaim the Republic that lies dormant beneath the bread and circuses of modern American society.

Saturday, March 27, 2010

The 1850's and the Path Ahead

Burning the Midnight Oil for Progressive Populism

Now that the Republican Health Care Reform legislation of the early 90's has been passed with no Republican votes, I've been musing on the Path Ahead.

The Path Ahead on Health Insurance Reform

The path ahead for health insurance reform seems straightforward, at least for as long as the Republicans remain trapped in a strict "Repeal" stance by the angry and noisy opposition to health insurance reform that corporations have stirred up in their base.

First step, electorally punish those Conserva-Dems who voted against reform, so that the "Rockefeller Republicans" who now call themselves Democrats after the alliance of "Taft Republicans" and Dixiecrats purged from the Republican party are less aggressive in undermining progressive policy.

And the second steps are labelled "2a", "2b" and "2c", because they can operate in parallel.
  • Second step, 2a, introduce a Medicare Buy-In for the health insurance exchanges.
  • Second step, 2b, scrap the RomneyCare Individual Mandate and replace it with a 4% Employer Mandate, with the payment made into the employee's health insurance exchange account.
  • Second step, 2c, accelerate the expansion of Medicaid.

Third step, accelerate the introduction of the health program.

Fourth step, allow states to opt their state exchanges into a regional exchange, with the opt-in required for the large number of state exchanges that will have an inadequate variety of policies available.

In order to get any or all of steps 2 into place, language has to be included in the 2011 budget resolution that always any or all of them to proceed via reconcilation. Then if the serious flaws with the RomneyCare version of health care exchanges have been corrected, the health care exchanges can be put into place

It has always been a misnomer to call the current legislation "health care reform" when it has always been primarily health insurance reform. Yet there is a necessary-through-not-sufficient relationship that applies here. Just as arriving at a less broken health insurance system was necessary to even apply bandaids to the health care system, a not-at-all broken publicly administered, not-for-profit health insurance system will allow actual reform of the health care system to proceed.

But then, thinking about how to organize to work for progress on Health Insurance Reform leads to thinking more broadly about achieving progressive social change in the face of our thoroughly corrupted political establishment.

Thinking Ahead by Looking Back

Every once in a while, I finish another chapter of 1831: Year of the Eclipse. I've just finished the chapter talking about the party politics - the Anti-Mason party, the National Republicans, soon to rename themselves the Whigs, Jackon's Democrats, and the petticoat rebellion that led to the dismissal of Jackson's first cabinet.

But I've also read some bits and pieces about what is coming up next ... especially for the Whigs. Any electoral college website bears the footprint of what was coming next. In 1832, Clay running as a National Republican, and refusing a fusion ticket with the Anti-Masons, would come second to Jackson ... but the only other candidate receiving more than a single state.

After running an unsuccessful split ticket, involving Harrison, Clay, and several others, designed to deny outright victory to the Democrats and throw the election into the House of Representatives, in 1840 the Whigs ran Harrison, as a "hero of 1812" (who had actually won his victory before the peace treaty was signed), who won election.

In 1852, the Whigs refused to nominate their own incumbent President Fillmore, and lost with General Winfield Scott.

Then in 1856, the Whigs in their last convention nominated Fillmore, who was no longer a member of the Whig Party.

Of course, what tore the Whigs apart was the Great Issue of the Day - Slavery. The Pro-Slavery Whigs purged the anti-slavery Whigs (including, for example, Abraham Lincoln) from their party but were then unable to maintain coherence as a coalition of state parties and collapsed.

By the last gasp of the Whigs, the 19th Century Republican Party had already been formed by pasting together a coalition of anti-slavery Whigs, abolitionists, former Know Nothings, Free Soilers, and others. The rest, as they say, is history.

But what is the Great Issue of the Day

It may seem like we face a blizzard of issues, rather than one. But of course, there is a single source for that blizzard of issues. The great issue of the day is Corporate Feudalism.

With the Republicans firmly entrenched in the most extreme of pro-feudalist camps, and the Democrats divided between "pro-reformed-feudalism" (quite like the pro-slavery Whigs "regulation of the worst excesses of abusive slaveholders") and anti-feudalists, the Democrats of today are in a position quite similar of the Whigs of the 1840's.

From climate chaos through Peak Oil through the cancer epidemic through the military industrial complex shredding our Constitutional rights in pursuit of slightly higher profits for the quarter ... there is a common core to the blizzard of issues that we face.

Now, given the real world conditions, there is no need for a Leninist strategy of deliberately monkey-wrenching things to radicalize the situation. The real world is already throwing monkey wrenches and will throw more and more over time.

We need to build organizations - no need to call them political parties, since they would be what political parties at one time used to be, not what political parties are today - that can take over city hall through the ballot box and put in effective emergency measures if the shit hits the fan. Movements. Likely distinct movements in different, overlapping, regions.

Up from there, we need to have a balance of power position in state legislatures to prevent the state legislature from blocking what needs to be done locally, which includes freeing up the ballot box and keeping it free.

But What Can an Individual Town Do if the Shit hits the Fan?

Consider the basics of a serious economic convulsion (and, no, the Panic of 2008, while a deep recession, was not an economic convulsion on the magnitude of what we face in the next two decades). People need shelter and a place to eat.

Now, even in the Great Depression, three quarters of the population was still employed. Even in Weimer Germany when a wheelbarrow was required to carry the bills to buy a load of bread ... there were people with wheelbarrows buying bread. There is a wide range of "serious problem" between the worst we have experienced since WWII and the worst that an economy can experience without descending into "Mad Max" territory.

A local community will still have some tax revenue, and some ability to obtain resources from the regional and national economy. However, the financial resources will fall far short of the need.

Now, suppose that the national government does not do what it could do, establishing a Job Guarantee program to ensure that labor resources are mobilized and put to work to cope with the challenges that we face. While it is certainly possible for the national government to take effective action - it is by no means guaranteed.

A local community is not powerless. With enough "volunteers", it is possible to grow food in community gardens. With enough "volunteers", it is possible to keep watch on those gardens at night and prevent a loss of the harvest through praedial larceny. With enough "volunteers", it is possible to cook and serve the harvest, combined with imported staples from the region or nationally, in community kitchens. With enough "volunteers", it is possible to keep a much larger number of people fed than can be done with local community US$ tax revenues alone.

In the face of economic convulsions, some buildings will fall vacant, and their owners will be unable to meet their property tax obligations. With enough "volunteers", large open interior spaces in big box or medium box stores can be refitted into livable shelter for individuals and families. With enough "volunteers", the problems of maintaining utilities and retrofitting the buildings to be more self sufficient can be addressed. With enough "volunteers", it is possible to keep a much larger number of people housed in livable accommodation than can be done with local community US$ tax revenues alone.

And why would people volunteer? Well, suppose that you are unemployed, and in return for volunteering to help, you can receive vouchers good for meals at community kitchens, and shelter in community housing.

Indeed, suppose that the local community allows local businesses to meet part of their property tax with volunteer vouchers in lieu of payment. Then with vouchers, you could also obtain additional amenities, beyond just food and shelter.

Of course, it would be difficult to operate any substantial share of an automobile based transport system on this basis ... since gasoline needs to be paid for in whatever currency the petroleum exporter will be demanding in the midst of an economic convulsion. But bicycle based transport ... that is something different, with a far smaller imported input component.

The Headliners: Midnight Oil

So, anyway, I've been thinking about the path ahead. What about you?

Monday, March 22, 2010

Sunday Train: Heritage Opposes Freedom to Choose High Speed Rail

Burning the Midnight Oil for Living Energy Independence

Front paged at Docudharma, Hillbilly Report and at ProgressiveBlue, also available in Orange.

I'm shocked, shocked I say, that a belief tank partly funded by Big Oil and Union Busters would issue a piece attacking High Speed Rail. But they did, claiming that there is a "Coming High Speed Rail Financial Disaster".

Less shocking is that the argument in the piece is tissue-thin, relying on shell games and appeal to stereotype in lieu of evidence.

Of course, just because its an empty argument does not mean its a pointless one. When you are trying to prevent solutions to problems, FUD ... Fear, Uncertainty and Doubt ... can sometimes be as effective as genuine argument.

Well, I hope someone out there is able to frame great counter-arguments that are useful in cracking into Dr. Utt's (Economics) target audience of those with short attention spans and limited access to information. What I can offer here is raw material for those counter-arguments.

Attack what you can, even if its not the policy on offer

The first red flag that the Heritage piece does not intend a serious consideration of current US Department of Transportation High Speed Rail policy is when the author blithely announces:
Although there is no fixed rule as to what constitutes HSR, a common definition is a rail line that operates at an average speed of at least 125 miles per hour (mph).

If talking about bullet trains alone, this number is low - the very first bullet trains half a century ago were going at these speeds, but there have been a lot of improvements since then. If talking about appreciably faster than what is available at present through the United States ... its high.

What "at least 125mph" means is the speed where a rail corridor has to be completely grade separated. That's why the Express HSR corridors are not built to be a little bit above 125mph: there is a substantial capital cost to cross over that hurdle, and once crossed, substantial benefit to operating at 170mph, 190mph, or 220mph.

As regular readers of the Sunday Train may be aware, outside the Northeast Corridor, the common maximum speed on US rail mainlines is 79mph. If it sounds odd that the speed limit is set exactly one mph below a normal US "count by 5's" speed limit ...
... as James McCommons recounts in "Waiting on a Train", over half a century ago, the Federal Railroad Authority mandated that all railway corridors supporting traffic at 80mph or higher must provide Positive Train Control signal systems for safety. These are systems that can automatically stop trains if a train is going into a track that is already occupied, or if the engineer is incapacitated.

And the railways mostly responded by setting speed limits of 79mph in their corridors. So while the US has the biggest and brawniest trains with massive heavy freight loads compared to most nations worldwide ... by international standards, that's big and brawny and slow.

In nations that already had regular Interurban Express services running 90mph~100mph, the improvements in technology that allow these trains to maintain that speed when going around curves were incremental improvements. "High Speed" was going substantially faster than that.

And so the first Japanese bullet trains in the 1960's went 125mph, and the first French TGV's in the 1980's went 168mph, with the second generation at 186mph ... and the most recent generation of bullet trains is reaching 220mph around the world.

Now, I'm sure Dr. Utt (Economics) knows perfectly well that the High Speed Rail policy that he is pretending to critique involves all three classes of speed that are higher than conventional US passenger rail. He is just setting the bar to create the frame for the very weakest part of his argument, when he considers the 110mph and 125mph classes of Higher Speed Rail.

To sustain these speeds over long routes requires a substantial investment in a secure and exclusive roadbed built to precise standards and tolerances, using equipment that meets the same high standards. As a result, an HSR line costs much more to build and operate than an ordinary passenger rail line. It is believed that only two HSR lines in the world earn enough revenue to cover operating and capital costs: Paris-Lyon and Tokyo-Osaka

Of course, as I've discussed before, "enough [passenger] revenue to cover operating and capital costs" really means, "pay all operating and capital costs by a fraction of the economic benefit, with everyone else benefiting getting a free ride."

And if we were to apply that same standard to the status quo, Interstate Highways ... Interstate Highways cannot even cover their maintenance alone out of gas taxes paid by traffic on the highways, but have always required cross-subsidy by gas taxes paid to drive on city streets. And now, even that cross-subsidy is not enough, and the shortfall is now being made up out of the General Fund.

So its (1) an absurd standard and (2) an absurd standard that High Speed Rail comes closer to meeting than the Interstate Highway status quo.

The cost of alternative Interstate Highway spending is no mere theoretical comparison. The only two 150mph+ Express HSR systems funded in February were in California and Florida, both in areas projected to have growing population and demand for intercity transport, and both of which present a choice between spending less money to provide transport capacity with High Speed Rail, and more money to provide transport capacity with long distance highways and investment in airport expansions.

So one freedom the Heritage Foundation is fighting against is the freedom to spend public capital subsidies in a cost-effective way.

Deficit Errorism Strikes at Rail Projects!

In addition to the high costs that the HSR program will impose on taxpayers during a period of economic hardship and slow recovery,

When applications made for funding, those applications include a cost and benefit analysis that does indeed claim that the total economic benefit exceeds the total cost. Yet Dr. Utt (Economics) has not to this point even pretended to dispute these claims. He simply jumps from "not profitable for a private business to pursue" to "a net cost to taxpayers".

That logical leap is lubricated by bullshit. If the projects yield economic benefits that are substantially greater than the costs, there is no net "cost imposed on taxpayers". Construction of those HSR corridors would impose:
  • job opportunities on unemployed and underemployed workers, and
  • demand for the product of supplier businesses

... but not net costs on future taxpayers. Instead, the investment in more capital efficient transport more easily powered by domestic sustainable energy yields a net benefit for future taxpayers.

And of course, if there is a particular corridor where the cost of an Express HSR corridor is not justified by the full economic benefit, build a less expensive system ... because Express HSR is just one option.

What there's no argument to make, hope for an ignorant audience

Of course, after criticizing Express HSR for being too expensive, without bothering trying to prove the point, the next step is to argue that the much less expensive Regional HSR projects are no good either. But I wonder how you could attack Regional HSR for being so much cheaper per mile than Express HSR, after resting your whole argument on the high cost per mile of Express HSR? I wonder ...
One has to wonder what exactly motivated the FRA review team to endorse the proposed $1.1 billion investment in the Kansas City-St. Louis-Chicago route, which would allow customers to reach their destinations 10 percent faster than they could by driving between Chicago and St. Louis.

Actually, no, nobody has to wonder. After existing improvements in bottlenecks with freight, even according to SubsidyScope's attack on Amtrak, the Chicago/St. Louis corridor recovers 80% of its operating costs from operating revenues at Amtrak speeds.

And that is a service that is slower than driving, which means there are trips that are day trips when driving but overnight trips by train.

It puzzling why a fellow economist would have to "wonder" why more people will make a choice when more people gain the freedom to make that choice. Indeed, on the demand side, its the growing freedom to choose that defines the three tiers of High Speed Rail:
  • Become time-competitive with driving, and people who would rather spend their trip doing something other than driving, have the freedom to make that choose.
  • Become faster than driving, and some people who wanted something faster than driving, especially for inner urban, outer suburban, and rural destinations without a convenient airport, will start choosing the train for the speed.
  • Become time-competitive with flying, and some people will choose the train for the greater comfort and the smaller portion of the trip spent waiting for the trip to start.

Given the willingness that Dr. Utt (Economics) has to engage in misleading framing and deceptive shell game arguments, when he has to resort to simply bluffing by "wondering why" for a question with a perfectly obvious and straightforward answer, he must be on very weak ground indeed.

And then cross-reference to fellow HSR deniers

However extravagant this commitment to jazzed-up 19th century technology may be, the ultimate costs of bringing HSR to the 13 corridors already approved by the FRA will be staggering. California received a $2.3 billion grant toward an HSR rail system with an official cost of $50.2 billion (in 2006 dollars), but independent analysts contend that it will more likely cost $81.4 billion.[6]

There's another shell game here:
  • shell one is the actual policy
  • shell two is the talking point that 110mph diesel and 125mph electric tilt trains, first successfully put into service in the 1950's and not gaining wide use until after active tilt was mastered in the 1980's is "1800's technology"
  • shell three is putting the cost of the California system immediately after the reference to the 110mph and 125mph speed classes ... even though California is a 220mph speed service.

But note the description of a cost quote from what is described as an "independent source". Is it a peer reviewed academic paper? A genuinely independent third party that takes no position on HSR pro or con? No, of course not, its the output of another partly Big Oil funded belief tank, the [http://www.sourcewatch.org/index.php?title=Reason_Foundation "Reason" Foundation]:
[6]Wendell Cox and Joseph Vranich, "The California High Speed Rail Proposal: A Due Diligence Report," Reason Foundation Policy Study No. 370, September 2008, at http://reason.org/files/1b544eba6f1d5f9e8012a8c36676ea7e.pdf (March 11, 2010).

... by Wendell Cox, who makes much of his living as being the "transport expert" who can be relied upon to deliver the pro-road-lobby conclusion.

Dr. Utt is lying about the independence of that source. Its the output of a belief tank that opposes High Speed Rail. That's not an independent source.

Dr. Utt then surveys the "overseas experience" while conveniently avoiding the fact that every system that he talks about, even the over-priced, badly managed UK investment in HSR, dogged by the politically imposed burden of "public private partnerships", generate operating surpluses. The bedrock foundation of this survey is the demand that everyone else who benefits from a transport service must be given a free ride on the back of passenger fares.

After all this time with shell game arguments, misleading frames, and "one wonders" questions where even a misleading argument must not be available, Dr. Utt saves the lie for very near the end. Blink and you would miss it ... especially for those who believe the lie to be true:
Most taxpayers will continue to travel by more cost-effective and largely self-financed modes, such as cars and airplanes.

Of course, the "self-finance" claim for roads is patent nonsense. Interstate Highways have always been cross-subsidized by people driving on city streets that receive no federal gas tax money, by zoning requirements to provide "free parking", and by a host of other explicit and hidden public subsidies. Unlike High Speed Rail, which can cover its own operating costs, intercity transport by road has been provided both capital and operating subsidy ever since the Interstate Highway System was first established.

None of this is surprising

It we cast our eye back across American Economic History, a watershed event that can be used to divide the Fordist period the followed WWII from the Second Gilded Age that started to gain full speed under Ronald Reagan is American Peak Oil ... and even more specifically, March, 1971, when the Texas Railroad Commission removed the quota on oil production.

When oil prices in the US were regulated through production quotas to remain relatively stable in dollar terms, which means falling prices when corrected through inflation, the interests of Big Oil were lined up with strong income growth. The side-effect that this provides a favorable economic setting for organizing workforces was, for capital-intensive corporations such as big oil, a regrettable but tolerable evil.

When the balance of pricing power passed from an elected Commission in the US to the major oil exporting nations, the interests of oil companies and the economic interests of the United States began to diverge. An over-valued US$ provides US-headquartered transnationals with added economic power when pursuing the rights to exploit non-renewable natural resources overseas. Depressed economic conditions in low-income countries are more appealing than rapid economic development.

When any industry has interests that diverge strongly from the national interest, it becomes useful to invest in propaganda mills to help promote argument frames and talking points that are favorable to their interest and help obscure the national interest.

Each of these propaganda mills are, of course, organizations that chase funding from various foundations and corporations ... so when a single right wing propaganda mill adopts a particular position, it would well be a matter of personal conviction by a group of propagandists wihin the mill. But when the Heritage Foundation, Reason Foundation, Cato Institute all take up the case (see Libertarians Against Choice: The Attack on Obama's HSR Policy and the Midwest HSR Association's HSR Fact versus Fiction) ... well, coming up with arguments that serve the interests of those who pay their bills is the common job of all three.

And so this last week, my "HSR" search tag caught mention after mention of the newest Heritage Institute "argument" against the present High Speed Rail policy.

Your Mission, if you Choose to Accept It ...

So, given what is clearly an effort at deceptive propaganda posing as a serious argument, your mission, if you choose to accept it, is to propose simple, clear, fact based responses to this kind of nonsense. While you ponder that, I'll pass the stage on to the headliners.

Midnight Oil: Truganini

Wednesday, March 17, 2010

Sunday Train: Economic Independence will Help Pay For Itself

Burning the Midnight Oil for Living Energy Independence

Last week I presented a draft of a national Steel Interstate plan. The focus was on the Institutional Framework required to be able to build it, including the source for the interest subsidy to finance its up front capital cost.

Possibly lost in the wall of words was an important point, which was focused on by some commentary: the users are paying the capital construction cost. As a country, we need it, so as a country, it makes sense to find a way to jumpstart it and have it available for the oil prices shocks that are coming in this next two decades.

... but once it starts getting used, that's what will cover the original construction cost. One way we can tell we are heading toward Economic Freedom is that it helps pay for itself.


I'll be talking about "STRACNET" below, the Department of Defense STrategic RAil Corridor NETwork, which is the system they developed for protecting their logistical needs in the half century that railroads were shedding track and corridors. The map is to the right. For those playing the home game, draw your own Steel Interstate system by selecting corridors from the red lines in this map.

Parasite Capitalism versus Economic Independence
Indeed, the focus of the Institutional Framework is ensuring that User Fees and Access Fees will refund the original capital cost, while at the same time ensuring that we do not have to dilly dally and delay on getting the process started.

So, yes, its a public investment in Economic Independence. But its a public investment, and part of the return actually is financial return. The Economic Independence helps to pay for itself. In that sense, it is closer to a Tollway than to the Free Rider type of Interstate.

What I want to argue, however, is that this is not unusual.

Parasite Capitalism and Oil Addiction

Certainly much of the "Great U-Turn" political economy that was established starting in the 1970's built upon the existing institutions of the Great American Middle Class economy that preceded it. However, it was very selective in the institutions it focused on: it focused on the art of taking the free ride.

Of course, there is no such thing as a genuinely free ride - what "free ride" means is simply that one party receives the benefit and a second party bears the cost. And the single word that encapsulates that relationship is "parasite". So we can call the economy of the 1970's to the present day, "Parasite Capitalism".

For instance, consider the Housing Bubble economy. This was just the most extreme elaboration of the standard sprawl property development system. And what is the standard sprawl property development system?
  • Get the right to "develop" an undeveloped greenfield site
  • Get someone to subsidize some road infrastructure
  • Get someone to subsidize utility support infrastructure
  • Get permission to do the development
  • Build it and sell it
  • Reap the reward of all your individualistic hard work

And the Highways based transport that the sprawl development relies upon itself relies on the art of the successful parasite. All highway users benefit from gas taxes paid by people driving on city streets that do not qualify for highway funding. The Federal Gas Tax helps people believe the myth that they are "paying" for the road and that its "their" road, when various state and local taxes cover the cost of the roads that generate the traffic on "non-highway" streets that generates the cross-subsidy to Interstate, US, State, County and Township Highways.

Note the last ... its not just Interstates. Lots of little country roads are subsidized by urban motorists.

With urban drivers as the parasite hosts and suburban drivers as the parasites, of course, growing numbers over time have moved to the suburbs, to get from the cost side to the benefit side. Which is great for short term windfall gains for property "developers", because that props up demand in the suburban areas where they have a well entrenched parasite capitalism system in place.

But its not long-term sustainable. Eventually, as the number of hosts dwindles and the number of parasites increases, the benefit available per parasite starts to drop. So it becomes harder and harder to meet all the demands on the highway trust fund with the proceeds of the gas tax that funds it. Add on top the decision to not index the tax rate for inflation ... which could be seen as a short-sighted measure to offset the ongoing increases in the real price of crude oil ... and there is less and less free riding opportunity.

What Did You Call Me?!!

To avoid confusion, I must stress that this is not a moral argument. One of the big shell games of the Great U-Turn is to moralize arguments, so that public consideration of problems does not involve looking at problems and looking for solutions, but instead involves looking at problems and looking for scapegoats.

This is the way the system is built. Its not the product of unconstrained individual personal choice. Looking to place individual blame in each individual suburban resident is like looking for the square of the checkerboard gives it the checkerboard pattern.

We definitely have to rebuild the system, but good people for many years have been fighting the fact that the system is built this way, and its just a hard fight, with no guarantees of victory.

Economic Independence is a big part of advancing from Parasite Capitalism to a system that is sustainable, and Energy Independence is a critical part of that.

Tailoring the Steel Interstates

This is the target of the Steel Interstate system: the long haul truck freight loads. That's where there is massive energy waste to be mined, since a long haul diesel semi truck requires over 10 times the energy to haul a ton of freight as Rapid Electric Rail Freight.

And the users are going to be paying its up-front capital costs, that's the financial value that the private railroads are going to be chasing in order to provide the payments. They are a bunch of corporations, after all, and like any other psychopathic corporation, they will provide precisely as much public benefit as the chase of dollars leads them to do.

Lots of points jump out that demand changes in the map that I drew last week:
  • First, the most important southwesterly line of freight in the Eastern US is the Shenandoah Valley extending into the Tennessee Valley, running inland of the population concentrations on the eastern seaboard
  • Second, there are important southern seaboard ports, and the line I draw, taken directly from the Southeastern HSR corridor plan, does not provide direct access for most of them.
  • Third, the first Stage ought to have lots of length to it, because until the network starts building up, its the longer runs that will be most vulnerable to competition from Steel Interstate rail ... and the more business the Steel Interstate rail wins, the more quickly they pay the capital cost of the line

I also thought that it makes more sense to start up all the four lines on a project development and planning basis, and the launch each with an increment of the interest subsidy funding from the imported oil tariff. So that is four stages rather than five, with all four Development Banks receiving $0.0025 from the initial penny per gallon, and then the four stages each hitting high gear as they get their additional penny in each following year.

So this is what I've done. I've started in Boston at the extreme Northeastern edge of the STRACNET system, come down to New York via Albany (the NEC is awfully crowded, after all, and this is for long haul freight), then to Harrisburg, Pennsylvania to enter the broad central valley of the Appalachian mountains. Follow that down to Chatanooga, then to Nashville and Memphis to run through to Dallas, then down to El Paso and run via Tuscon and Phoenix to Southern California, then up the Central Valley to northern California.

I call this the "Liberty Line", as a major step toward Economic Freedom.

This corridor is first in part because it makes plenty of sense to do it even if roll-out stalls with the first line due to political fighting the main Parasite Capitalists threatened, including those US Oil Companies with substantial overseas oil production interests and hence a strong financial interest in our Economic Addiction to Oil Imports.

Looking at the freight map, there are massive truck freight loads that run entirely north of the Liberty Line, as well as a substantial amount of the traffic that runs on part of the Liberty Line that comes in from further north. So next comes a North/South corridor that I call the "Heartland" Line.

The Heartland Line runs up from Miami to Nashville via Atlanta, then up to Chicago by the most direct STRACNET route, then up to Minneapolis, and finally grabbing land port business by running up to terminate at Winnipeg in Canada.

The second leg of the Heartland Line starts in New Orleans, Louisiana, running up to Nashville and then to Cincinnati via Louisville, Columbus, Cleveland, Buffalo, and then Toronto.

With the Heartland Line development in progress, now is time to launch the National Line stage, which in the first draft was presented as Stage 1. There is a major adjustment here, since looking at the truck freight flows suggests that it is better to access the Pacific Northwest via southern Idaho, and so the National Line is now drawn to fork west of Cheyenne, with the north fork going to Portland, Oregon, and the south fork going to Sacramento to cross the Liberty Line and the Port of Oakland.

The National Line begins at the port of Wilmington, Deleware, which is the most convenient port to Liberty Line junction at Harrisburg. The line crosses to the railhead of Pittsburgh, then follows the National Line through Wheeling and to Columbus, where it a junction with one leg of the Heartland Line. From there I've drawn it as taking the existing STRACNET corridor past Dayton, until it hits the Stracnet Corridor through Indianapolis, and then through the Terre Haute where it has the junction with the other leg of the Heartland Line.

From there the line continues through St. Louis, Kansas City, Denver, up to Cheyenne to run around the Colorado Rockies toward the strongest east/west freight market north of the southern tier of states. From there, as described, it forks, heading up through southern Idaho to connect to the Pacific Northwest, and through Salt Lake City toward Sacramento and then the main Northern California Pacific port of Oakland.

Now I have two main tasks to complete. First, I have a number of southeastern coastal ports that are not on the system and are too important to omit from the system. And second, if there is not going to be a Line running along the biggest of the east/west truck traffic flows west of the Mississippi, on Interstate 40, then there has to be crossing lines that can capture that freight. The Liberty Line can capture western Interstate 40 traffic to or from the Northeast, but there is nothing to intercept freight to or from the southeast.

So the Gulf and Atlantic line runs along the Southeastern Atlantic Coast to junction with the Heartland Line at Jacksonville, then to Mobile, New Orleans, Houston, and connecting to the Liberty Line at El Paso. It has a second leg from Houston that runs to Dallas, crosses I-40 at Lubbock, and continues up to junction with the National Line at Denver.

Which completes the system. It may look like a tangle, but in the Institutional framework, there are four organizations which have the goal in front of them to finish their corridor. And note that as a form of Regional Development Bank, they will not be exercising the Federal government's powers of eminent domain, so they have to focus on hammering out the way of meeting their charter that is sufficiently appealing to the freight railroads to be able to build their line.

And now the headliners: Dreamworld / Midnight Oil

Sunday, March 7, 2010

Sunday Train: A Nationwide Freight and Passenger Regional HSR System

Burning the Midnight Oil for Energy Independence

It often seems there is a deep canyon lying between what we can do and what needs to be done as a community, as a local region, as a state, as a national region, or as a nation.

But the Steel Interstate is a national program that a coalition of determined groups of advocates scattered across the country could get going. It bridges regional interest conflicts, and offers a way to advance some of the interests of:
  • Interstate motorists, by taking a substantial amount of semi truck traffic off the road, reducing both driving stress and road damage
  • Advocates of car independence, by providing a Rapid Rail network that can extend the reach of Regional HSR train services in a financially sustainable way
  • Private sector organized labor, by providing an ongoing project that will employ people in constructing the system and producing materials for the system, and as a direct consequence reduce the import share of national spending, increasing the employment impact of all newly financed spending, private or public
  • The large "army of unemployed" benefit in precisely the same way
  • Advocates of a development of an ecologically sustainable, by saving 90% of the energy cost of long haul freight transport by diesel powered semi-truck
  • Advocates of effective climate change mitigation strategy, in precisely the same way
  • Progressive Patriots, by advancing the cause of Energy Independence and weakening the foundation of the protection racket that oil companies use to gain control over US military power in support of corporate interests and in opposition to US national interest

Of course, I want to talk process, but it seems to be network maps that catches people's interest. So how I will go about this is alternating Map and Process.

Stage 1 Map: The National Line

The genesis of Stage 1, from which the balance of the map follows, was a comment in the dkos edition of the Sunday Train, Sunday Train: Attacks on HSR in Flyover Country, by IndianaDemocrat
So, Ya' Wanna Build A High-Speed Line?
Then build one that will actually have an IMMEDIATE TANGIBLE ECONOMIC BENEFIT.

Reconstruct the National Line form Pittsburgh to St. Louis as a High-Speed, three-rail line.

This bypasses Chicago, reduces cross-country travel times by as much as a day-and-a-half, OR MORE, depending on Chicago delays. Make it a Nationally-owned and operated line, available to all railroads to use. Even the Shortlines, for a fee.

Put that money to use actually doing something that could help breath life back in to manufacturing, instead of a flashy boondoggle.

The Stimulus Flyover projects in Chicago are a start, but little more than band-aids that don't really address the bottleneck problem.

by IndianaDemocrat on Sun Feb 21, 2010 at 08:00:59 PM EST

That's what Line#1 does. Now, as explained later in the process section, each stage is around 3,000 miles, so there's more to it: New York to Pittsburgh is the STRACNET alignment that is generally the route of the Amtrak Pennsylvanian, St. Louis to Denver is a STRACNET freight corridor, and Denver to Oakland, California is generally along the route of the Amtrak California Zephyr.

Before you react to the passenger service appeal of the corridor .... stop. Take a deep breath. This is at its core a plan that is to provide an opportunity for Sustainable Energy Independent long distance freight transport. Consider the truck traffic on Interstate 70 between Pittsburgh and Denver before rejecting the alignment out of hand.

What makes IndianaDemocrat's proposal so powerful is that STRACNET through Ohio and Indiana is a bit of a tangled mess, and it is quite plausible that the loss of the National Line is the reason.

Also, bear in mind that freight trains can change locomotives. Swapping locomotives costs time ... but if the run on an electric corridor is fast enough, both in terms of speed and in terms of capacity to handle traffic without delay, it can easily cover the time-cost for long-distance traffic.

So this is not an isolated corridor, its a trunk corridor that can be accessed by a wide number of the STRACNET corridors.

Stage 1 Process: Foundation Concepts for the Steel Interstate Project

After four to six months writing Sunday Train's, its easy for me to lose track of the fact that while there are some regulars, there are also always some people who are dropping by for the first time. So if the following is old news to the regulars, my apologies.

The Brawny Recovery. Back when the US was Energy Independent, progressive macroeconomist's would patiently explain that there is simply no problem with the government running a deficit during an economic downturn.

After all, "Money" is just a permission slip from the government: its resources that can limit the government's freedom to deficit spend. And during a downturn we have idle resources.

"Except" ... except that now we are no longer Energy Independent. Instead, we are addicted to imported energy. Like any Dependent Economy, there is always a risk that boosting demand for domestic resources will lead to problems in the exchange rate of the local money, causing a crisis in access to the external resource.

So under the situation of growing addiction to Energy Imports that has been pursued as active government policy over the past three decades by both Republican and Democratic administrations ... we can't ignore the impact on our external balance.

So we need to do more than just do "Keynesian Pump Priming": we need to ensure that we spending some of that money on stuff that helps us make stuff. That's the "Brawny Recovery": economic stimulus that also develops our national economic strength.

Ecological and Economic Sustainability. I do not spend a lot of time in the Sunday Train arguing about whether the US Economy is in an unsustainable ecological overshoot, nor about accelerating climate chaos, nor about a wide range of ecological and social failings of our current transport system. But Energy Efficiency ties into these concerns as well. Economic Growth is getting more stuff done that people want done. The massive material wastes built into our present system, means that we have an opportunity to mine what is presently wasted to get economic growth without requiring more material support.

And this is what makes it possible economically to get these projects launched. We are doing a lot of things in ways that only made economic sense with $1 a gallon gasoline or diesel (in 2010 prices). The economic foundation has fallen away, but the institutional supports keep obsolete systems and practices alive like so many zombie transport systems.

Opportunity for Sustainability. It is easy to fall into a status quo bias in which we evaluate every change in terms of what the impact will be under our present way of doing everything else. But I don't believe we can actually keep doing everything else the same way either, so I also look at how easy it is to upgrade something to full sustainability.

For long distance transport, there is no mature transport technology that has a stronger opportunity for sustainability than electric rail. Given the massive energy waste of long haul truck freight, the correct speed is "fast enough to capture freight shipments that would otherwise go on the road." Hence the focus on 100mph Rapid Electric Rail freight, which is fast enough to do precisely that.

STRACNET. STRACNET is the department of defense Strategic Rail Corridor Network. Forty years ago, the Pentagon noticed that rail lines that it depended upon in its planning for logistical support in times of crisis were in the process of being ripped out. So rail corridors with strategic impact were identified, and the STRACNET process was born, whereby the Department of Defense looks at proposals to abandon a rail line that is on STRACNET and tries to hammer out a solution that maintains the logistical capacity it requires.

As in so many other things in our society, we are only "allowed" to do serious national planning if there is a defense component. But we have been wearing massive (and politically motivated) blinkers over the past thirty years: the addiction of our nation's economy to massive oil imports is one of the greatest threats to national security that we face.

The presumption is that these investments will take place on STRACNET corridors - but note that there is some flexibility in this, since regional development banks would be in a position to negotiate with Department of Defense logistics bureaucrats to add or shift STRACNET status from one corridor to another.

Stage 2 Map: The Gulf and Southwestern Line

The next line to roll out ... and under the system proposed below, each line begin rolling out the year after the previous one ... runs from Miami to Los Angeles via Jacksonville, Pensacola, Mobile, New Orleans, Baton Rouge, Houston, San Antonio, El Paso, Tuscon, and Phoenix.

One thing this line focuses on is port traffic, which is why it starts at Miami, runs to Los Angeles, and runs through Mobile, New Orleans, and Houston (with junctions to Galveston).

This is the Florida Atlantic Coast route and then the old Amtrak Sunset Limited, before it was chopped back to NOLA/LA.

You'll probably notice that there is no "whistling past Dixie" here ... more like "whistling through Dixie".

Stage 2 Process: Institutional Foundations

So, if we want to tap the energy efficiency of long distance rail, how would we go about doing it?

First, we learn the lessons of Amtrak in the Northeast Corridor and set the "Line Builder" authority up as a form of public regional development bank from the outset. We charter it with a specific responsibility to get a Rapid Electric Rail corridor established, and specify the cities that it must serve when construction is finished.

How to fund the thing? (Note: I am being "cute" here, using "fund" in its 1930's classical technical sense, and will discuss "finance" in another stage.) If we want an integrated, national network, it has to be publicly owned infrastructure. If we want the network integrated with the existing rail system, it has to be primarily on freight railroad right of way.

Once a rail path in a rail corridor has been electrified, it is very capital efficient to electrify all tracks in that corridor. So the basis of the regional steel interstate development bank making itself welcome is to provide the infrastructure for all existing track in the corridor, as desired by the right of way owner, in return for cooperation in providing for a Rapid Electric Rail freight path in the corridor.

And then the original capital cost project is funded by charging access fees to the tracks owned by the public authority, and user fees for the electricity consumed by all electric trains, on either the Rapid Rail or Heavy Rail paths.

Indeed, since having the capacity is in the national interest, while its using the capacity that is in the interest of the private railways, its possible to ensure that the terms are attractive by mandating that the user and access fees will be set at the level that provides for full recovery of the original capital cost in four years of 100% capacity utilization.

So the more heavily railroads use the stuff (and therefore the more useful it is to them), the faster the infrastructure is paid back. If capacity utilization is 20%, it will take 20 years to refund the cost ... if capacity utilization is 50%, it will take eight years to refund the cost.

Obviously, during an extended oil price shock, it will be used even more intensively, but there is nothing in this proposal that is waiting for things to change in terms of gas and diesel prices. This thing would have been used at the diesel prices at their trough right after the Panic of 2008 hit in full force..

Indeed, the question that is up in the air is how intensively it will get used and how rapidly rapid electric freight traffic will gain market share. Alan Drake, who developed the most ambitious form of the Steel Interstate system, was able to get modelling of the system done by the Millenium Institution, and this will get used under current economic conditions.

The funding system proposed here and financing system proposed below will allow the infrastructure to be built. If it turns out that we experience another oil price shock, the result will be to accelerate the roll-out of the corridors. However, the proposed institutions are entirely workable under present economic conditions.

Stage 3 Map: The Gulf and Northwestern Line

Its a distinctive fact of the shape of our country that the Great Lakes and Gulf of Mexico makes the country narrower north to south east of the Mississippi, and wider north to south west of the Mississippi. Stage 3 takes advantage of that to provide for the first crosslinking while bringing in the northwestern quadrant that is under-served by the first two corridor.

Stage 3 starts at Mobile, linking to the Gulf and Southwestern Line, and runs up through Birmingham, Nashville, Louisville, and up the STRACNET connector to the STRACNET corridor to Chicago, It crosses the National Line with a high capacity cross-over junction at Terre Haute, Indiana. From Chicago, it runs through Milwaukee, Madison, Minneapolis, and then along the northern STRACNET corridor through North Dakota, Montana, Idaho, and Washington to Seattle.

In Amtrak terms, the Northwestern portion of this corridor is the Empire Builder route.

Stage 3 Process: Financing the System

Looking ahead to a system of repaying the original capital cost over time means that a system is needed for paying the interest expense of the capital spending between the time that the money is spent and the time that the capital cost is paid back. This is what is classically called "Financing" the capital expense.

My proposal cuts to the heart of the matter. The problem with gas taxes is that they are seen as making gas more expensive.

But the US is not Addicted to Energy Imports because we have lost the ability to produce oil. We are the third biggest oil producer in the world, behind Saudi Arabia and Russia but well ahead of Iran, Mexico, China, Canada, UAE, Venezuela, Kuwait, Nigeria, and etc. With roughly 5% of the World's population we produce about 10% of the world's oil.

We are not an "oil poor" country. We are an oil wasting country, consuming about one fourth of the world's supply, 2.5 times our production and 5 times our "global per capita share".

That's why "drill baby drill" was such a load of total bullshit. We already "Drill, Baby Drill" ... the myth that we do not is a convenient lie, and no basis for national policy.

And as the biggest oil waster of the world, our chief power to keep oil prices from skyrocketing is by cutting our massive waste of oil.

So this proposal goes to the heart of the problem. For each rail line, a $0.01 per gallon tariff is imposed on all imports of petroleum and petroleum products. The tariff starts at $0.01, and the regional development bank for the first line can start work, then $0.02 and the second bank can start work, up to $0.05.

A massive step toward independence from the Saudi Oil Sheiks and the Phantom Iranian Menace and the corruption and savagery of Nigeria's national oil policy and Hugo Chavez ... whoever you do not like among the nations we rely on to feed our insanely counter-productive imported oil addiction, a massive step toward reducing the imports "from them".

It may well be that the original interest subsidy will not cover the whole capital cost ... but that's OK, since building the first 2,000 miles will start generated user and access fee revenues which can be recycled into new capital spending until the line is finished. And then, when the construction of the mandated line is finished, the development bank uses the tariff revenue to accelerate repayment of the original capital cost.

And then, when the full capital cost is repaid, the tariff is extinguished.

We import in the neighborhood of 200b gallons of petroleum and petroleum products a year, so a $0.01 tariff yields in the neighborhood of $2b annually. That supports from $40b to $50b in bonds at interest rates of 4% to 5% ... less at higher rates, more at lower. Alan Drake's original proposal was costed at around $450b for over 30,000 miles of track ... so I am taking about $45b for 3,000 miles of track and working on that basis.

That is why these first three lines have all been in the neighborhood of

And building the system to its robust ... that is what allows "in the neighborhood" to work out. A robust funding framework with the flexibility to cope with moderate oil prices and extremely high oil prices is what we need to insure our economy against the potentially rocky road that lies ahead.

This is, after all, an infant industry tariff - a finance rather than protective infant industry tariff to be sure - so once the system is launched, the tariff should go away.

At that point, the longer term mandate of the regional development bank to promote the development of energy independent and carbon neutral transport in systems within its broader catchment kicks in.

Stage 4 Map: The Front Range Line, the Great Lakes Line, and the Southeastern Line

Apologies that the Southeastern Line was inadvertently omitted from the map ... you can see if on the final map below

So far New England extending into the heavily trafficked I-80 and I-76 corridors has not received a line, and there are obviously still large holes in the network. So at Stage Four there are three shorter Lines.

The Great Lakes Line starts in Boston and runs through Springfield MA, Albany and Buffalo, NY, Erie PA, Cleveland and Toledo OH, northern Indiana, into Chicago. The Southeastern Line extends from New York through DC, Richmond VA, Raleigh and Charlotte in NC, and Atlanta GA to connect with the Gulf and Northwestern at Birmingham, AL. And the Front Range Line runs from El Paso through Albuquerque through Colorado Springs to Denver.

The first three corridors are launched in three years, one after the other, each with a dedicated $0.01 in petroleum tariff revenues. These are three shorter lines, so the revenue is split: 0.4 cents goes to the Great Lakes Line, 0.4 cents goes to the Southeastern Line, and 0.2 cents goes to the Front Range Line.

Stage 4 Process: Building the Coalition to Get there

So far, this is just blueprinting. But without an opportunity to get involved, then a blueprint just gathers dust on the shelf. What is needed is to convert the blueprint into an Action Plan.

This requires coalition building. Steel Interstate Advocates need to form local advocacy groups, in all the cities and states served by the corridors ... which is all of them except Hawaii and Alaska. Even states that do not have a corridor have:
  • access to the corridor via their local rail network
  • benefits of the corridor in reducing national oil consumption
  • and participation in the energy independence transport investment by the "Line" development banks once they have finished rolling out the corridors.

But long experience is that face to face meetings are required to actually look people in the eye and talk to them in person and get things moving.

Of course, the groups can be freestanding, but do not have to be freestanding. It can be an interest group working party in a union local. It can be an interest group working party in a local political party. It can be an interest group working party as part of Drinking Liberally. It can be an interest group working party wherever you can pluck up the courage to suggest it.

This is one reason why I've focused on sketching a robust system ... a fine tuned, well oiled machine would be fine for a fine tuned, well oiled political machine to put into action as a demonstration of its prowess. But this is something that we are going to have to make into an issue, over the next year, or three years, or decade if that is what it takes.

Stage 5 Map: The Midwestern Line, the Texarkana Line, and the West Coast Line

Stage Five finishes up the main trunk network ... using STRACENET corridors to provide North/South trunks in the Midwest and West Coast. The Midwest Line runs from San Antonia to Austin, crosses the Texarkana in Dallas/Fort Worth, Oklahoma City, Wichita to Kansas City, then on the STRACNET corridor through Des Moines to Minneapolis. The Texarkana runs from through Dallas/Fort Worth to Little Rock Arkansas, Memphis TN, and connects to the Gulf Coast and Northwestern at Nashville. And the West Coast line runs from San Diego to cross the Gulf and Southwestern east of the LA Basin, up the Central Valley to Sacramento, where it crosses the National Line, then Northern California through Redding, up the STRACNET alignment to Eugene Oregon, and then up to Portland to connect to the Gulf and Northwestern at Seattle.

The Midwestern Line receives 0.4 cents from the fifth tranche of imported oil tariff, the West Coast line 0.4 cents, and the Texarkana receives 0.2 cents.

Stage 5 Process: What Do You Think?

Well, this is a big fat whopping Sunday Train, and will post an hour late to boot ... but what do you think? In order of importance:
  • What do you think is an effective means of organizing to promote a national Steel Interstate system?
  • What do you think about the Line Development Bank system?
  • What else do you think about the mechanics of the proposal?

I expect to get lots of suggestions of different alignments and roll-out sequences ... and I am happy to discuss my why's and wherefore's on each and every line proposed as well as the logic of the sequencing ... but you know, even if not one single line I propose is adopted, and it is rolled out in reverse order ... any serious real world steel interstate system beats the best possible fictitious real world steel interstate system.

So if the lines that people are willing to fight for end up being completely different to the maps I draw up this weekend ... people willing to fight for any steel interstate line is such great news that I'd be sitting pretty.

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