Burning the Midnight Oil ...

Sunday Train: A Streetcar for Broadway (LA)

2011-12-11T20:04:00.002-05:00

Nearly a month ago, Yonah Freemark had a post at The Transport Politic entitled, Los Angeles’ Streetcar Plans: Too Duplicative of Existing Services?. He wrote:

Los Angeles has big hopes for its downtown, and, like most of the country’s major cities, it has seen significant population growth in the inner core over the past ten years. Now, to extend this renaissance, the city — also like many others — is planning a [http://www.metro.net/projects/historic-streetcar-service/ streetcar line] that would traverse the district from north to south. Last month, it applied for $37.5 million in U.S. Department of Transportation TIGER grant dollars, which it hopes to supplement with local and private funds to complete an initial route of between 3 and 5 one-way track miles at a cost of between $106 and $138 million.

Despite the fact that planning for the L.A. streetcar goes back for more than a decade thanks to the work of a public-private local advocacy group, the city will have plenty of competition in its effort to win federal funds. Requests for the third round of TIGER funding outnumbered actual funding available by 27 to 1. With so many projects up for consideration, anything funded by Washington ought to be valuable. But L.A.’s project could benefit from significant improvement.

And then ... well, join me at one of the community blogs below:
ProgressiveBlue
The Stars Hollow Gazette
HillbillyReport.org
Daily Kos

Sunday Train: Strengthening the Jobs Bill with a $0.01/gallon Oil Tariff

2011-09-12T18:31:00.002-04:00

Burning the Midnight Oil for Living Energy Independence

Yeah, OK, its not Sunday, but I got called on Saturday morning after a Friday night class to substitute for a colleague, and that threw me off completely. Fortunately for the Sunday Train, I am massively underemployed, so there is Monday afternoon available to finish composing what I been thinking about this week.

As I discussed in Whether and How to Sell the Jobs Policy, there is not a whole lot of "pop" in the jobs bill, but there is some. The EPI analysis suggests 1m in jobs "created or saved", but of course "jobs saved" is an increase compared to a counterfactual, and not an actual increase. Over half of those are "job saved", so the "pop" is under half a million jobs.

If spread evenly across a calendar year, "just under half a million new jobs" would be 40,000 new jobs per month. If 150,000 new jobs per month is needed to bring unemployment down, that is relying on our stuttering economy to create 110,000 or more ~ close to what we have often been achieving, but there is substantial concern that we might not keep it up, after a month with about 0 (zero, zilch, nada) new private jobs created.

So the aim here is to look for something that can add some more "pop". And having read the title, you know that a 1 penny Oil Tariff is involved. Hopefully raising the question in our mind: "uhmmm, where's the 'pop' in that?"

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More at:

ProgressiveBlue
The Stars Hollow Gazette
HillbillyReport.org
and Agent Orange

Whether and How to Sell the Jobs Policy

2011-09-11T15:52:00.002-04:00

Burning the Midnight Oil for Progressive Populism

First off, the thing to do with the BS about gutting the safety net on the excuse that the Take Everything Away Party wants to kill it is to take the idea of gutting the safety programs behind the farmhouse to the mint bed and apply a sharp ax.

How to do that, I don't know.

But if it can be done, then there's still the question of whether and how to sell the "Jobs Policy"
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More at:
ProgressiveBlue
The Stars Hollow Gazette
HillbillyReport.org
Docudharma

Sunday Train: The Texas Wishbone Regional High Speed Rail

2011-08-14T19:16:00.002-04:00

Burning the Midnight Oil for Living Energy Independence

Back in the 90's, Texas tried to get an Express HSR system off the ground (that is, a bullet train system somewhere in the 125mph to 220mph range) with the "Texas Triangle" project. It was to be an entirely privately funded project. Not surprisingly, competing against the heavily publicly subsidized interstate highway and air travel systems, it did not get off the ground.

More recently, the Texas T-Bone was proposed, based on the Dallas to San Antonio leg of the Triangle and a route from Houston to Temple, then running north to Dallas with connections south to Austin and San Antonio.

While the Texas T-Bone seems to be the current plan of the Texas High Speed Rail and Transportation Corporation, this is more of an advocacy group than an official HSR Commission or Rail Development Commission.

Given that we are in between periods of substantial federal funding for High Speed Rail, I thought this might be a good time to take a look at the prospects for Regional HSR, in some of the existing rail corridors within the "Texas Triangle" region ... and so arrived at the Texas Wishbone.
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More:
The Stars Hollow Gazette
ProgressiveBlue
HillbillyReport.org
Docudharma
The European Tribune
and Agent Orange, aka Daily Kos

Fusion Tickets: why US 3rd Parties once worked, and why they stopped.

2011-08-09T19:21:00.002-04:00

Burning the Midnight Oil for Progressive Populism

We in the US take the two party system for granted, but a two party system is not normal among advanced industrial countries. And, in our history, we used to have a lot more third parties with a lot more impact on our political system in the US. What happened?

This diary is one of a series that was originally published as [http://thestarshollowgazette.com/diary/3679/the-insideroutsider-response-to-the-detb-ceiling-cavein single, long, sprawling diary].

For most of its political history to the late 1800's, the US was either dominated by one or two political parties. The (extra-constitutional) winner take all electoral college system and the winner take all nature of a state legislature selecting the state's Senator strongly pushed in that direction.

But alongside this was a political institution that allowed third parties to emerge and compete for influence ~ and indeed, the Great Re-Alignment from the Democrats and the Whigs to the Republicans and the Democrats occured in part thanks to the existence of third parties that were available to merge with the Anti-Slavery Whigs once they had been purged from the Whig Party.

How did this system work, and where did it go?
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More text, comments, and the Midnight Oil Clip at:
The Stars Hollow Gazette
ProgressiveBlue
and Agent Orange.

Sunday Train: Pushing for a Rapid Rail HSR Station in Ravenna, Ohio

2011-08-07T19:03:00.003-04:00

Burning the Midnight Oil for Living Energy Independence

OK, now, thanks to John Kasich, we are not going to get started on that Rapid Rail HSR network before 2015. Indeed, Democrats would probably have to take back one of the two Chambers of the State Legislature to be able to hit the ground running on getting that Rapid Rail HSR network going in 2015.

On the other hand, if you never lay the foundation, you always end up with an outcome you don't like.

And I don't like the way that the Ohio Hub connects to Summit and Portage Counties, so I want to work on how to get a station in Ravenna added to the Ohio Hub.

The reason its on the Sunday Train is threefold: maybe somebody can give me a great tip; maybe somebody can get an idea for something they can work on where they live; and its about making more sustainable transport options available to a medium city and a variety of inner and outer suburban landscapes.
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More:
ProgressiveBlue
HillbillyReport.org
The Stars Hollow Gazette
Docudharma, and
Agent Orange

LQD: The AA+ rating is valid, but the S&P case is intellectually dishonest ~ Mosler

2011-08-06T12:10:00.002-04:00

Burning the Midnight Oil for a Brawny Recovery

"LQD" is an abbreviation I first encountered at EuroTrib: it means "Lazy Quote Diary".

[http://moslereconomics.com/2011/08/06/sp-downgrades-us-on-ability-to-pay/ The quote from Warren Mosler]:

Credit ratings are based on ability to pay and willingness to pay.

David Beers of S&P knows this and has discussed this in the past.
...
So why then did David T. Beers decide to downgrade the US on ability to pay, and not explicitly on willingness to pay?

Sure looks like a case of intellectual dishonesty.
And I have no idea why.
So much for his legacy.

Well, its a very short post, so fair use restricts it to an even shorter quote.

But this is the gist of it: no issuer of its own currency is ever forced to default on debt issued in its own currency.

Think about it: if your family's IOU's were accepted by the bank to repay debts ... could you ever run short of the means to pay your debts?

What would an honest downgrade have said? Below the fold.
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The argument for a downgrade is this:

The only credit risk is that the sovereign issuer of currency is unwilling to pay its debts, as Mosler says. An honest downgrade would be, "in voting down a clean extension of the credit ceiling, the majority in the House of Representatives of the United States demonstrated a willingness to consider defaulting on its debts as a bargaining ploy to get what it wants. This implies a risk of default greater than 0, and so US debt doesn't deserve the "absolutely no risk of default" rating of AAA.

The argument against a downgrade is this:

Even in the manufactured debt ceiling crisis, there was never any reason to believe that interest would not be paid on Treasury Debt nor that Treasury Debt that matured would be redeemed at its face value. What the Government would have done ~ for no good reason, since it has the legal authority to mint coinage with face values in the billions, which on deposit in the Fed would have allowed payment to have been cleared without requiring the issue of debt ~ would have been to miss appropriated payments which it was not legally bound to pay.

So as far as what S&P are rating, the actual payments on the actual Treasury bonds, bills and notes that Congress permitted the Treasury to issue ... there was no risk.

However, 10 years is a long time in politics, and 10 years of this bullshit, who can tell. So while its hard to make a case that bills and notes should be rated below AAA, AA+ for 10 year bonds may be a bit more plausible.

Conclusion

Bottom line, though, S&P is still lying to people when it pretends that the rating is about "ability to pay". Its only ever about willingness to pay for a government issuing debt in the currency it issues.

Midnight Oil ~ Read About It

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Discussion at:
The Stars Hollow Gazzette
HillbillyReport.org
Docudharma
Agent Orange

Geithner reveals exactly what is wrong with his view of the Economy

2011-08-03T17:28:00.002-04:00

Burning the Midnight Oil for the Economics of Freedom

Quoted by digby:

TIM GEITHNER: Well, let's start with what this deal does. The most important thing is it creates more room for the private sector to grow because although it locks in some very substantial long term savings, the near term cuts are very modest. So that-- that was the really critical thing in making sure that this economy continue to grow and recover. Now, it locks in a very big down payment and it sets in motion what we think is going to be a very effective process for forcing congress to come together...

Now, for the ordinary person reading this carefully, the only reasonable response is, WTF?. However, as your insider correspondent from the quite bizarre Economist Tribe, my response is, "oh, yeah, that bullshit again."

Ah, well, economics is not the only science {*} where analyzing scat is a necessary research tool. Join me at one of the fine community blogs below.
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ProgressiveBlue
HillbillyReport.org
The Stars Hollow Gazette, and
Agent Orange

Progressivism in the New Gilded Age

2011-07-28T15:00:00.002-04:00

Burning the Midnight Oil for Progressive Populism

The "Progressive Era" was not so named because it was an era in which Great Progress was automatic, or effortless. It was so named because it was an era where Income Inequality was high, even by US historical standards, and extraordinarily high by the standard of the Great American Middle Class Era of the 1940's to 1970's ...

... and that meant that winning Progress that went against the vested interests was very hard, and required long, determined fights against a torrent of money deployed to oppose its progress.

Indeed, one of the fruits of the Progressive Era victories was to eliminate Progressivism as a distinct political force. But now the enemies of the Square Deal, New Deal and Great Society have rebuilt a Gilded Age, and we need it once more.

Progressivism, however, while necessary, is not sufficient on its own.

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More:
ProgressiveBlue
HillbillyReport.org
The Stars Hollow Gazette
and Agent Orange

Sunday Train: Chairman Mica to Cities ~ Screw You

2011-07-10T19:23:00.001-04:00

Burning the Midnight Oil for Progressive Populism

Chairman Mica says:

this proposal maximizes the value of our available infrastructure funding through better leveraging, streamlining the project approval process, attracting private sector investment, and cutting the federal bureaucracy, ... Most importantly, this six-year proposal provides the stability states need to plan major transportation improvements and create long-term jobs.

Decoding that, Chairman Mica is saying: "Screw You, Cities".

And of course, a bit of "screw you countryside" too, since those votes can be taken for granted.
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More:
ProgressiveBlue
HilbillyReport.org
Stars Hollow Gazette
Docudharma
Agent Orange

Sunday Train: Chairman Mica aims to block equipment Amtrak needs to expand

2011-06-19T19:30:00.002-04:00

Burning the Midnight Oil for Living Energy Independence

The headline spin on House Chairman of the Transport Committee is that he is proposing to privatize the NEC to allow HSR to be built in this decade.

However, if you follow the money trail, while he proposes a process to do that, there is no funding proposed to do that. And without a funding stream for the federal share of anywhere from $40b to $100b to bring the NEC up to a state of good repair and then to make the improvements required, under current FRA regulations, to meet Mica's modest speed targets ... that part of it is not a real proposal yet.

The real proposal is to have talking points to use to object to any funding that gets out of the Senate to allow Amtrak to buy more equipment so it can expand the capacity and frequency to meet the steady increase in demand for its services.
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More:

ProgressiveBlue ;
HillbillyReport.org ;
Docudharma ;
Stars Hollow Gazette ; and,
Agent Orange .

Sunday Train: Fighting Economic Sabotage

2011-06-12T18:55:00.003-04:00

Burning the Midnight Oil for Living Energy Independence

There was shocking news early this June about May economic performance: GDP growth in May was about the same as the average for the first quarter of 2011, and so employment growth was virtually stagnant, and indeed fell behind growth of the labor force.

What was shocking, of course, was that this was news to anybody. For anyone with the basics on how the economy works, it was obvious that economic growth would be sluggish.

Of course, the Republicans in Congress and the White House, both for their own reasons, completely missed the boat ~ the White House arguing if we ease off the accelerate and tap the brakes, but do it intelligently, that will eventually speed up the economy, and the Republicans insisting that, no, we have to slam on the brakes to fix things.

With such a broken political discussion, what can be done?
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More at:
.Progressive Blue
..HillbillyReport.org
...Docudharma
....The Stars Hollow Gazette
and .Agent Orange

Sunday Train: A Brawny Recovery or Consumption-Led Growth?

2011-06-05T17:22:00.003-04:00

... reprinted from about two years ago ~ June 2009 ...

Burning the Midnight Oil for a Brawny Recovery

On Agent Orange, bonddad writes:

Among the most important of the rules Rosie laid down, in my opinion, is #12: Get the US consumer right and everything else will take care of itself. The reason is fairly simple: The U.S. consumer has the biggest balance sheet on the planet. The U.S. consumer represents 70 percent of our GDP and about 18 percent of global GDP.

This is, however, following the entrenched habits of thought that got us into this mess in the first place. My reply, below the fold.
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More:
ProgressiveBlue
HillbillyReport.org
Docudharma
and Agent Orange

Sunday Train: Why We Fight

2011-05-29T19:45:00.002-04:00

Burning the Midnight Oil for Living Energy Independence

"Why We Fight" is a common feature of propaganda in support of a war. Here, tonight, it is a double entendre. On tonight's Sunday Train, in honor of Memorial Day tomorrow, with two wars launched in the past decade and still ongoing (though in one, "combat operations" by US forces have finished, so any fighting and dying is of the support and training type of fighting and dying), and another recently started up, what it means when we notice that "why we fight" has a simple answer: oil.

And also, politically, why we fight for Living Energy Independence, here on the Sunday Train.
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More:
ProgressiveBlue
HillbillyReport.org
Docudharma
the European Tribune
and Agent Orange

Sunday Train: Fighting FUD on the first California HSR segment

2011-05-22T20:43:00.002-04:00

Burning the Midnight Oil for Living Energy Independence

Last week, I looked at the California Legislative Analyst Office promoting a policy of raiding the California High Speed Rail funds to build commuter rail systems in LA and San Francisco by issuing what at first blush seemed to be simply a grossly incompetent analysis of the risks of building the HSR project.

This week, I step back and take a broader view of why it would be idiotic to accept the LAO's advice, as well as why it matters to people across the country, and not just the people of California who risk ongoing oil addiction of their intercity transport between Northern and Southern California.
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More:
ProgressiveBlue
HillbillyReport.org
Docudharma
and Agent Orange

Sunday Train: Legislative Analyst to Fresno: Screw You AND Your High Speed Rail

2011-05-15T16:42:00.003-04:00

Burning the Midnight Oil for Living Energy Independence

The big news on the High Speed Rail front this week is the effort by the California Legislative Analyst to prevent the High Speed Rail project in California from breaking ground. This is in two of their recommendations:

Fund Only Needed Administrative Tasks for Now. ... only appropriate at this time the $7 million in funding requested for state administration of the project by HSRA.
Seek Flexibility on Use of Federal Funds. We propose that the Legislature direct HSRA to renegotiate the terms of the federal funding awarded to the state by the Federal Rail Administration (FRA). ...

Wisconsin, Ohio and Florida also "sought flexibility" as part of the process of rejecting the Federal funding. Combine that with denying the California HSR Authority the funding to allow it to break ground to meet the requirements of the funding, and this report is a frontal assault on the second of the two Express HSR projects funded by the Administration HSR policy.
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More at:
Progressive Blue
HillbillyReport.org
Docudharma, and
Agent Orange

Sunday Train: States Rights to Living Transport

2011-05-09T22:57:00.002-04:00

Burning the Midnight Oil for Living Energy Independence

Cap'n Transit Rides Again wrote about "Getting People Out of their Cars by Not Subsidizing Roads, which perplexed Yonah Freemark at The Transport Politic, which drew a response from Cap'n Transit asking whether we want to be serious, or right.

Boiling them down well beyond the point of oversimplification, Yonah argues that transit advocates must go along to get along, and Cap'n Transit argues that if you aint anti-car, you aint doing it right.

The same debate we get anytime the maximum that is politically possible is less than the minimum our society needs for survival. How do we break on through to the other side, where the minimum we must do lies within the maximum that we can do?
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As always ~ well, at least since I started doing it this way ~ more at:
Progressive Blue
HillbillyReport.org
Docudharma
and Agent Orange

Sunday Train: West Virginia River Runner Rail and the Steel Interstates

2011-05-08T13:28:00.001-04:00

Burning the Midnight Oil for Living Energy Independence

The flashy rail projects are the very HSR projects to build bullet trains serving urban areas with millions of people.

But the role of rail in supporting sustainable extends beyond the bullet train system alone. It may not be critical to the financial success of these bullet trains to provide service to people living in urban areas of 50,000 to 200,000 ~ but its critical to these people to have access to some form of sustainable intercity transport.

Indeed, if we are going to be harvesting wind power, solar power, sustainably coppiced biocoal, geothermal, run of river hydro, and other sustainable resources ... we are going to be creating incomes in areas away from the 1m+ cities. We best look after the needs of the people who come to those areas looking for work.
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More:

Progressive Blue

HillbillyReport.org

Docudharma

Agent Orange

Sunday Train: Conventional Rail and the Steel Interstates ~ Best Friends Forever

2011-05-08T11:40:00.002-04:00

Burning the Midnight Oil for Living Energy Independence

I've written several times about the direct potential of the Steel Interstate project to cut our oil imports by 10% by getting long haul freight trucking off the road. It would at the same time relieve the crushing burden imposed by long haul trucking on our over-worked, under-maintained Interstate, National and State highways, help get renewable energy resources from places that they are to places people need electricity, and of course support long distance Rapid Passenger Rail offering dramatically improved reliability and transit speed, supporting operating surpluses with multiple services per day.

I don't recollect that I have written very much about the benefit that the Steel Interstates offer to passenger rail elsewhere. So that's what I aim to do. Today I will look at one rail transport ideas I have talked about previously ~ Northeast Ohio Regional Rail ~ and what help it would receive from the Steel Interstates. Then sometime in the next week or two, I will look at the Columbus / WV / Atlantic Coast "RidgeRunner", and the benefit it would receive from the Steel Interstates.
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More:

Progressive Blue

HillbillyReport.org

Docudharma

Agent Orange

Sunday Train: HSR, Express and Locals Done Right

2011-05-07T22:08:00.002-04:00

Burning the Midnight Oil for Living Energy Independence

After the outcry when the Caltrain system between San Francisco and San Jose (and once in a while beyond) faced a scare that it would drop from 86 trains per day down to a peak-commute-only 48 trains per day ...
... Caltrain was able to scrape together a 76 train per day schedule.

Clem at the Caltrain HSR Compatibility Blog ran the schedule through his commute service index, which weights 70% the average trip time, 30% the best trip time, 20% the average wait between trains, and 15% the maximum service gap.

So giving the original 86 train schedule a benchmark score of 100, how far did the 76 train schedule drop?

It rose to 104. On Clem's metric, the 76 train per day schedule is an improvement.

? What gives?

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More:

ProgressiveBlue

HillbillyReport.org

Docudharma

Agent Orange

Sunday Train: Oil Addiction is a Political Choice, not a Necessity

2011-04-26T14:32:00.003-04:00

Burning the Midnight Oil for Living Energy Independence

We can tell that an energy policy is not aimed at ending our nation's oil addiction in time when the speech presenting it follows up:

The United States of America cannot afford to bet our long-term prosperity, our long-term security on a resource that will eventually run out, and even before it runs out will get more and more expensive to extract from the ground. ...

with

I set this goal knowing that we’re still going to have to import some oil. It will remain an important part of our energy portfolio for quite some time, until we’ve gotten alternative energy strategies fully in force.

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Sunday Train at this blog has been lagging badly, in large part because of the extra layout effort to port the posts from the community blogs where they are first posted. So from here on out, only the introductory section will be posted, to be followed by links to the various community blogs where the full post appears.

More at:

ProgressiveBlue;

HillbillyReport.org;

Docudharma; and

Agent Orange.

Sunday Train: American Greatness and High Speed Rail

2011-03-28T13:53:00.004-04:00

Burning the Midnight Oil for Living Energy Independence

Community Blog Discussions at: ProgressiveBlue, HillbillyReport.org, Docudharma, and Agent Orange.

I believe that America can be greater than it ever was before.

That does not mean that its destined to be. Destiny makes us lazy. Destiny is like those post-Tour de France cycling criteriums where the top three places were guaranteed to the three big TdF heroes taking part ~ if you are in shape and need to keep going, maybe Destiny can keep the momentum going ~ but its no way to build up to race fitness.

Indeed, it does not mean that its at all likely. It may well be massively unlikely. But whether an outcome is likely or unlikely is an issue for passive spectators, watching from the sidelines. The issue for participants is whether the game is worth the candle ~ whether the prize substantial enough to make it worthwhile playing to win.

Our modern mess media trains us to the passive observer role, with their habitual "trackside race call" coverage of public affairs. However, if we participate, that trains us in the active player role, and the real life experience is a deeper lesson than the color and noise on the noise box.
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What Does It Mean for a Large Nation to be Great?

If it means anything for a nation such as the United States of America to be Great, what does it mean?

For a small nation to earn the label of great ~ a New Zealand, Central African Republic (CAR), Costa Rica, Laos ~ perhaps it can do something in particular brilliantly, and everything else OK enough not to disqualify it. We do not normally call small nations "great", but its not surprising to hear that a small nation is "great at {fill_in_the_blank}." Especially "great at {fill_in_the_blank} for its size."

And maybe there is some of that for medium size and medium-big size nations, except that "for its size" implies a higher standard, the bigger it goes. What would New Zealand great for its size might fall short for Australia or Canada. What would make CAR great for its size might fall short for South Africa or the Democratic Republic of Congo. What would make Costa Rice great for its size might fall short for Venezuela or Brazil.

However, my thesis is that for the four large nations of the world ~ for China, the United States, the European Union and India ~ relative scales do not apply. Greatness for a large nation of the world must be on an absolute scale.

What does it mean to be Great in the 21st Century

We face existential challenges in the 21st century:

We face the challenge of resource footprint over-reach ~ a way of life that requires more than one earth to sustainably satisfy.
We face the challenge of self-poisoning ~ a way of life that progressively increases the toxicity of our life support system.
We face a challenge of climate chaos ~ either an induced development or amplification {+} of the end of the mild global climates and the onset of a much more turbulent Anthropocene
We face a challenge of Peak Oil ~ the transition from the prevailing energy base of modern industrial society because we have used it up, rather than because of the stronger appeal of an alternative
We still face the challenge of Radioactive War ~ with no actual elimination of the standing 20th century threat of nuclear war, now augmented by the threat of various dirty bombs

And for some reason as a nation we seem to be somehow incapable of doing more than didley-squat about more than one of them at a time.

But for one of the Four Large Nations of the world to be Great, it must be great in leading the way and collaborating on all of the existential challenges we face. The footprint of each is too big. Each must carry its weight across the board, and more than carry its own weight somewhere of vital importance.

We cannot claim the mantle of greatness on the basis of "nailing down loose nukes" ~ while we pursue an energy policy that fails to nail down untapped coal reserves ~ still less if that policy subsidizes and otherwise encourages the burning of coal. Maybe a smaller country, where its relative reliance on coal in its national economy translates to a much smaller absolute share of total carbon emissions ~ but not the Peoples Republic of China, the Republic of India, the European Union, or the United States of America.

Clearly, what is not Great is for a Large nation to sit on its ass, hoping that some other nations will pull its irons out of the fire.

No Single Act Is Sufficient to Face an Existential Challenge

One of the habitual, regular, predictable red herrings that Big Oil and other saboteurs of the United State of America surviving the 21st century intact is to point out that some vital action "is not enough".

Big fat hairy deal. No single action is enough in facing an existential challenge. Any challenge that can be faced down with any single action is not an existential challenge. Existential challenges require multiple mutually supporting, and often interlocking, actions to face up to them.

That reason is, first, keeps getting tosses up is because people fall for it. "Yeah, that's no enough" among those encouraged to be lazy about it translates readily into "not worth doing". But whether its worth doing is based on how irreplaceable it is, and how many support it gives to other vital actions.

And, second, because for those challenges that are clearly existential, saying "its not enough" resonates much better than "give up, all hope is lost, we are ultimately a failure as a nation and its time to try to build some other nation in this part of the world" ~ at least among the broad swathe of population between those dedicated to an action vital to our national survival and those adamantly opposed to one or more of those actions.

But while the point does not have billionaires making it, it can be conveyed to and understood by the vast majority of our civil society. Remember that the point is to communicate the point, and people across our country are familiar enough with at least one complex system to get the point: Sure a transmission is "not enough" for a car to run. An engine is not enough. Working steering is not enough. But can you drive without a transmission? Without an engine? With working steering?

We don't need a smarter electorate, we need a wiser electorate, and the "needed vs enough" idea is worth passing on to as many fellow citizens as you can, in whatever opportunity you can create to pass it on to your fellow citizens.

Why are We Facing So Many Existential Challenges?

Cast your mind back to 1980. There are two Great Nations of the World, the United States of America and the Union of Soviet Socialist Republics. The USSR is surviving a fundamentally broken domestic economy on the back of high prices for its relatively expensive to produce oil ~ and looming over the next five years is the collapse of the real price of oil from its 1979/80 peak to a multi-decade period of cheap oil ~ not ultra-cheap oil, as when the Texas Railroad Commission was stabilizing oil prices via Texas oilfield production quotas, but still cheap.

And when the price of oil dropped, their ramshackle faux-socialist centralised authoritarian economic system collapsed together with the "second world" of the "cold war" world order. Now, if I listed Five Large Nations, I reckon I'd still have to include them (unless, of course, they are merely taking a several decades long pause in the process of falling apart) ~ but I only listed four.

China was still reeling from the twin catastrophes of Mao's deliberate promotion of population growth and the insane effort to convert the agrarian revolution of the rural commune system into an decentralized mass production industrial revolution that no amount of revolutionary fervor could ever suit it for. Deng Xiaoping is just launching the reset that unleashes the potential of the Chinese communes and then uses it to launch an actual industrial revolution ~ and the population policy that violates almost every tenet of Western social liberty, while also preventing what otherwise clearly would have been by now a collapse of central authority and descent into civil war ~ a devil's choice, but after the population policies of Mao, no angel's choice was any longer available.

India has passed through the Emergency Crisis and the stunning electoral defeat of Indira Ghandi's regime and then the subsequent collapse of a new government too experienced at opposition and inexperienced in government to hold the governing coalition together, with more years political turbulence, including Indira Ghandi's, before establishing the neo-mercantilist economic order which it has been pursuing over the past few decades. Not that political turbulence ever actually went away, but the periodic political storms did not wash away the foundations of the neo-mercantilism that had been adopted.

And the European Union? This youngest of all Four Large Nations does not even exist yet, a collection of medium-big, medium and small nation states in a divided continent, like the Greek states in the days of the Second Athenian League, before unification under Phillip II of Macedon, or the several English American colonies before the establishment of the Articles of Confederation.

In 1980, if there is a Large Nation that can act as a Great Nation and tackle potentially existential challenges before they come to a boil, that would be the United States of America. And in 1980, we elected to pursue the civil society equivalent of sitting on our fat ass and watching cartoons. And we kept it up for three decades.

Of course ongoing problems kept getting worse and worse and worse until they reached the point of existential challenges. There are always problems emerging. Either they get regularly pruned down to size, or else they go to seed and get worse and worse and worse.

Things just don't get better automatically on their own. People that imagine that they do are just engaged in the age-old practice of ignoring them that are doing the coping with the problems. And if the only Large Nation who is a candidate to be a truly Great Nation and tackle the big problems before they become existential challenges instead decides to pretend that hammers are bad because we sometimes hit our thumbs with them, or governments are bad because the rules they put in place are sometimes inconvenient ~ well, the kinds of problems that can only be tackled by serious national policy of a large nation exercising leadership on a world stage will, of course, sit, and fester, and get worse, and worse, and worse.

Didn't Is not Can't. Its Only Didn't.

If somebody didn't do something, maybe it means they couldn't. Maybe it means they could, but just didn't.

If a Large Nation does not act as a Great Nation, maybe it means it couldn't. Maybe it means it could, but just didn't.

In this case, the United States of America has the capacity to be a Great Nation. We have the capacity to pull our weight on all the major existential challenges we face and to lead the way on many.

"Will we choose to do so? What are the chances we will choose to do so?" These are passive spectator questions. If we choose to do so, we can. So as active participants, we have to act in ways that supports our nation as a whole choosing to be Great again.

So what's the big deal about High Speed Rail, then?

To get everything done, as many people as possible must do something. High Speed Rail is something.

For our Large Nation, our unchecked population explosion is the massive resource liberalism that we are indulging in creating an explosion in the cost to the earth of each member of our population.

The unsustainable deficit is the deficit between our sustainable resource base and our resource footprint.

And hoping that we can head toward a urgently necessary resource conservatism on the back of an outbreak of lifestyle asceticism seems to be an entirely vain and futile one.

So we need to find ways to do better lifestyle on less resource base per task.

Express High Speed Passenger Rail is no silver bullet along those lines, but it is a very shiny silver BB. In 100mile to 500mile corridors where population growth under business as usual will demand massive unsustainable investment in new intercity highway capacity, Express High Speed Rail is less expensive than the status quo. And where the massive hidden subsidies and cross subsidies for operating the status quo threatens to choke our economy, Express High Speed Rail in its strongest potential corridors will generate substantial operating surpluses.

Rapid Passenger Rail is no silver bullet along those lines, but it is a very shiny silver BB. In 100mile to 300mile corridors where there is existing unused rail corridor capacity and transport alternatives to private motor vehicles almost completely choked off by the multiple public and publicly mandate subsidies that "private" motor vehicles enjoy, Rapid Passenger Rail can offer an secondary alternative that can stand on its own feet on a small but viable share of the market and, again, generate an operating surplus so that they are not subject to closure with each swing of the political winds ~ and so they are not required to fight local public transport for the operating subsidies that local public transport both requires and merits.

Rapid Freight Rail is not a silver bullet along those lines, but it is a very shiny silver BB. In 800mile to 3,000mile corridors where there is sufficient long haul truck freight to expect to recoup original capital cost of these Steel Tollways through access and user fees, they offer us a chance to get half or more of those diesel guzzling, asphalt destroying, motorist terrifying behemoths off the intercity highway network, replacing them with sleep-in-your-own-bed-at-night short haul truck routes at each end connected by long Rapid Electric Freight Rail hauls in between.

So, no, High Speed Rail on its own will not make America Great.

But until we start to do things like High Speed Rail, despite and in the face of the opposition of Big Oil and other saboteurs of an American 21st Century, we will not start to be Great.

What About Greater than it Ever Was

C'mon, "great" relative to 19th century Europe? Relative to 17th century China? Even a slaveholding, indigenous inhabitant massacring nation could hope to think of itself as great against that yardstick.

"Great" in the 20th century relative to the militarist authoritarian Japan or Nazi Germany, or faux-socialist centralized authoritarian USSR? Not really a bigger challenge, is it?

But looking in the rear view mirror, many of these existential challenges are problems of our own making, the elaboration of a grab and plunder and move on economic system that we mutated from land to fossil fuels without fundamentally changing.

Facing up to these challenges, confronting them, and tackling them well enough to survive through to the end of this century ~ yes, that would be truly Great.

Bedlam Bridge ~ Midnight Oil

There are canyons full of movie stars,
churches made of metal
There are mountains made of muscle
We have leaders who are anxious,
we have captains not courageous
Captains tumbling into madness
But there's a man who makes no enemies,
a body never breathless
No ambition ever hopeless

Up on bedlam bridge somebody is waiting
Up on bedlam bridge I'm shot to heaven
Oh, up on bedalm bridge, waiting
Oh, up on bedlam bridge, waiting

Sunday Train: Quiet Progress Edition Two ~ Sustainable Power and Feed-in Tariffs

2011-01-31T12:26:00.002-05:00

Discussion and comments at:
HillbillyReport.org

ProgressiveBlue

Docudharma

Agent Orange

Burning the Midnight Oil for Living Energy Independence

It's one thing to call for a Nationwide Network of Electric Rapid Freight Rail Tollways, to take freight damage off the Interstate Network, or for its compelling national security and emergency preparedness reasons.

But the argument regarding its sustainability is that it provides modest reductions in carbon emissions on the back of dirty electricity, and massive reductions in carbon emissions on the back of clean, sustainable electricity. So the climate impact gains massive leverage if at the same time we are pursuing sustainable carbon free and carbon neutral power.

And so today's Sunday Train is on a quiet piece of good news on that front ~ good news that allows states that wish to pursue green jobs to do so without the Grossly Oil-addicted Party in the House of Representatives being able to get in the way.

__________________

An Abundance of Good Reasons for Electric Rapid Rail Freight Tollways

The reasons other than ecological sustainability and reduction of the amount of damage that will be caused over the next twenty and fifty years by climate chaos are certainly valid reasons in their own right.

Given the ongoing need to maintain our Interstate Network, which will only get more and more expensive in real terms as energy costs rise. With long haul trucking doing so much of the damage, while able to be replace with both less commercially expansive freight with more rapid transit and less strain on transport workers ~ often resorting to use artificial stimulants to meet the demands of trucking firms ~ and reduce the stress on motorists using the Interstate system, the opportunity to shift half or more of our long haul freight to rail is a compelling opportunity.

The fact that the system will allow the Departments of Defense and Homeland Security to move material and personnel with much less consumption of petroleum in a national emergency involving disruption of oil supplies ~ say, the current wave of Arabian uprisings crossing the Sahel and hitting Nigeria, one of our main oil suppliers ~ is also a compelling argument. Indeed, as I suggested last week, the Democrats in the Senate should pursue hearings on how well prepared our freight system is to cope with a serious disruption to oil supplies, and call on Department of Defense officials to testify on the usefulness of a national grid of Electric Rapid Rail Tollways in the event of such an emergency.

However, in addition to that is the question of developing a national economy for the US that can survive after the end of the Age of Oil and Coal. We aren't getting ready to slide down the Oil E. Coyote oil production curve, but just like Oil E Coyote, ignorance of the lack of firm footing does not really mean that the footing is actually there. And when we consider the real cost of burning our fixed domestic coal resources, it is not actually cheaper ~ its just that the entrenched privilege to use the atmosphere and landscape as a dump has allowed those vested with property rights in our national coal resource to dump the cost on others and gain a financial profit while the resource is selling below its full economic cost.

The Transition from Fuel Consumption to Energy Harvest

We have, obviously, been developing and refining social institutions oriented to the generation of electricity by permanent destruction of the energy content of fossil fuel sources for centuries now. It is not surprise if the same institutions have details built into the rules that are antagonist to the process of leaving behind the dead hand of this unsustainable history and escaping into a system with more than twenty or forty more years of viability.

As I covered in a previous Sunday Train, but as is covered in far more depth at Wind-Works.org, one institution that can greatly accelerate the escape from our current economic dead-end is the Feed-In tariff. "Tariff" here is the root meaning of "a price schedule", but rather than the common usage of the "price" to import a product across a national border, it refers to the price schedule for the product provided by a utility ~ a water use tariff, a natural gas tariff or, in this case, an electricity consumption tariff.

A critical benefit of the most well developed sustainable electricity sources, such as wind power, is that it is primarily spending on equipment to harvest a renewable power source. That means that the cost of the power is mostly determined up front: unlike coal, oil, or natural gas, there is very little price risk in the economic cost of windpower.

That implies that the windpower must be financed to buy the equipment up front and then refund that financial cost over the period of harvesting the power. Wholesale power is now mostly priced at the margin, the price that must be paid to bring the "last kilowatt" onto the grid. And since there is almost no extra cost to producing power once the wind turbine is in place, the wind power will always be put on line first, and then energy sources with higher costs to produce additional power, until total energy demand is met.

When almost all of your energy cost is the cost of the fuel, as with natural gas peaker units, you only bring the units online when it refunds the cost of the fuel to do so. And if natural gas peaker units are on the margin, they can easily common the small amount extra needed to cover the capital costs of constructing the unit.

But when almost all of your energy cost is the cost of the equipment, you will continue to sell power, even far below the tariffs required to repay the loans to buy the equipment. So wind power can easily "shoot themselves in the foot", making power too cheap to be able to refund their finance.

For windpower plants, it makes sense to make a different bargain: give a guaranteed tariff when energy is delivered to the grid (possibly up to some total amount per wind farm), and in return continue to receive that same tariff even if the marginal cost of power is higher.

And once there is enough wind power on the grid, that is a good deal for consumers as well, because the average cost of the power is pushed down ~ the extra cost during periods that wind power is paid more than the marginal price is more than offset by the savings when wind power is paid less than the marginal price.

So that is the idea of the Feed-in tariff. Give a guaranteed return on power delivered to the grid, in return for not giving a windfall return when the marginal price spikes above that tariff.

Not Being Allowed to Make A Good Deal For Consumers

Except, well, there is this law, which, as recounted by the writing swarm at The Wikipedia Machine was originally enacted as part of an effort to encourage sustainable power:

The first form of feed-in tariff was implemented in the USA in 1978. President Jimmy Carter told Americans that the energy crisis was "a clear and present danger to our nation" and drew out a plan to address it.[14] As reaction to a perceived energy crisis and growing concerns over air pollution, President Jimmy Carter signed the National Energy Act (NEA) and the Public Utilities Regulatory Policy Act (PURPA). The purpose of these watershed laws was to encourage energy conservation and the development of national energy resources, including renewables such as wind and solar.[15]

PURPA required utilities to purchase electricity generated from independent power producers at rates not to exceed their avoided cost.[16] Avoided costs are designed to reflect the cost that a utility would incur to provide that same electrical generation.

And the concept of avoided cost is where the California effort to establish a Feed-in tariff came unstuck in the middle of last year:

The California Public Utilities Commission (CPUC) asked FERC for a declaration that this program was not pre-empted by federal law, but the three major investor-owned utilities in California asked FERC to declare that the program was pre-empted.

The CPUC argued that it was not setting a price for wholesale power sales, but was only requiring the utilities under its jurisdiction to offer to purchase power from eligible cogenerators at the price set by the CPUC. In an order issued July 15, 2010, FERC rejected the CPUC’s argument that it was only setting an offering price.

FERC held that the program amounted to impermissible wholesale price-setting, which is solely within the jurisdiction of FERC.

The central question is whether "avoided cost" is forward looking ~ in which case, who is to say what costs shall be avoided in the future ~ or backward looking, which is what the three California utilities argued it should be.

Any objective measure of avoided cost must be past-bound, and incompatible with preparing for a dramatically different future. And if a state cannot put a feed-in tariff in place because it is wholesale price setting, and the FERC won't put a feed-in tariff in place without be directed to do so by an act of Congress ... that is a recipe for a lack of progress.

Now, California developed a system which was intended to cope with the limitations of the July 2010 Ruling, but the ideal is a system that provides for long term feed-in tariff price stability. The more stable an average price, the less risk in the up-front costs of wind power, and so the more wind resources will be financially appealing at that price. The greater the instability, the greater the risk premium that will be required to get a project up and going.

Which is why the following news was such good news:

In response to FERC’s July 15 order, the CPUC asked FERC for clarification regarding the flexibility it had to establish “avoided costs” for specific power resources that it wished to encourage. In earlier FERC precedent, it had been unclear whether different "avoided costs" could be established for different resources.

The Good News

In its Oct. 21 order, FERC provided the requested clarification. FERC, emphasizing that states had wide latitude in establishing avoided costs, held that a "multi-tiered avoided cost rate structure" was consistent with PURPA. FERC reasoned that where a state requires a utility to procure a certain percentage of energy from generators with certain characteristics, those types of generators "constitute the sources that are relevant to the determination of the utility’s avoided cost for that procurement requirement."

FERC also clarified that the state may also include in its avoided cost calculation the costs of transmission upgrades that would be avoided by purchasing power from closer resources. Additionally, FERC noted that a state is free to reward favored resources through other mechanisms outside of the avoided cost rate, such as the creation of renewable energy credits.

Continued limitations under PURPA

FERC’s Oct. 21 order was a clear effort to give the states more leeway with respect to feed-in tariffs, and is more state friendly than FERC’s July 15 order. However, that leeway is still limited by necessary compliance with PURPA.

This limitation has three implications.
1. The only resources that could be beneficiaries of such a feed-in tariff would be those that meet FERC’s definition of a QF, which encompasses certain cogeneration, renewable, geothermal, biomass, waste, and geothermal resources.
2. Although the state will have a fair amount of discretion, the rate established for the tariff must have a demonstrable relationship to the costs a utility would avoid for that class of resources.
3. This PURPA-type feed-in tariff may only be used where utilities remain under an obligation to purchase from QFs.

I have emphasized the key element of the ruling. Since a state has power to impose a range of energy portfolio requirements for renewable, geothermal, biomass, waste and cogeneration, it can take the avoided cost of acquiring those energy resources into account when setting a feed-in tariff.

So the Feed-in Tariff is a two step process. First establish the portfolio requirement. Establish a penalty for undercompliance at the difference between the wholesale price of the power and a stable penalty rate. Then establish the Feed-in tariff at that penalty rate.

Note that this means the feed-in tariff has a quantity component: once the portfolio requirement is met, the penalty no longer applies. So under this system, the state that wants to gain the maximum employment impact from the system will ensure that the portfolio requirement is set in excess of the current supply of renewable power and be set to grow at a steady pace toward the ultimate target.

In other words, the Feed-in tariff cannot really, under current Federal Law, be forward looking itself, but it can take into consideration the current cost impacts of other forward looking state legislation.

Now, of course, Ohio won't be doing this

Ohio has passed from small-r republican rule to Imperial Rule, so of course it won't be happening here in the next four years. But in any state that does have a state government that is in a position to put employment in the state ahead of the interests of oil companies and coal companies ~ this offers the opportunity for substantial employment in the establishment of these renewable energy resources. Note in particular that the tariff can incorporate the avoided cost on transmission capacity of using more local sources as opposed to more distant forces, so while a purely protectionist version is not allowed, a "semi-protectionist" version is permitted that puts a premium on local rather than distant energy supplies.

And of course, if four years from now there are five to ten states that have started to leave the ranks of the zombie economies due to the expansion of green jobs in their state ... the ability of my own Governor K-Street ~ "Gov. K(sic)" for short to maintain the pretense that he gives a damn for the job of any Buckeye outside of the millionaire club will be substantially weakened.

Midnight Oil ~ Dreamworld

Sunday Train: Going on the Attack for Amtrak

2011-01-24T14:28:00.003-05:00

Discussion and comments at:
HillbillyReport.org

ProgressiveBlue

Docudharma

Agent Orange

Burning the Midnight Oil for Living Energy Independence

The Republicans have won one of the established political Power Positions in American Politics, and so they propose to eliminate funding for Amtrak:

The Bush budgets for 2006 and 2007 proposed ending federal support of Amtrak, the only US national passenger rail service.In fiscal 2005, the federal subsidy to Amtrak was $1.2 billion, which is what Bush spends in six days in Iraq.

Now, that was a 2005 fight by Resident George W. Bush, after he won his first Presidential election and his second term in office. So as one of their "new ideas", the new Republican House proposes the same old same old.

What a big surprise. Really, you could knock me over with a feather {Legal Disclaimer: Strictly speaking, a bronze plated ostrich feather when I am already in danger of losing my balance}.
_______________________________

Same old, same old

RSC: Federal Funding for Amtrak & HSR on the Chopping Block

First we had President George Bush and would-be president John McCain calling for the end of federal funding of Amtrak. Republican gubernatorial candidates joined the anti-rail chorus and campaigned on promises to refuse federal funds for passenger rail improvements and expansion if they couldn't be twisted and perverted into subsidies for trucks and automobiles instead. Now it looks as though the GOP-led House is not far behind on the bewildering but growing anti-rail bandwagon that is quickly developing into a fundamental platform position for the Republican party. Although there may not yet be enough Republicans in active office to completely defund Amtrak at this time the trend lines are clear. Presumably there will be some sort of reduction in a "compromise" between the House and the Senate. If the Republicans are able to regain political dominance Amtrak is likely to suffer a critical shortage of funds at their hands. I cannot predict exactly how much funding Amtrak will lose in a compromise bill or when the GOP will regain their former political clout, but I think it's safe to say it's going to happen eventually. The question that's bouncing around in my mind now is how much of Amtrak's current network can possibly survive on its own after all or most of their federal funding is finally lost?
[The Republican Study Committee] wants to eliminate Amtrak operating subsidies ($1.565 billion), which amounted to $32 per passenger in 2009. In 2009, 41 of Amtrak's 44 routes -- which service 500 destinations in 46 states -- lost money, indicating that, without the subsidies, Amtrak would have to significantly reduce or eliminate its service outside the heavily trafficked urban coastal routes. The plans also call for the elimination of Intercity and High Speed Rail Grants to the tune of $2.5 billion a year.

Fighting Back against the Amtrak Cutback

Now, when the Republicans had the Presidency, the House of Representatives and the Senate, the push from the White House to eliminate operating subsidies to Amtrak did not work. The last time they tried, there was tha familiar outcry. Then-Senator Biden argued against the cut:

MR. RUSSERT: Let me ask you about another tough issue for both of you: Amtrak. The president wants...

SEN. BIDEN: It's not tough for me.

MR. RUSSERT: You take Amtrak every day back and forth to work.

SEN. BIDEN: This is absolutely bizarre that we continue to subsidize highways beyond the gasoline tax, airlines, and we don't subsidize, we don't want to subsidize a national rail system that has environmental impact. Do you know what it would take? It would take us $71 billion to be able to go and take--if you took Amtrak out of the Northeast Corridor from Washington to Boston, to build enough highway on 95 to go up and back. This is the ultimate being penny-wise and a pound-foolish.

Take a 3% discount rate, and a 50 year time horizon (given the oil-addiction of our road-based intercity transport system, a time horizon of 20 years before obsolescence would be generous, so this is being extraordinarily generous). That capitalizes to $1.8b per year. So the capital savings in not having to replace the transport service in the Northeast Corridor alone covers over half of the operating subsidy.

And of course, Amtrak was also defended by a large number of other usual liberal suspects, such as a pair of radicals from Pennsylvania (continuing from above source):

MR. RUSSERT: Senator Santorum, your Republican colleague from Pennsylvania, Arlen Specter, said the president's elimination of federal subsidies for Amtrak is unacceptable.

SEN. SANTORUM: Yeah.

MR. RUSSERT: Do you share that view?

SEN. SANTORUM: I would agree with--it's not...

MR. RUSSERT: So you're going to fight it?

SEN. SANTORUM: It's not acceptable to me, either.

The Amtrak Wedge

What was Resident George W Bush really attempting here? Look a little closer at the details of the proposal:

President Bush wants to push Amtrak into bankruptcy, and end its rail services. He proposes to set aside funds for a new train system to someday run only in the country’s northeast corridor.

Bush wants to "privatize" the rest of Amtrak by selling its assets, and let corporations make profits as they see fit.

Of course, what would "push Amtrak into bankruptcy" would be the mandates to provide service on routes that cannot be operated without a subsidy. Lift those mandates, and provide funds for the Northeast Corridor ~ where, as Biden pointed out, the cost of appropriating sufficient funds to replace that transport service with roadworks has a massive sticker shock effect ~ and Amtrak would operate in the NEC corridor that it partly owns, as well as in operating those state-subsidized lines where the state or states would be willing to replace the Federal subsidy.

It is, in other words, not primarily an attack on rail service New York, Connecticut, Massachusetts (etc), Virginia, North Carolina, Illinois, Washington, Oregon and California.

It is primarily an attack on rail service in West Virginia, South Carolina, Georgia, Indiana, Alabama, Mississippi, Louisiana, Arkansas, Missouri, Iowa, Wisconsin, Minnesota, North Dakota, Montana, Nebraska, Kansas, Oklahoma, Texas, New Mexico, Colorado, Utah, Nevada and Arizona.

Its primarily an attack on rail service in places where people can be convinced that the operating subsidies to Amtrak is a subsidy for some "them".

And the goal is, of course, not primarily in diverting the $2.5b in operating subsidies or $1b~$4b in capital maintenance and upgrades to the service of some more Republican constituency. It is, rather, the fear that Amtrak may be entering a period of sufficient success that it will be able to start expanding upon the skeleton backbone network. The "problem" is, after all, not that Amtrak is losing riders: the problem is that Amtrak is gaining riders even in "Red States":

WASHINGTON - Despite the lingering effects of the Great Recession, Amtrak ridership hit an all-time high in fiscal 2010.

According to the Georgia Association of Railroad Passengers, Amtrak carried 28.7 million riders during the fiscal year that ended Sept. 30, up 5.7% from fiscal 2009. Ticket revenue set an all-time record too, and all four Amtrak trains serving Georgia shared in the gains.

The Palmetto, running between New York, Washington and Savannah, showed the biggest surge: it carried 10.6% more riders, and ticket revenue was up a whopping 23.1%. The Silver Meteor and the Silver Star, both running between New York, Washington, Savannah and Miami, enjoyed ridership gains of 6.5% and 6.0% respectively, and revenue increases of 8.1% and 10.2%. On the New York-Washington-Atlanta-New Orleans route - which stops in Toccoa, Gainesville and Atlanta - the Crescent recorded a 4.2% ridership gain and a 8.3% revenue gain.

Looking at raw numbers, the Silver Star was the most popular Amtrak train serving Georgia, carrying 393,586 passengers during fiscal 2010. The Silver Meteor was next, with 352,286 passengers, followed by the Crescent with 298,688 riders and the Palmetto with 189,468 passengers. The Palmetto 's revenues covered about 53% of its costs; the Meteor had a 49% revenue-to-cost ratio; the Star had a 42% ratio and the Crescent had 38% ratio.

So one fear is something like the system sketched to the right. While very heavily subsidized services like The Cardinal and The Hoosier could see very substantial increase in ridership with only a small drop in total subsidy, each 1% in revenue growth in services like the Palmetto and Meteor means a 1% or greater drop in subsidy per service mile.

Because of the way that the route performance is now tallied, it is most convenient to report this in terms of net operating ratio, where a negative net operating ratio under (-50%) is in the zone where subsidy drops as fast or faster than revenue:

Auto-Train, (-26%);
Empire Builder, Palmetto, (-50%),

However, ridership and revenues are growing, and the real risk is that all but two of the remaining trancontinental routes have net operating ratios in the (-50%)~(-60%) range:

Capital Ltd, (-53%);
Silver Meteor, California Zephyr, (-53%)
Texas Eagle, Coast Starlight, (-55%)
City of New Orleans, (-56%),
Lakeshore Ltd, (-57%);
Southwest Chief, (-58%),
Crescent, (-59%)
Silver Star (-60%)

With a series of oil price shocks likely to hit in the coming ten years ~ which is either, if you believe they are freely functioning competitive commodity markets, what freely functioning competitive commodity markets do when supply constraint, or if you believe the evil commodity traders are blatantly manipulating the market, an irresistible ploy for evil commodity traders in the face of supply constraints. Indeed, since we get a series of oil price shocks from the pure free functioning scenario and from the pure price rigging scenario, and since its somewhere between the two opposite extremes ~ we're getting a series of oil price shocks in the decade ahead.

And when they hit, ridership and revenue will only grow. And, indeed, when they hit it will be too late to spring this attack.

Best to ensure that as many people live in states with no intercity rail transport at all, so that pandering to their prejudices is not threatened by the dangerous facts of personal experience or face to face discussion with somebody with personal experience.

And that is only one fear ... there are also these:

If a kernel of Express HSR and Regional HSR corridors get established, and demonstrate that they can generate positive net operating ratios ~ as the Acela services already do ~ that is a serious threat, and so to would be the establishment of a network of 100mph oil-independent electric freight rail tollways.

Because the danger is the demonstration that the way we do things is not the way we have to do things, which threatens a vast array of yellow bellied surplus suckers with their snouts buried deep in the public trough. The fear is that national passenger rail will stop being a running joke, because when that happens, there are big chunks of the Great Rip-Off Economy that are under threat.

Responding to the Attack

It is very unlikely that the Republican House on its own will be able to eliminate Amtrak operating subsidies. Indeed, it seems unlikely that this is their goal.

The goal of the House Republicans is to force patriots who do not wish to sell out our national security to the profits of the oil industry and road building lobbies into a defensive, hunkered down posture, enabling them to gouge out some or all of the HSR capital grants and some or all of the Amtrak capital grants that are the serious threat.

After all, without capital funding, Amtrak will not even be able to buy enough new passenger cars to carry more than a fraction of the people who will wish to ride when the next oil price shock hits.

We need to push our Senators ~ both Democratic and Republican, wherever possible ~ to do more than to hunker down in a defensive posture. They need to go on the attack. And since objectively this policy of the Republicans is betraying the national security interests of the nation in the service of the profits of the oil industry and the road building lobby ~ they need to go all out, wrap themselves in the flag, and go on the attack:

Hearings that grill the Department of Defense on how we move vital war material and maintain logistical support for vital Defense Industries in case of an massive disruption of oil supplies, such as the Shutdown of the Straits of Hormuz or collapse of national government in Nigeria
Hearings that grill the Department of Defense on how we mobilize troops in the event of a massive disruption of oil supplies
Hearings that grill the Department of Homeland Security on how their evacuation plans for each of the top 100 US metropolitan areas in the event of a massive disruption of oil supplies

In other words, don't restrict ourselves to the standard ~ an perfectly valid ~ litany of external benefits ... environmental benefits, equity of access to transportation, massive subsidies being provided to alternative means of intercity transport. Those are all points well worth hitting, but if that is the sole case, we are preaching to the choir.

We get the right 15 second sound bite from an Army General, we have the material for an ad hitting a Republican Congressman for being soft on national security.

Now, of course, I'm just an economist, so read this more as a general strategy than a specific tactic: getting the right messaging delivered in the right way is not necessarily going to come out of any one of these attacks, but if we push at the enough different edges of the established frame, we can dig up something that shakes people's perceptions. And with gas prices likely heading up again this coming summer, it puts supporters of sustainable transport in a position to gain increasing traction on the back of voter's everyday experience.

Late Update: The Fight to Save Caltrain in the Bay Area

See the California HSR Blog for More information.

Midnight Oil ~ Truganini

Sunday Train: Quiet Progress Edition One ~ Superelevation & Cant Deficiency

2011-01-24T14:10:00.003-05:00

Burning the Midnight Oil for Living Energy Independence

Discussion and comments at:
HillbillyReport.org

ProgressiveBlue

Docudharma

Agent Orange

I've mentioned several times that there are lots of Federal Rail Authority regulations that are impediments to developing sustainable transport in the United States.

One of these is in the area of "superelevation" and "cant deficiency". Superelevation is the term used in railroading for the degree of banking provided in a turn. Just as banking a turn on a road makes it possible to take the turn at a higher speed more safely, banking the track on a railroad line makes it possible to take a turn at higher speed more safely. In US rail, its measured in the inches of the higher rail above level.

And it might seem minor technical details, but this is really critical for how much new passenger transport we can get out of our existing rail alignments for how much money.

The Basic Terms: Superelevation, Cant Excess, Cant Deficiency

When a track is "cambered", that is to say banked in this way, there is a speed at which weight is evenly distributed between the two tracks.

At a lower speed, more of the weight is placed on the lower track. This is called "cant excess", which is how much the bank would have to be reduced for the load to be balanced.

At a higher speed, more of the weight is placed on the higher track, which is "cant deficiency", or how much more the upper track would have to be raised for the weight to be balanced.

Now, suppose that you have a single track that is only being lightly used by freight, and you want to take advantage of that by adding some passing track ~ say 1 mile of passing track on average for each 5 miles of track ~ to increase the capacity of the corridor to maintain the same freight train capacity and add the capacity to support passenger trains.

Now, how fast is the freight going? If this is a mainline corridor running through fairly flat terrain, carrying a large number of fairly time-sensitive freight containers from a sea port to some inland rail yard (to be hauled away by truck to the loading dock that is the final destination of the shipment), it might be rolling along at 60mph.

But suppose that its a bulk load of coal, granite, timber or any of the other high weight, low cost per ton freight tasks that are in the US travel largely by rail. It might be trundling along at 20mph. And if 20mph has a substantial cant excess, that means a lot of that up to 33 US short tons per axle load is being carried by the lower track.

Now, consider an Express intercity passenger train that we want to bring through. Since we want it to be time-competitive with Interstate driving ~ better if feasible ~ we'd like that train to be running as close to 110mph as possible.

20mph, 60mph, 110mph ~ there is no superelevation that will be anywhere close to balanced for all three. And if the heaviest freight is the slowest, if the track is superelevated at the ideal level for Express Intercity passenger trains, the result will be massive increases in wear and tear on the track because of the cant excess for slow speed freight.

Well, if you have to build that common track to avoid too much cant excess for slow speed traffic, then in turn the speed limit on the Express Intercity train through the curve depends upon the allowed amount of cant deficiency.

And if you have a choice, you put the passing track in a segment with more than the normal number of curves, so that you can superelevate that as an Express track and allow the slow, heavy freight trains to run on track with less camber.

What is it that Tilt-Trains Do?

Tilt-trains effectively act to add extra camber to passenger car. This is important in that the speed that the train can safely operate on the track normally includes speeds that will throw the passengers around inside the train.

While it is partly a physical problem ~ it is also a regulatory problem.

That is, an important part of allowed cant deficiency is the matter of what lateral force passengers are permitted to experience by regulation. Since the most common European standard is 50% higher than the US standard ~ or at least, what I thought was the US standard ~ the allowable speed of the same tilt-train through a curve with the exact same curvature is substantially higher than Europe than it is in the United States.

Now, there is more to this than just the allowed lateral force passengers are permitted to experience: there is also the matter of the weight of the train. A train with 33 US short tons per axle (a common mainline maximum in the US) is putting 16.5 US short tons per wheel on the track when operating in perfect balance. A train with 25 US short tons per axle (a common European mainline maximum), is only putting 16.5 US short tons per wheel on the upper track at a cant deficiency when 66% of the weight is carried on the elevated track. And a train with 20 US short tons per axle (a shade over the maximum weight of many European and Japanese Express HSR sets), is only putting 16.5 US short tons per wheel on the upper track at a cant deficiency with 82% of the weight carried on the elevated track.

So while allowed lateral force is an important element of operating speed through curves, the weight of the train is also an important element, as noted by German rail enthusiast Hans-Joachim Zierke, in looking at the [http://zierke.com/shasta_route/ opportunities for an Emerging HSR corridor connecting California and the Pacific Northwest via the Shasta Route] (and note that this is an unfinished project), when presenting the following [http://zierke.com/shasta_route/pages/15regulation.html example of the impact of FRA regulation on operating speed limits in the US]:

The highest curve speeds in the USA are achieved by the Acela Express. For the track between New Haven and Boston, it has a waiver for operation at 7 inches of unbalanced superelevation. This means, that the Acela is allowed to use the same curve speed as non-tilting TGVs (or multiple units) in France.

Adding results to the comparison on page 4 gives the following table therefore:

curve radius superelevation speed limit ¹

Amtrak Cascades, tilting 1000 feet 4 inches 48 mph

TGV, non-tilting 1000 feet 4 inches 53 mph

Acela Express, tilting 1000 feet 4 inches 53 mph

Baureihe 411 EMU 1000 feet 4 inches 63 mph

... In the USA, trains like the type 411 EMU are not allowed to operate. US regulations require a very high carbody strength for political reasons, which adds several tons of weight to a vehicle. If this mass is added to a European tilting EMU or DMU, it is no longer safe to operate at 11.8 inches of unbalanced superelevation, because the maximum safe axleload is exceeded.

The Acela Express is built to these strength standards. It is nearly double as heavy as European or Japanese tilting trains. Instead of restricting the axleload to 16 tons or less, the powercars weigh 25 tons per axle. No safety authority would allow values like those for the German 411 or 610 for this train, because the forces at the wheel-rail contact point would be too high for safe operation.

As a result, the "Acela Express" looses about half an hour between New York and Boston, compared to best practice in tilting train usage. (It also looses at least half an hour, compared to the calculations of US railroad engineers in the 1960s.) If this half hour of running time from New York to Boston needs to be cutted away by infrastructure investment instead, a three-digit number of millions in additional public investment will be needed at least. A similar situation will be found with almost all upgrade projects for curvy track.

	curve radius	superelevation	speed limit ¹
Amtrak Cascades, tilting	1000 feet	4 inches	48 mph
TGV, non-tilting	1000 feet	4 inches	53 mph
Acela Express, tilting	1000 feet	4 inches	53 mph
Baureihe 411 EMU	1000 feet	4 inches	63 mph

In the US, the standard allowed cant deficiency of passenger rail has been set by, first, the safe operating limits of the train itself and, second, by the amount of lateral force placed on the passenger inside the train. In practice, the second is the main constraint, and this results in a much lower allowed amount of cant deficiency in the US than in Europe.

That is, even if tilt trains were acquired that were safe to operate at extremely high cant deficiencies, and which were allowed in Europe to operate at those high cant deficiencies, the existing regulations in the US would have substantially reduced the speed limit going through a curve.

The Importance of Speed Limits Through Curves

To get an idea of the importance of speed limits through curves, consider the diagram to the right. This is the modeling results (pdf) of the operating speed along the 110mph of the planned Ohio Hub 3C corridor.

When the line drops all the way down to 0mph, that is, of course, a stop at a station. However, you can see all the notches where the train slows down to take a curve at a slower speed.

Consider one of the notches where speed has to be dropped down to 40mph. In the speed profile, notice that most of the time is spent dropping down from 110mph to 40mph and accelerating from 40mph to 110mph.

That is, of course, a route profile, not a trip time profile. When we think about the average speed of the service, the slowest sections of a route loom the largest.

Consider, for example, a train that runs 50 miles at 40mph and 50 miles at 110mph. A simple average of the two speeds is 75mph. But the slow section requires 1.25 hrs while the fast section requires 0.46hrs, which is a total of 100mile in 1.71 hrs, or about 59mph. More of the time is spent at 40mph, so it looms larger in the average speed.

And consider the difference between accelerating the slower leg by 10mph and accelerating the fastest leg by 10mph:

50 miles at 40mph and 50 miles at 120mph is 100 miles in 1.67 hrs, or ~60mph
50 miles at 50mph and 50 miles at 110mph is 100 miles in 1.46hrs, or ~68mph

Given the importance of the amount of slow down required through curves, the table that Hans-Joachim Zierke shows represents the US tying one hand behind its back in the race with Europe and Japan to achieve sustainable transport.

However, the Regulations May Be Fixed

OK, now. Put yourself in my shoes. I am googling around for information on cant deficiency and Federal Rail Authority regulations in mid-November, when I stumble across the following notice in the Federal Register:

Vehicle/Track Interaction Safety Standards; High-Speed and High Cant Deficiency Operations
FRA is proposing to amend the Track Safety Standards and Passenger Equipment Safety Standards applicable to high-speed and high cant deficiency train operations in order to promote the safe interaction of rail vehicles with the track over which they operate. The proposal would revise existing limits for vehicle response to track perturbations and add new limits as well. The proposal accounts for a range of vehicle types that are currently used and may likely be used on future high-speed or high cant deficiency rail operations, or both. The proposal is based on the results of simulation studies designed to identify track geometry irregularities associated with unsafe wheel/rail forces and accelerations, thorough reviews of vehicle qualification and revenue service test data, and consideration of international practices.

I was even more excited when I looked at the details of the proposal, and found that both the allowed amount of superelevation and the allowed amount of cant deficiency were proposed to be increased.

While they were looking at the regulation, they noticed a flaw in the existing regulation, and restating the regulation in terms of a design target and an allowed tolerance raises the effective maximum superelevation of track to 7in.

There is a standing balance requirement on rolling stock, since it would be unsafe to operate a train that would be in danger of tipping over if it was necessary to come to an emergency stop, so its quite possible that not all rolling stock would be permitted to use a corridor that was superelevated for Express service ... but to me, you do not want every coal and granite train to qualify to enter an express bypass anyway.

For a curve with a 1000ft curve radius (which is a 5.75 degrees of curvature), under the old rules, outside of the North East Corridor, the best that could be reasonably expected would be 9" of combined camber, from 4" of superelevation of the track and an allowed 5" of cant deficiency, even with a tilt train. That means that the passenger service ~ even if its a tilt train ~ would be limited to 47mph through that curve. A freight train, which is limited to 3" of cant deficiency, and indeed all other trains limited to 3" cant deficiency, would be limited to 41mph (those are the ~40mph curves in the above speed profile).

Why is the Northeast Corridor singled out there? Because it was granted a waiver, that allowed both the Acela tilt train and the NEC Amtrak Regional trains to operate at a higher cant deficiency than generally allowed for.

Under the new rules, which would be nationwide, if an express section of track can be superelevated to 7", and a tilt train can operate with 8" of cant deficiency, that is 15" of combined camber, which would allow a express freight train to run at 49mph around the same curve, and a passenger tilt train to run at 61mph.

Indeed, one thing that this new regulation implies is that existing Amtrak services operating in mountainous terrain along "river routes" with the large number of curves that this implies can receive a substantial speed upgrade even before raising the top speed limit above 79mph. Also, Amtrak services that will be running on any segment of track upgraded for use by an Emerging HSR 110mph service will be in a position to take advantage of the higher speed track as soon as it is ready for service.

What Else Needs to be Done

Since what I have been reading is the rule proposal, but the final rule date is given as December 2010, I am not quite sure what has come of this, and due to broken links at the Federal Register, its a bit difficult to work out. That is something I am following up by email to the listed contact.

However, if anything like the proposed rule actually takes affect, this implies a substantial upgrade in the possibilities for using our existing rail corridors. Since this is being done by regulation rather than by waiver, it can be put to use across the board, rather in the piecemeal way implied by waivers of regulations. And since it is being done by regulation, it provides a standing target for the manufacturing of a new generation of more effective and efficient passenger train.

Of course, this is not everything. As Hans-Joachim Zierke notes, the "build it like a tank" approach to crash survival results in heavier trains, while the European and Japanese approach of "design the system to avoid crashes" results in lighter trains, and lighter trains are better able to take advantage of these new cant deficiency regulations than heavier trains.

But this is a good step. And its a first step that may well have been the result of a Republican Take-Over ... that is, in 2009 in the Department of Transportation, when [http://fastlane.dot.gov/ Roy LaHood] was made Secretary of Transportation and the eight year assault on rail transport by the Bush administration came to an end.

Midnight Oil ~ Kosciusko

Older than kosciusko
Darwin down to alice springs
Dealers in the clearinghouse
The settlements explode

High up in the homelands
Miners drive across the land
Encounter no resistance
When the people block the road

Old than kosciusko
Dry white seasons years ago
Darkness over charleville
The fires begin to glow

No end to the hostility
Now they wanna be somehwere else
No stranger to brutality
Now they'd like to be someone else
...

Comment at ProgressiveBlue: What's Latin for While I Breath, I Organize'?

2011-01-03T19:48:00.002-05:00

Original post at Progressive Blue:
My New Years Resolution "Dum Spiro Spero" by RDemocrat.

Comment:

I'm not an organizer. Hell, I cannot organize myself, let alone organize a movement. But its the organizing that is the critical thing. Ever since electing a Hedge Fund Democrat became our best hope for the 2008 Presidential election, which was clearly the case quite early in 2008, our political organizing goal became building Progressive and Populist caucuses in the House, State Legislatures, City Councils, Country Boards, School Boards and etcetera.

While the right wingers focus on the Presidential election, and while the chatterers online chatter about the Presidential election, we still need to organize to the same end.

IMV, at the present point in time and with the present balance of power in the House, many State Legislatures ... hell, many School Boards ...

... fussing about what is happening in Presidential politics is like trying to build the roof on a house before we've laid the foundation.

So my hope is that there are the organizers who can train those who can be organizers in turn so that we can mobilize a progressive populist change coalition before its too late.
...

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

2010-11-24T17:45:00.005-05:00

Already up at:

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.
_________________________________________

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

2010-11-21T12:39:00.002-05:00

Burning the Midnight Oil for the Arc of the Sun

You can also comment at crossposts at

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

2010-11-16T17:02:00.006-05:00

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

2010-11-09T20:05:00.002-05:00

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?
________________________________________

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

2010-11-08T18:57:00.000-05:00

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.

2010-10-31T16:28:00.004-04:00

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

2010-10-13T19:34:00.000-04:00

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

2010-10-04T00:20:00.001-04:00

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

2010-09-05T20:01:00.001-04:00

Burning the Midnight Oil for Living Energy Independence
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Discussion at:

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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.
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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

2010-09-03T12:29:00.003-04:00

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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O'Donnell Hits a Social Security Foul Tip

2010-08-31T15:47:00.003-04:00

Burning the Midnight Oil for Progressive Populism

Discuss this post at:

When Lawrence O'Donnell started berating the woman who received the email from Alan Simpson with this BS (5:05)], I was forced to leave the room until Rachel came on:

It is solvent until 2037.
Workers your age who are contributing to social security every day, we concurrently tell you when your time comes to collect, the money will not be there according to all projections we have today.

"According to all the projections we have today"? First, that is false. Its according to one projection we have today ~ among a range of projections that are made. And second, if Lawrence O'Donnell is going to shift from host to pundit, he is responsible when he uses figures in a misleading way.

Over the fold, how this is wrong, let me Countdown the Ways.
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Now, before I begin, I must confess that I am an economist, and given the performance of the majority of my colleagues over the past forty years, it would not be surprising if you turn the channel immediately on knowing that.

However, I will say in my defense that I have also been arguing that the majority of my colleagues have been engaging in an anti-scientific approach to understanding the economy for two decades now, since starting grad school in what was then one of the few places you could pursue an PhD while learning from American Institutional economists ... and while I am not a macro-economist, several of American Institution macroeconomists were among those who "called it" as far as the Panic of 2008. Indeed, the Association for Evolutionary Economics has collected a list of economists who are placed among the "nobodies" whenever anyone says, "Nobody Could Have Seen It Coming": Got It Right Project

There Is No Immediate Crisis: Rich People Just Do Not Want to Pay Back Money They Borrowed from Poor People Via Tax Cuts

Originally, the Social Security Trust Fund was set up on a Pay As You Go basis: except for a small buffer, funds coming in covered liabilities. But with demographic swings in the American population, and in particular with growing life expectancies, we looked ahead and saw that when the Baby Boomers started retiring, that would lead to a very high rate of payroll tax.

So Tip O'Neill and Ronnie Raygun reached a deal, where the Social Security rate would be raised, in the early years the resulting surplus would go the General Fund to allow for up front tax cuts, and then when the rate fell behind obligations, the Congress would raise revenues to "pay back" the funds that the Social Security trust fund had lent to the General Fund.

Of course, now that it is nearing time to start paying back, this deal has stopped being a sweet tax deal, swapping higher regressive taxes that rich people do not have to pay for lower progressive taxes that rich people do have to pay, and is entering the flip side of the deal, where the progressive taxes are below Pay As You Go rates, and the funds lent to the wealthy in the form of tax cuts have to be paid back to cover the bonds in the Trust Fund.

Rich People enjoyed borrowing the money from the Trust Fund in the form of tax cuts largely for Rich People. While Borrowing, they were all for the deal. Now that it is time to pay back, they do not like the deal any more.

Now, if we had put this money into an infrastructure fund, we would have a massive amount of infrastructure projects now paying back and it would not be an issue ... but we decided to let rich people borrow it instead. Because we listened to all sorts of BS framing about this deal ... framing mindlessly repeated by people like "Congressional Staffers" (and being a former Senate Staffer with the ability to repeat inside the beltway "expert opinion" is Lawrence O'Donnell's claim to fame) ... instead of seeing this as rich people paying back money they've been borrowing since the mid-1980's, its framed like Social Security is a private insurance fund that is threatened with "insolvency".

So that is the introduction: this is all about Rich People trying to renege on a borrow and pay back deal now that the pay back time is approaching. THAT is the "crisis", not the fictitious 2037 insolvency.

5. The Predictable Movements of the Insolvency Year Projection

The first way that "the projection says its 2037" is BS is that Lawrence O'Donnell, if he checks, will know perfectly well that the projection itself moves in a very regular way. Consider the projection from 2000 to 2009:

2000: Payback 2015, Insolvency 2037
2001: Payback 2016, Insolvency 2038
2002: Payback 2017, Insolvency 2041
2003: Payback 2018, Insolvency 2042
2004: Payback 2018, Insolvency 2042
2005: Payback 2017, Insolvancy 2041
2006: Payback 2017, Insolvency 2040
2007: Payback 2017, Insolvency 2041
2008: Payback 2017, Insolvency 2041
2009: Payback 2017, Insolvency 2037
2010: Payback, Present to 2011, then 2014, Insolvency 2037

When the economy is in the middle of the deepest and longest recession since the Great Depression (though both Great Depression recessions were deeper and the Hoover recession far longer), the Insolvency year goes down. When the economy is treading water, the Insolvency year treads water. When the economy is doing OK, the Insolvency year goes up.

If a Big Recession like the Panic of 2008 costs us 4 years, and even a sluggish recovery (for the bottom 90% of the income ladder that pays into the trust fund) pushes the year back by half a year or better each year, that means that AVOIDING A REPEAT OF THE PANIC OF 2008 will guarantee that there are still funds in the Trust Fund by 2037.

And, of course, we can avoid a repeat of the Panic of 2008 by adopting policies that ensure it does not happen again. In other words, taking the 2037 year as a "fact" depends on assuming that we won't fix the structural flaws of our financial system.

Someone might say, "but, what is the evidence we will?" ... but the point is, Lawrence O'Donnell pointedly ignored that fact that "fix the massive problems that we created when we started pretending that the Finance Sector can be a sustainable Engine of Growth" as one of the possible "fixes". It was all regressive tax increases or regressive benefits cuts.

4. Projections, with an S. Its Plural. 2037 is just one Scenario

The statement that "according to all the projections we have today" is simply a baldfaced lie. Its not even true according to all the projections done by the OASDI Trustees. The image to the right displays "all the projections" done by the OASDI Trustees for their 2009 report. The left hand line, exhausting the fund around 2029, is the bad economic growth scenario. The middle line, exhausting the fund around 2037, is the intermediate economic growth scenario. And the right hand line, never exhausting the fund, is the strong economic growth scenario.

Obviously, if the optimistic scenario never exhausts the fund, then there is a range of scenarios between "intermediate" and "strong" growth that exhaust the fund in 2040, or 2050.

Even more to the point, the strong economic growth scenario shows just how important the scenarios are. If the fund exhausts sometimes after 2050, it would only represent a small shortfall, since the Baby Boomers will, to put it delicately, start to retire from the status of being social security recipients. If the trust fund exhausts at a time that Social Security tax receipts cover 90% to 95% of entitlements, then it would be entirely possibly to put in a small levy at that time to cover the shortfall, and once the receipts have returned to 100% of entitlement, to then put Social Security back on a Pay As You Go basis.

Well then, there is another "Fix Social Security" policy for you, that Lawrence O'Donnell conveniently forgot to mention: grow the economy. For example, the 10 cent a gallon tariff on imported crude oil that I have proposed to finance investment in oil-independent transport is part of a Social Security Fix.

Its not "on the table" because its a "Bipartisan" commission, and that means that the Republicans and Corporate Democrats who brought us the current slow-growth economic policies are the majority of the Commission. But that is no excuse for Lawrence O'Donnell: he is not bound to respect the slow-growth, wage-minimizing, sluggish investment (and environmental damage maximizing) policies of the "Bipartisan", aka Corporate, Economic Consensus.

Indeed, as seen in Story Number 5, we have had a strong test of how "unbiased" the "intermediate" projection is: the first business cycle without growth in median income since World War II, then followed by the deepest recession since World War II is what was required to keep the projection stable. In 2000, the intermediate insolvency projection was 2037, and in 2010, the intermediate insolvency projection is 2037. So just keep median incomes from falling, in addition to avoiding a repeat of the worst recession since World War II, and the real world track ought to be to the right hand side of the middle projection in the figure above.

3. Its Not One Trust Fund: It's Two

Taking the 2010 report, under current law, the exhaustion of the main Social Security Trust Fund under the (floating and biased low) "intermediate" projection will take place in 2040.

Wait a minute, what about the 2037 figure?

That is a combined figure, combining the main Social Security trust fund with the Disability trust fund. The Disability trust fund is projected to exhaust its assets in 2018. If the law is changed to allow the Disability trust fund access to the main Social Security trust fund assets, then the combined pool will be exhausted (under the biased-low intermediate projection) in 2037. But under present law, that is not allowed, and so under present law, the main Social Security trust fund will be dedicated to the main Social Security entitlement.

There is, in other words, a funding problem to fix, but its in the Disability trust fund. That fact is entirely obscured by Lawrence O'Donnell's beltway-conventional-wisdom driven punditry from the host's chair.

Fix it a different way and exhaustion of the Social Security trust fund is pushed out toward 2040, even under the biased-low "intermediate growth" estimate.

Say, impose a levy on combined unearned and earned income above $250,000, set each year to retain one year's balance in the Disability Income trust fund. Off the table from the "Bipartisan", aka Corporate Majority, Commission, but a perfectly reasonable fix. It avoids a tax increase now, and by transferring income that will be largely directed to accumulating wealth to those who will largely spend it on newly produced goods and services, acts as a mild stimulus when it does kick in.

And of course, if the wealthy were to abandon the policy of holding economic growth hostage to prevent wage increases, the levy would be substantially smaller than under the current approach to economic policy.

2. What About Income Growth

Time for another graph. To the right is median income growth in the US since the mid-1960's, when the Census started keeping track.

That is the source of the remark I made previous about the Bush Business Cycle having no median income growth, even before the Great Bush Recession pushed the economy into a ditch.

What if we changed that? What would that do to the trust fund? Well, the OASDI Trustee's report does not project that directly ~ they only include it indirectly to the extent that strong economic growth will drive income growth.

But what if we made a "secular" change to that trend, and grew the incomes of people in the middle. That means that the payroll tax taxbase rises, and the trust fund insolvency year steadily climbs up ... remembering that if it hits somewhere in the 2050 to 2060, then there is no problem to be solved, since the Baby Boom demographic bulge will have been bridged. Solving the immediate DI trust fund issue pushes the main Social Insurance trust fund insolvency out to 2040, 30 years from now. We only need to push the year back by an average of 2/3 of a year each year, and we are home free.

So here is another Social Security Fix policy that Lawrence O'Donnell left off the table: pass the cardcheck unionization bill. Increased rates of unionization will lead to higher median income growth, and thus will steadily push back the insolvency year even under the biased-low "intermediate" growth projection.

1. Income Inequality

And for the top story this afternoon, consider the graph to the right. The Social Security payroll tax kicks out at $106,800, which means that the bulk of income in the to 10% of the income ladder is outside of the Social Insurance tax base.

And we have been putting more and more of our national income in the hands of the people who do not pay FICA on the majority of their earned income ~ and of course who pay FICA on none of their unearned wealth income.

According to the Trustees report, if the Disability Insurance trust fund is taken care of, covering the (overestimated) shortfall of Social Insurance will require 1.62% of taxable payroll.

Now the FICA tax rates for the Social Insurance fund are 10.6% (only half of that tax is shown on your paycheck, the other half if taken out of the cost of employing you as an "employer contribution". Of course, since its all considered to be a cost of employing you by an employer, the difference is only cosmetic).

Shifting 9% of US income back from the 10% who largely do not contribute to Social Insurance to the 90% who fund the program ... would be roughly a 9%/58% increase in the "taxable pay" ... which is a 15% increase in the Social Security taxbase ... and 10.6% of that is 1.59%, or almost the entire amount of the (over-estimated) projected shortfall.

So:

1. going back to the income distribution that the US had when we gained the status of the wealthiest nation on the face of the earth, rather than the income distribution we have had as we lost that status ... basically closes the hole entirely
2. Restoring median income growth will certainly reduce and has the prospect of closing the hole
3. Fixing Disability Income without putting a brake on growth with regressive tax increases or benefit cuts closes the only part of the problem that threatens to hit this coming decade
4. Reversing our slow-growth income policies will certainly reduce and getting even halfway to the fast-growth scenario would likely close the hole entirely and
5. Avoiding a Second Great Recession in the next thirty years will reduce the hole substantially over the next thirty years.

Without a single regressive tax and without a single regressive benefit cut, that is reducing the hole one ways and closing the hole entirely three ways.

So the next time Lawrence O'Donnell tries this shit, hit him back with a shitstorm of calling him on his bullshit. Hit him here, hit Countdown's email, hit twitter, hit facebook ... whatever social media you are connected to, hit it. The fix is in and unless we call them on it, it will stay in.

Midnight Oil ~ Power and the Passion

You Take All The Trouble That You Can Afford
At Least You Won't Have Time To Be Bored

If the College Educated hit 16% unemployment, would it be different?

2010-08-17T16:39:00.005-04:00

Burning the Midnight Oil for Progressive Populism

While Matthew Yglesias tends to be susceptible to patently absurd conventional wisdom economics, he does have his moments, as back in February when he observed:

The people in all the key jobs—not just the members of congress and cabinet secretaries and FOMC members and newspaper editors, but the bulk of the people who staff those people—are virtually all college graduates. And the way America works in 2010 those people are overwhelmingly going to have friends, neighbors, and acquaintances who are also college graduates. And while the labor market outlook for college graduates is bad by the standards of recent history, it’s really not catastrophic. Things look very different for people with high school diplomas.

The figures are stark, and starker when plotted as a graph:

The people I teach are mostly on that purple line trying desperately to climb down onto that green line, out of the 10% (headline) rate to the just-under-8% rate. Which may be part of why I am skeptical when Richard Florida reckons that the 'Knowledge Economy' as currently constituted, which mostly constitutes people making intellectual property claims to slice and dice existing income streams, is sufficient as a future for the American economy.

If the US is going to be importing the actual manufactured products, mostly from the Factory of the World across the Pacific, we have to have something to export that people can work on without genuinely requiring a four year college education.

Now, I don't believe in silver bullet, all-in-one miracle solutions, so none of these are intended to be silver bullets, but all of these involve work below the four year college level, in addition to the college-educated work that it generates:

Pass a Federal Law that long term fixed tariff electricity rates may take as their "avoided cost" the average annual wholesale price of power in the median of the past five years. This will allow states to pass feed-in tariffs, establishing jobs in manufacturing, installing, and maintaining wind turbines in all states that take up the offer
The same Federal Law allows for stable feed-in rates to buy back power from small scale solar and industrial cogenerated electricity, further expanding the employment that can be generated
A 10 cent a gallon tariff on imported crude oil to finance Steel Interstates, High Speed Rail, Electric Transport, Public Transport and Active Transport, with the ability to borrow ahead on the tax revenue, can generate millions of new jobs ~ many college educated, and many not requiring a four year college education

This is a point that is perhaps lost in the noise: when the Oil Industry founded and as it funds the Radical Right Wing echo chamber, including the Cato Institute, the Heritage Foundation, the Reason Foundation, among the notable opponents to Energy Independence and supporters of maintaining America's vulnerability to its greatest national security threat ...

... they are opposed to the creation of jobs for ordinary working families.

While the Republican noise machine generates outrage about a non-existent Mosque which will not look onto Ground Zero to distract attention from its own jobs policy of "prosperity is just around the corner".

People know that someone has ripped off their American Dream. Too many Democrats are beholden to the same interests that did the ripping off to stand up and say loud and clear who did the ripping off ... in this election cycle. But what that means is that we have to organize so that starting around December 2010, we are working to getting people on the ballot for State Legislatures and Congress ~ Democrats if they'll let us, independents if need be ~ who are willing to stand up and say loud and clear who is on the getting side of the Great American Rip-Off Economy.

Remember what happened when gasoline hit $4/gallon. Over the decade ahead, we will be starting to slide down from the Peak of Peak Oil, and will be looking back fondly at $4/gallon oil, unless we start doing something now to tap the jobs that are available from Working to Kick Oil.

Midnight Oil ~ Dreamworld

The Breakfast Creek Hotel is up for sale
The last square mile of terra firma gavelled in the mail
So farewell to the Norfolk Island pines
No amount of make believe can help this heart of mine
End - your dreamworld is just about to end
Fall - your dreamworld is just about to fall
Your dreamworld will fall

Sunday Train: Richard Florida and the End of the Automobile Age

2010-08-16T12:17:00.003-04:00

Burning the Midnight Oil for Living Energy Independence

Crossposted to: Hillbilly Report, ProgressiveBlue, Docudharma, European Tribune, and Agent Orange.

This week in The New Republic, Richard Florida presented his vision of High Speed Rail as the central strategic point of leverage in an economic "reset" to get us out of the doldrums resulting from the failure of the 20th century growth model to deliver ongoing, sustained growth any more ... though the way he frame it is:

As dismal as housing prices continue to be, they have yet to hit bottom in some places. Unemployment remains frozen at an overall level of nine-plus percent, and job creation has been anemic. If the crisis belonged to George W. Bush, the recovery has been Obama’s—and it has been a fragile and tentative one at best. Along with billions of dollars in stimulus payments, the president has spent down most of his political capital. So what is his next step?

So ... what is the next step?
_______________

This article is dated 12 August, and given the central role that Florida paints for High Speed Rail, has of course already been addressed by a number of others, including Yonah Freemark at The Transport Politic and Robert Cruickshank at the California HSR Blog.

Florida's thesis:

The Economic Growth Engine that dominated the post-WWII US economy generated a form of geographic Keynesianism
This Economic Growth Engine has reached its end
We must therefore turn to a Growth Engine based on Innovation
Innovation is fostered by clustering
So the Economic Geography of the Next Growth Engine will be emerging national Mega-Regions
High Speed Rail is uniquely suited to connect the distinct cities of a Mega-Region together, so High Speed Rail is the strategic linchpin of launching the Next Growth Economy

The End of Keynesianism and Beginning of Fantasy

There is much that is right and much that is wrong in Florida's argument. One of the signal failings of the story as he presents it is presenting the 20th Century Growth Engine as some kind of natural force, ignoring the substantial entrenched policies that channeled it down the particular paths it took.

And this is strategic for Florida's argument about the nature of the Next Growth Engine, since if these things are natural forces, the projection of the Next Growth Economy from the trends of the twilight of the Automobile Age is straightforward. For example, if:

Our transition from a Fordist mass production economy, based on the assembly line, to a knowledge economy, in which the driving force is creativity and technological innovation, has been under way for some time; the evidence can be seen in the physical decline of the old manufacturing cities and the boom in high-tech centers like Silicon Valley, government boomtowns like Washington DC, and college towns from Boulder to Ann Arbor. Between 1980 and 2006, the U.S. economy added some 20 million new jobs in its creative, professional, and knowledge sectors. Even today, unemployment in this sector of the economy has remained relatively low, and according to Bureau of Labor Statistics projections, is likely to add another seven million jobs in the next decade. By contrast, the manufacturing sector added only one million jobs from 1980 to 2006, and, according to the BLS, will lose 1.2 million by 2020.

This reads as if this just happened, rather than being made to happen by pursuing policies of de-industrialization, and by accepting policies with de-industrialization as a natural consequence, whether promoting the power of transnational corporations with mis-named "trade" agreements that primarily focus on the freedom of corporations to exercise corporate power across national borders, or the "fight inflation first" strategy of the Fed that biases the US exchange rate against the interest of exporters and toward the interests of importers, all the while their primary target is the prevention of full employment.

By stereotyping manufacturing as Fordist mass production, and setting it in opposition to the Knowledge Economy, Florida sets up a false dichotomy where Knowledge-Intensive Manufacturing disappears from view, and so does not have to be considered as a target for national industrial policy.

The story Florida sketches regarding the post-WWII Fordist Growth Economy is, of course, only partial, but is broadly correct.

There was a wave of investment in Road Infrastructure by state and especially local governments in the 1920's, and its ebbing was part of the sagging national income that exposed the financial fragility of the late 1920's
Federal Investment in Road Infrastructure picked up in the 1930's, providing part of the foundation for the post-WWII wave of suburban development
That wave of suburban development was financed in a way that permitted the further finance of automobiles, refrigerators, stoves, furniture,
and the income from the manufacture of that whole complex of products helped fuel the ongoing development of the suburbs.

However, Florida skips an important part of the story, which is the system of cross-subsidies that helped fuel that system by channeling income from urban and rural households into the development of sprawl suburbia. A fairly well known example is the Federal gas tax, which many Americans imagine to be a user-pays system for funding roads. In reality, all motorists pay the tax, whether or not their driving is on funded "highways". The majority of city streets are ineligible for funding while a majority of Interstate, National, State, County and Township "highways" on their periphery are eligible for funding, so that in the 1950's, this was a strong cross-subsidy from the urban and pre-WWII inner-suburban majority to the "new suburban" minority.

But this is, of course, only the tip of the iceberg. When utility hook-ups are priced by a flat rate rather than by the cost of providing the hook-up, that represents a substantial subsidy to sprawl development. When zoning imposed required minimum parking, the value taken from the property owners depends on the value of the underlying land, so the "in kind" tax imposed on landowners to subsidize cars with the parking they require is substantially higher in urban and inner suburban areas than in greenfield outer suburbs. Households living in unincorporated area (study area is Wisconsin) tend to receive more of their services from the county where they are located. Direct and tacit subsidy of logging, through undercharging for logging rights and provision of logging roads, implied an undervaluing of the value of existing durable urban structures versus new stick-frame detached housing.

What is the difference if we recognize these cross-subsidies of sprawl suburban development? The basic logic of cross-subsidies is to promote growth of the subsidy recipient at the expense of the subsidy payer, reducing the share of income contributing and increasing the share of income sharing the cross-subsidy. A Growth Engine based on cross-subsidy is destined to eventually run out of gas.

And then, of course, we ran out of gas ... starting in the late 1960's when we hit peak oil, the system of stabilizing US crude oil prices by manipulating production in the big Texas oil fields went by the boards, and the Automobile Age was exposed for the first time to the vagaries of the international oil market ... and after sprawl suburbia had captured over half of the US residential population, placing its flow of cross-subsidies at risk, we reached the neighborhood of global peak oil production, at a time that we consume a quarter of the world supply but only while we still produce a tenth of the world supply.

A gasoline price shock of a mere $4/gallon was one of the three forces contributing to the Panic of 2008: a serious gasoline price shock or an interruption of crude oil imports would have an even more devastating impact.

The Optical Illusion of Interstate Highways

Now, the Interstate Highway System, while not the majority of the cross-subsidy for sprawl development, were an integral part. But for passenger transport, "Interstate Highway" is a misnomer. The bulk of the passenger miles on the Interstate Highway system are local passengers, not interstate passengers.

Where the "Interstate" nature of the Interstate Highway system is dominated by interstate transport is in freight transport.

Yet, while Florida gives lip service to freight ...

That means high-speed rail, which is the only infrastructure fix that promises to speed the velocity of moving people, goods, and ideas while also expanding and intensifying our development patterns.

... it is only lip-service. The focus is on all the entrepreneurs coming into the Megaregional Hub to work out how to provide innovative services to each other and consumers, which services will somehow generate the export revenue to allow all of us to import all of the industrial and consumer goods that we require.

Fleshing Out the Skeleton

So, does HSR offer the opportunity to be the "Reset" technology to allow us to restructure our economic geography on a long term sustainable basis?

Well, any long time readers of Burning the Midnight Oil or others who know me as a long time advocate of HSR will already be expecting my answer: No, of course not. Setting up High Speed Rail as "the" answer to anything is setting it up to "fail" to meet a poorly thought through target.

On of the reasons why "Auto Uber Alles" required heavy cross-subsidy to grow is that it was a "one-size-fits-all" solution. And one size never fits everyone, and never fits many people all that well.

High Speed Rail is a useful part of the mix and, as I have long argued, is the part of the mix that we can get working on right away, given the fact that High Speed Rail has repeatedly shown its ability to generate operating surpluses, even under Automobile Age conditions. That makes HSR a strategic "leading edge" of the new transport system that we shall require for this new century.

However, we must not make the mistake of trying to "re-fight the last war": High Speed Rail corridors will not be providing the bulk of passenger transport, nor will they be providing the bulk of freight transport. Their superior capital efficiency compared to the same intercity passenger transport capacity provided by roadworks is due to the fact that HSR does not try to be a magic "silver bullet" one-size-fits-all solution, rather focuses on being the efficient solution to the problem it solves.

Indeed, despite Richard Florida's focus on innovation, one reason that High Speed Rail looms so large in his vision of the new 21st century is that in High Speed Rail, the essential technical innovations required to allow us to start building have already been made, and there is very little social innovation required. Florida is, in other words, projecting an existing technology into the future.

In local transport, more social innovation is required to reach the point of painting a compelling grand sweeping vision of how we will get from our current, obsolete, system to one that will meet the needs of our new century. So, although this is a more important challenge for our day to day standard of living in 2020 or 2050 ... it is a far less question to consider for those who specialize in painting grand sweeping visions.

And the idea that we will simply abandon making things that do useful things is a fantasy from the twilight of the Age of the Automobile. It rests on the neo-mercantelist strategy of China and others to accept lower terms of trade in return for being allowed to export potential unemployment to the US. The credit creation required to maintain a discounted ¥RMB to US$ exchange rate has been an important part of the credit creation that has been papering over the fading income-generating capacity of the post-WWII Growth Economy.

However, this is also an imbalanced and ultimately unsustainable process. In a sustainable system, our standard of living will depend not on the creation of credit in China, but in the creation of goods and services of value to our own economy and to potential trade partners overseas. Pre-emptively hobbling our capacity to produce valuable products by continuing to engage in aggressive de-industrialization is the path towar being a poorer nation in the future than we need to be.

Midnight Oil ~ Blue Sky Mine

_________________

... but if I had a fast car, would I be so would I as indifferent to the end of the Automobile Age?

Sunday Train: Kasich says Outsource Ohio HSR jobs to California

2010-08-08T23:02:00.002-04:00

Burning the Midnight Oil for Living Energy Independence

... or Virginia or Illinois or upstate New York or North Carolina or Washington and Oregon or ...

... well, any other state except Ohio. Outsourcing Ohio's HSR jobs to other states is a central plank of John Kasich's run to become Governor of Ohio.

Of course, we don't expect people from places like Lehman Brothers to flat out say something like that: instead, they give a plausible sounding sound bite which then falls apart the minute you think about it. Their hope, it seems, is that nobody thinks about it.

So too with Kasich's plan to hand Ohio's $400m in HSR Stimulus Funds back to the Federal Government for another state to use ... he hides his plan behind a red herring.
________________________________

The Background to the Story

Once upon a time, in the 1980's, before the neoliberal trade policy pursued by Bush and agreed to by Clinton shipped Ohio's manufacturing economy overseas, there was an ambitious plan to build a bullet train system for Ohio. It was to be supported by an increase in the state sales tax. It got onto the ballot, and then was voted down.

Fast forward to the 90's. While the Clinton administration lobbied hard to signed President George H.W. Bush's NAFTA agreement into law, it also pushed through a High Speed Rail bill that set up a system of state based High Speed Rail commissions, with enough funding to basically fix up a few of the most dangerous level crossings around the country. Ohio got its High Speed Rail Commission, and went back to the drawing board.

Fast forward to the turn of the 21st century. Under the aggressively anti-rail Resident George W. Bush administration, some states took the lead in promoting incremental improvements to passenger rail, and through a merger with other state rail authorities to form the Ohio Rail Development Corporation, Ohio's "Ohio Hub" plan continued to take shape.

Fast forward to a major lurch of US transportation policy into the final third of the 20th century, $8b in HSR funds were approved as part of Stimulus II, after the Stimulus I under Bush of tax cuts alone failed to prevent the recession that started in 2007 from spiraling down into the worst recession since the two recessions that made up the Great Depression.

Republicans in control of Ohio's State Senate prevented the state from applying for a 110mph corridor between Cleveland, Columbus, Dayton and Cincinnati, but the Strickland state administration was able to wrest agreement to a 79mph "starter line", which would get service started and which could be upgraded by ongoing incremental investment to be converted into a 110mph corridor.

And Ohio won $400m in funding. It is presently negotiating the agreement with the FRA to use $25m for final planning and design, leaving $375m to break ground in Spring of 2011.

Kasich Against Jobs In Ohio

Now, it would normally be hyperbole to say that a candidate for Ohio governor is actually opposed to the creation of jobs in Ohio. I have lived through lots of gubernatorial elections, and normally both candidates are for jobs.

But really, Kasich wants those jobs to go out of state. From Cleveland Scene Weekly

Republican gubernatorial challenger John Kasich is no fan of rail either. His camp didn't respond to interview requests for this story, but a news clip posted on his website about Ohio rail studies is headlined "Train Already Wasting Taxpayer Money." And he said earlier this year that the $400 million Ohio received for rail would be better spent on Ohio's roads and bridges.

But it can't be: The funds are specifically attached to rail. If Kasich becomes governor in November and decides to kill the 3C project, Ohio's money will go to other states. With California, Florida, and the Pacific Northwest, among others, ramping up to build their stimulus-funded routes, someone else will be waiting in line to take the money Ohio leaves on the table.

The 2009 work (pdf) of the American Public Transport Association gives the following job impacts per million dollars for capital works in public transport:

Direct job creation, 8.2/$m
Indirect (upstream) job creation, 7.8/$m
Induced (downstream) job creation, 7.7/$m.

Now, working out the Indirect job creation impact of the Kasich policy to hand the money back for use by another state is tricky ... it requires untangling which upstream spending will leave Ohio in any event, and which upstream spending will stay in Ohio in any event. So I will focus on just the direct jobs, which of course are taking place in Ohio on the 3C corridor, and the induced effect.

Assuming that $25b is spent to do final planning and design, and then Kasich cancels the project, that means $375m is handed over for use by another state. That means:

$375m x 8.2 direct jobs/$m = 3,075 direct jobs lost; and
$375m x 7.7 induced jobs/$m = 2,887 induced jobs

So its roughly 6,000 jobs that Kasich wants to outsource to another state.

Big Deal, its only 6,000 Jobs

The immediate protective reaction is, well, its only 6,000 jobs. Why, with Ohio's 10.5% headline unemployment rate, 6,000 jobs is surely just a drop in the bucket. Ohio has 625,000 unemployed ... 6,000 is less than 1% of our total unemployed workforce.

But of course, this is just one policy. Kasich summarizes his four main policy platforms as:

lower taxes
Make government more effective
Transform Our Educational System and
End the Influence of Special Interests

The first three seem likely to translate into sacking state employees and cutting assistance to local governments forcing them to sack local city, country and village employees, some more sacking of state employees with outsourcing of their jobs to private corporations (and if those private corporations outsource work out of state, well, that would be consistent), and cut public school budgets forcing them to sack teachers.

As far as ending the influence of special interests ... who is it backing Kasich's policy of handing as much of the $400m HSR money back to some other state?

But that award was also met with opposition from the Ohio Contractors Association, the Ohio Trucking Association, and the Ohio Petroleum Marketers and Convenience Store Association — all of them highway-dependent groups

So as far as "ending the influence of special interests" goes, that would seem to be code for, "swapping one set of special interests for the special interests that are backing me".

But, what about the problems with the Starter Line

One thing the Conservative echo chamber excels in is spreading unbacked, empty, but plausible sounding talking points far and wide. The main talking points for the 3C starter line are:

Among their criticisms: Building a rail line will require expensive state subsidies and will never be self-supporting, and train speeds will be so slow and they will run so infrequently that they won't attract ridership. Besides, they add: Nobody in Ohio wants to ride trains anyway.

The argument about the train being slow often goes, "we should jump straight to HSR". And, indeed, if it would have been supported by the Republican State Senate, it certainly should have been.

But that is a red herring. From today, surely the fastest route to a 110mph HSR 3C line is to build the starter line, starting to run in late 2012, and upgrade distinct individual segments to 110mph, cutting trip speed, increasing patronage, and reducing subsidies with each segment upgraded until we have a 110mph 3C line with average trips of 70mph to 80mph and with sufficient frequency that there is no need for surpluses. Cutting the corridor into four segments, two segments per year would see a 110mph corridor by 2016, while one segment per year would see a 110mph corridor by 2018.

How much faster would the "leapfrog the Starter Line" be? With the $400m for the Starter Line in hand, Ohio can get started. After turning the money back, certainly a Kasich administration could not apply for a more ambitious project, so that would be 2011-2014 lost, at least a year for an incoming Democratic governor taking over to clean up Kasich's mess before attention could be turned to it, and then finding money for a state match, since going ahead, a 20% state match looks to be required for Federal HSR capital grants. So maybe 2016 to apply, 2017 to begin construction ... 2018 to finish the 110mph HSR 3C corridor under the "leapfrog" plan would be optimistic.

So, the "leapfrog" would mean getting the HSR corridor no sooner, probably later, and doing without increasingly rapid intercity passenger rail for at least six years. More like a "leap-tortoise" plan.

Conclusions

Well, none of this is surprising. Strickland loses the Governor's race if Buckeyes vote the fact that the economy sucks, Kasich loses the Governor's race if Buckeyes vote the fact that under Kasich it will suck much worse.

More to the point is to fight the talking points that the opponents will be spreading in letters to the editors and newspaper sites across the state. Just Google ""Ohio High Speed Rail" in news.google.com on a regular basis, and look for the Ohio based newspapers:

Giving the money back means about 6,000 jobs heading off to another state
The "40mph" starter line is designed from the start for the upgrade to cruise at 110mph ~ once its in place, Ohio is in place for a series of Federal HSR funds to do the upgrade, and each upgrade will boost ridership and cut the subsidy
The ridership study is based on the assumption of cheap gas: if there is another oil price shock, ridership will explode

Midnight Oil ~ Dreamworld

The Fightback against Cutting Electric Prices with Wind Power

2010-08-06T11:47:00.004-04:00

Burning the Midnight Oil for Living Energy Independence

Recently, Jerome a Paris and afew from the European Tribune published a piece in New Scientist on why having sufficient wind turbines in an energy portfolio has been observed to lower energy prices to consumers.

After tweeting that article, I started to receive tweets with links to the anti-wind conservative echo chamber, including The American Thinker, and the Oil-money founded and partly funded Cato Institue.

The piece I am looking at today is a brilliant example of the echo-chamber shell game: how you fill up the echo chamber with outdated, irrelevant, or partial and misleading facts so that there are "facts! facts!" that can be cited in social media, complete with demands "answer the facts!" by those who either are pushing a line for strategic reasons or have been taken in by the argument.

Entitled "Wind Energy's Ghosts", the information in the piece is familiar to anyone who has participated in online discussion of wind power or renewable energy in general and has encountered the oil or coal industry sponsored and inspired pushbask.

Guilt By Association with PIIGS

Bankrupt Europe has a lesson for Congress about wind power.

Wiwo...wiwo...wiwo.

The sound floats on the winds of Ka Le, this southernmost tip of Hawaii's Big Island, where Polynesian colonists first landed some 1,500 years ago.

Some say that Ka Le is haunted -- and it is. But it's haunted not by Hawaii's legendary night marchers. The mysterious sounds are "Na leo o Kamaoa"-- the disembodied voices of 37 skeletal wind turbines abandoned to rust on the hundred-acre site of the former Kamaoa Wind Farm.

The voices of Kamaoa cry out their warning as a new batch of colonists, having looted the taxpayers of Spain, Portugal, and Greece, seeks to expand upon their multi-billion-dollar foothold half a world away on the shores of the distant Potomac River. European wind developers are fleeing the EU's expiring wind subsidies, shuttering factories, laying off workers, and leaving billions of Euros of sovereign debt and a continent-wide financial crisis in their wake. But their game is not over. Already they are tapping a new vein of lucre from the taxpayers and ratepayers of the United States.

Anyone with knowledge of the facts has their bullshit alarm going off already.

What are the examples of "typical" European countries? Spain, Portugal and Greece: three of the so-called "PIIGS" (Portugal, Italy, Ireland, Greece, Spain), which were in the news as facing serious finance constraints because of their inability to float bonds on international bond markets sufficient to cover expected budget deficits.

Of course, this is selecting examples of European countries pursuing expanded wind power based on which ones are having macroeconomic problems, not based on which European countries are most aggressively pursuing wind power. If you line up European countries by wind power penetration at the end of 2007, the list is:

Denmark 21.7%
Spain, 11.8%
Portugal, 9.3%
Ireland, 8.4%
Germany 7.0%

That is, in fact, the list of the countries that are raising the EU-wide average of 3.8%. So the list of three examples ignores both the nation with the greatest wind power share and the largest economy in the EU, and includes Greece, which is below the EU-wide average.

The logical fallacy here is the Biased Sample fallacy. From the Nizkor Project

This fallacy is committed when a person draws a conclusion about a population based on a sample that is biased or prejudiced in some manner. It has the following form:

Sample S, which is biased, is taken from population P.
Conclusion C is drawn about Population P based on S.

The sample bias works in both directions, excluding the two Eurozone nations with above average wind power penetration that face no pressing fiscal constraint in international bond markets, while including a Eurozone nation among the PIIGS with below average wind power penetration. That was the country in the headlines, of course, so it needed to be included to generate guilt by association between support for wind power and economic instability.

There is, however, a common energy thread that does tie these countries together, but its not wind power penetration in electric markets. As Luis de Sousa reported in The European Tribune in April, in What makes them PIIGS:

In orange, all lined up to the left, are found the PIIGS, the most Oil reliant states in the Union. Coincidence? Certainly not. The riddle is now understanding if they are PIIGS due to their Oil reliance or are Oil reliant because they are PIIGS.

This is what happens when you start from the facts to try to find conclusions, instead of starting from conclusions and looking for facts that seem to back them up: you discover new, sometimes surprising, relationships. And from those relationships, generate new questions to explore and even, maybe, start to see what are the problems facing a country that need to be addressed:

These observations also show where the PIIGS have to work to become competitive economies. Energy Policy cannot target solely the Electricity sector, a serious Programme is needed to reform - revolutionize - the Transport Sector. Road transport has to be re-equated at large: either true alternatives to the present internal combustion engine show up or it simply has to be phased out. Starting with freight (where the impact on daily life is minimal), governments could concentrate on promoting rail and maritime modes, instead of putting up ever more tax and toll cuts to hauliers. PIIGS have also to reconsider their Industrial fabric, that may be too leaning on the Service sector. The Manufacturing Industry has to regain its proper role, perhaps taking advantage of business opportunities in alternative energy and efficiency, and together with Agriculture, increase the overall value per freight-km travelled.

The Mysterious End of the 1970's / 1980's wind power boom

The piece in The American Thinker tells us what happened in the Hawaiian wind farm, but not why:

Built in 1985, at the end of the boom, Kamaoa soon suffered from lack of maintenance. In 1994, the site lease was purchased by Redwood City, CA-based Apollo Energy.

And why did the "boom" end: because of the on-again, off-again US policy. With our reliance on tax subsidies instead of feed-in tariffs to promote wind power, the wind industry in the US is subject to a massive political business cycle effect. As described in Ups and downs in the land of the pioneers in New Energy:

President Reagan ended wind energy promotion

A devastating crash happened in the late 80s. The error rate of the turbines used in California had increasingly driven away investors. And so in 1987 the state government scrapped all subsidies. At the same time, the new Republican president, Ronald Reagan, axed renewable energies research funding from $1.9 billion to $269 million. All the tax breaks Jimmy Carter had introduced were scrapped.

It plunged the wind market into insignificance. While in the late 80s Californian turbines produced 79% of the world’s wind power, the share then declined rapidly. Until the end of the 90s the wind energy capacity installed in the USA stagnated while long-term government promotion funding in Europe drove the technology to its breakthrough.

The American wind energy producers had to cope with ups and downs of promotion funding only ever available for short periods. These boom and bust cycles continue.

Thus the 1992 Energy Policy Act for the first time provided a tax break of 1.5 cents per kilowatt-hour of wind power. But the industry could not benefit from it because in times of market liberalisation many US power sellers invested only cautiously in new generation capacities and generally preferred coal and gas. Meaningful wind growth only resumed in 1998 and 1999. But the tax break running out in June 1999 pushed the project developers to hurry. That year 732 MW went on the grid, substantially topping the previous biggest increase of 442 MW in 1985.

Subsidies come in waves

In subsequent years the US Congress extended the tax break for wind power plants, but in 2000, 2002 and 2004 the promotion gaps were particularly long each time. The market collapsed every time, reviving after the Production Tax Credit (PTC) was reinstated (see chart). The installation figures fluctuated accordingly. The present subsidy is available until 31 December 2007. Many operating in the market firmly expect the next extension to come in good time.

So the US launched the modern utility grade wind turbine technology, but it became a political football, and so the benefit of our early experience was reaped elsewhere. A very similar story to the hybrid gas-electric car, which was promoted under Clinton, forcing the Japanese to pursue catch-up policies, but the abandoned under Bush, so that it was the Japanese who brought it to market and today Ford licenses hybrid power train technology from the Japanese who originally launched their development efforts to avoid falling behind the US.

And Then There Was Altamont

The American Bird Conservancy makes this chilling statement: "Wind farms ... kill birds and bats." Therefore, they support development of wind farms.

Hey wait: what? Well, to put that statement in context:

ABC believes that wind energy is a valuable, non-polluting, renewable power source, capable of reducing our reliance on fossil-fuel burning power-plants that damage the environment through greenhouse gas emissions, pollution, and other environmental hazards. Wind farms, however, kill birds and bats, thereby raising concerns of a different kind. We all want clean, renewable energy, but we cannot sacrifice large numbers of birds and still consider wind power "green."

Despite the fast pace of development of wind power and its great potential to provide green energy, we must not be in a hurry to get it wrong. Continued close collaboration with industry and strong federal regulation that uses tax breaks for doing the right thing and meaningful fines for doing the wrong thing will be the carrot and stick approach that will ensure the next fifty years are positive for birds at wind farms.

Bans for sites that threaten endangered species and threaten critical migratory paths, fines for sites that engage in practices that cause unecessary bird kills, tax credits for sites that adopt best practice to minimize and mitigate bid kills.

Why not just ban? If wind farms kill birds, why not just ban them entirely? Lets put this in an even broader context. In Deconstructing the wind farm bird-kill story (Providence Journal, 20 October 2005, Jack Coleman reports:

In June, two Danish researchers with the Environmental Research Institute announced the results of a six-year radar study of avian impacts from offshore wind turbines -- the first such research. The researchers, Mark Desholm and Johnny Kahlert, focused on a specific wind farm, the 72 turbines off Nysted, in southern Denmark.

Desholm and Kahlert began their work in 1999, while the Nysted project was still in the planning stage; the 360-foot turbines became fully operational in December of 2003. The four years between the start of the research and the wind farm's going online provided the researchers with abundant time to study migrating birds. Their conclusion? "Overall, less than 1 percent of the ducks and geese fly close enough to the turbines to be at any risk of collision."

Their report continues: "The analyses also show that birds remain at a greater distance [from] the turbines during the night, while flying inside the wind farm. Thus, these birds reduce their collision risk.

"In total, less than 1 percent of the waterbirds migrated close enough to the turbines to be at any risk of colliding."
...
A U.S. Government Accountability Office report of Sept. 19 urged federal officials to take a more active role in siting wind farms to avoid bird kill. But the report also pointed out that millions of birds are killed by collisions with buildings and towers, pesticides, and attacks by feral and domestic cats. "In the context of other sources of avian mortalities," said the report, "it does not appear that wind power is responsible for a significant number of dead birds."

And, lest we forget, birds along our coastline are genuinely threatened by the heavy oil that's hauled in barges, which has an unfortunate habit of spilling into the ocean and killing terns, gulls and other birds by the hundreds.

Cats kill birds. Tall buildings kill builds. Transmission towers kill birds. Cars kills birds. And these are not just randomly selected examples: these are more serious risks to birds than wind turbines.

And of course, Mountain Top Removal Coal Mining kills birds, oil spills kill birds (and while the BP oil spill is a massive news story, there are small spills every single year in the Gulf of Mexico).

Some of the problem at Altamont was location, but most of the problem was the now-obsolete design of the wind turbines and towers. The towers were open framework towers - no longer used, because of the loss of efficiency from tower wind turbulance - encouraging raptors to perch on the towers themselves. Because of their relatively small cross section, so the towers were lower, the bottom sweep of the blade much closer to the ground, and the blades spun far more rapidly than modern turbines, make it far harder for a raptor to avoid, especially in mid-stoop.

Add the fact that the cleared ground around the base of the turbines are attractive for rabbit warrens and ground squirrel burrows, so there was a strong incentive for raptors to perch in wind turbine towers and stoop for prey right in the potential path of a wind turbine blade, and the obsolete 1970's era wind turbines at the Altamont Pass are deadly to raptors. 1300 raptors are still killed each year at Altamont Pass, about one raptor kill per year for every four wind turbines.

The current windfarm at Altamont pass has a 576MW capacity with about 4900 wind turbines, for an average capacity of 117kW per turbine. Since modern turbines have capacity in the range of 2MW, that means that about 17 of the obsolete Altamont Pass turbines are required to match the capacity of a single modern wind turbine. So start with the fact that not only is each of the 1970's era wind turbines a much more serious bird killer than each modern wind turbine ... but These capacities are obtained with much broader cross section blades, placed much higher, on closed towers to minimize tower wind turbulence.

Using the thousands of obsolete, bird killing turbines at the Altamont Pass windfarm and similer 1970's and 1980's era wind farms to argue about whether or not modern wind turbines should be promoted is like using the Model T to argue about whether or not the current massive subsidies for driving are justified.

And so ... that's just what the American Thinker does. Six paragraphs, a picture of what are quite clearly small obsolete turbines replaced by modern units (not showing the modern replacements, of course), five block quotes, all presenting evidence that establish quite clearly that if the 1970's era wind turbines were the best we could hope for, wind power would be a not-ready-for-prime-time technology.

Of course, written as if this is represents 21st century wind turbine technology, which makes this an example of the Straw Man fallacy:

Description of Straw Man

The Straw Man fallacy is committed when a person simply ignores a person's actual position and substitutes a distorted, exaggerated or misrepresented version of that position. This sort of "reasoning" has the following pattern:

Person A has position X.
Person B presents position Y (which is a distorted version of X).
Person B attacks position Y.
Therefore X is false/incorrect/flawed.
This sort of "reasoning" is fallacious because attacking a distorted version of a position simply does not constitute an attack on the position itself. One might as well expect an attack on a poor drawing of a person to hurt the person.

Before using Altamont Pass to attack policies promoting utility scale wind power, one has to find a policy promoting utility scale wind power that will lead to adoption of the obsolete and far more expensive per MW, Altamont Pass wind turbine technology instead of modern, and less expensive per MW, wind turbines. But no such policy exists.

Attack The Tax Credits

And then finally, after the irrelevant example of Altamont Pass, the piece ends with an attack on tax credits.

But of course, the link was forwarded to me in response to my circulating a link to a piece on feed in tariffs and the Merit Order Effect.

Recall that in the 1980's, the US went through a wave of deregulation in the power generation industry. We built up our 20th century world class electricity generating and transmission system on the back of heavily regulated monopolies, supplemented by direct public provision. Then, as covered in The Oil Drum in The US Electric Grid: Will it be Our Undoing? - Revisited we deregulated, to allow "the market" to work its wonders. And now, because in a deregulated system there is no single stakeholder with deep pockets and a strong incentive to maintain and upgrade the transmission, we now have a system approaching third world status.

When a utility's primary role is taking care of its own customers, there is a strong incentive to carefully maintain its transmission and distribution system. Once the system is divided into many competing entities, many of whom do not have financial ownership of the transmission system, the situation changes significantly. Some of the impacts include:

1. Declining investment. There is less incentive to maintain transmission lines, since under a fractured system, no one has real responsibility for the lines. Also, profits are higher if equipment is allowed to run until it fails, rather than replacing parts as they approach the ends of their useful lives.

2. Overuse of lines between systems. Prior to deregulation, transmission lines between utilities were designed for use primarily in emergencies. Once widespread trading of electricity began, lines between utilities are put into much heavier use than they had been designed to handle.

3. More rapid deterioration. After deregulation, there is much more cycling on and off of power plants and the structures involved in transmission, to maximize profits by selling electrical power from the plant that can produce it most cheaply. This results in metal parts being heated and cooled repeatedly, causing the metal parts to deteriorate more quickly than they normally would.

4. Unplanned additions to grid. Wind and solar are added to the grid, with the expectation that the grid will accommodate them. "Merchant" (investor owned) natural gas power plants are also added to the grid, sometimes without adequate consideration as to whether sufficient grid capacity exists to accommodate the additional production.

5. Difficulty in assigning costs back. Since the industry is more fragmented, if any transmission lines are added, the cost must somehow be allocated back to the many participants who will benefit. Ultimately, the cost must be paid by a consumer. These consumer rates may in fact be regulated, so it may be difficult to recover the additional cost.

6. Increased line congestion. There is a need for more long distance transmission lines, because of all of the energy trading. There is a great deal of NIMBYism, so approval for placement of new lines is very difficult to obtain. The result is fewer transmission lines than would be preferred, resulting in more and more line congestion.

7. No overall plan. There is a need for an overall plan for an improved system, but with so many players, and so much difficulty in assigning costs to players, very little happens.

8. Little incentive to add generating capacity. As long as there is a possibility of purchasing power elsewhere, there is little incentive to add productive capacity. Profits will be maximized by keeping the system running at as close to capacity as possible, whether or not this causes occasional blackouts.

Long time readers will be aware that I have long pushed for establishment of a Steel Interstate system to provide "border to border" transcontinental electric freight rail, including 100mph Rapid Freight Rail paths. However, to place even the relatively modest power demands of this system on our aging, declining patchwork quilt of a national electric system is asking for trouble. So the proposal also includes using the Steel Interstates to provide Ultra High Voltage Direct Current power transmission lines, which can carry power over 1,000 miles with less than 10% transmission losses.

Libertarians will, of course, complain that financing this as a small fraction of a two and a half cent per gallon tariff on imported crude is a "statist solution". But they have had thirty years of deregulated power market policy to arrive at some "market based" solution that will build up transmission capacity rather than exploit existing capacity while it decays, and have failed miserably.

But, on the question of whether feed-in tariffs are superior to current US policy based on production tax credits: how do attacks on the production tax credits system address that argument. If anything, libertarian attacks focusing on production tax credits support the argument that feed-in tariffs are better.

Under the so-called deregulated system, the government has dictated that power generating be divided into multiple companies, and that power distribution networks bid for power on formal markets. The producers bid what they are willing to sell power for, the grid selects the producers in order from cheapest to most expensive, until all required demand is covered. The price is the bid of the most expensive producer.

All generators have a mix of overhead costs and costs of providing power to the grid. For a peaker merchant gas generator, the overhead is dominated by the turbine, and the cost of providing power is dominated by the cost of the natural gas. At the other extreme, almost all the cost of the wind turbine is overhead, with very low incremental cost of each kW it puts onto the grid.

So the system set up by the government since the 1980's is tilted in favor of gas generators and against wind turbines. Peaker gas plants can dictate the price required to start operating, so when peak demand brings the peaker gas plants online, they cover their costs, even if they only run 5% or 10% of the time. On the other hand, if a large amount of wind capacity is online, then when it is generating, it pulls the wholesale price of power down, and often pulls the price down so far that it cannot cover its overheads.

The feed-in tariff allows a power market to tap the benefit of reduced average cost by fixing a rate that the power company must pay to the wind producer. If set correctly, then when wind power is being produced off-peak, this increases the total cost of power, and when wind power is being produced on-peak, this reduces the total cost of power.

Obviously, this is a question of "discount+premium=???" ... that is, whether a particular feed-in tariff regime delivers a net rate reduction or rate increase to power consumers depends, first, on the level of the feed-in tariff and, second, the pattern of power costs from existing sources. However, the evidence from Europe is that there are feed-in tariff levels that both encourage installation of new windfarms, and also reduce the cost of to consumers. From Wind's latest problem: it ... makes power too cheap ... pulling the buried lede out of a Bloomberg piece:

windmills (...) operators in Europe may have become their own worst enemy, reducing the total price paid for electricity in Germany, Europe’s biggest power market, by as much as 5 billion euros some years

The wind-energy boom in Europe and parts of Texas has begun to reduce bills for consumers.

Spanish power prices fell an annual 26 percent in the first quarter because of the surge in supplies from wind and hydroelectric production

That's the empirical observation. Its doing it. What is the point of engaging in endless hypothetical arguments about whether it can when it already is?

So the response to the critique of production tax credits subsidy is straightforward: if you think that policy sucks, adopt feed-in tariffs for wind power, set at levels where a boom in wind power generation will lead to a drop in the cost of power.

Indeed, if the topic under discussion is feed-in tariffs, then an attack on tax subsidies would seem to be a case of a Red Herring logical fallacy:

Description of Red Herring

A Red Herring is a fallacy in which an irrelevant topic is presented in order to divert attention from the original issue. The basic idea is to "win" an argument by leading attention away from the argument and to another topic. This sort of "reasoning" has the following form:

Topic A is under discussion.
Topic B is introduced under the guise of being relevant to topic A (when topic B is actually not relevant to topic A).
Topic A is abandoned.
This sort of "reasoning" is fallacious because merely changing the topic of discussion hardly counts as an argument against a claim.

Conclusion

Empirically, it is too soon to say, because this is just one observation, but I would hypothesize that if you wish to be popular in the conservative echo chamber, building your argument on three logical fallacies in succession could just be the road to success.

Midnight Oil ~ Kosciosko

Older than Kosciusko
Driven back to Alice Springs
Endless storm and struggle
Marks the spirit of the age
High up in the homelands
Celebration 'cross the land
Builds up like a cyclone
Now the fires begin to rage

Sunday Train: A Dime A Gallon Tariff on Imported Oil for Energy Independent Transport

2010-08-01T12:58:00.004-04:00

Burning the Midnight Oil for Living Energy Independence

The big news from July was: Senate's energy bill: What a disappointment (LA Times Editorial):

Amid tough fights over healthcare and financial reform, Obama's push for cleaner energy ran out of gas long ago. It looked like a losing battle anyway; with Senate Republicans universally opposing a cap-and-trade program or other efforts to reduce greenhouse gases, and some Democrats in heavy manufacturing states also opposed, it may have been impossible to round up the 60 votes needed to overcome a filibuster on a Senate energy bill as strong as the one passed by the House last year. But that doesn't excuse Obama or Reid for surrendering so easily, or so completely.

So we need to do something. And the strategy to stitch together a complex, multiple part, massive sprawling suburb of an Energy Bill that would be all things to all people has failed in precisely the way its opponents intended it to fail: this is a big reason why Big Oil was so heavily invested in the fight against health care reform, to make sure that it took so much time that the Energy Bill would run into election year politics and their direct lobbying efforts and come unglued.

Treason? Well, given that we are far more exposed to a disruption of our energy imports than to any threat to be found in Afghanistan, and are far more exposed to catastrophic climate change than to any threat being secured by our bases in Japan, Germany or any of the balance from the 687,347 acres of overseas military bases ... sure.

But what to do about it?

The proposal here is to get a target that can be fought for, now, and campaigned for, in the fall: as the title says, A Dime A Gallon on Imported Oil for Energy Independence

It won't get all of the way there, of course, but with sufficient leverage it can provide an immediate economic stimulus while getting an essential start on the problem.

The basic policy behind the label is:

$0.10 tariff on imported crude oil. Crude oil, after all, is an "unscheduled" commodity under existing WTO agreements, so we are free to put any tariff on it that we wish
Four funds (two and a half cents each) for electric transport, active transport, Steel Interstates, and High Speed Rail
Spending must be on qualified projects, but money is distributed to state and local accounts on a per capita basis
For capital investment projects, account holders in the first ten years can borrow on the OMB projected revenue in the first ten years

A Dime A Gallon: How Much is That

According to the US Energy Information Administration, our annual imports of Crude Oil in 2009 (a low year, because of the recession) were 3,289,675 thousand barrels. Each barrel is 42 gallons, so that is 138,166,350 thousand gallons. Times ten cents is $13,816,635 thousand, or $13.8b.

Divide this into fourths for each project, and that is $3.45b per task. At a real interest rate of 3%, that is up to $29.4b per task or, in other words, about $95 per capita (based on a Census July 2009 figure of 307m.

This is, admittedly, not sufficient for the magnitude of the task ahead, but, unlike the status quo, its a step in the right direction.

Electric Transport Fund

The electric transport fund is divided into state-based accounts, so that, for example, if the following states borrowed the full ten years ahead (based on 2009 Census estimates):

California, 36,96m, $3.5b available;
Ohio, 11.5m, $1.1b available;
Iowa, 3m, $287m available; and
New Hampshire, 1.3m, $127m available.

So, what could this money be spent on?

Electrification of rail corridors
Purchase electric rolling stock
Electrification of bus corridors
Purchase of electric trolleybuses
Purchase of pluggable hybrid buses
Charging infrastructure in support of electric vehicles
Credits on the purchase of electric vehicles
operations of an electrified transport system (this is not capital spending, so it would be out of current revenues)

The state presents a project, its vetted for qualifying as electric transport spending, if approved, the state can direct the money in its account to the project.

Active Transport

This is an area that is often overlooked, but an important aspect of this was addressed in the PBS BluePrint America show Dangerous Crossing. Outer suburbs were, of course, established for people who could afford cars, but as suburbs have grown to account for half of US residences, there is a growing share of suburban populations can't afford or don't wish to spend on a car.

Watch the full episode. See more Need To Know.

And that leads to situations like that documented in Dangerous Crossing:

27-year-old Nimia Larcia lives in a suburban housing complex just outside of Atlanta, Georgia. She moved here from Honduras six years ago in search of a better life.

Suburban America used to be synonymous with good living, not the least of which was because its streets were so much safer than those in the city. Not anymore.

Every morning when Nimia walks from her apartment to her minimum-wage job at a jewelry store, she has to cross one of the most dangerous roads in Georgia: Buford Highway. People in cars race back and forth, many if not most exceeding the 45 mile per hour speed limit.

A system that is designed so that it kills people for crossing a street - on foot is not one that encourages existing transport systems that can be shifted toward oil-independent transport ... and, indeed, active transport to get to a public transport stop is especially dangerous in these kinds of communities:

Demand for transportation is so high here that taxis, freelance car services and private buses race down these roads competing for customers with the public transit system, often using the very same stops.

People rushing to and from buses account for one in four of the accidents here [Buford Highway].

And of course, there is demographic change:

Demographers are warning that millions of older Americans living in car dependent communities could be left isolated, unable even to get to the grocery store. Dunham-Jones is hoping the country will design its way out of these problems. Even Buford Highway, she says, could be transformed with medians, trees and buildings set closer to the road. Changes that are known to slow traffic. But outside of the ivory tower, change does not come easily. Or quickly.

Last year Georgia spent more than two billion dollars on transportation, but only a tiny fraction, less than 1 percent, went specifically to pedestrian safety.

Of course, the typical state -highway- transportation department faces a situation just like Georgia's, with roadworks having dedicated funding while pedestrian facilities do not.

So this is allocated to local communities: incorporated cities, towns and villages, and for residents in unincorporated areas, counties and reservations. Qualifying projects include:

Capital spending on sidewalks and pedestrian crossings
operating spending on sidewalks (eg snow removal) and maintenance of pedestrian crossings
Pedestrian benches and bus stops
Dedicated cycleways
Shared use bicycle boulevards
Public bicycle parking and secured storage
Recreational bike and hike trails

Steel Interstates

The Sunday Train has covered Steel Interstates several times in the past. The basic idea is to start with the Department of Defense Strategic Rail Corridor Network (STRACNET), and upgrade selected corridors to support electric heavy rail and rapid rail, including 110mph paths (whether by separate track, passing track, or time scheduling), including provision to support High Voltage Direct Current transmission line to connect renewable energy resource grids to renewable energy consumer grids.

This is a single fund, since the purpose is to establish a single network. Unlike the first two funds, this is an interest subsidy on capital funds, with the capital funds themselves paid by user and access fees paid by the various freight railroads and passenger rail operations that might make use of the corridors.

High Speed Rail

The Sunday Train has also covered High Speed Rail projects once or twice in the past.

The High Speed Rail fund is set up with state by state accounts. States such as California, Florida, and Illinois that already have Express or Emerging HSR programs already in progress can simply apply their accounts to existing projects. At the other end of the spectrum, are states that do not have projects in hand, which will be applying the state High Speed Rail account funding to project development, design, and environmental impact assessment.

The Department of Transportation is already in a position to vet whether a project qualifies for HSR funding, with the project evaluation framework established for Stimulus II HSR funding.

For the 220mph Express HSR projects, such as in California and Florida, and for the most promising approach to the 125mph Regional HSR as well, the same project can draw funding from both the HSR fund and the Electrification Fund. This increases the total that could be applied to the California Express HSR project from these account based funds to around $7b for California, and around $3.5b for Florida.

On the other hand states such as Ohio that are (or may be) pursuing the less capital intensive Emerging HSR corridors might focus the HSR funding, around $1.1b in our case, on Emerging HSR and focus the electrification funding on local electric transport.

Of course, states that do not have programs up and running would be in a position to simply draw on the current revenue in the account on project development, to put their state in a position to launch a system.

But the Politics Are ... Possble, Maybe?

As we have seen over the past year and a half, its a lot harder to stop something from being done than to get something done.

While it is nicely symbolic to be using a tariff on imported oil to be financing these things, and while it sidesteps a lot of investment in framing by the drill baby drill crowd ... it also includes a substantial wedge for the opposition. For US based oil production, what a tariff means is that $4.20 gets added to the cost of each imported barrel of crude oil. So while the projects being funded will cut oil production profits in the long term ... its an extra $4.20 per barrel in the pocket of each owner of a domestic oil well.

That's the production offshore of Louisiana, the production of the Bakkan field in North Dakota and Montana, ongoing (if declining) production in Texas ... an extra $4.20 per barrel in the short term, against the substantial reduction in oil dependency a decade from now.

Could it actually get started?

If I were designing a program from scratch hoping for a Presidential candidate to run on in the primaries and then take into the General Election, this probably would not be it. However, pragmatically, that is four to five years in the future, and we don't really have that much time to sit on our hands.

In the aftermath of the abandonment of the Energy Bill, and the aftermath of the BP oil spill ... having foreign oil finance our return to the Energy Independence that we relied on from Independence through two World Wars and the height of the US economic development in the 50's and 60's is the best shot that I can see from here.

Midnight Oil ~ A River Runs Red

...
So we came and we conquered and found
Riches of commons and kings
Who strangled and wrestled the ground
But they never put back anything
Now I'm trapped like a dog in a cage
Wherever the truth is pursued
It must be the curse of the age
What's taken is never renewed

Sunday Train: Can the US get its Energy Freedom Act Together?

2010-06-20T17:30:00.004-04:00

Burning the Midnight Oil for Living Energy Independence

Here we are:

a long, long way from full employment and full capacity utilization, when only the ignorant and ideologically insane would imagine any general objections to increased government spending on useful long term
and with a gusher in the Gulf reminding us that the Oil Companies are lying liars and listening to their assurances and advice leads to disasters at best and calamities at worst

... and yet there is a genuine question whether or not the Federal government will take the bit between its teeth and push ahead toward funding a 21st century oil-free transportation system.

While it is a fun thing to imagine different institutions to see through the development of different alignments, lurking in the background is the worry: what if our body politic is just broken, and this time we cannot do what needs to be done?
______________________________

The Dread Specter of Deficit Errorism

The main reason for concern is the problem of Deficit Errorism: people engaged in magical thinking of one sort or another who work under a fantasy model in which the Federal Government faces a finance constraint on the spending of its own sovereign currency. This malignant fantasy once again raised its ugly head in the recent Senate vote on extending Unemployment Benefits:

Resolving the impasse that has pitted deficit concerns against traditional social safety net programs provides an object lesson on how hard it is for Congress to legislate at a time when public anger over government spending is growing but the appetite and need for government programs has not waned.

And where does that "growing public anger over government spending" come from? Its stoked by well researched memes irresponsibly spread by corporate media. Find out that people are angry about government bail outs of big banks, and then find a way to direct it to generate poll results that scare Senators into voting against extending unemployment benefits.

Throwing the Baby Out With the Bathwater on "Energy Independence"

But, "oh! That is just the GOP = Generosity of Oil Party". Yet then to listen to Rachel Maddow declare:

Want to know why Energy Independence is still a goal ...? Its because its not a real thing.

Bull excrement. Of course its a real thing. Its because we have talked about it but not done anything about it.

Well, she qualifies this, but then launches into the silly red herring that has so taken the centrist and progressive blogosphere, that cutting our net oil imports down to zero would not be accomplishing anything because "oil is fungible".

The fact that oil is fungible of oil has nothing to do with why every President elected since 1968 except Jimmy Carter has been lying to the American People when pretending to be pursuing Energy Independence. They've been lying about Energy Independence because they have been proposing to pursue it with policies that are incapable of achieving Energy Independence

Oil was just as fungible in the 1940's and 1950's as it is today, and we were Energy Independent then and addicted to imports now.

Bulk wheat, rice and corn is fungible, but a country that is food self-sufficient cannot be starved into submission, no matter how much cross trade they have in any cereal grain or how much they tend to export one crop an import another. A blockade or disruption of external supplies can never be the cause of famine in a food self-sufficient country.

Dependency matters. Dependency is a loss of freedom of action. No matter how much the authors of political fiction that pass as foreign policy speeches for so many elected officials wish to imagine that US military might makes us mighty - we are a giant with shoulders of steel and feet of clay.

Before the 1970's, the United States has never been dependent on outside countries for food or energy or transport or shelter. It is true that at one time we were dependent on outside countries for the equipment required to maintain a manufacturing industry, and worked very hard to eliminate that dependency. And then, once we had ... we were not a wealthy country, we were in income terms at best a middle-income country ... but we were an independent economy, free to pursue our own national interests as we saw them.

But since the 1970's, increasingly, not. Since the 1970's, we have been trapped by our addiction to imported energy.

It is true that this is about oil, and ideally we would target zero oil consumption in 20 years ... but if we achieve 80% to 90% reduction in oil consumption and simply get back to an oil surplus, and at the same time avoid becoming dependent on some other imported energy source ... that would be real, genuine, energy independence.

The reason that the Republicans in the last campaign were lying is because we already tried Drill Baby Drill, and we got our oil imports reversed by tapping lots of little pockets of hard to obtain oil, and then the ongoing decline in our old big oil fields reversed that and imports started exploding again. They were lying about the safety of offshore oil production, but more critically they were lying in pretending that tapping every single oil field physically in reach despite all safety hazards and environmental impact could not conceivably reverse the decline in our oil production.

The Democratic position was not so much a lie as a clever bit of rhetoric that meant far less than it sounded like. Obviously, being in the Western Hemisphere, the US tends to buy more oil from producers like Venezuela and Nigeria and Angola than from producers like Saudi Arabia and Iraq and Iran. So promising to get "independence from Middle Eastern oil" was just empty campaign rhetoric. Its not Energy Independence unless its independence from Imported Oil.

Or, perhaps, if Energy Independence has be ruined by far too many people led to think it has something to do with using using less than 1% of total world oil production on top of our existing 10% of oil production to feed our oil habit consisting of 25% of world oil production ...

... if too many people think that "Energy Independence" means covering a 15 cents on the dollar budget shortfall with less than a penny on the dollar in resources ...

... then hell, call it "Energy Freedom".

An Independent US Economy Requires Oil Free Transport

60%~70% of our oil is imported, 60%~70% of our oil is consumed in transport. If we do not do a serious full court press for Oil Free Transport, then as we experience the coming series of serious oil price shocks - the ones that will let people know that $4/gallon was a pre-earthquake tremor, and by no means the main event - our Economy is screwed.

It really is that simple. While the Generosity of Oil Party sells one after another fantasy simplification of reality, and the Democratic Party establishment seems to aim to make every policy proposal into a hopeless muddles so nobody can tell how far short it has fallen of the lofty campaign rhetoric ... here, at least, we do have a simple, true no matter what the economic conditions are, stable place to plant our flag.

Recession? We need work. We need the government to spend money to directly or indirectly put people to work. But we are a dependent economy, so we do not have the freedom we once had: if our dollar melts down, gasoline and diesel prices will skyrocket and our economy is screwed.

Solution? Spend money on things that will reduce our dependency on oil. Then there is on the one hand less reason for speculators to dump dollars, and on the other hand less damage done if they do.

Overheated economy leading to inflation? In the face of demand-driven inflation, we need to increase productivity and increase productive capacity. The short-circuit to a classic wage-price inflationary spiral is to cut producer price inflation, so that rising wages do not force an equal increase in prices leading to pushed for "catch up" wage increases and so on.

Solution? The simplest, most easily accessible sources of increased efficiency are the massive energy waste build into our transportation and logistics system.

Imported cost inflation? This is the easiest of all: all three episodes of substantial imported cost inflation that we have experience, in the 70's, early 80's, and just recently, have been due to oil price shocks. Reduce our dependency on imported oil, reduce our exposure to oil price shocks.

Getting Around Deficit Errorism

Paradoxically, the malignant fantasies that lead politicians into Deficit Errorism leave the door open for getting serious about oil-free transport.

The thing is, over the long term, the shift of our transport from inefficient oil fed systems to more efficient, domestically powered alternatives will have a stimulus impact just because we are importing less oil. What we need is to get the ball rolling.

So we can fund this with dedicated taxes and other revenue sources, setting up Development Banks that allow borrowing against future dedicated revenue streams. If done right, the bill is in formal terms balanced budget - and of course in terms of the national economy an overall surplus, because cutting our energy imports is a real saving to our national economy.

So, just hypothetically: take the Cantwell / Collins carbon auction system with a 75% Social Dividend built in. Instead of a free for all for the other 25%, allocate 10% according to the location of employment in affected industries, and 15% to subsidizing Connie Mae financing of carbon reducing spending by consumers and businesses. Since Connie Mae financing is primarily funded by the reduced energy cost of the financed projects, the leverage of putting 15% of carbon permit auction revenues is tremendous.

And then, allow five times the present annual Social Dividend to be allocated to Connie Mae financed spending. Now instead of just offsetting the cost of the carbon permits, the system is leveraging more business nationwide for qualifying Connie Mae financed spending.

Then, add to that same bill a 1% plus 5 cents per gallon import tariff on imported petroleum and all petroleum products were countries have a free hand on setting import tariffs. Devote 20% of the revenue to individual accounts for cities, counties and reservations in oil-free transport systems. Devote 20% to each of four Line Development Banks to develop national "Steel Interstate" rail corridors providing electric freight rail, including 100mph rapid freight rail, from coast to coast, combined with a national network of Long Haul HVDC grid to grid transmission lines to connect all domestic renewable electricity resources to the grids serving the nation's electricity consumers.

In rough terms, that is from a quarter to a third of the way there. So fracking pass the bill and get to work on the next one.

The Question Is Not Whether It Can Be Done ...

This is not a theoretical question. This is not something that requires development of amazing new technologies. This is not something waiting for breakthroughs.

Enough breakthroughs have already been made.

New developments would, of course, be nice. Under mature technology, this will rely heavily on utility scale wind power and point-of-use solar power, supplemented by some utility scale peak solar power. Under mature technology, this will rely heavily on electric catenary and trolley-wire rail and trollery-wire/battery trolleybus transport systems, complemented by suburban infill to support pedestrian and cycle access, and supplemented by pluggable hybrid electric buses.

And if we start doing it, that may well not be the final shape of things, because if we start doing things, we may end up finding some new ways of doing things that as they mature take over in unexpected ways.

But even without any big technological advances, we can get this, in terms of the available, already proven hardware. Hardware is not the problem.

What is subject to doubt is whether we can get our act together. We have a clear and straightforward goal to aim at. A goal that our politicians have been lying about and paying lip service to for years. And our decades of time to slowly edge toward a solution has been completely wasted in a combination of phony policies and aggressive counter-attacks from the vested interests who are on the wrong side of history.

But can we get our act together? Can we seize this moment, shed our Addiction to Imported Oil and pursue Energy Freedom?

Midnight Oil ~ River Runs Red

Sunday Train: Working on the Railroad for Energy Independence

2010-05-11T18:06:00.003-04:00

Burning the Midnight Oil for Living Energy Independence

Well how the frack d'ya like me now?

I'm not going to say "toldya so", since many who will be reading this diary said much the same during the "Drill, Baby, Drill" absurdity in 2008 ... but the undersea oil volcano underlines, boldfaces and highlights in red the basic facts of the situation that we face:

Our country produces about twice as much crude oil per person as the world average
Our country consumes about five times as much crude oil per person as the world average
And we have been producing oil a long time, have passed our peak of domestic oil production, and aint ever getting back to it.

And, anyway, we already tried Drill, Baby, Drill. Its played itself out already.

Obviously, the direction to go to insulate ourselves from oil price shocks and the recessions they cause is to cut our consumption. Which means, in part, Train, Baby, Train.

So, what is it about trains, anyway?

I would admit that I have a big model train set in the basement - except its not mine, its my stepfather's. For me, trains are transport, a way to get from Point A to Point B. Indeed, the mode of transport that has a special place in my heart over and above their functional utility is not trains so much as bikes (and living in NE Ohio, I must hasten to explain "Bikes like Schwinn's are Bikes, not Bikes like Harley's are Bikes").

No, this is why trains. We consume 28% of our energy in the transportation sector. If we are going to reduce our oil consumption by 5% a year each year for the next 20 years, that means we have to consume the consumption of petroleum by transport by 5% a year, each year for the next 20 years.

We also have to get off mineral coal, but it turns out that trains can contribute to that as well.

My focus here, today, is how to use the process of breaking our oil addiction as a means of providing the jobs that our economy needs, and does not and will not otherwise have, over the next decade.

Of course, when we focus on oil, transport is even more important. To get more specific, according to the government numbers, transport consumes about 2/3 of our petroleum. We produce about 40% of our oil consumption, and even if we cut our oil consumption by 5% a year ... by the time we have cut 60% of our present oil consumption in 12 years time, we will be producing less oil than we are producing now.

And once we get to the point where we are getting the majority of our transportation energy from sources other than oil, we can start looking to the future. One of the bright, glaring points about "Drill, Baby, Drill", why Drill, Baby, Drill represented the complete abandonment of Republican pretensions about being the grown ups in the room, is that when you pump out and burn oil, its just gone, never to come back.

After all the Republican pretensions I remember hearing ever since being a kid in the 60's and 70's about the Republicans being the party of "responsibility" - their approach to our non-renewable natural resources is "Burn It All As Fast As Possible and the Devil take the Hindmost!".

So, to cut our oil consumption by 5% a year over the decade ahead ... which will still leave us an oil importer, but take us off the front line for being the demand reduction via recession in future oil price shocks ... we need 7 of those 5% reductions to come from transport. And each and every one means more work over the coming decade.

I'll look at three of the seven, today.

1. The Steel Interstate

I described the Steel Interstate approach to Electrified, Rapid Freight Rail a couple of months ago, and then polished up the network map a bit the following week.

So, broad brush strokes here:

15,000miles+ of STRACNET corridors electrified with rail improvements that allow scheduled slots for 100mph Rapid Freight Rail
Built primarily in existing freight rail rights of way by distinct government owned, not for profit "Line Development Banks"
Those using the infrastructure pay Access and User fees that cover up-front capital costs
Interest costs covered by a $0.01/gallon tax on imported petroleum, rising to $0.05/gallon over five years

This is based on the full scale plan offered by Alan Drake and studied by the Millenium Institute, and projected to be able cut our petroleum consumption by about 7%. And of course, the "first half" will result in more than half of that, provided it provides a rough grid that covers the bulk of the long-haul transport markets in the country ... so I'll slate this in as the first of the seven transport "5%/year" projects.

Note that the way I have sketched it out, the Access and User fees are ongoing, on a simple formula, and that a Line Development Bank has completed its line, it would be chartered to devote any capital surplus to the funding of energy-independence transport within its broader service area. So on the back of that funding, the Steel Interstate proposal is also one of the seven required 5% reductions in the second decade of our Freedom from Oil in Twenty Years program.

2. Local Electric Transport

Back in March of 2009, NBBooks wrote $3.195 trillion -TRILLION - for urban RAIL transit.

Where this is derived from is a target for rail transit density:

Building 50,757 kilometers of new rail transit lines, at a cost of $3.195 trillion. is based on building urban rail mass transit systems to the same service density found in New York City, in the next 38 largest urban areas. I began by assuming a desideratum of having a rail transit line no more than 2.5 miles from any point in an urban area. That is, if you took a square of urban area five miles on each side, we want to have a rail transit line running directly across the middle of that square. Slice that 25 square mile area into one mile strips, and you get one mile of rail transit line for every five square miles of urban area, or a density of 0.2 mile of rail transit line for every square mile. Converting square miles to square kilometers, and miles to kilometers, what we are looking for is a density of 0.124 mi {sic.=km} of rail transit line for every square kilometer of urban area.

This is a fine density for densely populated areas, but I am of the view that moving to a sustainable settlement system from our current system that is dominated by sprawl-suburban settlement (in terms of representing half or more of all residential population, just as over half of the nation's residents at the previous turn of the century lived in urban rather than suburban areas) will require both rebuilding residential population in core urban areas and establishing urban density walkable neighborhoods along dedicated transport corridors running through suburban areas.

This "clustered network city" approach of suburban transit villages connected to urban centers would seem to permit a looser rail network complemented by a mix of local transport access - by foot, bike, neighborhood electric vehicle, battery/trolleywire trolley bus, etc. So I ease this back to a rail transit line no more than 5 miles from any point in the urban area. That is then, above, a 10 mile square line with a line running down the middle, or a density of 0.1 miles of rail transit line for every square mile ... or 0.62 km line per sq. km.

However, taking the rest of NBBook's estimates, that is $1.6T (trillion with a T). Spread across ten years, $160b/year ... about 1% of our national economy.

How to finance that? Most directly, impose a 5% payroll levy on earned and unearned income received by those making over 7 times median income, roughly $280,000.

In order to achieve broad based oil independence, this would be allocated on a per capita basis to municipalities, counties and reservations, which they could annually allocate for construction or improvement of dedicated transport corridors and dedicated support facilities for electric common carrier transport. Since not all municipalities or counties cannot allocate their share, the annual surplus would be re-allocated to those able to invest their original share.

Is this a 5% piece? I think it likely will be, but I will have to look into that more closely. In any event, it is a piece that will be generating 3.75m jobs per year, every year for a decade.

3. Personal Transport

The third piece I would offer today is Personal, or "Active" Transport: Walking and Cycling.

The objection might be raised that this is not a rail project ... but in reality, it is the flip side of the local rail project above. A bike is a fine thing to ride for a couple of miles, but a ten mile ride is not a commute for a regular transport cyclist.

So the focus of increasing Active Transport sufficiently to save 5% of our petroleum imports is the establishment of a walkable zone around stops along the dedicated transport corridors, with a mandatory easement to allow three story, mixed used and stacked townhouse development within a quarter mile of the stop on the corridor.

Given the capital-efficiency of these modes of local transport, the funding can piggy-back onto the above system as well: for all funds drawn from the municipal, country and reservation accounts in support of dedicated transport corridors, 1% must be allocated to qualifying projects in support of Active Transport.

OK, so those are my three ...

... what are yours?

The Headliners: Midnight Oil with Truganini!

There's a road train going nowhere / roads are cut, lines are down ...

Sunday Train: King of the Mountain, Part 1

2010-04-04T22:49:00.001-04:00

Burning the Midnight Oil for Living Energy Independence

I noted near the beginning of the Appalachian Hub series about the special advantages offered by rail electrification for this project.

Now that I have sketched out a process by which a national Steel Interstate network of corridors can, in fact, be built in this coming decade, this is probably a good time to come back and take a look at the challenges that are faced when putting the Steel Interstates through hilly and mountainous terrain.

Of course, if rail electrification was a particular benefit in mountainous terrain, one would expect to see it in places like, say, Switzerland.

Picture of a Swiss electric freight west of the Albula tunnel
_________________

Trans-Alpine Freight and Swiss Rail

When tuning in to news from Switzerland, the big story are so-called "base tunnels". These are tunnels that cut through "the base of a mountain". The Lotschberg Base Tunnel, featured in World's Most Spectacular Tunnels, cuts through the mountain a 1,312 feet lower than the tunnel that it replaces ... that is about a quarter of a mile lower.

Just as the original investments in Japan and France in capital-intensive HSR passenger lines, what is driving this investment in base tunnels is the capacity limits of the present rail routes. As AlpTransit's description (pdf) of the Gothard Base Tunnel Project puts it:

Construction of base tunnels under the Gotthard and Ceneri creates an ultramodern flat rail link whose highest point at 550 metres above sea level is no higher than the city of Berne. This is much lower than the highest point of the existing route through the mountains at 1150 metres. Gradients will be no steeper than where the railway crosses the Jura mountains through the Hauenstein tunnel (Basel – Olten) or the Bözberg tunnel (Basel – Brugg). The route through Switzerland becomes flatter and 40 km shorter. Italy and Germany come much closer together.

Freight trains travelling on the flat route can be longer and pull up to twice today's weight – 4000 tonnes instead of 2000 tonnes. They will be up to twice as fast, too: the fastest freight trains will have a top speed of 160 km/h. Trains like this cannot be used on existing Alpine routes because of the steep gradients and tight curves. When the flat route is complete, it will be possible to transport an equal volume of freight with fewer locomotives and personnel, and less energy.

Just as with the Japanese and French investment in Passenger HSR, it is important to put this investment in context. This is not a result of the failures of the existing Swiss electric freight rail system - it is a result of its success. That is, the growth in interstate freight transport is pushing up against the capacity limits of the Swiss system because the Swiss rail system was effective in capturing a substantial share of freight.

This figure from sheet 5 of the Gothard Tunnel pdf makes the point in no uncertain terms. The original Swiss electric freight system has carried a majority of the Trans-alpine freight that passes through Switzerland, while in France and Austria, the majority of freight has been passing by road.

And when digging further into the description of the Base Tunnel makes it clear the benefit that the Swiss have obtained from electric rail.

Why Electrification in Mountain Rail Corridors?

Bear in mind that a normal maximum gradient in many US mainline rail corridors is 1%, or "10 per thousand", when considering the following description of the route being replaced:

The ramps of the present-day railways through the Gotthard and Ceneri have gradients of up to 26 per thousand. The flatness and straightness of the base route – maximum gradient 12.5 per thousand overground and 8.0 per thousand in the base tunnels – allow productive deployment of long, heavy trains through elimination of time-consuming shunting operations. Today, a heavy freight train travelling north-south over the Gotthard and Ceneri mountain routes requires a pushing locomotive because of the steep gradients. The goal of freight trains hauling more than 2000 tonnes travelling through Switzerland without stopping at Erstfeld or Bellinzona, and without midtrain or pushing locomotives, can only be accomplished when both the Gotthard and Ceneri base tunnels are completed.

Consider that: a gradient of 2.5% and "only" being able to move 2,200tons of freight at 50mph.

As the Wikipedia machine notes, the secret to this success in the mountains lies in the higher power-weight ratio of electric locomotives:

The high power of electric locomotives gives them the ability to pull freight at higher speed over gradients, in mixed traffic conditions this increases capacity when the time between trains can be decreased. The higher power of electric locomotives and a electrification can also be a cheaper alternative to a new and less steep railway if trains weights are to be increased on a system.

Putting the Advantages to Work

Of course, one way to cope with mountainous terrain is to avoid it. In the proposed Steel Interstate system, line one, the Liberty Line from New England to California, runs along the Shenandoah River Valley, the original "highway to the west", mostly avoiding the type of terrain that the Swiss would consider to be Mountains. To the west, it runs through the lower land of southern New Mexico and Arizona, a similarly easy route through the western cordillera, and then runs up the Central Valley to bring most of California within its catchment.

The roughest terrain that this corridor needs to tackle is the alignment west and north of Chattanooga, where the existing STRACNET corridor does a sweeping S-curve to avoid the rougher terrain where the Interstate has simply been blasted through. This is a key point where the Line Development Bank will have to carefully analyze the alternative alignments, and could well opt for taking the Rapid Freight Rail corridor out of the conventional freight rail corridor, where the Rapid Freight Rail path gains time by operating at a steeper gradient than the conventional rail corridor. That is, operating at 60mph over half the distance may well be a faster path than operating at 100mph along the heavy freight alignment.

Unlike the Swiss freight system, the electrified heavy freight paths will not have to contend with constantly shuttling aside to make way for passenger trains, since the passenger trains will be on the Rapid Rail Paths, whether those are provided by dividing up the time of day that different trains run on a track, by providing separated track in the same right of way, or by providing a Rapid Freight bypass on its own Right of Way.

Once the Chattanooga to Nashville, alignment is determined, that also solves the only stretch of rough terrain that the Heartland Alignment faces, while the Gulf and Atlantic Line only ever runs to, but never through, rough terrain.

In other words, other than the Chattanooga/Nashville alignment, all of the challenging terrain has been focused on the National Line:

Harrisburg to Pittsburgh, within the territory tof the Appalachian Hub;
east of Salt Lake City and east of Sacramento, on the line to Oakland;
the northeastern and northwestern Oregon corridors on the line to Portland; and
the Southern Oregon / Northern Californian corridor between the Pacific Northwest and the California Central Valley

Indeed, it has been suggested to me that this is a line that should not exist at all. So in a couple of weeks, in King of the Mountain Part II, I'll take up the focus on the need for a genuinely national network, and the flexibility that the institution of the Line Development Bank gives us in pursuing a genuinely national network, focusing on the proposed Steel Interstate system both with and without the National Line.

The Headliners: Midnight Oil / King of the Mountain

Walking through the high dry grass,
   pushing my way through slow
Yellow belly black snake,
   sleeping on a red rock
Waiting for the stranger to go
Sugar train stops at the crossing,
   cane cockies cursing below
Bad storm coming, better run
   to the top of the mountain
Mountain in the shadow of light,
   rain in the valley below

The Job Free Recovery Continues

2010-04-02T23:44:00.002-04:00

Burning the Midnight Oil for a Brawny Recovery

crossposted at ProgressiveBlue

The March Jobs Report has come, and though there appears to have been some employment growth in the rose colored glasses retailing sector, in most other sectors, the headline is that the Job Free Recovery continues.

There are three main numbers to focus on when looking at the monthly employment report:

employment
the headline unemployment rate, seasonally adjusted
the broad ("U6") unemployment rate, seasonally adjusted

... so let's have a look at them.
________________________

The report employment figure showed employment growth of 162,000. Is that good news? Bad news?

Well, its news to the extent that "the normal average season growth in employment" means that the string of job losses have come to an end. The headline unemployment rate was unchanged at 9.7%, while the broad unemployment rate increased from 16.8% to 16.9%, both seasonally adjusted.

When trying to work out what's going on with the business cycle, we look at seasonally adjusted figures, and that is, part of why the headline unemployment rate is constant. The raw figure is down by 0.2% ... but that's on average what is normal in moving from February to March.

The uptick in the seasonally adjusted broad unemployment rate is explained directly in the summary:

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) increased to 9.1 million in March. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

So while employment increased, some of that was part-time work held by people who want full time work. Just as we would expect this early in a recovery, many businesses do not feel that they have to hire people full time when there is a wide choice of perfectly good workers who can be had with no commitment on their part.

How long would it take to get to full employment at this rate?

I saw someone "tweet" that at this rate, it would take a year to get the unemployment rate down by 1%. However, actually, since this increase in employment is very close to the seasonally expected increase, employment could grow "like this" for years without bringing the unemployment rate down by 1%.

"Like this" would, after all, be increases in employment in months where that's normal, and reductions in employment in months where that's normal.

This is why we need a Brawny Recovery: a recovery where we roll up our sleeves and get down to the work of catching up on thirty years of postponed investment in infrastructure, and thirty years of postponed establishment of a New Energy Economy to address the fact that we have an oil-addicted economy.

And there is no way to describe it other than oil addiction. After all, we are still a major oil producer. We produce about twice the world average, per person. However, we consume five times the world average.

Something to demand immediately

Something that can and should be done immediately is for the Federal Government to make up transit system budgets that are directly due to reductions in state and local sales tax receipts.

Of course, this needs to be in proportion to the downturn in tax receipts for given tax rates. We have to avoid setting up a system that encourages and rewards state and local governments that treat a budget crisis as an opportunity to throw the bus under a bus ... as in California, where the Governor seems determined to kill off public transport as a favor to his big oil contributors.

However, it should be backdated. This is something we should have been doing since September 2008, at the latest ... it is, indeed, something we should do for any recession. During a recession, farebox revenues decline, because people that have lost their job no longer have their daily commute. But the cost of operating the services remain fairly stable, and the need to have access to the services often increases. When at the same time dedicated or general fund tax receipts at the state and local level decline due to the recession, transport and transit authorities get hit with a double whammy.

There are lots of things that are a rightful part of a Brawny Recovery: electrification of local public transport corridors, establishment of Electricity Superhighways, establishment of a nationwide electric freight rail system, investment in energy efficiency upgrades to both public and private buildings ...

... but one that can have very rapid impacts is helping local transport cope with the fact that this recovery, like the two before it, look like it will take about a year before genuine employment growth starts to show up.

Not only will this help keep people in useful employment, but it will also ensure that the most vulnerable are not locked out of participating with the real employment growth, when it really does start to appear.

The 1850's and the Path Ahead

2010-03-27T13:42:00.003-04:00

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?

Sunday Train: Heritage Opposes Freedom to Choose High Speed Rail

2010-03-22T15:19:00.002-04:00

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