Bes Stocks To Buy 2014, Best Stocks For 2014: Riding High-Speed Rail to a U.S. Recovery: John Rosenthal

Sunday, January 1, 2012

Riding High-Speed Rail to a U.S. Recovery: John Rosenthal

Bipartisan enthusiasm greetedPresident Barack Obama��s announcement in 2009 that the U.S.,long the world��s caboose in train travel, would finally investin high-speed intercity passenger rail.

Much as Dwight D. Eisenhower made the Interstate HighwaySystem a hallmark of his administration, Obama pledged to make anational network of bullet trains the legacy of his. Governorsfrom both parties applied for the initial round of $8 billion infunds from the $787 billion stimulus bill.

Because of its ingenious scope, neither the airlines northe auto industry contested the plan. It targeted corridorsamong major cities that are too far apart to drive, but tooclose to make flying worth the time and hassle of trudgingthrough airport security: Chicago, Detroit, St. Louis andMilwaukee, for example, or Atlanta, Charlotte, Birmingham andNew Orleans. Although trains wouldn��t compete with planesbetween New York and Los Angeles or, for that matter, Chicago,the plan would put high-speed rail within the reach of 80percent of Americans.

At the time, there was little opposition. The first awardswere announced in January 2010, and while there was predictablegriping about which corridors got the most money, supportremained high for the program overall.

Tea Party Surge

Then came the Tea Party uprising of 2010, ushering in acrowd of anti-spending legislators. They immediately set out toderail the program, which they conflated with the supposedlysocialist agenda the president was pushing with his health-careoverhaul. Newly elected Tea Party governors in Florida,Wisconsin and Ohio returned a total of $3.6 billion in stimulusawards; Representative Paul Ryan of Wisconsin introduced anamendment to rescind $2.3 billion in rail funding that hadn��tyet been spent.

The protests were mostly grandstanding, and didn��t end updenting the deficit by a dime. Ryan��s bill stalled in theSenate, while the grants to Florida, Wisconsin and Ohio wereredistributed to other states. Wisconsin��s governor, Sc! ott Walk er, even applied for an award from a later round of federalfunding to upgrade rail between Chicago and Milwaukee.

This opposition may have been good politics, but it��sterrible policy for America. The arguments in favor of high-speed rail are just as compelling as they were in the early1990s, when President George H.W. Bush��s administration firstoutlined the rail corridors.

Investment in rail is a step toward energy independence.Transportation accounts for almost three-quarters of U.S. oilconsumption. Shifting millions of passenger trips from cars andairplanes to electric-powered trains each year wouldn��t justrelieve airport and highway congestion; it would also reduce theamount of oil we need to import from the Middle East. Andbecause trains use a third less energy per passenger mile thancars do, they��re far less damaging to the environment.

The weak economy only increases the urgency. Interest ratesare at historic lows, real estate values remain depressed,private sector spending is stagnant, and unemployment is stuckaround 9 percent. There could hardly be a better time to borrowbillions of dollars to buy up land for train rights-of-way andto create high-paying jobs in engineering, manufacturing andconstruction.

When Florida��s Republican governor, Rick Scott, returned$2.4 billion in federal rail funds last year, he also expungedabout 17,000 construction jobs in one of the most depressedareas of his state. The Florida corridor, which could havelinked Orlando to Tampa as early as 2014, was projected toreturn an operating profit of $10 million in its first yearalone.

Out of Depression

From the Appian Way to the Erie Canal, economic developmenthas always followed transportation. Businesses small and largecluster around train depots, propelling real estate values andgenerating millions in new property taxes. The U.S. built itsway out of the Depression by investing in massive projects suchas the Empire State Building, the Hoover Dam and the Blue RidgeParkway. Hi! gh-speed rail is a time-proven way out of today��seconomic morass.

It is undoubtedly expensive. And rejecting the massiveinvestments required as wasteful spending would be easy ifAmerica��s transportation needs were stagnant. But they aren��t.The Census Bureau estimates that the population will grow by 100million over the next 40 years. And most of those people willreside in urban areas where airports and highways are alreadybursting at the seams.

Compared with the cost of building new airports, wideninginterstates, relocating highway sound barriers, and erectingmillions of parking lots, high-speed rail is a bargain.

California recently revised the projections for its high-speed rail plan to $98 billion, more than twice the previousestimate. But even at those prices, it��s cheaper than thealternative. According to Rod Diridon, executive director of theMineta Transportation Institute, in San Jose, to meet thetransportation needs of California��s growing population withoutrail, the state would have to spend more than $100 billion tobuild new airports and add six lanes to every highway.

And by 2050, those highways and airports would be just ascongested as they are today. But if California spends the moneyon high-speed rail, it can simply increase the frequency ofservice or add more cars per train whenever population catchesup to capacity.

The existing framework for high-speed rail isn��t perfect.America has spent a century neglecting what was once one of thefinest rail networks in the world. It��s going to take more thantwo years to get it back on track.

There are also flaws with the way funds have been allocatedthus far. Too little has been directed to the NortheastCorridor, where population density is greatest, where demand isalready high, and where Amtrak��s Acela service strains to reachits top speed of 150 mph because of antiquated infrastructure.

Upgrading Service

And it��s valid to complain that too much of the high-speedmoney has gone toward upgradin! g conven tional rail service in theMidwest. Yet, in fairness, simply getting existing trains up to90 mph is already going a long way toward the network��s goal ofcompeting favorably with driving and flying.

Abandoning this cost-effective, energy-efficient,environmentally friendly, revenue-generating grand vision wouldbe a mistake we would regret for generations. The constructionof a successful high-speed rail network is vital to America��sfuture. But it won��t happen unless the leaders of the 21stcentury stop playing politics and start thinking beyond the nextelection.

(John Rosenthal is a contributing editor for NationalGeographic Traveler. The opinions expressed are his own.)

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