In economics, experiments are rare. There is seldom a control group. But sometimes crude experiments can be done. Both the passenger and freight rail system in the US were nationalized after “common carrier” price neutrality regulation bankrupted the industries. But then freight rail was privatized, while passenger rail was kept public. Now, the US has the world’s BEST freight and WORST passenger rail.
Freight rail’s renaissance is powering the U.S. economy even without Uncle Sam’s help
By Michael Grunwald @MikeGrunwaldJuly 09, 2012
Congress is gridlocked over infrastructure. On one side, Democrats want to invest in America. On the other side, Republicans want to tighten government’s belt. But there’s one more side to this story. U.S. freight railroads will get $23 billion worth of upgrades this year, and taxpayers won’t pick up the tab. That’s because the railroads build, maintain and improve their own infrastructure and even pay property taxes on their tracks. Also, freight trains are about three times as fuel-efficient as long-haul trucks, which means they help cut smog and reduce the U.S.’s carbon emissions and oil dependence. And forget those accident-prone trains your kids watch on Thomas the Tank Engine & Friends. In reality, shifting freight from roads to rails sharply reduces crashes and congestion.
We don’t think much about freight trains except when they make us wait at intersections or blow their horns while chugging through our towns. The industry evokes images of ruthless Gilded Age monopolies and hapless 1970s bankruptcies. But railroads are one of my favorite special interests–not because they’re less greedy or aggressive than other Washington lobbies but because what’s good for them really does tend to be good for us.
It’s not just that they are self-sufficient and fuel-efficient, employ 175,000 workers and have poured $500 billion into their trains, tracks and terminals since 1980. They are also quite literally the engines of our economy. America’s passenger rail is a global joke, but our freight rail is the envy of the world, carrying over 40% of our intercity cargo. Trains carry much less of Europe’s freight, which is why trucks clog Europe’s highways. And America’s rail-shipping rates are the world’s lowest, reducing the cost of doing business in the U.S.; they’ve fallen 45% in real dollars since the industry was deregulated three decades ago.
The right should love railroads because they’re proof that deregulation can work and the private sector can upgrade infrastructure. The left should love railroads because they fight global warming and provide union jobs. We all should love railroads because they bring us our stuff and keep prices down.
