Krugman on Republicans "Railing Against Rail". Also, Kerry on the infrastructure bank

[ProSense]

Railing Against Rail

Jonathan Cohn points out the curious opposition of Republicans to any improvement in our woefully inadequate rail system. As he suggests, this opposition goes beyond issues of cost; there’s something visceral about it. What would Dagny Taggart say?

It’s not too hard to understand, of course: in real life, as opposed to bad novels, railroads aren’t run by rugged individualists (nor should they be). In fact, passenger rail is generally run by government; even when it’s partially privatized, as in Britain, it’s done so with heavy state intervention to preserve some semblance of competition in a natural monopoly. So rail doesn’t fit the conservative vision of the way things should be.

I suppose there’s some echo of this attitude on the other side; people like me probably have a slight affinity for rail because it’s a kind of socially provided good. But I don’t think it’s comparably irrational: rail just makes a lot of sense for densely populated regions, especially but not only the Northeast Corridor. New York could not function at all without commuter rail, and Amtrak even as it is is crucial to intercity traffic — it’s not just a question of expanding airport capacity, we just don’t have the airspace.

I’d add an informal observation: on casual observation, rail makes even more sense in the digital age. I almost always take trains both to New York and to Washington, and consider the time spent on those trains part of my productive hours — with notebooks and 3G, an Amtrak quiet car is basically a moving office. And I don’t think I’m alone in that.

So let’s hope that ideology doesn’t get in the way of our steel-railed future.

Kerry spoke recently on the issue, video and remarks:

Kerry Testifies In Favor of National Infrastructure Bank

WASHINGTON, D.C. – Senator John Kerry (D-Mass.) today renewed his call for the development of a National Infrastructure Bank. In testimony this morning before the Banking, Housing, and Urban Affairs Committee, Kerry said that strengthened roads, bridges, rail, and aviation will create jobs, strengthen our economic competitiveness, and bolster our national security.

Earlier this month, Senator Kerry said he’s committed to developing National Infrastructure Bank legislation.

The full text of Sen. Kerry’s testimony as prepared is below:

Mr. Chairman and Senator Shelby, I want to thank you for the opportunity to testify at this hearing to explore ways to develop a National Infrastructure Bank. Rising economic powers around the world are investing in their future – we need to do the same before we fall farther behind.

There are many ideas about the best way forward. We must be candid that there’s no way to become more competitive on the cheap. But what’s clear to me is that the best way – and the most efficient way – the way that galvanizes private sector investment rather than a big government approach - is to create an infrastructure bank for the United States. Already, a diverse bipartisan group supports the idea of a national infrastructure bank including the Chamber of Commerce, the AFL-CIO and SEIU.

We need to create new and strong incentives for investment here in the building blocks for economic competitiveness – roads, bridges, rail, aviation and other essential infrastructure. But investing and upgrading our infrastructure is not only good economic policy, just as President Eisenhower recognized when he built the national highway system and bet on American ingenuity and American economic capacity to strengthen our hand in the Cold War, it’s related to our national security and our strength in the world. Simply put, a strong economy at home means a stronger America in the world.

At times, we do, we can, and we will debate and disagree over the appropriate size of government. I believe that Americans don’t want "big government," but they certainly want as much government as it takes to be safe and secure on our roads, bridges, rail, and highways -- businesses certainly want as much government as is required to efficiently, cheaply move products to market -- and that means upgrading our nation's highway, rail, maritime and aviation systems and modernizing our electrical grid.

How bad do we need help? In 2008, the National Surface Transportation Policy and Revenue Study Commission called for an annual investment of $250 billion from federal, state and local governments for the next 50 years to meet our transportation needs. We are talking about staggering sums here, and it clearly reflects just how much we have neglected our infrastructure – and just how much we need to do in the years ahead.

Well-functioning infrastructure is not a luxury – it is the key to connecting and protecting our people and creating millions of middle-class jobs for American workers over the long term. And it is vital to our economic future in the face of global competition. Our growth and exports are directly tied to how our infrastructure operates. Quite simply, we are falling behind many of our main economic competitors, and the further we fall behind in this race, the harder it will be to catch up.

For example, China’s 2009 infrastructure spending is estimated at 9 percent of GDP, or $350 billion, and is growing at an annual rate of 20 percent. China’s highway mileage is expected to surpass the United States’ in under three years.

Europe’s infrastructure bank, the European Investment Bank, financed $350 billion in projects from just 2005 to 2009 across the European continent, helping modernize seaports, expand airports, build rail lines and reconfigure city centers.

And Brazil has invested over $240 billion in their infrastructure in the past three years alone, with an additional $340 billion planned for the next three years. Brazil has unveiled major initiatives to invest in infrastructure ahead of hosting the World Cup and Olympics, using their own infrastructure bank as a key tool to finance this massive expansion.

To get back in the game we need more than the existing municipal bond market system, which is already struggling to support over 80% of infrastructure investment in the United States. A national infrastructure bank would complement existing federal infrastructure programs, not compete with it. We’re talking about an infrastructure bank that brings the private sector to the table in a way that allows us to leverage investments. This provides us with a way to do more with less. If we cannot find a way to include private investment in our infrastructure, it will go to other countries to assist their infrastructure upgrades.

If done right, I believe an infrastructure bank can change the playing field. It would finance projects from high-speed rail to air and sea ports, all with the expectation of being repaid. It would lend directly to economically viable projects of both national and regional significance, without political influence. It would be run in an open and transparent manner by experienced professionals and have meaningful Congressional oversight.

Americans have always been builders. We built a transcontinental railroad. We built the Panama Canal. We built an interstate highway system. We went to the moon. But for too long now, we have lacked adequate investments in our infrastructure and what building we have done has been without a long-term strategic plan. A national infrastructure bank will change that. A national infrastructure bank will make Americans builders again.

In deciding whether to create a national infrastructure bank, we should also consider this: When President Eisenhower signed the law creating the Interstate Highway System; he noted that, “Together, the united forces of our communication and transportation systems are dynamic elements in the very name we bear – United States. Without them, we would be a mere alliance of many separate parts.” What was true then is still true today.

[DBoon]

1. "New York could not function at all without commuter rail"

I think that answers Krugman's question.

Republicans would like to see cities like New York die.

Starving rail transport is one way to accomplish their goal

[blm]

4. you're probably right...sadly enough

.

[karynnj]

2. Kerry's statement to the committee and the Krugman article are excellent

One wonders how the country would have functioned in the last 50 years without all the infrastructure built under FDR and under Eisenhower. Things need to be updated, maintained and improved.

[damonm]

3. "we don't have the airspace", my left earlobe...

If EVERY US-registered aircraft were airborne at once, at the same altitude, with 1-mile separation, they'd only cover a space the size of Arizona. We've got TONS of airspace - it's the hub-and-spoke system that makes Godawful use of it.