Amtrak is the kind of insfrastructure we need

I’ve spent a lot of time on I-95 in the past 30 years, seen numerous expansions and lane additions, and experienced ever-increasing traffic jams. All the experts tell us it will get worse, probably much worse, in the foreseeable future.

I’ve had exactly the opposite experience on Amtrak between Wilmington and Washington and Wilmington and New York. As conditions on I-95 have deteriorated, the Amtrak experience has improved. People are beginning to notice; annual ridership in the Northeast corridor was up 5.2 percent in the six-month period from October 2011 to March 2012.

The American love affair with the automobile is alive and well, but it doesn’t take a genius to realize that on certain routes between densely populated cities there is no way we can build enough ever-more-expensive highways to keep up with the growth of our population. Unless you love your car so much you want to sit in an unending 500-mile traffic jam in a few years, Amtrak has to be part of the solution.

Yes, Amtrak requires government subsidies. I won’t dig into the argument about which is cheaper in the long run, government subsidized rail traffic or government-funded highway construction. Like a lot of our arguments these days, ideology seems to get in the way of pragmatic answers. I can, however, take on those who are calling for the privatization of Amtrak.

The private sector does many things better than the government. But the private sector works best when there is competition between companies, spurring them to innovate and reduce costs while competing for customers by offering superior products. Government usually works better in circumstances, such as a passenger rail line, where there is no competition. At least if the service is lousy or overpriced, you can vote to throw the people responsible out of office. The worst of all worlds is the private sector without competition.

Santayana’s famous dictum, “Those who cannot remember the past are condemned to repeat it,” is applicable here. The most prominent example of a country privatizing its rail lines happened in the United Kingdom back in 1993. This was done, of course, because it was believed that private ownership would lead to reduced costs and better service. What happened?

The answers are in an exhaustive and authoritative study commissioned by the British government and released last year. “There is widespread recognition that the industry has problems in terms of efficiency and costs,” said study chairman Sir Roy McNulty. Among the study’s other conclusions: “Unit costs per passenger kilometer have not improved since the mid 1990s …Further benchmarking has identified an efficiency gap of 40 percent against four European competitors …At present, [U.K. rail passengers] are paying at least 30 percent more than their counterparts in other European countries, which not only places an unjustified burden on passengers and taxpayers, but also disadvantages U.K. competitiveness in the wider sense.”

What about the costs to the taxpayers? According to The Guardian, one of the UK’s leading newspapers, “In its last year before privatization, our railways required just 431 million pounds [$694 million] in public subsidy. By 2006, the figure had reached over 6 billion pounds [$9.7 billion] …The only people who don’t see the need to re-nationalize the railways are profiteering firms and their supporters in Parliament.”

Another major concern has been the safety record of the privatized rail lines. The inevitable pressure to maximize short-term profitability has led to a reduction in long-term investments in rails, rail cars and engines. The Guardian reports, “After a string of fatal crashes, culminating at Hatfield [four killed, 70 injured] the safety record of the marketised system lay in tatters.”

The most successful rail systems in the world are run by the four European competitors (including France and Germany) referred to in the McNulty study and by our own significant international economic competitors (China and Japan). All are government owned and operated.

When we balanced our federal budget back in the 1990s and created budget surpluses, we didn’t do it by reducing subsidies to Amtrak –a tiny percentage of our deficit. Willie Sutton got it right when asked why he robbed banks: “Because that’s where the money is.” In the case of deficit reduction, the real money is going to be found, just as it was in the 1990s, by making tough choices about revenue, defense and entitlements.

Don’t cut Amtrak. It is exactly the kind of infrastructure spending we need to improve our global competitiveness.

Originally published 6 October 2012 on delawareonline.com