Over at Grist, Lisa Heinzerling, a Georgetown law professor, has written an essay arguing against the embrace of cost-benefit analysis by environmentalists. She suggests that environmentalists enjoy nature in a very concrete and reverential manner that cannot be captured by economic analysis.:

These values are foreign to the cost-benefit mindset. Cost-benefit analysts insist — through use of an arcane technique called discounting — on treating the future as less important than the present. Sometimes, in fact, they effectively dismiss the future altogether. Cost-benefit analysts dismiss the altruist, explaining either that she does not exist or that she cannot know what is best for other people (even if that means saving them from dying). Cost-benefit analysts also speak in nothing but abstractions: Human lives are not human lives, but “statistical lives” — a handy construct that allows economists to pretend that life itself is not at stake in debates over environmental policy. And shivers of joy and glimpses of the infinite do not appear in cost-benefit tables.

Cost-benefit analysis also produces results that are kin to neither reason nor compassion. Scientists around the world now urge us to act quickly to prevent catastrophic effects from climate change. Many economists soberly advise us to do nothing, or very little, because their calculations demonstrate that the future is worth very little, that people prefer warm weather to cold, and that humans in poor countries are not worth as much as humans in rich ones. These calculations are not the work of the radical fringe in economics; they come from highly regarded cost-benefit practitioners. But they are unreasonable and uncompassionate all the same.

I obviously think that this is a fairly substantial misinterpretation of the use of cost-benefit analysis. Heinzerling makes a number of key errors. First, economists aren’t pulling their discount rates out of nowhere, they’re making an effort to capture actual human valuations of the future. Analysts place less value on outcomes well down the road, because you and I do, too. That’s what interest rates are all about.

It’s also important to note that there are disagreements within the economic community about what an appropriate discount rate should be. It’s a bit dishonest to argue that the median economic position is that nothing should be done; certainly some in the field believe this, but in many cases their rate choices are influenced by ideology more so than data. If we remove the cost-benefit abstraction, their positions would not substantially change. The analysis isn’t the evil in such cases, the belief system is.

And at times, Heinzerling seems to acknowledge this, suggesting that cost-benefit analysis might have been all right in her book if only the users had gotten their numbers right–that is, come up with discount rates more favorable to her position. She also acts as if it’s improper to consider these analyses alongside other pieces of information, as if once the dollar abstraction has been made, all other information has been erased. That’s not the case at all, and in fact many economists have looked at different economic models of climate change, observed the findings, and speculated that other things are worth taking into consideration.

But the big–enormous, really–problem with this line of thought is that there is no good alternative. Economists, by and large, haven’t adopted this mindset because they’re emotionless and cruel. They’ve adopted these techniques because it’s almost impossible to grapple with the problems and solutions involved without abstracting to some degree. It’s all well and good to observe that the globe is warming, and the spiritual power of nature compels us to act to halt this process, but then what? What changes should be made, who will those changes help and hurt, and what costs should we be prepared to accept in this battle?

I suppose that she would answer that more should be done, and that present humans should be prepared to suffer more for the sake of the future. Ok, fine. Why? Are costs not to be considered at all? Are all potential trade-offs to be ignored? A person in her position, observing the environmental destruction of the industrial age, might have argued that we were vastly underestimating the costs of such destruction. On the other hand, the wealth generated from that industrialization has materially improved billions of lives.

I think it’s important to acknowledge the weaknesses and limitations in any of the models used to establish costs and benefits, and to fill in gaps with qualitative information when possible. But to toss out the analysis completely is bound to do more harm than good. Doing so would, in all likelihood, lead to worse decision making. It would also deprive environmentalists of a common language with policy makers and skeptics. Answering hard numbers with discussions of nature’s transcendent power is unlikely to be helpful when the rubber meets the road.

If environmentalists don’t want to be marginalized, and if they don’t want the weight of undue human suffering on their hands and consciences, then they’d do well to embrace cost-benefit analysis. Because these issues are so important, we can’t afford to toss aside the best analytical tools we have, imperfect as they may be.

If you’d like to have a look at the inner workings of a District public high school from the perspective of a teacher/Dismemberment Plan bassist, or if you simply want to check out the coolest new blog on the interwebs, please visit Camp Teacherman.

Matt passes along some high speed rail news:

Imagine a high-speed rail line that could get you from San Francisco to LA in 2 hours and 40 minutes.

That dream appears to be coming true, thanks to work by the California High-Speed Rail Authority. After getting a green light by State environmental impact assessors, they’ve begun implementation of an 800-mile bullet-train system that will connect Sacramento, the San Francisco Bay Area, the Central Valley, Los Angeles, the Inland Empire, Orange County and San Diego. Trains traveling at 220 mph on the systems are forecast to carry up to 100 million passengers per year by 2030.

Matt notes:

But that’ll just give Southern California plenty of time to ensure that when San Franciscans hop off their train in LA there are tons of good ways of getting around that don’t involve renting a car.

Good point! There are lots of nice things about rail on the northeastern corridor, but one big one is that when you get off the train in Washington or New York, you don’t immediately have to find the shuttle bus to the Hertz satellite lot.

Transportation systems are networks, and it’s important to make sure all the links in the network work. The annoyance of switching from Metro to local bus route is no doubt a substantial deterrent to many would-be transit riders, and a big problem with taking the train to points south of Washington is, what the hell do you do when you get there? You need a car.

So while high speed rail is likely to be very worthwhile along some corridors, we shouldn’t neglect the importance of funding all transit legs, from the very local up to intercity.

In another example of one of the hottest new journalism genres–the transit use is up story–the Examiner tells us that Virginians are headed for the rails:

More commuters are leaving their cars and jumping on Northern Virginia commuter trains as gasoline prices quickly approach $4 per gallon.

The number of daily rail riders spiked by more than 1,500 people over last April, or 12 percent, as the Virginia Railway Express reported its 10th consecutive month of climbing use.

The increase came despite a dramatic rise in delays that left one in five trains late to the station.

Twice in April, daily trips hit the 16,000 mark for the first time since 2005, which officials attribute to typical driving commutes taking longer and costing more, according to Chief Executive Officer Dale Zehner’s report being presented to the governing board today.

As the story notes, VRE is not a particularly good commuter rail system. The trains are slow and unreliable, and there are only two lines, one of which is rendered all but useless in the summer, when heat delays and CSX traffic turn a long commute into an endless commute.

And still they come, because driving in from the outer suburbs sucks just that bad. A responsible government would see this and make life easier for its citizens by improving rail service. Unfortunately, a substantial minority in Richmond thinks that crumbling infrastructure is just part of the American dream.

The debates continue here and at the listserv, but some good news on another front. Abdo Development has been named as the leader of Catholic’s south campus redevelopment. Abdo does very good work; this bodes well for the quality of the project. And quality is important in a neighborhood struggling to determine its position on new development. If the first significant project in an area is badly designed or built, it will be that much more difficult to get existing residents to buy into the process.

So we’re counting on you, Jim.

So, today is kind of a big day for me. I have been, for most of the life of this blog, working a full-time day job as an economic consultant. No longer. Beginning on Monday, I’ll officially be a “journalist,” making a living entirely off the fruits of my pen. Hopefully, I won’t starve.

I just want to say thanks to all my readers, whose comments and criticisms have helped me improve my writing and my thinking on lots of subjects–improvements which helped make this career shift possible. Hopefully, I won’t fall flat on my face.

Cheers,

Ryan

Christ. Color me incredibly disappointed:

Here’s a startling figure from the Bureau of Transportation Statistics: In 2006, Amtrak made 29.7 cents of revenue per passenger, per mile (PPPM). Inversely, commercial airlines (arguably Amtrak’s toughest competition) made 13 cents PPPM. What’s this tell us? Well, Amtrak makes a ton of revenue from passenger tickets. And it doesn’t look as if this will change — that PPPM figure has been going up every year since 1994. For an organization who makes this much money from ticketing on top of the $1.332 billion it received in federal funding for fiscal year 2008, this seems more than a bit off. Amtrak needs to have external pressure placed on it to either improve service or reduce ticket prices. You can’t halve your cake and eat it too.

Similarly, the price structure for Acela Express trains is so out-of-whack, it’s almost like Amtrak makes the figures up out of thin air. If anyone wants to explain the logic in a ticket that’s advertised as “the fastest way to get to New York,” but is only about 25 minutes quicker (a gain that can easily be wiped out with any delay) and 76 percent more expensive - please do fill us in.

The Guest Rewards program could use an overhaul. Currently, you earn two points for every dollar you spend. But for a one-way coach ticket, you need 3,000 points (the equivalent of at least $1,500). Again: that’s one-way. Amtrak should do its most loyal customers a favor and at least make it plausible to get a round-trip fare without subletting your apartment.

To increase customer satisfaction, other small efforts could be made. For example, on our Thursday night train to Philadelphia, before boarding, we had to show our ticket to an Amtrak employee before accessing the platform — except there was only one ticket-checker for a full train on the busiest route Amtrak has. One extra set of eyes for 15 minutes would have moved things quicker and made people happier.

The real question lies in the fact that no one knows what to do next. Privatizing Amtrak would likely lead to its demise, while the organization hasn’t (obviously) done enough to garner support for more public subsidies (which is why the trains in Europe run so efficiently). Do leave any bright ideas you might have in the comments.

No, no, no, no, no, no, no. Try again, my friend.

That revenue figure? Let’s think about it. First, Amtrak has to pay for the network on which it runs. Either it owns the trackage and has to take care of capital expenses, or it pays to rent it from others. So comparing revenues between modes is foolishness. What’s more, the question isn’t revenues at all, it’s income, and Amtrak’s income is negative because it has to run a bunch of federally mandated long-haul lines that lose basketloads of money. Come on, dude, get a clue.

The price structure for Acela is out of whack. Says who? They charge what they charge because they can; because the demand is there, because people pay for the seats. I could just as easily write, “What’s up with first class plane tickets? They’re ten times the cost of coach, and you don’t get there any faster!” It’s price discrimination, and we should be happy that Amtrak is making as much money as it can on its profitable lines.

Look, if you want rail to be dirt cheap, you need to not bitch about Amtrak; you need to bitch about the political leaders who believe rail isn’t a priority. Given Amtrak’s financial constraints, it has to make money where it can. You don’t deserve a cheap train ride any more than you deserve a cheap airplane ride, but if you want one, you need to change the rules, not blame the companies.

And trade-offs. Yes, waiting in line sure is annoying. This, in part, is why so many people use Amtrak, because a 15 minute wait to get your ticket checked beats hell out of an hour long security line and a cavity search. Ticket checkers cost money, and Amtrak isn’t having any difficulty attracting new riders, so cut them some slack.

You want to fix rail in this country, here’s what you do. One - recognize the unfair playing field and fix it. Two - express to your political leaders that better rail is a priority for you, and that you’d like the federal government to reduce the $40+ billion spent on highways each year by just a bit, so that we can increase the $1 billion or so allocated to passenger rail.

Hillary Clinton’s gas tax holiday (and McCain’s) notably flopped with the American people, in part because one candidate was willing to call out the proposal as foolish, but mainly because the media seemed to be willing to report that it was, in fact, foolish.

Now McCain is saying that, like his Democratic rival, he will be pulling the troops out of Iraq. Unlike his rivals, he notes, he’ll do it because by 2013 we will have won the war. This is clearly a much better policy. Why would anyone withdraw without winning when it was possible to withdraw and win?

The answer, of course, is that it’s not possible. And to the extent that it is, well, McCain has done nothing to indicate that he knows how to get there. Certainly, a simple maintenance of the status quo will not do the job. But let’s listen to McCain’s pipe dreaming:

By January 2013, America has welcomed home most of the servicemen and women who have sacrificed terribly so that America might be secure in her freedom. The Iraq War has been won. Iraq is a functioning democracy, although still suffering from the lingering effects of decades of tyranny and centuries of sectarian tension. Violence still occurs, but it is spasmodic and much reduced. Civil war has been prevented; militias disbanded; the Iraqi Security Force is professional and competent; al Qaeda in Iraq has been defeated; and the Government of Iraq is capable of imposing its authority in every province of Iraq and defending the integrity of its borders. The United States maintains a military presence there, but a much smaller one, and it does not play a direct combat role.

The threat from a resurgent Taliban in Afghanistan has been greatly reduced but not eliminated. U.S. and NATO forces remain there to help finish the job, and continue operations against the remnants of al Qaeda. The Government of Pakistan has cooperated with the U.S. in successfully adapting the counterinsurgency tactics that worked so well in Iraq and Afghanistan to its lawless tribal areas where al Qaeda fighters are based. The increase in actionable intelligence that the counterinsurgency produced led to the capture or death of Osama bin Laden, and his chief lieutenants. There is no longer any place in the world al Qaeda can consider a safe haven. Increased cooperation between the United States and its allies in the concerted use of military, diplomatic, and economic power and reforms in the intelligence capabilities of the United States has disrupted terrorist networks and exposed plots around the world. There still has not been a major terrorist attack in the United States since September 11, 2001.

The United States and its allies have made great progress in advancing nuclear security. Concerted action by the great democracies of the world has persuaded a reluctant Russia and China to cooperate in pressuring Iran to abandon its nuclear ambitions, and North Korea to discontinue its own. The single greatest threat facing the West — the prospect of nuclear materials in the hands of terrorists — has been vastly diminished.

The size of the Army and Marine Corps has been significantly increased, and are now better equipped and trained to defend us. Long overdue reforms to the way we acquire weapons programs, including fixed price contracts, have created sufficient savings to pay for a larger military. A substantial increase in veterans educational benefits and improvements in their health care has aided recruitment and retention. The strain on the National Guard and reserve forces has been relieved.

After efforts to pressure the Government in Sudan over Darfur failed again in the U.N. Security Council, the United States, acting in concert with a newly formed League of Democracies, applied stiff diplomatic and economic pressure that caused the government of Sudan to agree to a multinational peacekeeping force, with NATO countries providing logistical and air support, to stop the genocide that had made a mockery of the world’s repeated declaration that we would “never again” tolerant such inhumanity. Encouraged by the success, the League is now occupied with using the economic power and prestige of its member states to end other gross abuses of human rights such as the despicable crime of human trafficking.

Maybe this kind of talk will prove inspirational to conservative voters. I wouldn’t be surprised if it came off to most people as utterly delusional, divorced from reality, the rantings of a man wholly unprepared to assume the highest office of the land.

But the important question is to what extent the media will allow this kind of daydreaming to go unchallenged. Will they just report these statements, or will they add crucial insight? Where will the money come from? How will we get other nations to join us? What magical strategy change will facilitate a political settlement in Iraq? Why hasn’t McCain been taking his medication?

But I think this is also why it’s very important for Obama to adopt the Yglesian strategy of fearlessly making national security a center of the Democratic campaign.

International financial expert Brad Setser notes:

If oil — using the price for sweet light crude — stays to $125 a barrel for the rest of the year, the average price of oil over the course of 2008 will be around $115 a barrel. The average 2007 price was around $70 a barrel. The $45 a barrel y/y increase in the average price of oil is equivalent to going from $25 a barrel oil to $70 a barrel oil in a single year. It is a large jump.

It would lead to something like a $650-700 billion transfer of wealth from the oil-importing economies to the major oil-exporting economies.

Alternatively, we could spend $5-6 billion on transit, but no, that wouldn’t be very American dreamish.

Marc Fisher reports on the Virginia transportation funding morass:

Arthur Purves, president of the Fairfax County Taxpayers Alliance, is a hard-core anti-tax activist who nonetheless believes that Kaine’s proposal is a mere “drop in the bucket compared to what’s needed.”…

Purves says the money to build roads — he doesn’t care for public transit projects such as Metrorail to Dulles airport — should come from cutting spending on public education and Medicaid. (Yes, he freely admits that that is an utterly impossible political pipedream. “I love losing battles,” he says.)

Schwartz isn’t ready to reject Kaine’s plan; he hopes any new money can be linked to more transit and local roads and not to big new highways that open up more rural lands for sprawl development.

Purves, in contrast, likes those new roads. “Sprawl is just a derogatory term applied to the American dream,” he says. “Sprawl is a car, a house and a yard.”

That’s right, the American dream. Work hard and save your money and one day you, too, can own a home in a traffic-clogged hellscape of strip malls and half-empty neighborhoods blighted by mortgage defaults, with plenty of time to savor the glory of it all on your epic, wallet-crushing daily commute. Unless of course, you’re an immigrant. The American dream, as I understand it, has never involved immigrants. Oh, and let’s defund our schools while we’re at it.