Yesterday, Megan McArdle tweeted:
Okay, I like trains and all, but the bemoaning of America’s lack of high-speed rail seems out of proportion to any possible benefits.
Of course, many folks who support new investments in high-speed rail would no doubt say that the number of angry denouncements of rail programs seem out of all proportion to the policy choices actually on the table. Why such disproportionate discussion of the topic?
I’d attribute part of the commentary to a real technocratic frustration with the sorry state of American transportation infrastructure, the sorry state of America’s transportation planning and funding mechanisms, and the sorry state of the Congress that should be trying to fix the problems. But the bulk of the passion can probably be chalked up to the fact that high-speed rail has become a culture war issue. And that’s unfortunate. It also feeds back into the frustration among technocrats, who see the debate over HSR as providing another telling example of an important issue, the merits of which are wholly obscured by identity politics.
It’s a very frustrating debate. But let me just lay out of few quick thoughts on where I think a lot of the criticism of high-speed rail investments goes wrong.
One problem is the extent to which critics overstate how much true high-speed rail is actually on the table. It’s easy to get the sense reading op-ed critiques of HSR programmes that what’s actually in the works is construction of a truly nationwide true HSR system. In fact, much of the money allocated to “HSR” projects is actually being spent bringing woeful lines along major transportation corridors up to speeds competitive with driving. These are important investments that don’t fall into the “shiny, fantastically expensive, European” set of typical criticisms.
I’m also bothered by the fact that most basic analyses showing relatively poor returns for HSR construction tend to make unrealistic assumptions. They tend to take existing transportation subsidies as given and compare HSR to a no-build alternative that isn’t actually an alternative. America is forecast to grow by over 100 million people in the next few decades. New infrastructure will be built.
But among the most annoying things about the discussion is the extent to which HSR is held to an entirely different standard than other investments.
Consider. What should America’s top transportation investment priority be at this stage? I don’t think it’s controversial to say that first on the list should be spending to bring existing infrastructure into good repair. But current spending is insufficient to maintain current levels of service, to say nothing of improvements up to acceptable standards, and current revenues are insufficient to fund current spending absent broad transfers from general funds at the local, state, and federal level. Now, if we are interested in economic efficiency, then we should want the beneficiaries of transportation investments to pay for the benefits they receive. And that means that revenue should be raised from increases in user fees. To raise enough revenue to cover necessary spending, gas taxes would need to rise at least 20 to 40 cents, and perhaps more.Â In much of the country, that moves the retail gas price to near $3.50.
Beyond paying for maintenance, we would want to ensure that existing roads and rails were being used efficiently before deciding to build more. And those caring about economic efficiency would insist that this be accomplished through road pricing. The added driving cost from congestion pricing would probably swamp that from increased fuel costs. I don’t know exactly what it would cost to drive from Washington to New York under a system that would keep that route congestion free 90% of the time, but I suspect it would be between $50 and $100, and potentially more (especially if one’s drive involved a trip into Manhattan). Costs would be significant in lots of places outside the Northeast Corridor. It wouldn’t be cheap to keep I-85/I-40 between Raleigh and Charlotte free of traffic 90% of the time.
Obviously, one would want to improve pricing on transit, as well. But this would be far easier in a system in which drivers pay an appropriate amount (this is the high-revenue equilibrium versus the low-revenue equilibrium). But on the NEC, Amtrak already runs a healthy operating profit. What do we think would happen in a world — demanded by those who take economic efficiency seriously — in which drivers pay significantly more to travel from one end of the corridor to the other? Run the models on that, and the calculus in favor of HSR looks quite compelling. What’s more, it would look compelling on other major corridors, including places like California. Certainly, American-style 90-mph average speed HSR would seem a no-brainer along many routes — like that between Charlotte and Washington.
That’s what concern for economic efficiency implies — more expensive driving that makes demand for rail stronger. Perhaps we shouldn’t take economic efficiency seriously. In that case, rail supporters should feel free to say, fuck it, let’s build HSR whatever the numbers say. Or perhaps critics would say that they’re interested in economic efficiency, subject to what the political system can deliver. That’s not an unreasonable argument, but it certainly justifies all the angry columns about HSR and political dysfunction that the technocrats can muster.
But unreasonable or no, I don’t think it’s the right argument. The smart critics with whom I’ve debated tend to argue something along the lines of this: in a world in which current transportation planning and pricing weren’t bollixed up, HSR would make more sense, but given that they are, it doesn’t. With heavy auto subsidies, HSR becomes a boondoggle rather than a savvy investment, and so bollixed is better than bollixed plus HSR. But that’s not actually the choice we face. Amid heavy congestion and with the pressure of 100 million more Americans bearing down on governments, new construction will take place. And so the decision is between bollixed plus HSR and bollixed plus new highways. And on almost every measure, bollixed plus highways is the worse of the two options.
So why are there so many angry op-eds fuming about America’s inability to build HSR? Probably because current institutions and politics seem destined to fund the worst of all available transportation alternatives. We should be surprised that there’s so little outrage over this failure.