Written by Richard Rahn at To The Point News
If taxpayers suddenly stopped subsidizing Amtrak, what do you think would happen?
Before trying to answer that question, it is useful to review U.S. railroad history. The first railroads were built in the United States in the late 1820s, and by 1900, only 70 years later, almost every town in the country had rail access.
Railroads were high tech, the Internet of their time. The system was built and profitably operated by private companies.
Amtrak and the modern freight railroad companies use the infrastructure that was built long ago. The 180-year-old privately built Canton Viaduct (an incredible stone bridge – see link) in Canton, Massachusetts and the 100-year-old Hell Gate Bridge (the model for the Sydney Harbor Bridge in Australia) over the East River in New York are still used by Amtrak.
The investor-owned Pennsylvania Railroad built the hugely expensive North River Tunnels under the Hudson River in 1904-1908, which were technological wonders of the time. They are still used by all of those who ride Amtrak from New Jersey to New York.
(As an aside, I found it rather ironic when President Obama claimed that private business only succeeded by using government infrastructure — “You did not build that” — when, in fact, government mostly uses privately built infrastructure.)
Once the railroads were built, state and local governments began heavily taxing every mile of track and other railroad facilities, and the federal government imposed endless regulations, including regulating fares.
The predictable result was that expenses grew faster than revenues — causing deferred capital spending and maintenance. Eighty years ago, trucks, automobiles and airplanes began to lure away rail’s customers. As a result, the rail industry began a death march after World War II.
Railroad companies ripped up thousands of miles of track to save on expenses and tax levies. Today, the United States has a fraction of the number of miles of railroad tracks compared to what it had 100 years ago. Route mileage peaked at 254,251 miles in 1916 and fell to 139,679 miles in 2011.
By the late 1960s, most of the nation’s railroads were in deep trouble as a result of new forms of competition, disastrous tax and regulatory policies, and inflexible unions. In 1971, the federal government created Amtrak as a government corporation to operate intercity passenger rail service.
By contrast, freight rail was finally deregulated in 1980, now resulting in the most efficient and profitable freight railways in the world.
Amtrak has eaten through more than $45 billion in taxpayer subsidies in its 44-year history. The only line it has that it claims to be profitable is the Northeast corridor from Washington to Boston, which was shut down for six days following last week’s fatal train crash near Philadelphia.
It is widely acknowledged that Amtrak is poorly managed — as are most government enterprises — but nothing is done about it by either the administration or Congress. Amtrak even manages to lose money on its food service, which is hard to do when one has a captive market and serves only mediocre food at high prices.
Studies show the government could save money by giving away airline tickets to everyone who rides some of the long-distance Amtrak routes, because the subsidy per passenger exceeds the cost of an airline ticket over the same route.
It is no surprise that many of those who call for more taxpayer spending on Amtrak are the affluent media and political folks who frequently travel between New York and Washington. To pay for their subsidies, they seem to have no trouble taxing lower-income folks in much of America who have no access to Amtrak.
The rail tunnels under the Hudson River are now more than a hundred years old and will need to be rebuilt or replaced. Many members of Congress are calling for billions of taxpayer dollars to be spent to rebuild these tunnels.
Yet we have many examples of private companies that are willing to invest in transportation infrastructure, such as bridges, tunnels and roads, when they are allowed to charge market prices for use of the infrastructure. No taxpayer dollars need be spent.
Again, if the subsidies were eliminated, what would happen?
All of the trains now operated by Amtrak, other than the Northeast corridor, would cease operation. But then many private entrepreneurs would buy up some of the rail cars or buy new ones, and make contracts with the railroads to run trains over their tracks (Amtrak uses the private railroad companies’ tracks).
Private passenger rail companies might well successfully compete with airplanes, buses and cars on some routes by providing luxury services with great dining cars as an alternative transportation experience, as they do in other parts of the world.
We now know that a socialistic, government-regulated, -taxed and -operated passenger rail does not work. So let’s get rid of Amtrak and its taxpayer subsidies, and see what magic free-market rail entrepreneurs might create.
Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.
I write a lot about housing and real estate as a freelancer for many real estate investors around the country. Generally it is positive about buying a house instead of renting. I also write about foreclosure and bankruptcy; how to avoid both and, if you can’t get out by yourself there are options, such as sell for cash quickly to those real estate investors. I have noticed that the high priced houses are selling fairly quickly in the market place, but the lower priced houses are having trouble. I suspect it is because the average American hasn’t seen any income or wage increases for at least 5 to to years.
An article in Seeking Alpha caught my eye. Why Housing Stocks May Be Slowing Down. Isn’t that just the opposite of the latest news? Andrew Sachais writes:
U.S. housing stocks could remain range-bound as confidence declines amid slowing building permits and housing starts. U.S. housing stocks are represented by iShares Dow Jones US Home Construction(NYSEARCA:ITB).
In April, the building permits figure came in at an annual pace of 5.18%, slightly above the previous month’s reading of 5.12%. After peaking in 2013 at over 33% annual growth, building permits have slowed to a more modest level, seen below. As the rebound in permits slowed, so too did actual housing starts.
I took a look at (NYSEARCA:ITB)and was surprised by what I saw.
I see a big divergence in price to the indicator. Does it mean just a correction to the action or is it forecasting trouble ahead? Watch to see if ITB can make a new high and watch the bottom. The last low was above 25. Breaking 25 would be a clear signal that housing/construction has changed.
Remember no guarantees on anything I wrote.
Banning cash transactions and then charging for deposits seems to be our future. Now this is the latest:
HSBC has become one of the biggest global banks to say it will begin charging clients on deposits in a basket of European currencies to prevent its profit margins from being crushed in a record low-interest rate environment. The unusual steps come after the ECB became the first big central bank to announce a negative deposit rate – in effect a penalty on banks parking their surplus cash – last year. HSBC -0.5% premarket.
From Daniel Greenfield writing at To The Point News: Obama can not defeat ISIS with soft power, though ISIS could beat him with soft power assuming its Caliph ever decided to agree to sit down at a table with John Kerry without beheading him.
Iran has picked up billions in sanctions relief and the right to take over Yemen and raid ships in international waters in the Persian Gulf just for agreeing to listen to Kerry talk for an hour. And that might be a fair exchange.
As bad as having your capital or ship seized by Iran is, listening to John Kerry talk is even worse.
If ISIS were to agree to a deal, it could pick up Baghdad and Damascus just in exchange for showing up. All it would have to do is find a Jihadi who hasn’t chopped off any heads on camera to present as a moderate. The administration and its media operatives would accuse anyone who disagreed of aiding the ISIS hardliners at the expense of the ISIS moderates who also represent the hardliners.
If Obama did that, he would at least lose in a way that he understands — instead of in a way he doesn’t.
So far ISIS has preferred the classical approach of killing everything in its path. The approach, deemed insufficiently nuanced by masters of subtlety like Obama and Kerry, has worked surprisingly well. Their response, which is big on the Bush arsenal of drone strikes, Special Forces raids and selective air strikes, hasn’t. But Bush was fighting terrorist groups, not unrecognized states capable of taking on armies.
It’s hard to destroy something if you don’t know what it is. And it’s hard to know what a thing is if you won’t even call it by its name or name its ideology.
The left loves root causes, but the root cause of ISIS isn’t poverty, unemployment or a lack of democracy.
The Islamic State isn’t unnatural. Its strength comes from being an organic part of the region, the religion and its culture. Its Arab enemies have performed so poorly fighting it because their institutions, their governments and their armies are unstable imitations of Western entities.
The United States can’t make the Iraqi army work because Iraq isn’t America. The assumptions about meritocracy, loyalty to comrades and initiative that make our military work are foreign in Iraq and Afghanistan where the fundamental unit is not the nation, but the tribe, clan and group.
Iraq and Syria aren’t countries; they’re collections of quarreling tribes that were forced into an arrangement that included the forms of Western government without any of the substance. When the Europeans left, kingdoms quickly became military juntas. Now the juntas are fighting for survival against Islamic insurgencies that are striving to return the region to what it was in the days of Mohammed.
ISIS is the ultimate decolonization effort. It’s what the left claims that it wants. But real decolonization means stripping away everything the Europeans brought, including constitutions, labor unions and elections. The cities that ISIS controls have been truly decolonized. There is no music, there are no rights, slavery is back and every decision is made by a cleric with a militia or a militia leader with a cleric.
That’s Mohammed. It’s the Koran. It’s 7th century Islam.
ISIS, or something very much like it, was always waiting to reemerge out of the chaos. 100 years before ISIS, there were the Wahhabi armies of the Ikhwan which did most of the same things as ISIS. The British bombed them to pieces in the 1920s and the remainder became the Saudi Arabian National Guard.
The insistence on democratic institutions weakened the military juntas holding back Islamist insurgencies. Islamists took power across the region. Where they couldn’t win elections, they went to war. But whether they won on the battlefield or the ballot box, violence and instability followed them.
The fundamental mistake of the Arab Spring was the failure to understand that Islamist democracy is still a road leading to the Caliphate. Turkey’s Erdogan, the Islamist whose rule was used to prove that Islamist democracy can work, now openly promotes the reestablishment of the Ottoman Empire.
Or as Mullah Krekar of Ansar Al-Islam put it, “The resistance is not only a reaction to the American invasion; it is part of the continuous Islamic struggle since the collapse of the Caliphate. All Islamic struggles since then are part of one organized efforts to bring back the Caliphate.”
A decade later, the Jihadist leader has proven to be more accurate than his Western hosts in Norway.
ISIS is not a reaction. It’s the underlying pathology in the Moslem world. Everything planted on top of that, from democracy to dictatorships, from smartphones to soft drinks, suppresses the disease. But the disease is always there. The left insists that Western colonialism is the problem. But the true regional alternative to Western colonialism is slavery, genocide and the tyranny of Jihadist bandit armies.
Our policy for fighting ISIS is colonialism by another name. We are trying to reform Iraqi institutions in line with our values and build a viable Iraqi military along the lines of our own military. Yes, the West is the solution — but institutional Westernization that never goes beyond a few government offices and military officers won’t work.
Neither will the attempt to artificially inject a few big ideas such as democracy into an undemocratic tribal culture. The only alternative to depending on military juntas is transforming the people.
The West won a culture war with the USSR. It is capable of winning one with Saudi Arabia. It has even unintentionally won a culture war with Iran. (Which is why most Iranians love America and hate their mullah government. See Hope for Iran, November 2014-JW)
ISIS is not just a military force. It is a cultural one. Much of its success has come from its cultural appeal.
As long as the Middle East is defined in terms of Islam, some variation of the Islamic State or the Moslem Brotherhood bent on recreating the Caliphate will continue reemerging. We can accept that and give up, but the growing number of Moslem migrants and settlers mean that it will emerge in our country as well.
We have a choice between Islamization and de-Islamization.
After defeating Saddam, we pursued the de-Baathization of Iraq. If we are going to intervene in the Moslem world, it should not be to reward one Islamist group, whether it’s Iran or the Moslem Brotherhood, at the expense of another. Instead we must carve out secular spaces by making it clear that our support is conditional on civil rights for Christians, non-believers and other non-Moslems.
Our most potent weapon isn’t drones or fighter jets, it’s our culture. We disrupt Islamists with our culture even when we aren’t trying. Imagine what we could accomplish if we really tried.
But first we must abandon the idea that we need to take sides in Islamic civil wars. Any intervention we undertake should be conditioned on a reciprocal degree of de-Islamization from those governments that we are protecting.
Instead of pursuing democracy, we should strengthen non-Islamic and counter-Islamic forces in the Moslem world.
We can’t beat ISIS with Islam and we can’t fight for freedom while endorsing constitutions that make Sharia law into the law of the land in places like Iraq and Libya.
We don’t only need to defeat ISIS militarily. We must defeat the culture that makes ISIS inevitable.
Daniel Greenfield, a Shillman Journalism Fellow at the David Horowitz Freedom Center, is a New York writer focusing on radical Islam.
From Seeking Alpha: The numbers are in on 2014 CEO compensation, and it does not look like the controversial income gap in America is narrowing. According to the AFL-CIO, the average S&P 500 company CEO made 373 times the salary of the average production and non-supervisory worker in 2014, up from 331 times in 2013. This translates into an average CEO pay package of $22.6M, up from $20.7M last year.
TND Videocast Spotlight: Greg Hunter’s USAWatchdog.com
Mexican retail mogul Hugo Salinas-Price is worried about the common man and the upcoming currency calamity that is approaching the globe. Salinas-Price says, “It certainly isn’t getting better when you have some intellectuals going so crazy as to say they want to ban cash. We can’t go too much further along this road. This is utter madness. We’re not supposed to use cash anymore? Salinas Price goes on to say, “If we have these lunatics running things, it can’t get any better. We have people running things that have forgotten about what motivates the common man. . . . I want people to have silver because it is going to protect them.”
Why does the common man need the protection of precious metals? Salinas-Price says, “I just read today the global debt is $200 trillion, and it’s grown from the last crisis in 2008. Something has to happen to take care of that debt. Either it’s going to be repudiated or it’s going to be inflated away, or it’s going to be paid with taxation. . . . We are headed over Niagara Falls.”
Michael Goodwin at the New York Post calls out Stephanopoulos:
My, my, the bigger they are, the dumber they think we are.
Dan Rather of CBS was toppled by a phony document scam. Lyin’ Brian Williams at NBC casually mixed fact with self-aggrandizing fiction. Now George Stephanopoulos is caught in a Clinton web of deceit at ABC.
The hat trick of arrogant anchor scandals helps explain why Americans don’t trust network news. With apologies to Walter Cronkite, that’s the way it is, and the way it is stinks.
Stephanopoulos shares with Rather and Williams the rotten distinction of fessing up only after being exposed by real journalists. In his case, the Washington Free Beacon uncovered his secret donations to the Clinton Foundation and contacted ABC for a response.
That was the honorable thing to do — get the other side of the story before publishing it. But Stephanopoulos ditched his journalistic veneer and reverted to his Clinton White House roots by quickly leaking the info to what he regarded as a more friendly news outlet, Politico.
His track record of secrecy, partisanship and dishonorable behavior blows up his claim that he made an honest mistake. He engaged in a prolonged and brazen act of dishonesty.
Over three years, he gave at least $75,000 to an organization that acts like a political superPAC for Hillary Clinton’s presidential campaign and a tax-free slush fund for the Clinton family and their cronies.
Through their opaque foundation, the Clintons have financial ties to repressive regimes and shady individuals around the world, pocketing many, many millions for themselves. Yet apparently starting when Hillary was Secretary of State, Stephanopoulos made common cause with his former bosses and in the process destroyed any credibility he built as a news anchor and moderator for ABC.
He made two unforgivable decisions: He didn’t tell his bosses about the donations and he didn’t tell viewers that he had given money to the foundation even as he reported on it and the Clintons.
At most news organizations, either would be a fireable offense. Either would be a fireable offense at ABC for someone less important.
But he may too big to fire, at least quickly, so the network’s defense of him could be a trial balloon to gauge the fallout.
Even a brief tally of recent offenses makes a compelling case. On April 26, Stephanopoulos grilled Peter Schweizer, the author of the sensational “Clinton Cash,” pressing him to admit the book contains no “smoking gun.”
The implication was that, if it’s not indictable, it’s not important. That’s a legal test, not a journalistic or political one, yet Stephanopoulos cleverly used that standard to give the Clintons the all-clear.
The anchor also cited Schweizer’s “partisan interest,” noting that Schweizer was a speechwriter for President George W. Bush.
But as a columnist in the Washington Post noted at the time, Stephanopoulos never told viewers that he had worked for the Clintons and had defended them in many scandals. Like the Clintons themselves, he acted as if the rules only apply to others.
Two days later, Jon Stewart had Stephanopoulos on his show to talk about news coverage and the Clinton Foundation. To watch a video of the segment is to wonder whether Stephanopoulos fears Stewart knows about the contributions and will bring them up. The lack of disclosure now makes Stewart look like a chump.
Indeed, every story Stephanopoulos has ever done about the Clintons, their critics and other politicians is now suspect. What did he make of her vanishing emails? Benghazi? Her entire tenure at State? What did he say about her Republican opponents?
To suggest, as Stephanopoulos and ABC do, that disclosing the contributions would have meant going “the extra mile” is preposterous.
Disclosing something so fundamental is not extra. It’s basic. High school newspapers have stricter conflict-of-interest rules.
Almost as egregious, ABC’s “punishment” is that Stephanopoulos will not take part in a GOP debate. Big whoop. It misses the point, as does the New York Times’ coverage highlighting Republican complaints.
The breach is clearly partisan, but that is secondary. First and foremost, it is a disqualifying violation of professional ethics, and trying to remedy it by setting partisan boundaries compounds the mess.
Are we supposed to trust Stephanopoulos on some stories but not others? Will ABC put a graphic on the screen to signal when their man is playing it straight?
Hillary Clinton’s Democratic rivals also are victimized by his conflicts. All other journalists at ABC, some of whom are dependent on Stephanopoulos for air time, are tainted by his donations.
ABC needs to face the truth. Stephanopoulos has forfeited all trust as a newsman, period, end of story.
I sent this email to ABC News today
KOPPEL’S POSSIBLE A.M. SHIFT, Please make it true. I used to watch the Sunday morning program with my coffee, Sam and Cokie, and George Will. Then you brought in the “shill”(George Stephanopoulos). I told you I would stop watching. I emailed you to get rid of George whenever I saw that the show’s ratings were declining. I told you I was still not watching. Well, now you are considering Ted Koppel and I will be back, when George is gone. You see I don’t need to see my news filtered through the eyes of a Clinton flack or apologist for the ex-president and the coming campaign for Senator Hillary Rodham Clinton. (NYT please note the accuracy).
I told you he was a shill for the Clintons. Now ABC you have a gigantic POS problem.
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