Superheater leaps to the conclusion that my comment above was directed at him. It wasn't. The comment deleted by a moderator was my target. I enjoy Superheater in the same way I enjoy George Will in the newspaper. Good writing, interesting arguments, but I don't happen to agree most of the time. End of story.

Folks, if you don't like what someone has posted here or feel it's off topic, either ignore it, bring it to the moderators' attention, or just let the moderators deal with it; otherwise threads like these just turn into a bunch of rantfests and pointless arguments that just clutter the board. 'nuff said...

There was no leap involved, since I started the thread. Questioning the relevance of a thread can only be directed to the initiator.

However, rather than indulging my suspicion that your question about relevance was a pretext to censor a philosophical position you found objectionable (based upon prior experience, not the first time you've responded similarly), I decided the proper course of action was to answer your inquiry objectively as stated.

However, since you have betrayed your motives, I thank you so very much. I much prefer candor over stealth.

Anybody who reads my stuff with half a brain knows that I'm a free-market advocate but I'd rather dispute statists than censor them. If you have a contrary position that federal regulation was historically a reasonable encroachment on a private enterprise and did not contribute to the financial ill-health of the railroads, by all means, state it clearly and openly and defend it-because it is relevant to the past, present and future.

As much as I like "Trains" I know it's always been a industry rag! "Railroad" and "Railfan" were better fan magazine. Before Amtrak many railroads carryied "Trains" in the lounge cars of their trains.

Check out the board of directors of your favorite "Super" railroad. You might find GM (which will still be Government Motors after the IPO. Since the government is only selling a part of it's holding at this time.) Oil companys and Banks with foreign Capital. Let's face it the "Super" money center banks have been bad bankers that's why the Wall Street bailouts, they were deregulated too. The "Super" railroads with GM and Oil company people on BOD might be bad railroaders. Since these monster systems don't want to give service, just high rates. What do you do about them? If their service was any good this wouldn't come up. These are other business people want this regulation! Not everyone is a railfan.

Gee Superheater, I think you failed to read what I said, which was to affirm that while promoting a political agenda is not acceptable, discussion of politics is appropriate. We were on the same page. Nuff said.

Higher Speed Rail's comments echo my own at the end of my original post, in particular the real questions I have.

What do you do if you are a lumber shipper out of Orbisonia, Pa., with a logging road that operates off the E.B.T. (and there was one, as I recall), and you have a problem with the lumber rate from Mount Union to, say, Altoona or Elizabethtown on the PRR in the 1880s? What do you do if you have problems with chemical rates from your facility in Texas that has only the UP or BNSF serving it? How do you run a steam passenger service (i.e., a Greenbrier Express) without the cooperation of a mainline road that is not cooperative? How do you handle this in a free-market world? How do you take on the giants of business who care nothing about you, even when you have what seems to be a good business model and adequate capitalization? How do you deal with what may well be simply blind prejudice against what you want to do--and the prejudiced one is the one in power?

The "free market", which is only truly free to those with the power to manipulate for their own purposes, can be just as tyrannical as the most intrusive government regulator. We've seen some pretty decent examples recently of how individual private citizens are at the mercy of both, and of the terrible consequences of some partnerships between public and private interests that are still being played out. And, it isn't anything new. Those of us that have studied some history along with our technogeek understand that. I'm a recovering Jeffersonian libertairan who got better after getting to know enough people who had no business being allowed to control their own checkbooks, much less vote on how the country should control its finances. Perspectives gained through reading, interaction with generations while growing up, and finally having endured for long enough to build life perspective leads me to conclude that no, we don't learn, and are condemned to permit the same tomfoolery to reoccur in different clothing by both business and government, reacting to each others actions and feeding off conditions caused by each other as the pendulum swings and the wheel turns again and again and again.

If there is a villain, and I'm not sure it isn't simple human nature, I'd think it would be ignorance, shortsightedness and greed combined.

Anybody else struck by the similarities between the recent bubble bursting and the previous depressions and panics?

dave

What do you do if you are a lumber shipper out of Orbisonia, Pa., with a logging road that operates off the E.B.T. (and there was one, as I recall), and you have a problem with the lumber rate from Mount Union to, say, Altoona or Elizabethtown on the PRR in the 1880s? What do you do if you have problems with chemical rates from your facility in Texas that has only the UP or BNSF serving it? How do you run a steam passenger service (i.e., a Greenbrier Express) without the cooperation of a mainline road that is not cooperative? How do you handle this in a free-market world? How do you take on the giants of business who care nothing about you, even when you have what seems to be a good business model and adequate capitalization? How do you deal with what may well be simply blind prejudice against what you want to do--and the prejudiced one is the one in power?

The "free market", which is only truly free to those with the power to manipulate for their own purposes, can be just as tyrannical as the most intrusive government regulator.

Let me assume for a minute that "shipper captivity" (the situation described by J3a-614) represents a real and significant instance of market failure, uncorrectable by the recourse to other service alternatives. It's one thing to assume a problem, but quite another to assume the answer, the best answer, the answer without significant adverse effects is federal regulation (which there is still is, by the way). Its also a real show of paucity to apply 1880's solutions to 2010 issues.

In any case, if I make that leap that (more) federal regulation is the answer, how does rate regulation resolve access concerns. It doesn't and the present initiatives are focused on profitability as a prima facie case of excessive market power.

Sure, some shippers FEEL that they are getting screwed, because they reason that the ratio between the number of cars of commodity X that can be shipped in a train relative to commodity Y is Z so therefore they should pay a proportionately different rate. Of course that's not the only factor, for example there's a heck of a lot more risk with placarded hazmat than grain. You simply don't get that many tort claims from a punctured hopper of grain as you do with chlorine gas. The fact that somebody FEELS the quoted price is unfair doesn't mean it is. A price is inevitably arbitrary, whether fixed at arms-length in the market or at the barrel of a gun by a bureaucrat. Why people think the bureaucrat possesses the wisdom of Solomon is beyond me-I am a bureaucrat, for crying out loud.

The money quote of 2007 GAO testimony on railroad rates:

http://www.gao.gov/new.items/d08218t.pdf

"It is difficult to precisely determine how many shippers are “captive” because available proxy measures can overstate or understate captivity. However some data indicate that the extent of potentially captive traffic appears to have decreased, while at the same time, data also indicates that traffic traveling at rates significantly above the threshold for rate relief has increased. In October 2006, GAO reported that STB’s rate relief process to protect captive shippers have resulted in little effective relief for those shippers."

Great: After 120 years of federal regulation, the GAO found a non-functioning relief designed for and indefinite and undefined group of shippers.

There's also a contravening aspect of railroads that counterbalances any tendency to provide discriminatory access-that is, they are high fixed cost enterprises that require volume to have any chance at profitability. They get paid to accept carloads, not reject them. I don't think it was any accident that the Staggers Act was passed after the feds had a few years experience contending with their own rules. You think its an accident Congress routinely exempts itself from rules it imposes on everybody else?

The history is pretty clear that Congress and the ICC ceased being an umpire between shippers and railroads and became an advocate for shippers and antagonist for railroads. It shouldn't be that surprising: There's a lot more shippers than railroad constituents. We do know how appealing the narrative SEEMED there was a very profound result: industry failure. The inter modal we take for granted today, was prohibited (in trailer on flatcar form) in the 1950's by the ICC as "horizontal integration". Why? because antitrust theorists see economic markets not as organic, needing to adapt, but as neat little lawns, with important little fences separating them. That was just one example of the ICC's brilliant regulation.

I'm not a railfan, I'm a stockholder and a citizen, interested in functioning markets.
It would be really interesting to make lawmakers disclose stock and option transactions and then compare the timing and nature of those transactions to the timing and nature of their pronouncements.

There's a very big difference between government and free markets. Free markets are overturned bloodlessly. Government can tax and imprison. I don't have any power in the free market for computers, but I know every machine I've purchased since 1998 has gotten me more power, more features and more capacity every time. My Core I-5 Acer laptop cost $600 at Costco in January, less than I spent for a 350mhz HP in 1998. Is tech perfect? No way, I've already posted a warning about hard drives-but I'll bet that the replacement technology will be the result of private efforts, not government mandates.

How do you run a steam passenger service (i.e., a Greenbrier Express) without the cooperation of a mainline road that is not cooperative? How do you handle this in a free-market world?

Now wait a second. Are you suggesting that a compelling reason for federal regulation is to require a private entity to lease its physical plant to an independent party, running irregular equipment, outside the primary mission of the host, presenting a dramatically increased legal risk, perhaps interfering with its primary mission due to operational reliability (614 had mechanical problems running on Chessie in 1985) and without the fear of termination to enforce compliance with corporate directives?

Where's the respect for private property?

Thank you for your replies, Superheater. They do make sense.

Now, I can't say I'm entirely familiar with the chemical case as you might be. My understanding is that the rate differential dispute wasn't about chemicals costing more than grain (and the last time I checked, grain often moves in unit trains at unit train rates, while chemicals, by their nature of being in small shipments, move in single car or traditional "loose-car" style), but rather that someone on one railroad, without access to a realistic alternative, had to pay a higher rate than one who had some alternative access. This is the complaint, as I understand it, of the coal operators and the power people, and it's the same complaint that came up in the 1880s. As Dave suggested, human nature doesn't change much over time!

(Warning--Off Topic Comments Approaching)

I can't say I'm entirely a government fan, either. In my opinion, the really big thing that made life so difficult for the rail industry is that the air and road competition (and the inland waterway competition, at least for a while) has never paid its full costs. As recently as 2004 or so, this country, through all its government bodies (federal, state, and local) paid out something like $148 billion for roads, but only collected $76 billion in fuel taxes and another $6 billion in tolls. The difference at that time worked out to something like 36 cents per gallon, and that was essentially just cash flow. (I don't have the figures in front of me right now, but I can tell you this same measure is now over 50 cents per gallon.) It didn't include deferred maintenance, what Don Philips has called "wimpy engineering" (we have an example of that where I live, in the form of cable barriers that were supposed to stop even tractor-trailers from crossing a narrow median strip on I-81, but were found not to work too well), or poor system design (again, near where I live, there is a new bridge over the Potomac River at Shepherdstown, W.Va. which leads to a bottleneck 4-way stop; proper system design would have likely been a real bypass around the town along with the bridge--and the original bridge probably could have lasted a lot longer with an adequate coat of paint).

Some, including myself, would argue that our recent military adventures are at least partially driven by our oil dependence--and that dependence is largely driven by our transportation system, in which 48% of the oil consumed in any given year is for gasoline alone, with diesel trucks consuming another 6% (about the same as railroads, air, and water transport, each). In short, 54% of our oil consumption is for motor fuel; it's our Achilles heel, and in my opinion, a national security risk. (Warning, potentially controversial comment about to follow.) My seat-of-the-pants estimate of what gasoline really costs is about $7 per gallon, which we are paying in our income tax, sales, tax, property tax, and insurance premiums.

(Warning, more potentially controversial commentary following)

A number of comments have been made here about the importance of keeping steam skills alive. In a sense, I also see this preservation movement as about keeping the memory of a pre-auto lifestyle alive, because I think the time is coming--and sooner than we think--when we will be living in a post-auto lifestyle! (Think of the challenges that poses for a Strasburg or a Pennsylvania Trolley Museum.)

Finally, I will simply comment that respect is a two-way street (which I have always tried to practice, even if I sometimes fall a little short, as does anybody)--and I will say your respect for "property" and other "rights" gets mighty diluted when you wind up too often on the losing end. There are times when I think my attempts at being respectful are so useless as to be a bad habit! I will also comment that we are dealing with age bias in a lot of cases, most notably with the NIMBYs (at the risk of sounding like a shameless self promoter, check out the "Generations" thread).

Anyway, I still want to thank you for your comments. I hope we understand each other at least a little better--and don't be afraid to be a railfan, trains are cool!

Check this out...

http://www.railcure.org/

Notice the fusion of certain legislators with these private interests. This is the result of an unconstrained power to interfere with businesses-and the result is that fortunes are made with lobbyists, not innovation.

Whether you like railroads or not, the assertion that they are engaging in deceit is a little over the top, not an objective policy statement based on facts, but inflammatory and incendiary rhetoric.

As I see this group, its the one that's deceitful. They are a collaboration of shippers; dedicated to the proposition that railroads make to much money and that they should be able to have the feds dictate prices in their favor. This is EXACTLY what was going on a century ago; when moronic or disingenuous Senators bloviated in their chamber that the presence of "surplus" (now called retained earnings) on railroad balance sheets proved that railroads proved they were abusing their customers. I strongly recommend Albro Martin's "Enterprise Denied" (out of print, but available). Some familiar names sound goofy.

Their self-description: "An umbrella membership organization, CURE includes large trade associations that represent more than 3,500 electric, utility, chemical, manufacturing and forest and paper companies and their customers."

I see them as organized crime, using available-for-sale legislators, instead of tommy guns as the weapons of choice, developing a sophisticated plan to increase their own profitability at the expense of another industry.

The point is we have people once again thinking they can get more eggs by strangling the chicken-it didn't work before-and economically, its as viable as those goofy looking attempts at flight that preceded the Wright brothers.. (I'm thinking of that goofy looking thing with the spinning umbrella that jumped up and down).

Its not that railroads are pure, either. They are (increasingly) looking for mini-bailouts in the form rail freight grants and "investments" (that never seem to involve an exchange of stock for the grants to public treasuries in exchange for grants and loans from the taxpayers). But on the whole, public policy regarding railroads has been destructive. Its been mitigated enough since the Staggers Act to allow some vitality and we should see these attempts for what they are-these are major players, dominating the public agenda for private gain.

By the way, as for ridding the world of internal combustion cars-check out the econtalk.org podcast a few weeks ago

[url]
http://www.econtalk.org/archives/2010/0 ... n_the.html[/url]

The guest won the 98 Nobel Prize for Physics; he addresses the fact gasoline allows superior containment of energy in a small, light space and right now there's no viable alternative. If cars go, they'll be legislated out of use-previewed in some respects by the rock group Rush about 30 years ago in "Red Barchetta".