Yes, The Gov’t Does Spend Money on Freight Rail

About $550 million since 2009, by the feds alone:

That doesn’t even include tens of millions more that states have contributed for additional investment in ports and high-speed passenger trains that’s boosted the nation’s freight railroads….

The public dollars have built new overpasses to separate trains from one another, as well as cars and trucks. They’ve replaced aging bridges, laid new track and upgraded signal systems. They’ve paid to enlarge tunnels and raise bridges so that shipping containers may be double-stacked. They’ve built new facilities where cargo containers can be transferred from trucks to trains, or vice versa.

Supporters say these public investments, combined with private capital, are model infrastructure partnerships that will help take trucks off crowded highways, reduce pollution and improve the flow of goods to and from the nation’s seaports.

And another $450 million by the states.  If you add up the numbers in the story, the total cost of the projects is about $5.7 billion, so governments have picked up about 17.5% of the overall tab.  That leaves $4.7 billion in cap ex by the railroads themselves.  In a properly functioning economy, they wouldn’t need the extra $1 billion to get most of these off the drawing board.  But when the money’s available, and when the banks are doing better by leaving their money on deposit rather than loaned out in the world, this is what happens.

I work in the trucking industry, and I can tell you that intermodal traffic – freight that gets delivered to and from ramps from truck, but is delivered cross-country by train – is one of our fastest-growing businesses.  It’s that way because over a long route, rail takes less fuel than trucks, given that most of the infrastructure is already in place.  Rail, of course, is much more capital-intensive that road.  But the Class I rails are long-since paid-for except for maintenance, and the containers tend to be owned by the shipping companies rather than the railroads.

But this is telling:

For all the public money that freight railroads have received, they haven’t talked much about it. The industry spent years trying to free itself from government regulation, and it doesn’t want federal money with too many strings attached.

No kidding.  This is largely how they got into their mess in the first place, with massive land grants that left the door open for massive regulation.  Then trucks and trains spent several decades battling each other over regulatory hegemony rather than on price and efficiency.

I’ve never been as hostile to good infrastructure spending as some other conservatives, provided that it’s not disastrously pointless spending like high-speed rail.  There’s a good argument to be made that the transcontinental railway was a national security project as much as an economic one.  Walter Russell Mead points out that in the 19th Century, by ship, San Francisco was closer to London than it was to New York because Brazil juts so far out into the Atlantic.  There was some concern that unless we actually cemented our claims to the West Coast with people, the British might set up shop there and raise the price, or carve out some sort of permanent presence there a la Hong Kong or Gibraltar.

And while there’s always waste, sometimes you put up with some of that to create platforms that everyone can use.  In the case of  the railways, the platform was the land grant.  In the case of the interstates, it was the roads themselves.  Also, in the case of multi-user facilities like ports or urban rail crossings, there are property rights issues that need civil authority of some sort to work out, and better beforehand than in the courts for years.

Still, it seems as though most of this has gone not to resolving legal tangles, but to actual CapEx, and to protect Amtrak’s hopelessly outdated interests.  So even at the cost of 1/800th of the “stimulus,” we probably overpaid.

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