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287 comments on DrumBeat: March 19, 2008

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AlanfromBigEasy on March 19, 2008 - 9:42am Permalink | Subthread | Comments top

Why DC Metro Extension to Tyson's Corner and Dulles was killed

Several weeks ago I was upset at the abrupt cancellation of a project that took a decade to put together and will save 20,000 to 25,000 barrels/day once built out. Physical construction would have started last week, helping stimulate our economy. The Washington Post helps explain why.

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/16/AR200803...

For Macquarie, the Dulles Toll Road has enormous appeal. The company approached Virginia in 2005 about leasing the road, pocketing motorist fees and financing the rail extension to the airport. But Virginia officials had other ideas. They wanted to keep the road in the hands of a public entity -- the Metropolitan Washington Airports Authority -- and let it build the rail line.

According to four former senior DOT officials, Virginia's decision upset Duvall and then-DOT chief of staff John A. Flaherty. "They went ballistic," one of the officials said. "[They] wanted that to be their pet project in the nation's capital. Tyler would mention that frequently . . . that it would be better for the project to go to Macquarie."

As they have crafted policy, Duvall, Gribbin and other Bush officials have been working closely with private equity funds. The DOT persuaded Congress to change the tax code to make $15 billion in tax-exempt bonds available for private firms to build road and freight projects.

The department waived regulations to speed development of toll road projects and wrote sample laws to help state legislatures permit the lease or sale of their roads to private companies, with laws now enacted in 23 states.

As a consequence, private equity funds focused on transportation attracted an estimated $100 billion to $150 billion in 2006, according to industry analysts.

The new opportunities for private equity have also created job opportunities for government officials. In the past three years, nine current and former top DOT appointees have worked for such funds or for engineering or construction firms interested in tolling projects subject to federal review.

Gribbin is one of those officials

The number of major new rail and bus projects on track for federal funding dropped from 48 in 2001 to 17 in 2007, even as transit ridership hit a 50-year high last year and demand for new service is soaring.

William Millar, who heads the American Public Transportation Association, says he set up three appointments with Duvall to try to influence how the Urban Partnership money would be spent, but each was cancelled. "They just see no role for transit," Millar said

And the WaPo gives insight into where the Bush Administration finds expertise to deal with this nation's issues, such as our "addiction to oil".

Duvall, 35, is a fourth-generation Washingtonian whose father is a well-connected lawyer. He had no transportation experience when he was plucked from his job handling corporate mergers and acquisitions at Hogan & Hartson and was offered a political appointment at the DOT in 2002. "It was a friend of a friend of a friend sort of thing," he said.

Within four years, he was setting national policy.

Best Hopes for Leanan accepting the long quotes this time, the Washington Post article is 5 pages long,

Alan

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bluestem on March 19, 2008 - 9:50am Permalink | Subthread | Parent | Comments top

"Friend of a friend of a friend...." Life goes on and we who have half a brain wonder where their brains are. Oh well, if you really like that kind of friend of a friend kind of stuff, Randy over at Economicrot.blogspot.com has food for thought on powers that be and "manipulation." Not too bad of a read for a Wednesday morning. John

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WNC Observer on March 19, 2008 - 9:57am Permalink | Subthread | Parent | Comments top

Alan:

Sad story. This is why I think it is a mistake to place the operation of toll goods (which is what all public tranport systems inherently are) in the hands of EITHER the government or corporations. The corporations will just cream off the most profitable part of the business and leave the public to suffer. As for the government, your article illustrates exactly what ends up happening all too often - wrong decisions end up being made by incompetent and corrupt public officials.

What is the alternative? Public ownership need not mean the same thing as government ownership. Imagine a public authority, run by trustees that are elected directly by the people who live within its service district. Because they are ultimately answerable directly to the people, the incentives are there to run the system in a manner that will best serve THE PEOPLE. Those trustees that try to cater to their corporate pals could quickly see themselves booted out of office. Governments wouldn't be able to use these systems as milk cows or patronage tools. The problem of striking the right balance between low fees on the one hand and higher quality service on the other hand solves itself through the combined feedback mechanisms of ridership and elections.

What I describe is neither capitalism nor socialism, but something else which doesn't really even have a name yet. "Cooperativism", maybe? It hasn't really been tried anywhere. We've got to figure out some way of bringing this idea from the wilderness into the mainstream, though, and quickly. Otherwise, I am afraid that your sad story will continue to be the rule to how things are done, and that does not bode well for your EOT vision.

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AlanfromBigEasy on March 19, 2008 - 10:05am Permalink | Subthread | Parent | Comments top

I tend to agree.

Many municipal transit agencies have their own taxing authority (usually sales taxes) and board members appointed by local mayors, etc.

Direct election of a majority (if not all) of the members would be a good thing.

Ed Tennyson has stated that an ideal board would have at least one seat restricted to Professional Engineers, another to CPAs, etc. with 6 year terms that rotate (1/3rd up every 2 years)

There is no doubt that governance can be improved !

Alan

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eric blair on March 19, 2008 - 10:13am Permalink | Subthread | Parent | Comments top

There is no doubt that governance can be improved !

*clap* *clap* *clap*

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710 on March 19, 2008 - 12:12pm Permalink | Subthread | Parent | Comments top

George Carlin on Voting (YouTube)

Everybody complains about politicians. Everybody says, "They suck".

But where do people think these politicians come from? They don't fall out of the sky. They don't pass through a membrane from another reality. No, they come from American homes, American families, American schools, American churches, American businesses, and they're elected by American voters.

This is the best we can do, folks.

It's what our system produces: Garbage in, garbage out.

You may substitute "American" for your country of choice, and it still largely applies.

The optimist believes this is the best of all possible worlds. The pessimist fears this may be true.

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InJapan on March 19, 2008 - 10:15am Permalink | Subthread | Parent | Comments top

Is that not analogous to the (in theory) local school boards?

While I'd prefer the ascent (or more accurately, the return) of private rail, your approach may be workable too.

Currently, my region's transit system is run by a board that is made up of government officials from other elected offices... and it suffers IMO because of it. The layering and interconnectedness of it all appears to drive the system into making choices that are palatable to the political machine but doesn't always meet the real needs.

Case in point, I was speaking with a bus driver the other day - the drivers are contract drivers, the regional transit system contracts to a local company for bodies - who informed me that when some of the drivers wished to pass on suggestions for making changes in the system at a regular board meeting, they were told explicitly that the board didn't want to hear input from the drivers. Who else to give reasoned input on how to improve a system than those who operate it every day?

( Note that I was speaking with this driver as he was baby-sitting an empty bus, which was waiting (and causing all the wanting to board riders to be late) for its scheduled shift replacement driver to show up for work, who hadn't shown. )

If government bureaucracy is a millstone, then interlocking government bureaucracies are certainly the death of any innovation.

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Dryki on March 19, 2008 - 10:26am Permalink | Subthread | Parent | Comments top

What I describe is neither capitalism nor socialism, but something else which doesn't really even have a name yet.

It does have a name - several. It could be a corporation chartered in the public interest - as the Blues were before they got privatized. Many towns are corporations. It could be a "community investment trust" or a muni. It depends on what is in the charter and the rules by which it has to play. The vanilla corporate charter is designed to suck out of the community; that is the engine of our own destruction. The charter for something like this has to be written to serve the community interest. Ownership has to stay local. Operations bounded. That sort of thing.

cfm in Gray, ME

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PeakOil Tarzan on March 19, 2008 - 1:04pm Permalink | Subthread | Parent | Comments top

The vanilla corporate charter is designed to suck out of the community...

Amen. Every time I see some down-on-its-luck community go to the mat over a proposed big box store, I want to say to these people, "Look you guys, if Maxi-Mart weren't expecting to get more out of this community than they plan to put into it, they wouldn't be knocking on the door."

Something of an over-simplification, yes, but not much of one.

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shaman on March 19, 2008 - 1:11pm Permalink | Subthread | Parent | Comments top

Same way I feel about insurance companies. They've done all the research. On average, the insurance company is going to get more out of you than you will out of them. Add on to this that most of us don't want the event to happen that would cause the insurance company to pay out (e.g., an auto accident, house fire). So when you buy insurance you are essentially placing a bet that you don't want to win.

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eric blair on March 19, 2008 - 6:10pm Permalink | Subthread | Parent | Comments top

So when you buy insurance you are essentially placing a bet that you don't want to win.

Or the law requires it.

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shaman on March 19, 2008 - 8:26pm Permalink | Subthread | Parent | Comments top

Indeed. Another superb argument for the "free market" - entire industries legislated into existence.

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ozonehole on March 19, 2008 - 11:57am Permalink | Subthread | Parent | Comments top

What I describe is neither capitalism nor socialism, but something else which doesn't really even have a name yet. "Cooperativism", maybe?

Rest assured that it will be labeled "socialism" or "communism" if it threatens the profits of a corporate special interest. Even publicly owned water companies are "communist" according to the Fox News set.

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Jason Bradford on March 19, 2008 - 12:06pm Permalink | Subthread | Parent | Comments top

Reminds me of the work in community land trusts to protect ag land in the face of development pressure by having a non-governmental public interest board oversee long-term leases to farmers who can only live on the land as active farmers using certain methods and providing food to local communities. In the CSA model, the board is elected by the farm members who also eat the food.

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dtbks on March 19, 2008 - 2:54pm Permalink | Subthread | Parent | Comments top

I like your idea.

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Zadok_the_Priest on March 19, 2008 - 10:15am Permalink | Subthread | Parent | Comments top

Where is an engineer and developer like William Wilgus today? Radical vision without public funding or disruption to daily commuter service.

http://www.pbs.org/wgbh/amex/grandcentral/program/

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DIYer on March 19, 2008 - 8:09pm Permalink | Subthread | Parent | Comments top

Manhattan Bans Steam Locomotives (12:24)

We need a new directive: America bans Internal Combustion Engines ... probably not gonna happen, though. Thanks for the link, cool story.

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River on March 19, 2008 - 10:32am Permalink | Subthread | Parent | Comments top

Alan, I worked on the Metro Rail system for seven years for a signals company. You now have an inkling of how convoluted the politics surrounding the building of the system is and has been...I know from first hand experience that it is a chaotic situation.

One of my responsibilites was to write reports for and attend the Council of Governments meetings to answer technical questions regarding signals/atc, track and way, comm., and power. No one on the council had a clue. Waste was rampant, major equipment was never installed but was signed for, large numbers of people were hired to work on the system and maintain it for political reasons...many were totally unqualified. As just one example when a S Korean leader was assinated, metro suddenly had an influx of S Korean workers that new nothing of hs rail and could not speak English. Anyone that was remotely qualified was promoted far beyond their abilities and little or no qualified support staff was provided for the newly promoted 'managers'. Most of the top managers hired by metro that I delt with were ex military and not from hs rail or railroad backgrounds...many of these 'managers' had postings at the Pentagon prior to military retirement, and, literally, did not know how to run a railroad.

In summation I will say that the metro system is a typical example of what passes for governance in and around DC at many levels.

Don't say that I didn't warn you, for I did some months ago.

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AlanfromBigEasy on March 19, 2008 - 11:04am Permalink | Subthread | Parent | Comments top

One of my assumptions is that Americans will learn to operate with the speed and efficiency of French bureaucrats post-Peak Oil (or at least 80%). Many competent managers give public transit a wide berth today, unfortunately. With "economic contraction" that could well change.

The new WMATA (DC Metro) GM is getting "good marks" so far.

Best Hopes for semi-competent Management,

Alan

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pi on March 20, 2008 - 3:27am Permalink | Subthread | Parent | Comments top

So many issues in the US seem to have this common theme, where private profit outweighs the common good; healthcare, daycare, building trains, etc. Maybe this is what Hillary Clinton meant when she tearfully uttered "I see us slipping"....

When the private equty co. sells investors pieces of the road to generate future returns, they will come up against peak oil: the number of toll-paying drivers will surely be slowly declining. These investments will lose money. More bad debt!! Not to mention that maintenance probably won't be a priority anymore, safety simply will be cast aside in favor of profits. So short-sighted. Sigh.

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