Let Amtrak die
WASHINGTON - The Acela Express, Amtrak's much-ballyhooed hope for high-speed train travel, was shut down indefinitely Friday because of brake problems, leaving thousands of travelers scrambling for other transportation.The federal government is pouring money into a business that just doesn't work. A century ago, would we have subsidized horse carriage manufacturers, or whip-makers, because they couldn't compete against the new automobiles?
The beleaguered rail service pressed slower trains into use between Washington, New York and Boston. It could not say how long the Acela trains would be disabled by newly discovered cracks in disc brakes.
Acela's average weekday ridership is about 9,000, and on Fridays it usually moves about 10,000 passengers along the Northeast corridor.
The cracked brakes come at a bad time for Amtrak. A Senate committee will debate next week whether to end the rail service's federal subsidy — as the Bush administration has recommended — and radically reshape train travel in the United States.
Of course not. Nor should we do that today, so it's time to let Amtrak die since it clearly cannot stand on its own two feet. The quick story is that the price of its tickets aren't enough to cover its operating costs, let alone make a profit, and Amtrak operates so inefficiently with poor management, so Amtrak needs government subsidies to make up the gap. That's morally wrong, because everyone who doesn't ride Amtrak (like me) has to pay for part of Amtrak passengers' tickets. Why should any people have to pay for a service they don't use? Amtrak is not a public good, because it is a rivalrous service: if you ride on it, that's one less seat available to others.
If Amtrak had to run purely on its own revenues, its tickets would be considerably more expensive; the current subsidy of $1.2 billion would have to be distributed among its passengers. Many of the passengers, I'm sure, would stop riding Amtrak because it would be more expensive than airlines; or, airline ticket prices wouldn't be that much more expensive, making them more worth the extra speed. So, it's time to let the Amtrak dinosaur become extinct. (I won't get too much into this, but the federal bailout of airlines must also stop. Let the inefficient airlines die out too, because they also can't compete.)
But we can always count on big government to stand in the way of real progress, to subsidize yesterday's technology that no longer works. There are a lot of idiot politicians who want to do the equivalent of saving the horse carriage maker:
"When Amtrak is terribly underfunded and has to operate on a shoestring budget, these kinds of things will keep happening, which will really disrupt people's lives and our economy," said Sen. Charles Schumer, D-N.Y.Why doesn't my aunt start running her wine store as "underfunded"? She can charge less than cost, making her artificially more competitive, and the federal government can give her a subsidy so she'll still make a profit. That's unfair, isn't it? She would be operating only because the government is helping her, when, after all, she should charge enough to stay in business. And if she does but her prices are higher than her competitors, well, that's not anyone's problem but her own? Why should we support someone with a poor business model, right?
So why is Amtrak so different? The simple answer: it's not.
And why does Schumer act like Amtrak is the only option for both its employees and passengers? If Amtrak employees are laid off, certainly they can find work elsewhere. Amtrak passengers can start flying. Schumer, though, is a schmuck who wants to save Amtrak for Amtrak's sake. He thinks it's fine that people who'll never ride Amtrak in their lives will pay for others -- like him -- to ride Amtrak.
Schumer, my senior senator, is the ultimate liberal. He's literally liberal, as in generous -- generous with other people's money. He regularly rides Amtrak between New York and Washington, but would he be willing to pay higher ticket prices to keep it solvent? I doubt it.
It's the whole liberal idea that if you take a penny from everyone, you can give it to a special interest group, and taxpayers won't notice it too much. If taxpayers grumble, it's not worth their time to fight about the penny. Meanwhile, big government makes sure they can never fight over whole dollars. If you complain about paying taxes, you're accused of not wanting to pay your "fair share." Or you're accused of not wanting to "help the poor" and others who benefit from tax revenues.
Today, Tax Day, remember how much of your taxes go to pay for goods and services that other people use. I know Cato reported in 2001 that federal subsidies to private businesses were already up to $87 billion per year. God only knows what it is now. Sadly, as Dr. Richard Ebeling of FEE once said to me, "This government makes criminals of us all." Even when trying to engage in nothing but honest commerce, we inevitably take advantage of subsidies paid for by others.
To paraphrase Walter Williams, how about completely eliminating subsidies to everyone: you pay full price for what you buy and consume, and I'll pay full price for my own purchases and consumption. Isn't that the fair thing to do? If not, explain why should I have to pay for any part of your life, and you for any part of mine?