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The Moonbeam Express

Seldom has public opinion and expert judgment been more unified than in its opposition to  the California high-speed rail project.    The project has been criticized by its own Peer Review Group, the Legislative Analyst's Office (LAO), the California State Auditor,  the State Treasurer and a group of independent  experts  (Enthoven, Grindley, Warren et al.).  In addition, the bullet train has come under severe criticism by influential state legislators and  by members of the state's congressional delegation. Equally damaging to the project's future prospects have been two public opinion surveys showing  that California voters have turned solidly against the project, and the opposition of  virtually all of California's newspapers, including The Orange County Register, whose latest editorial we reprint below.  

Editorial: Bullet train becoming "Moonbeam Express" (OC Register, Feb 1, 2012)
Gov. Jerry Brown wants to use anti-global-warming carbon taxes to fund California's much-maligned high-speed rail project. 

In a brazen denial of the obvious, Gov. Jerry Brown now insists the proposed California high-speed rail can be built for much less than its own business plan stipulates, and wants to use anti-global-warming carbon taxes to underwrite the proposal, whose price tag has nearly tripled in the three years since voters approved it.

The governor seems intent on demonstrating how California's state government has burdened taxpayers with mounting debt, while overspending to create consecutive years of budget deficits. The rail project has been dubbed "the train to nowhere" because the only portion close to being built would link relatively sparsely populated Central Valley towns and no metropolitan areas. Perhaps with Mr. Brown's new foolish insistence, it should be christened the Moonbeam Express. 

Since the rail proposal appeared on the 2008 ballot, it has been widely and legitimately criticized in detailed analyses by the rail project's own Peer Review Group, the state auditor, treasurer, Legislative Analyst's Office, local governments including Tulare, Madera and Kings counties and the city of Palo Alto, numerous state and federal lawmakers from both parties and studies by UC Berkeley Institute of Transportation and the Reason Foundation. These highly unfavorable critiques reflect many of the criticisms the Register Editorial Board has raised since the project was proposed.

In only three years, the train's estimated cost has increased from $33 billion to $98.5 billion in the latest version of its own ever-changing business plan.

Voters approved only $9.9 billion in bonds based on the rest coming from Washington and local governments along the route, and private investors. Washington has provided about $3 billion and not another dime has materialized or been pledged. Meanwhile, the estimated completion of the original phase of the project, from San Francisco to Anaheim, has been extended 14 years beyond the original estimate of 2020.

Ridership estimates are unrealistic, meaning trains can't operate solely on ticket revenue as required by the initiative. Costs, even at their current highest level, are certain to increase, and the needed additional funding sources are not forthcoming. Given hostility in Congress to the project, more money from Washington, which is grappling with its own massive deficits and debts, won't be seen in the foreseeable future.

State Sen. Doug LaMalfa, R-Richvale, introduced a bill Monday to put the high-speed rail proposal back on the November ballot so voters can de-authorize selling the $9.9 billion in bonds.

The Register has urged this ill-conceived and increasingly untenable project be resubmitted to voters. Thankfully, for the most part, bonds remain unsold. There is no reason taxpayers should assume billions more debt --- with annual interest payments of up to $1 billion --- when the likelihood is remote the train ever will be built, despite the governor's strained assurance.

Moreover, state Sen. Diane Harkey, R-Dana Point, notes that the governor's proposed new revenue stream --- carbon taxes created by the 2006 Global Warming Solutions Act--- is another hoped-for, rather than assured, solution. "The state's cap-and-trade program is not yet in operation, and revenue estimates of $1 billion per year are unreliable and unsubstantiated," Ms. Harkey said. "Relying on projected revenues that fall short is the key reason why our state deficit continues to explode year after year. To rush this project forward, just using up the $3.5 billion of federal funds, with the hope of an additional funding mechanism based on guesswork, is irresponsible."

What to Do About Gang Violence in Salinas California

Is there any connection between the fact that Salinas has the gang problem that it does, and the fact that Monterey County's restrictions on the building of housing are very strict? I can see why the inhabitants of the Monterey Peninsula might want to protect the coastal strip. But if they apply their policies to the whole county, it becomes very difficult to build any housing. I saw a proposal 40 years ago from Ralph Nader's think tank that would encourage the building of Italian style hill towns along the hills along both sides of the South Santa Clara Valley, thus leaving the lowlands along the river for agriculture; such a plan could be applied to the Salinas Valley as well. I don't have the expertise to draw the connection between restricted housing and the gang situation in Salinas, but surely the situation is worth looking at. What kind of novels would a John Steinbeck write, if he were growing up in Salinas today?

On The Move

Overall migration rates in America appear to be down in the wake of the Great Recession, reaching the lowest levels recorded since the 1940's. While some statisticians argue that changes in data collection over time have led to an overstatement of such changes, there seems little doubt that "interstate migration has been trending downward for many years," regardless of recent recessionary effects. That said, Americans remain a mobile people. Each year, millions of Americans make an interstate move. While overall migration rates may be down, "the commonly held belief that Americans are more mobile than their European counterparts still appears to hold true." In good times and bad, the draw of opportunity in a new state still remains a siren call for many Americans.

Adding a bit of information on current American migration patterns, Atlas Van Lines, a major American moving company, recently released it's annual data on interstate moves. A plurality of states (24) had a balance between inbound and outbound moves. Magnet states included the upper south (TN and NC), the capital region (DC, VA, and MD), and hubs of energy production, including North Dakota, Texas, and Alaska. Many Midwest and Great Lakes states had more outbound movers than inbound. While the Atlas numbers don't mesh completely with Census migration estimates, they may lend some support to Wendell Cox's argument that domestic migration may be returning to some sort of normalcy. Simply put, people continue to go where they can find work, economic opportunity, reasonable costs of living, and good weather.

Things Aren't that Bad in Saginaw

Our 8th Annual Demographia International Housing Affordability Survey included the Saginaw, Michigan metropolitan area, which we noted had the lowest Median Multiple (median house price divided by median household income) among the included 325 metropolitan areas. This made Saginaw the most affordable metropolitan market, principally due to depressed economic conditions. Saginaw has been ravaged by the loss of manufacturing jobs and a generally declining economy because of its strong industrial ties to the Detroit metropolitan area.

D. Robertson of Freeman's Bay (Auckland, New Zealand) must think that things are much worse, as indicated by a letter to the editor in the New Zealand Herald on January 24 (The Herald does not post letters to the editor on its internet site). Robertson says that including and prominently reporting the result of Saginaw Michigan (population 297 in 120-odd dwellings) was inappropriate. Robertson makes a 99.9% error, having apparently confused Saginaw, Missouri (population 297) with Saginaw, Michigan. According to the 2010 US Census, the Saginaw metropolitan area has a population of 200,169. That would be substantial enough to qualify Saginaw as one of New Zealand's largest metropolitan areas if it were there.

"Jaw-Droppingly Shameless:" Mother Jones on California High Speed Rail Projection

Kevin Drum of Mother Jones reports on the highly questionable "cost of alternatives" that has been routinely repeated by proponents of the California high speed rail project, in an article entitled "California High Speed Rail Even More Ridiculous than Before."

The mantra goes something like, "yes high speed rail is expensive, but it would cost even more to not build it." Yes, indeed, it is expensive, starting at the low estimate of $98.5 billion the press and proponents usually cite to the nearly $118 billion that the California High Speed Rail Authority itself indicates. Advocates then cite a $171 billion figure as what Californian's would have to pay if they didn't build the line.

Joseph Vranich and I detailed the flaws in this "alternatives estimate" in a Wall Street Journal commentary on January 10 ("California's High Speed Rail Fibs"). We noted that the claim "sets a new low for planning projections in a field that has been rife with abuse." This was a reference to "strategic misrepresentation” ("lying") that has characterized rail project forecasts, according to top European academics.

Drum goes further, calling the claim "jaw-droppingly shameless," an appropriate characterization based upon the method and documentation. He goes on to suggest that "A high school sophomore who turned in work like this would get an F."

Regardless of the views that officials or the public may have on high speed rail, they are entitled to a standard of professional (and taxpayer financed) analysis above "jaw-droppingly shameless."