Natalię Dowzicky, “How Florida Beat California to High-Speed Rail,” Reason, September 20, 2023.
Excerpt:
Not only is Brightline the first privately funded intercity rail line in the U.S., but it’s also the fastest train in the country outside of the northeast corridor. Topping out at 125 mph in Florida, it will travel from Miami to Orlando in about three hours. For comparison, the Amtrak in the area takes about six and a half hours to complete that same trip.
Mike Reininger, CEO of Brightline, told Reason that passenger rail makes commercial sense under specific conditions, such as the case in Florida, where it connects two populous, tourist-friendly cities that are about 250 miles apart. At that distance, Reininger says, “It is too far to drive and too short to fly. You can approximate the time of flying significantly, improve the time of driving, and you can offer it at a price point that makes it an economic proposition.”
Not surprisingly, though, Brightline has become a subsidy sucker.
Romina Boccia, “Social Security Benefits are Growing Too Fast,” Cato at Liberty, September 21, 2023.
Excerpt:
When a Social Security‐eligible worker’s benefits are first calculated, this worker’s past wages are indexed to bring them to the same level as today’s earnings. This is called wage indexing and is based on the growth in average wages in the economy. When the Social Security Administration (SSA) first indexes a worker’s lifetime covered earnings, it does so using the SSA’s Average Wage Index (AWI). The AWI includes all wages that are subject to federal income tax, including wages in excess of the taxable Social Security maximum payroll tax threshold.
Wage indexing gives retirees a benefit amount that reflects the increase in the standard of living over their working careers—even if they didn’t earn commensurate wages. It’s like giving workers retroactive credit for improvements in the economy, including for wage improvements among the highest income earners.
Definitely worth reading carefully.
Christopher Wilcox, “Truck This: Why I’m Leaving the Long-Haul Industry,” American Institute for Economic Research, September 21, 2023.
Excerpt:
More recently, environmental regulations requiring manufacturers to reduce emissions gave us the diesel particulate filter (DPF), an exhaust treatment system that replaces a standard muffler. While there is no current federal mandate requiring a DPF, the filters are required by the 2008 California Statewide Truck and Bus Rule, which has incentivized many nationwide fleets to adopt them. The problem with DPFs is the filter system clogs. A lot.
When DPFs go down, trucks roll to a stop. Truckers report having to have a DPF serviced as often as every 5,000 miles, which means lots of lost productivity and stranded cargo. I’ve had four breakdowns over the past two years, and three were due to my DPF. A tow truck driver I spoke to on one of those occasions told me half of his business comes from malfunctioning DPFs. Repairs are a specialized affair, and replacements can cost up to $2,000. When my truck isn’t moving, I’m not earning. And these regulators have required that my truck stand still far too often.
Of course California is in the forefront of regulation.
Fiona Harrigan, “Biden Administration Announces New Measures to Get Migrants to Work,” Reason, September 21 2023.
Excerpt:
Yesterday, the Biden administration announced new actions to help get recent immigrants to work, including offering almost half a million Venezuelans a status that will let them live and work in the U.S. legally for the next 18 months. The new measures come at a critical time, as labor shortages persist and cities struggle to provide for newcomers.
Certain Venezuelan migrants are eligible for temporary protected status (TPS), a designation offered to migrants who can’t safely return to their home countries due to armed conflict, environmental disaster, or another temporary safety hazard. Venezuela was first designated for TPS in 2021 due to a severe political and economic crisis perpetuated by Nicolás Maduro’s regime. Under that designation, Venezuelans who came to the U.S. before March 2021 qualified for protection; now, the status will apply to Venezuelans who arrived before the end of July this year. There are currently 16 countries designated for TPS.
If I understand the program correctly, it sounds good: let them work instead of forcing taxpayers to subsidize their living expenses. It’s win-win-win for immigrants, employers and consumers, and taxpayers.
James Herndon, “Keep the Washington Consensus,” Law & Liberty, September 21, 2023.
Excerpt:
Despite those deliberate omissions, synergies still allowed the Consensus to exceed the sum of its parts. Opening up foreign direct investment eased privatization. Privatization enabled balanced budgets. Balanced budgets limited inflation, which encouraged foreign direct investment. The common denominators were respect and restraint: leaders had to trust that firms and citizens knew better than the bureaucrats how best to allocate their own labor and resources. That’s why the Consensus’ first beneficiary was always likely to be the poor. After all, funding for primary education and basic healthcare does far more to reduce poverty than subsidies for diesel fuel and national airlines.
In short, Williamson promoted policies that enabled sustainable growth in developing countries with respect for their autonomy and an emphasis on raising prospects for the least fortunate. The Left never forgave him.
It’s the nicest treatment of the Washington Consensus that I’ve read. Lots of good nuggets.
READER COMMENTS
Thomas L Hutcheson
Sep 24 2023 at 8:55am
“Wage indexing gives retirees a benefit amount that reflects the increase in the standard of living over their working careers—even if they didn’t earn commensurate wages. It’s like giving workers retroactive credit for improvements in the economy, including for wage improvements among the highest income earners.”
This sounds like it is doing exactly what it is reasonable to do. SS is a program to transfer income to older people from younger people. It is not, never has been, never should be, an inflation indexed IRA. The floor is open to the fairness/efficiency of the tax and benefit formulae.
William C Tetley
Sep 24 2023 at 9:47am
In the Buffalo Depew station there is a plaque about Train 999. This train set the land speed record in 1899 for traveling between Buffalo and Rochester. The record is for 100 mph. That is significantly faster than the Amtrak trains that run that route today.
David Henderson
Sep 24 2023 at 7:41pm
Nice. Thanks, William.
Thomas Hutcheson
Sep 24 2023 at 10:03am
DPF: Looks like another case of failing to make regulations pass cost benefit tests. While reducing particulates is an important public health benefit, the cost of avoiding the particulates seem excessive. I wonder if just requiring monitoring and taxing of the emission rathe than mandating a specific remedy would not have been more efficient?
Thomas L Hutcheson
Sep 24 2023 at 10:06am
TPS with work permits ought to be part of a merit based immigration system.
Thomas L Hutcheson
Sep 24 2023 at 10:19am
Washington Consensus: Herndon’s has always been the standard argument for the Washington Consensus. More power to him for restating it. The Consensus was undermined in part by its association in richer countries with tax reductions that mainly favored higher income people and the resulting deficits and to a lesser extent with Stolper-Samuelson income distribution effects of trade liberalization in relatively capital rich countries. This was definitely NOT how it worked in developing countries.
Richard W Fulmer
Sep 24 2023 at 12:00pm
Thoughts on the diesel particulate filter:
In his book, The Birth of Plenty: How the Prosperity of the Modern World Was Created, William J. Bernstein describes how Jean-Baptiste Colbert, France’s minister of finances under Louis XIV from 1665 to 1683, worked to expand commerce by improving his country’s roads and canals. Unfortunately, trade was hindered by more than potholes – a complex system of internal tariffs was throttling commerce. Colbert – though, at the same time, increasing tariffs on foreign goods and imposing burdensome regulations on all stages of domestic production – tried to dismantle the country’s internal tariffs. He was only partially successful, and after his death, “all fiscal restraint was lost. By the end of Louis XIV’s reign three decades later, the State had doubled the tolls on the roads and rivers it controlled, and the nation that had once been Europe’s breadbasket . . . was bled white. . . .” Bad regulations trumped good roads.
In Federalist No. 22, Alexander Hamilton quotes Charles Jenkinson, a member of the British House of Commons as follows:
There are few better ways to bring an economy to a halt than to shut down transportation.
Scott Sumner
Sep 24 2023 at 2:03pm
Very good post. The Reason headline is a bit misleading, however, as Brightline isn’t actually “high speed” by any reasonable definition—Europe, Asia, etc.). Still it’s a vast improvement over Amtrak.
David Henderson
Sep 24 2023 at 4:07pm
Thanks, Scott.
And you’re right re high speed. BTW, when I give talks and the issue of California’s rail comes up, I refer to it as “California’s medium-speed rail.”
steve
Sep 25 2023 at 6:32pm
From the Reason article.
“But in Florida, Brightline is showing that it’s still possible to run a viable, privately operated passenger rail line under certain conditions. The company is starting service from Miami to Orlando on September 22.”
The article was written by Karnak? How do we know if it’s viable if it really hadnt been running when the article was written? Looks promising but we should wait at least a year? Also, while the very large majority of Brightline was private financing it should be remembered that a lot of this was just upgrading the Florida East Coast rails. Those were built by Flagler back when the government gave you 8000 acres for every mile of track laid. So maybe we put private investment in quotes? Still, much better than the California version.
Steve
MarkW
Sep 26 2023 at 6:33am
It is too far to drive and too short to fly
Except that this is only because we’ve made flying so artificially slow on both ends with the TSA. Passenger rail is arguably more inherently vulnerable to terrorist attacks — e.g. not only at embarkation, but all along the route — protecting tracks that stretch hundreds of miles is virtually impossible. Fortunately, we don’t actually have any terrorists to worry about. Unfortunately, we seem highly likely to continue airport security theater indefinitely. Even so, I could probably be in Orlando almost as soon starting from my home in Michigan as somebody from Miami using this new service. The average speed is 69 mph, so no faster than driving — substantially slower, really, unless your starting and ending points happen to be right near the two stations.
And ‘real’ HSR is not really possible along existing tracks such as those that Brightline uses. Real HSR lines need to be grade-separated, rails need to be welded, heavy freight trains have to be excluded, and curves need to be much more gradual. Those requirements make it prohibitively expensive to do in the U.S. (see CA for one of the clearest ever examples ‘the exception proving the rule’).
Brightline, however, is clearly better and less wasteful than Amtrak, and given our persistent airport idiocy, there may be a niche where it can be successful. Two cheers, I guess.
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