Free Markets, Free People


Politicizing the Amtrak incident

One of the favorite ploys of Democrats is to claim the GOP has a tendency to “politicize” tragedies.

Well, there’s politicizing a problem and then there pretending there is a problem in order to politicize it.   This recent Amtrak tragedy is the latter.

What do I mean?  Well, they hadn’t even cleared the bodies from the wreckage before former Governor Ed Rendell was on “Morning Joe” talking about how it was due to a lack of infrastructure spending.

Meanwhile, the NTSB is putting out stuff like this:

screenshot 2

Oh … 100 mph in a 50 mph curve?  That’s an obvious problem with “infrastructure spending”, isn’t it?

But that didn’t stop the Democrats talking point from continuing to roll, did it?  Nope, the good old reliable media pitches in as well.  Phillip Bump in the Washington Post:

As The Post’s Colby Itkowitz noted, Congress has delayed passing legislation to fund Amtrak since 2013. The last time it did so, in 2008, the vote passed only after a rail disaster. Which, of course, happened again Tuesday night.

The constant struggle of Amtrak to get funding derives largely from the fact that not very many Americans use the rail system. Ridership is heavily centered in the Northeast, in the corridor between Boston and Washington where Tuesday’s accident occurred. But more than that, ridership is unevenly distributed politically. Data from the National Association of Railroad Passengers shows the number of passengers that get on or off the train in any given congressional district, and reveals an obvious reason why Republicans might not be too concerned about funding the system.

Amtrak has never had a profitable year since its inception.  In fact it is a totally subsidized rail system that would fail if not subsidized.  And as Bump mentions, it is “heavily centered” in a northeastern corridor.  So essentially, given the fact that the “elites” want Americans in mass transit and this fits the description, plus it is very handy for said elites to use if they so choose, they’re fine with a wealth transfer from the rest of the country to support their desires.

Powerline picks up on the media bias as well:

There is a certain irony in these three stories perching one above the other on Politico’s main page: House panel votes to cut Amtrak budget hours after deadly crashAnalysis: GOP cuts to transportation, housing draw fire; and Derailed Amtrak was likely traveling at twice recommended speed.

Politico is a mouthpiece for the Washington establishment, where all spending is good spending. But the anti-Republican theme was picked up by many other news outlets, like Reuters: “Amtrak crash throws spotlight on funding disputes; Republicans back cuts.” And the New York Daily News: “Deadly malfeasance: Amtrak passengers paid with their lives for Washington’s neglect of transportation.”

But funding is not the problem.  Amtrak has gotten over 30 billion dollars in subsidies since its founding in 1970.  30 billion.  For a small railroad.  The WaPo’s Bump also claimed that “Republicans” hadn’t funded Amtrak since 2013.

In fact, they gave Amtrak nearly $1.4 billion less than five months ago.

One of those anti-narrative facts that keep ruining their righteous rant.

Oh, and as for “infrastructure spending?”  You remember the stimulus don’t you?  Wasn’t that for “infrastructure?” And who was in charge of doling out the loot then?

Yeah, certainly not Republicans.

Meanwhile, the union associated with Amtrak decides it too needs to score political points on the back of the 7 dead and many injured:

The Teamsters-affiliated Brotherhood of Maintenance of Way Employees Lodge 3014(BMWE) published a blog post on Tuesday attributing the deadly crash to new safety standards proposed by management of the government-partnered railroad.

“The new ‘One Amtrak Way’, along with the new inexperienced Amtrak senior management (after the old experienced senior managers were fired) has lead to this massive derailment,” the union said.


Reuters reported that the train was not equipped with the latest U.S. safety controls that are supposed to prevent high-speed derailments.

The Pennsylvania-based BMWE failed to mention the actions of the operator on its website, instead focusing on the union dispute with management. The crash, the post said, came as “senior management has declared war on safety with it’s [sic] unions.” Union membership unanimously approved a resolution in April giving union leadership permission to call a strike. Lodge 3014 had about 240 members in 2014, according to its most recent federal labor filings.

“The unions [sic] struggle to maintain safe working conditions is hampered by Amtrak senior management’s lust for complete control and railroad inexperience,” the blog post said.


Why does Amtrak continue to be such a fiscal wreck?  The usual reasons:

In its current form, Amtrak is less a for-profit passenger rail corporation and more a union jobs program (its ridiculous labor contracts are a major reason why the company is perpetually swimming in red ink).

Despite all the disingenuous chatter about a lack of infrastructure funding for Amtrak, the company’s salary costs absolutely dwarf its infrastructure depreciation expenses. In 2013, for example, Amtrak spent $2.1 billion on salaries, while it recorded $687 million in annual depreciation costs. Amtrak’s pension losses alone in 2013 totaled $425 million.

The numbers are pretty easy to compute.  Nothing is going to change here.  Amtrak will continue to be a money pit that benefits only a relative few in the country.

However, again, funding and spending wasn’t the reason this train crashed and killed, is it?  At least no according to witnesses and a preliminary finding by the NTSB.

But since the politicizing has begun by the left, why not jump in.  Powerline asks the pertinent questions:

The real question is, why is the federal government in the railroad business at all? Far more people are killed in automobile accidents than train crashes, but no one says the problem is that the federal government doesn’t pay enough money to car companies. If Amtrak can’t operate safely–reasonably safely, since nothing is absolutely safe–based on the revenue it gets from customers, it should go out of business, like any other company.

Here is another question: why should businessmen, journalists, lobbyists and politicians who commute between Washington and points north have their travel costs subsidized by taxpayers? Train travel costs what it costs. Those who ride the trains should pay those costs, just like those who fly in airplanes. It is absurd that the richest and most powerful companies in the United States have their employees’ travel costs subsidized by you and me. This is cronyism at its worst. Amtrak should be a wholly private enterprise. Having ridden that Northeastern line that goes to Washington a number of times, I think it has great advantages over air travel and could easily charge enough money to be profitable in competent hands.

Look folks, the federal government has proven its incompetence for decades when it comes to running or managing anything in a efficient and cost-effective way.  Why?  Because there are no penalties for it not doing so.  It just takes more of your money to cover its incompetence or goes into debt in your name.

These questions deserve answers. The incompetence involved, the fiscal waste, is simply staggering.  And 7 people paid with their lives because of it.

Will we get any answer to those questions?  Oh, no.  The elites are fine with you subsidizing their travel expenses.  And since, it seems, most of our “leadership” comes out of that area anymore, you’re not going to see that change anytime soon.

Divestment of Amtrak is the answer, but then, passengers would have to pay real costs wouldn’t they?  And the leaching elites, who will condemn you in a NY minuted for not paying your “fair share” aren’t about to see this bit of subsidized cronyism pass by the way side are they?

I mean how would Joe Biden get home?





Recession cafe: today serving Obama economic hash

CNN has a story about a bike store owner who has retrenched and is weathering the recession. Contained in the story is the kernel of the economics of the problem we face and how the administration still doesn’t get it.

Here’s the quote:

Both then and now, D’Amour said the chief problem for small business owners is access to financing. And lawmakers want small businesses to know this complaint is reaching Washington.

President Obama urged Congress last week to move forward on a bill designed to help small businesses, including a $30 billion lending fund to loosen credit lines and $12 billion in tax breaks.

That will help but it won’t solve the problem, said Anne Mathias, director of policy research at Concept Captial.

"It’s not going to bring a rush of people into stores to buy whatever it is these different small businesses have to offer, but it will help," she said. "It’ll help kind of at the back end."

Republicans say the bill won’t have much effect and are urging the president to extend the Bush administration’s tax cuts.

Todd McCracken, the president of the National Small Business Association disagrees.

"Putting money in the pockets of both consumers and small business people so they can take advantage of the opportunities when they come along is crucial," McCracken said Sunday morning on State of the Union with Candy Crowley.

Access to financing, although important, isn’t the base problem. Consumption is – or the lack thereof. Additionally, payroll taxes will be going up for everyone in January (a little known part of allowing the Bush tax cuts to expire).

Question: if you are charged – both short term and long term – with getting the economy moving by implementing policies/laws at a national level, how would you go about it?

Well, in the short term you can provide businesses with all the financing in the world, but unless consumption steps up, it doesn’t do anything useful.  Until buyers are buying, businesses won’t be hiring.

So what’s the best way to quickly boost consumption?  Obviously it is to put more money in the hands of consumers.  And one such way to do that is to cut payroll taxes, or, as has been suggested, have a payroll tax holiday.

That, of course, has been rejected by the Obama administration which feels it would “cost” the government to much money.  They’d rather government “cost” the consumer too much money and the consumer stay home as a result one supposes. 

Instead, the administration is proposing a $100 billion “research and development” credit for businesses.  A couple of observations – that’s not a short term fix and not all businesses engage in R&D. 

The point, of course, is the administration is more concerned about the government revenue stream than the economy and it is, as John McCain has said, just “flailing around”.  It is much more concerned with the “cost” incurred by government necessary to actually have some impact on the economy than it is the “cost” it will impose on the tax payer for it’s future multi-year deficit fueled budgets. 

It refuses the other side of tax cuts – spending cuts.  Instead, it simply intends to shift the burden of its profligacy to you.  And these tax cuts are for show only – a way of claiming to do what the GOP wants without really doing much of anything.  When this tiny and piece meal approach fails to get the dead weight of the economy moving, the left will claim to have tried the right’s prescription and that tax cuts didn’t work.

Anyway, the administration plans to “pay” for this tax credit (oh, so now PAYGO is important) by increasing taxes through closing “tax loopholes” for multinational corporations and some energy companies. This, dear friends, is simply another much desired wolf from the liberal agenda in sheep’s clothing.

The National Tax Payer Union points out that those taxes being proposed as “closing loopholes” will actually make our domestic oil and gas business uncompetitive.   It will, for instance, tax all the revenue Chevron earns (both here and overseas) because Chevron is an American based company but won’t do the same to BP (or Venezuela or China) because BP isn’t an American based company.  Unilateral nonsense like that will put Chevron in an unenviable competitive situation.

Make sense?  Especially in times of recession? Can anyone guess what a Chevron may decide to do (hello Toronto, any office space to lease up there?).  And, of course, the taxes in question will be passed along to the hard pressed consumer with increased prices.  That’ll spur increased consumption, won’t it?

The rest of the proposed economic package is the usual failed stuff – increased infrastructure spending.  The only laudable portion of the package is the proposed extension of the middle class portion of the Bush tax cuts.  But again – that doesn’t put more cash in the pockets of consumers, it simply maintains the status quo.

But the “rich” – tough noogies.  You may have seen administration flunkies out pushing the canard that the tax will only effect 3% of the small businesses out there.   The Wall Street Journal blows that bit of spin out of the water – first by explaining the smoke and mirrors the administration used to produce that number and then pointing out what the number really is:

According to IRS data, fully 48% of the net income of sole proprietorships, partnerships, and S corporations reported on tax returns went to households with incomes above $200,000 in 2007.

So, the proposal by the administration to get the economy moving is maintain the status quo taxes on the middle class (no immediate impact), provide a limited benefit (at best a long term impact) cut to some business in the area of research and development, more infrastructure spending (long term because of the government project process), an increase in taxes on American oil and gas companies (immediate negative impact) and an increase in taxes for 48% of the small businesses in America (immediate negative impact).

If that’s not a bad tasting hash of ideas, I’m not sure what to call it.  And yeah, you can bet your bottom dollar it will get the economy moving.

Excuse my sarcasm, but obviously this is “rocket science” to the administration, and they’re totally baffled by it.  Someone, anyone, tell me why the GOP should support this?


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