The Economist Issues a Reality Check to Rail Privatization Proponents

The Economist’s blog on business travel, Gulliver, has a short post this morning about Rep. John Mica’s proposal to privatize the Northeast Corridor. Blogger “N.B.” has a healthy dose of skepticism for arguments on either side but does significantly more damage to Mica’s argument that that of his opponents. Gulliver strikes a blow at the very idea that private companies can accomplish what Mica hopes they will:

Surely the congressman is aware that most high-speed systems elsewhere in the first world were built with enormous investments of government money (not to mention exercises of government power, including eminent domain seizures to find land for new routes).

Major infrastructure projects, be they airports, highways, or railroads, are more often than not undertaken with significant government support. Privatisation of established rail lines has been successful before and can be again. But Americans shouldn’t trick themselves into thinking that private investors will willingly foot the bill for massively upgrading the nation’s high-speed rail infrastructure.

The post also questions the anti-privatization argument that the proposal would leave less profitable routes without an important source of funding. “Economics, not nostalgia or politics, should determine where Amtrak operates,” N.B. writes. “Right now, it’s often the opposite. Is it really necessary that Amtrak service Dodge City, Kansas (pop. 27,340)?”

Of course, the blog also says the obvious: this proposal isn’t going anywhere. House members can argue about it all they want, but the Senate isn’t having it, and neither is the president. It was wise of Mica to introduce the bill separately from the rest of the reauthorization, to avoid the risk of letting this controversial idea sink the rest of the bill.