Human beings are restless. Even at the point of our greatest success, we are often unable to leave well enough alone. We repeatedly seek to shake things up.
Last October, The Economist did a cover story on the US economy entitled “The Envy of the World“. The US was outpacing almost all other developed countries, often by a wide margin. Flash forward to 2025, and we seem determined to blow up the international trading system that has contributed to our prosperity.
Another example is occurring in California, a state that is home to many of the richest corporations on Earth. Our relatively high income tax rates generate a firehouse of revenue from places like Silicon Valley. In poorer states, tax money would be allocated more carefully, to insure a basic level of public services. Because California has far more money than needed for these basic services, they’ve decided to waste vast sums on a high-speed rail boondoggle.
The plan originally adopted by voters in 2008 called for a high-speed rail line to be built between LA and San Francisco, by the year 2020. To no one’s surprise, the cost estimates have escalated, even as the project has run far behind schedule:
The project’s price tag now exceeds $100 billion, more than triple the initial estimate. It has mostly been funded by the state through the voter-approved bond and money from the state’s cap-and-trade program. A little less than a quarter of the money has come from the federal government.
The authority has already spent about $13 billion.
And not a single mile of track has been laid. But it gets worse, much worse. The state has now abandoned the goal of building high-speed rail between LA and San Francisco. The new plan calls for the high-speed rail line to be built between Palmdale and Gilroy:
Finishing the line in the Valley is just the first step. Next, the train has to extend north toward the San Francisco Bay Area and south toward Los Angeles. Choudri’s goal within the next 20 years is to build to Gilroy, about 70 miles (113 kilometers) southeast of San Francisco. Under current public transit, it would then take at least one more train transfer to get into the city.
Southward, he envisions building to Palmdale, 37 miles (60 kilometers) northeast of Los Angeles. From there, it takes more than one hour to drive or two hours on an existing train line to reach Los Angeles.
Technically, it would still be possible to take a series of trains from LA to San Francisco, but it would take more like 7 hours, rather than the promised 3 hours. In the unlikely event that this project is completed in 2045, almost no one will take the train (actually series of trains, with transfers.) I can fly round trip from Orange County of Oakland for $80 in one hour each way; why would I take a 7-hour train trip at a far higher price?
So why did this fiasco occur? In a sensible world, the authorities would have figured out a plan before starting construction. At some point they would have discovered that the project was infeasible, and abandoned the idea. But the actual goal was not a high-speed rail line; it was funding lots of contracts building high-speed rail lines. That project has succeeded. For the contractors, Palmdale to Gilroy is just as good as LA to San Francisco. Thus they decided to immediately begin constructing the line in order to present “facts on the ground” that would make it less likely that the project was abandoned. To be clear, on a cost/benefit basis it still makes sense to abandon this project, even after $13 billion has been spent, because the actual costs will undoubtedly vastly exceed the current $100 billion estimate.
Early on, the French were brought over to help build the line. They were so appalled by the incompetence of the California officials that they left in disgust. They shifted over to Morocco where they built a high-speed rail line that is already up and running.
PS. Off topic, in a recent post I discussed how the Trump effect had shifted the Canadian election from the Conservatives to the Liberals. The post ended by suggesting “Up next, Australia”.
Here’s today Financial Times:
Anthony Albanese has ridden a wave of anti-Trump sentiment to win a landslide second term as Australian prime minister, just three months after polls suggested he faced a humiliating defeat.
Albanese has become the first Australian prime minister in more than 20 years to claim back-to-back victories and the first Labor leader to achieve that feat since Bob Hawke in 1990.
Labor needed 76 seats to form a government and was projected to win almost 90 seats as the count continued.
The pendulum effect in action. Canada, Australia, where will it hit next?
