2009: The Year In California HSR

Dec 29th, 2009 | Posted by

As 2009 winds to a close, it’s worth taking a look at the year past in order to figure out what we have learned – or what we should have learned – about California High Speed Rail. Later in the week I’ll post a look ahead at 2010, and then an assessment of the CHSRA’s work, likely over the weekend. I won’t say much about the CHSRA below, but will have a lot more in that weekend post.

That was the year that was:

The status quo strikes back. 2008 was the year of change. It culminated in November 2008 with some of the highest voter turnout in generations, who gave a mandate for doing things differently. Here in California that included a full-throated embrace of passenger rail, as funding for at least four major projects were approved by voters – not just Proposition 1A for high speed rail, but Measure R in LA County, massively expanding their rail system, Measure B in Santa Clara County, further funding the BART extension to San José, and the SMART train linking Sonoma and Marin Counties.

But in 2009, the defenders of the status quo fought back. While frustrating much of President Obama’s agenda in Washington DC, California defenders of the status quo – those people who are quite happy with a depressed economy, the threat of rising sea levels, and a state dependent on fossil fuels whose price is volatile on a long-term upward trend – mobilized to try and frustrate the passenger rail agenda Californians approved. Defense of the status quo is often made easier during an economic crisis, when those who propose change have fewer resources at their disposal.

The California High Speed Rail Authority wasn’t prepared for this, conceptually or organizationally. However, they have made a series of good moves over the course of 2009 to adapt to the need to present a clearer and more consistent argument for HSR that engages the public to the maximum possible extent.

I would say that HSR supporters weren’t quite prepared for the reaction from the status quo either. Even though I’d been warning of that at this blog in late 2008 and early 2009, it took some time for the unions, environmental groups, and business groups backing the project to grasp this and begin their own organizing to support the project.

2010, as we will see in the next post, will be the year the supporters of change and of HSR strike back.

NIMBYs have too much power. When I was growing up in Orange County, I attended a high school right next to Interstate 5 – and we lost half our front lawn to the freeway widening project in the early 1990s. My parents’ home, where they still live now, backs up to one of the busiest intersections in the city and is a half block from a fire station – we constantly heard loud sirens, screeching brakes, honking horns, etc. But somehow we made do. We didn’t go to the fire department and ask them to turn down the sirens, for example. We understood the purpose and the situation.

Unfortunately, that attitude is not shared across this state. Way too many homeowners believe that the government’s duty is to protect their property values and do so in part by giving them veto power over everything that happens in their neighborhood. Both premises are absurd, but deeply held.

Government’s job is to provide services that benefit the whole population, not cater to the whims of a select few. It’s bad enough that NIMBYs along the HSR route do not understand the ways the project will benefit them – in Palo Alto, for example, the rash of suicides and other deaths can be ended for good, and the city made more whole by grade separations. But our politics and our laws give disproportionate power to them, narrowly defining as “stakeholders” only those who own property near the route, leaving out entirely the riders of current and future systems and others who would benefit from the trains.

NIMBYs are very much part of the status quo defenders described above, and in 2010, HSR supporters will need to organize and mobilize to show local and state governments that there are other residents whose voice deserves to be heard, considered, and included in the HSR planning process.

The feds are there for us – to a point. As we eagerly await the FRA’s decision on HSR stimulus grants, due to be released sometime in January, it’s worth considering how much the federal government has done for HSR this year – more than any other year since Congress funded the high speed Metroliner project back in 1965.

It began in February when President Obama inserted $8 billion in HSR stimulus into the $787 billion American Recovery and Reinvestment Act, revealing a pent-up demand among the states for HSR. In early October over $50 billion in HSR grant applications were submitted, including a $4.7 billion request from California. Ray LaHood has frequently said California is one of the states most likely to get some of that $8 billion.

The bigger question is whether this will be sustained. Earlier this month we learned that the Congress agreed to include $2.5 billion in annual HSR funding in the 2010 budget, a number that wasn’t as high as the $4 billion the House had approved, but is still an important start and a sign that Congress intends to fund HSR over the long term.

Exactly how that will happen remains unclear. In April Obama announced a long-term HSR plan but the funding element is not yet determined. The reauthorization of the federal Transportation Bill has been delayed all year long, has now been kicked into 2010, where it seems unlikely that an election-year Congress will have the appetite to increase taxes to fund anything, even the soon-to-be-insolvent highway trust fund, not to mention HSR. It may take until 2011 to see development of a permanent HSR funding solution.

Private investors make all the difference. The current recession notwithstanding, there is every reason to believe there will be private investors lining up to put their money into a project that has every reason to expect to generate revenue, as does every other HSR route in the world, including the Acela. The question therefore isn’t “will they come” but “under what terms?”

The 2009 Business Plan indicated higher costs for the first phase of the project, owing to the federally-mandated shift to “year of expenditure” accounting. CHSRA proposes – and note that right now it is only a proposal – to make up the difference with greater private investment, and charge higher fares to repay that investment, even if it means fewer riders than previously assumed. Note also that CHSRA projections still show the system will generate revenue at those higher fares, as does Spain’s AVE, another “high fare” system.

But that isn’t an optimal solution. Although this issue became prominent only at the end of the year, we’ve been discussing it here since March, when what I believe to be the most important HSR article of the year was written: DoDo’s Puente AVE. DoDo showed how HSR ridership follows a five year curve, not attaining its potential until the fifth year. This causes problems for systems that overuse private investment, since it’s not usually possible to repay the investors until the 5th year. Taiwan’s HSR system had to be bailed out by the government because it couldn’t repay investors even after hitting its ridership targets. The system was funded 80% by private investors, which wasn’t a sustainable level.

I’ll say more about this in the look ahead to 2010, but the role of private investors was an underreported HSR story in 2009, and will become a major story in 2010.

The state legislature is a broken institution. It defies logic that an institution that sets a national model for fiscal irresponsibility is going to lecture the CHSRA, a body it created, about fiscal responsibility. The California legislature in 2009, a broken institution that was mired in its own financial crisis, was either unable or unwilling to help exercise the kind of leadership on HSR that would match the voters’ support as shown by Prop 1A. Normally legislators fall all over themselves to take credit for something that’s popular with the public. Unfortunately, the state legislature generally hasn’t been willing to do this with HSR.

Instead legislators such as Alan Lowenthal and Joe Simitian have thrown monkey wrench after monkey wrench into the HSR works, saddling the CHSRA with inefficient and inflexible rules and mandates that don’t help get a system this state needs for the future to get built.

2009 was a lost opportunity for the state legislature to step up, as has Congress, in providing leadership to help implement Prop 1A and get high speed rail built. 2010 will need to be a year where this changes, and where legislators actively seek to support a project that will bring desperately needed jobs to their constituents.

CEQA needs to be reformed. Back in November I called CEQA the biggest obstacle to HSR in California. It is a land use planning process that is unable to deliver large infrastructure projects quickly and affordably. CEQA is set up on the theory that government construction projects are bad, are threatening, and that stakeholders are already in a reactionary, even adversarial position. CEQA was written with a 1970s logic, reacting to a 1960s California Department of Highways that really did behave as a giant bulldozer not giving a crap about what anyone else in the state thought of its route choices, neighborhood impacts, or environmental consequences.

CEQA wasn’t designed to promote smart, sustainable growth. It was written to enable people like Gary Patton to have legal recourse to stop projects they don’t like, no matter the reason. The mentality is one that assumes the status quo is just fine, that the cost of doing nothing is actually zero – if a project isn’t built, no problem, we didn’t really need it anyway.

California’s planning process should not be a tool for NIMBYs to stop projects they dislike. It should be a vehicle for public involvement in a project development, and to ensure that a project does not cause damage to the environment. CEQA currently fails to meet these objectives. 2009 showed that CEQA needs to be reformed to meet the environmental needs of the 21st century.

Environmental groups are split between those living in the 1970s and those living in the here and now. Whereas the Sierra Club understands that California’s current reliance on oil is ruinous for the environment, especially as it contributes to climate change, groups like the Planning and Conservation League believe that carbon emissions are just fine, that global warming is no cause for concern, and that the late 20th century model of massive pollution should be sustained in order to stop HSR from going through the Pacheco Pass.

The CEQA process was set up to preserve the 1970s model – no new growth, but sustain the way things are currently done as far into the future as possible. Worsening drought, a more intense fire season, potentially rising sea levels, and other problems should make it absolutely clear to anyone who cares about environmental quality the status quo must change. We must reduce our carbon footprint and shift to sustainable infrastructure as quickly as possible.

Environmental groups that fight HSR are implicitly saying they don’t care if we keep on polluting and spewing carbon dioxide into the air, causing a climate crisis. It’s a ridiculous position to hold, but 2009 showed that it’s still popular in some quarters.

Progress was made on the key project implementation decisions, though the final choices haven’t yet been made. Much of 2009 was spent focusing on the scoping process on the various parts of the project, where public input was solicited across the state on how HSR should be built. In some places the issue was whether a tunnel or above-grade solution should be chosen (Peninsula, Anaheim) and in others the route details were still a bit unclear (such as San José to Gilroy). A lot of this happened below the radar, although on the Peninsula it became a very public process through the use of Context Sensitive Solutions. 2009 therefore will have generated a lot of information and input that will, in 2010 and into 2011, result in the final details of how HSR will be built here.

Some of these decisions may already have been made, such as Curt Pringle’s preference for a tunnel through Anaheim. This would be a very bad and unfortunate precedent. But one of the first things we’ll attend to in 2010 is the situation in Anaheim and getting some clarity on what is happening there and why.

HSR is the only job creation vehicle on the horizon in California right now. That was one of the most consistent messages I heard at an Economic Recovery Summit sponsored by the California Labor Federation earlier this summer. Professors, economists, and labor leaders all agreed that in California, sitting at a higher unemployment rate than anytime in the last 60 years, has pretty much NO meaningful job creation on the horizon except for high speed rail. Back in the Great Depression we built bridges and dams to help alleviate unemployment and provide for long-term growth. In a similar situation, we need to return to the infrastructure well and ensure HSR gets built if California is to have economic recovery.

Some criticize this model of recovery. Most, if not all, of those critics are weathering the recession pretty well. It’s a case of the haves telling the have-nots they can’t have job creation or prosperity.

The media does not understand passenger rail. At all. It’s become pretty clear to me that the media, in California and across the nation, simply has no comprehension of how passenger rail works, what its overall value is, and why it matters. They see it as a curiosity, as something unusual and alien. And that lets them use it as an opportunity to prove to their readers that they can hold government accountable. Even though road projects routinely soar beyond their budgets, and even though California spends billions more on roads every year than we’ll spend on HSR in any given year in the coming decade, we rarely hear about cost overruns and other problems with road projects (the East Span of the SF Bay Bridge is a notable exception to the rule).

The media doesn’t view rail passengers as a significant constituency, so they give more time to homeowners and NIMBY critics than to the people who would regularly use a system. They don’t view rail projects as commonplace or legitimate infrastructure, so they carp about “subsidies” even though the roads and freeways they use daily were built by tax dollars and are heavily subsidized to this very day.

This ignorance leads some of them to become susceptible to HSR denialism such as Edward Glaeser’s discredited attack on HSR in the New York Times earlier this year.

UC Berkeley economist and blogger Brad DeLong is fond of exclaiming “why oh why can’t we have a better press corps?” 2009 leads me to reach the same conclusion about the sorry state of HSR coverage in California mainstream media.

California HSR came one year closer to completion. Despite some of the negative things I pointed out above, on the whole 2009 was a productive year for high speed rail in the Golden State. The debates over implementation have shown the public that this project really will get built, after 30 years of effort. As we enter a new year and a new decade, we’re going to make sure that it is the year and the decade of high speed rail.

Feel free to add your thoughts on HSR in the year just past in the comments.

  1. jimsf
    Dec 29th, 2009 at 17:09

    ceqa needs to be reformed
    media is lost on rail issues.
    im still waiting for the headline “amtrak train hits truck” to read as the more accurate “truck ignores warning, gets in way of oncoming train”

  2. jamiewhitaker
    Dec 29th, 2009 at 17:17

    I’m relatively new to this blog, so this may be something already discussed ad naseum …

    Term limits of our legislators and governor represent a huge impediment to big, multi-year projects like high-speed rail. This project has no champions who will be around in 4-6 years in a similar capacity – they will have found their next ‘gig’ and moved on.

    State and local tax revenues tend to lag … 2010 will be another kick in the teeth to state and local government agencies, and voters will be hard pressed to prioritize funding things that they cannot relate to. I believe the UC student protests of the 30%+ fee increases are just the tip of the ice berg of what may be a year of fights for resources between groups typically allied with one another.

  3. Paul H.
    Dec 29th, 2009 at 19:09

    With a project of this size the name of the game is funding. Funding equals jobs. Those who support the system need a little wind at their backs, and ARRA funds in January might just be what we need to really rally behind the project. Look, it will be built, no doubt about that, we have a champion for HSR in the Oval Office. This was the year of right-wing bitching after their leader for 8 years completely devastated our economy, and this country’s standing with the rest of the 6.4 billion inhabitants of this planet. 2010 will see the conversation change, and I predict it will be the 2010 elections that show the true colors of the GOP. Because really, what have they done to prove to the voters of this country that they should be re-elected? Those in the media that talk of raised ticket fee’s or lower than expected ridership don’t get this project whatsoever. What they do get is obstruction. You look around the world and see other countries with much more stable economies and its partly because of their superior transportation networks.

    I believe our next challenge will be the US transportation bill, which I believe should cover California’s $20 billion need over the next ten years and also help with other HSR systems in Chicago hub, Florida, Texas, and NEC improvements. That’s what HSR advocates should fight for whether it be this year or 2011.

    jimsf Reply:

    amen to that. Obama’s style though, seems to be to make statements (glorified suggestions) and leave it to congress to do all the work. well that’s like the engineer of the circus train handing the controls to the monkeys. I dohn’t know why he is so reticent on things. He doesn’t have what reagan and clinton had. ( no Im not talking about alzheimers and good cigars) if the dems lose in 2010. then what.

    Paul H. Reply:

    I think people underestimate Obama and the Dems campaign abilities and resources. They are
    far greater than that of the GOP. All the republicans have is Fox (right-wing opinion) News. And the
    crazier Fox gets, the better it will be for the Dems. I’m not worried about the 2010 elections at all. The dems lose some house seats, but they will keep majorties in both houses. Regean nor Clinton were didn’t get there status of being great presidents in there first year in office, Obama will get his time in the sun, but the economy is too much in the shitter for that time to be now.

    adirondacker12800 Reply:

    The Congress the Executive branch are co-equal and have specific responsibilities. Spending bills originate in the House. All the President can do is suggest things to Congress.

    jimsf Reply:

    I think Obama is keeping himself removed from issues for two reasons.

    if the dems lose in 2010, he is going to have to rely more heavily on republican support in getting things done.

    If obama aligns himself in too much of a partisan fashion, with pelosi and the dems it could cost him a second term.

    he smart in that sense. but we aren’t getting the bang for our buck we thought we might from him.

    granted things take time.

    he could have repeal dont ask dont tell, and doma. he didnt do either. he never brings it up.
    that is something hed have to do in his second term cuz if he does it in his first term he wont get re elected.
    we are sending more troops to war. not fewer. doesn’t matter to me, but we did think there was going to be a change.

    He hedging on defense, so that middle of the road voters on the fence will say ” well he wasnt a sissy, he did go kick some ass s he’s not all bad”

    Im giving him the whole 4 years to prove himself though. I just want him to stop talking to us, and start making some phone calls down the street and putting pressure on LBJ style.

    TomW Reply:

    Technically, you are correct. However, if the president “suggests” something in the form of a deatield proposal, it will get introduced and considered by the House.

    jimsf Reply:

    well he best get to suggestin’ then. he’s losing his base and if he doesn’t get people back to work in the next 10 months the dems are gonna lose. I hope he can do it. Id love a long 8 year year of pure democratic control to firmly reverse republican policies and to the point the when the reps take control again itll take them years to do any damage.

  4. YesonHSR
    Dec 29th, 2009 at 23:39

    NO they live by the Fox news..Other wise WE would have 30Billion for HSR ..No its for the WAR on freedom…funny how such a small group of people can make thew USA scream ..MY stupid fellow american..c.aaans

  5. Spokker
    Dec 29th, 2009 at 23:41

    Grade separation doesn’t eliminate suicides. There will still be one or two every couple of years to get everybody rabble-rousing again.

    jimsf Reply:


  6. jimsf
    Dec 30th, 2009 at 01:02

    rabble rabble rabble rabble

  7. Elizabeth
    Dec 30th, 2009 at 05:36

    We actually did some work on the jobs number in December. The unfortunate reality is that California is extremely financially constrained. The HSRA’s numbers explicitly assume that California has an unconstrained budget. The analysis is here:

    California’s decision to match federal dollars is turning out to be potentially a major strategic blunder. It more or less wipes out stimulus impact for Californians, as well as causes a lot of problems for AB3034.

    Again, our issue would be that a more complete analysis like ours should have been part of the board discussion if the goal really is to create

    Robert Cruickshank Reply:

    That’s an *extremely* flawed analysis. Wow. Simply stunning.

    Here’s why. First, you didn’t actually examine where the jobs would be coming from. You’re using an assumption about how many jobs will be created per dollar of spending, instead of looking at comparable projects to determine how many jobs it has actually generated in practice.

    Second, you’re making a false choice between bond spending and other budgetary priorities. You assume California’s “fiscal constraints” are fixed. But they’re not. We need more revenue to fund education and health care – even if we didn’t spend another dime on bond service, we still need about $10 to $15 billion in new taxes to solve the structural revenue shortfall.

    Even if we leave that aside, your argument rests on the common fallacy that the cost of doing nothing is zero. It’s not. California will be in perpetual financial crisis unless we can create new jobs. Each new construction job generates new spending in the community, which generates new income and sales tax revenue. No HSR, no new jobs, no fiscal stabilization, no new recovery.

    Where, I ask, do YOU expect new jobs to come from in this economy?

    We learned during the Depression that using bonds for infrastructure spending doesn’t hurt the economy at all. Once construction got underway on the bay bridges, Shasta Dam, and other similar projects, California began to see economic recovery and a decline in the unemployment rate.

    Ultimately your analysis is basically right-wing economics, a claim without hard evidence that government spending hurts the overall economy. It’s wholly without merit.

    Bobierto Reply:

    “Even if we leave that aside, your argument rests on the common fallacy that the cost of doing nothing is zero.”

    Bravo, that’s the crux. We need fundamental structural change in California (and in the US Senate but I’m not sure how to achieve that!). See http://www.repaircalifornia.org.

    Cynthia Ward Reply:

    “We learned during the Depression that using bonds for infrastructure spending doesn’t hurt the economy at all. Once construction got underway on the bay bridges, Shasta Dam, and other similar projects, California began to see economic recovery and a decline in the unemployment rate.”

    Really? Because according to Henry Morgenthau Jr., “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong…somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. ..I say after eight years of this administration we have just as much unemployment as when we started…and an enormous debt to boot!”

    But perhaps Robert knows more about Depression era economics than FDR’s own Secretary of the Treasury. For myself, I prefer to create today’s jobs with something other than my great-grandchildren’s tax burdens, but then i am just a NIMBY.

    jimsf Reply:

    your grandchildren are going to inherit the debt anyway. What you can leave them is a california that is cleaner and has a proper 21st century infrastructure in place so it can compete on the global stage.

    Spokker Reply:

    Hoover was a better Keynesian than FDR. It is a myth that FDR was a Keynesian. He had one meeting with Keynes and neither of them liked each other.

    Here’s what happened. Not only did the New Deal not go far enough in stimulating aggregate demand, but when you factor in all levels of spending including state, impacts on aggregate demand were negative four out of the seven FDR Depression years.

    World War II got us out of the Depression which was, after all, the most massive stimulus in the history of the United States.

    There is good evidence that FDR spent New Deal money where it would get him the most votes, swing states like Nevada rather than loyal blue states like South Carolina. There is less evidence that it actually worked.

    The two lessons here are clear.

    Spokker Reply:

    “I say after eight years of this administration we have just as much unemployment as when we started…””

    This simply isn’t true.

    Here’s the problem with his statement. Work relief jobs were not counted in the official unemployment statistics on the grounds that they were only temporary jobs. However, some economists contend that they are still important because a New Deal job did mean someone was working, taking home pay for their family.

    At the start of FDR’s term unemployment was approaching 25 percent. By 1937 unemployment was around 15 percent using traditional metrics. However, if you add in work relief jobs, the unemployment rate drops to under 10%.

    Then there was a recession in the midst of the Depression, insane huh? Unemployment spiked back up toward 20%. It wasn’t until World War II that unemployment dipped below 5%, but then again, those were just temporary jobs, right ;)

    Alon Levy Reply:

    Morgenthau was factually wrong about unemployment in the Roosevelt years. You can see it in this chart of unemployment in the US. After peaking in 1933, it fell until 1937, when FDR tried to balance the budget out of concerns about debt, against Keynes’ advice. The secondary peak is 1938, at the height of the new depression; afterward, Keynesian spending returned with World War Two.

    There were a lot of people in the 1930s who were deeply ambivalent what to do. Keynes was not ambivalent, but the politicians had to listen to concerns about deficits and to economic theories that didn’t have a solution. The Marxists thought nothing should be done, so that capitalism would fall; the Austrians said that the Depression was a good thing; the institutional economists said the problem was too complex to tackle. Keynesianism became dominant after the war because it was the only theory that had workable solutions to the Depression.

    BruceMcF Reply:

    Cynthia Ward Reply: December 30th, 2009 at 9:12 pm

    Really? Because according to Henry Morgenthau Jr., “We have tried spending money. We are spending more than we have ever spent before and it does not work.”

    Your problem here is that you are working in nominal values, not adjusted for inflation or growth in the size of the US economy. Relative to the size of the US economy, we are not spending quite as much as the strongest spending years in the New Deal – which ameliorated but did not end the Great Depression – and nowhere near as much as we spent at the height of WWII spending, which was, indeed, enough to end the Great Depression.

    Anybody who reads someone saying “We are spending more than we have ever spent before” should be correcting that person, not using them as an authority to try to support a claim that the plain facts will not support.

    Cynthia Ward Reply:

    I’m sorry Bruce, but I am not in a position to correct the Secretary of the Treasury under FDR, a man I assume knows more about what was spent during that period than I do. That quote was from the man himself, on May 9, 1939, during his address to the House Ways and Means Committee. Morgenthau was lamenting the fact that despite the Feds best efforts to spend their way out of the Depression, unemployment in 1939 was at 17.2 percent, up from the 16.3 percent it was at when FDR took the office from Hoover. Federal spending does not correct unemployment, and in fact it hampers recovery as government attempts to creat a false prosperity on borrowed dollars. To promote HSR as an employment program is a short term fix with long term consequences, and I would advise against using that as a reason for building the project. Either it is a good project and we suck up the amount and build it, as something worthy of the investment, or not. But in no way can we see those few short term jobs paid with long term bond money as an economic benefit that anyone in the private sector would promote as feasible.

    Alon Levy Reply:

    unemployment in 1939 was at 17.2 percent, up from the 16.3 percent it was at when FDR took the office from Hoover

    Unemployment wasn’t 16.3% in 1933 – it was 25%. Look it up – my above comment has a link.

    But nice try.

    adirondacker12800 Reply:

    Silly Alon, trying to argue with a zealot using facts…..

  8. AndyDuncan
    Dec 30th, 2009 at 11:04

    Question for Robert (and of course whoever else wants to answer): The argument about maximizing ridership or profit was brought up in the 50%/75%/80% ticket price discussion. My question for those who want the 50% ticket pricing, how do you feel about business/first/green/super green class cars? Wouldn’t those be antithetical to the idea of building ridership?

    Walter Reply:

    Simply put, no. Profit margins are huge on first class travel. I want a cheap ticket, but if someone wants a lot of extras with their ticket, then by all means, let them pay for it. They are keeping train frequencies higher and my ticket cost lower. Ridership will not take a hit from the existence of first class (if it’s at a price where those tickets can be sold). It only stands to drop if low-cost tickets are unavailable.

    jimsf Reply:

    There should and will absolutely be upgrades available at a premium price. this helps keep coach fares lower so more people can ride. the people who want upgrades will be glad to pay for them just like they do now on trains and planes. offering upgrades does build ridership, you have to offer something for everyone.

    BruceMcF Reply:

    Note that if First Class tickets attracts first class passengers who would otherwise not take the train, that’s building ridership too. There may not be a financial incentive to have more than two classes, but there could well be a benefit in distinctive sections, such as no-talking-on-cellphone sections in both regular and first class.

  9. Elizabeth
    Dec 30th, 2009 at 11:04

    Believe me –
    I am no right wing economist. If the argument was – should California invest in all projects that meet a certain ROI, that would be one thing.

    The reality is that California WILL cut spending for any spending on this project. This is not a discussion about the wisdom of such a policy. California’s financial situation is a travesty on many levels and I have thought many times about how to change it and come up with basically nothing.

    It is FACT, not opinion, that construction does not create a lot of local jobs per dollar spent because of the large percentage of modern construction methods that goes to equipment (which already exists) and materials – many of which are not locally produced.

    This causes a lot of handwringing for economists of all stripes. Construction projects generally have big price tags which means that the absolute # of jobs is a lot, but the $ per job is quite high. For example, this year a lot of Fed dollars went to make up for state cuts to education. This saved a ton of jobs. It wasn’t glamorous but it did the trick.

    There is a whole other question about the jobs created from long term economic growth. The CHSRA’s analysis is not actually very helpful. Their model is so messed up that it only showed jobs being created from population growth.

    You would have to have a good model of this – the stuff I have seen is that it is similar to highway spending but somewhat less and real benefits are concentrated in the central business districts like San Francisco that already attract a lot of FIRE (finance, insurance, real estate) businesses. This too needs to be netted against the losses from investments that California will not make – like the 150k spots in the UC system predicted not to exist.

    If this project is done 100% on the federal level, the numbers look very different because projects not funded are much more theoretical. This project comes with California as a key funder however.

    There are plenty of reasons to want to do this project. Short term job creation should not be one of them.

    adirondacker12800 Reply:

    It is FACT, not opinion, that construction does not create a lot of local jobs per dollar spent because of the large percentage of modern construction methods that goes to equipment (which already exists) and materials – many of which are not locally produced.

    That really depends on your definition of local. If they can’t mine gravel for the concrete in Anaheim they will mine it someplace local. Mining gravel isn’t cheap but transporting from the Far East wouldn’t make sense. Same thing with the cement in the concrete they make with the gravel. Some of the equipment exists. They will be buying new too. If the Federal stimulus keeps the assembly line open in the Midwest that’s a good use of the Federal stimulus money.

    Robert Cruickshank Reply:

    You have a frustrating habit of taking your assumptions and claiming they are facts, even though you’ve not offered any evidence to suggest that’s the case. Example:

    It is FACT, not opinion, that construction does not create a lot of local jobs per dollar spent because of the large percentage of modern construction methods that goes to equipment (which already exists) and materials – many of which are not locally produced.

    Prove it. You use terms like “not a lot” – what exactly does that mean? Can you quantify it? In my earlier response I suggested you look at other comparable projects to see how many jobs they created. Why didn’t you offer that evidence? Either you don’t think you have to offer evidence, or what you found undermines your claim.

    Another example:

    The reality is that California WILL cut spending for any spending on this project. This is not a discussion about the wisdom of such a policy. California’s financial situation is a travesty on many levels and I have thought many times about how to change it and come up with basically nothing.

    I don’t know what your day job is. Mine is to think about how to change it and how to implement those changes. I can assure you that California’s financial situation will *not* persist like this. It is going to get fixed one way or the other. While you’re trying to undermine the only source of a significant number of jobs on the horizon, labor unions, business groups, political leaders and other organizations are planning to offer a number of solutions in 2010 to this crisis. Some of them will be dealt with in the legislature through the budget process, others will go to the ballot. One or more of these WILL succeed. Just because you haven’t seen the coalition emerge yet doesn’t mean it’s not there – it’s just coming together behind the scenes.

    In any event, California needs to find more tax revenue. Either that comes through new taxes or it comes through new jobs to pay more of the existing tax. In February 2009 the state raised taxes, and most people didn’t notice. In November 2009, just as in November 2008, well over a majority of the tax proposals on the ballot across the state were approved. So that suggests to me voters will support new taxes, depending on the tax, what it funds, and other specific contextual conditions.

    If new taxes aren’t going to happen, then California has to find new revenue anyway, even before we talk about the HSR bonds. That means new jobs. HSR is slated to provide thousands of them. What else is there on the horizon that’ll offer that? Tell me where those jobs will come from. 37 million Californians are eagerly awaiting your answer.

    You’re acting as if California isn’t in a jobs crisis and that we can afford to just toss aside the possibility of 150,000 construction jobs. Even if the real number is some fraction of that, it’d be a significant and welcome contribution to economic recovery. Perhaps you are weathering this recession just fine and can afford to not take this issue seriously. But since we know from other rail projects across the nation and the world that meaningful numbers of local jobs ARE created, and since you have been consistently unable to prove your extraordinary claims, it’s worth wondering why you’re arguing against government spending to revive the economy.

    As we saw in November 2008, and with consistent polling support for Obama himself and his economic stimulus policies among Californians, your views are not shared by the majority of your fellow Californians.

    jimsf Reply:

    I was watching a very interesting cal channel program last night and well i think it was the treasurer and some, hmmm is it the assembly Im not sure, but I was surprised and glad to see and hear what sounded like a genuine realization that there are structural probs, and that it seems that at least some members are aware they need to start cooperating to cut spending and increase revenues and start producing a truly balanced budget every year, on time because the usual shell games are out of steam.
    I wish I could remember more detail but I came away thinking they (sac) know there is a problem and they are up against a wall and must change.
    that means cuts, but it also mean generating more revenue. they correctly pointed out that californians demand the expenditures we have, yet don’t like to pay for them.
    one idea that came up is that any spending by initiative must come with a funding source attached so that the voter will know where the money will come from.
    of course that has its own drawbacks in terms of flexibility.

    the scariest part is that we actually are behind on needed infrastructure to the tune of 400 billion dollars – to get us to where we should be for the 21st century.

    any one have a spare 400 billion?

    Cynthia Ward Reply:

    “I can assure you that California’s financial situation will *not* persist like this. It is going to get fixed one way or the other.”

    For someone who rips Elizabeth for specifics, you are pretty good at speaking in generalizations. Tell me Robert, how will California come out of this mess? You want new jobs to create more tax revenue, but employers are leaving in droves due to crushing loads of regulation and taxes, which you then advocate for expanding. If you think employers will simply remain in Calfornia and continue to have their livelihoods siphoned off by an out of control State government eager to finance more of their boondoggles, you are clearly out of touch with economic reality.

    Your belief that the Great Train Robbery will create jobs and tide us over until the economy improves has yet to be proven with any sort of reliable numbers and is based on the assumption that something in Sacramento will change so dramatically that employers will return to the State and create new opportunities.

    To the man who insists on facts, I ask, where do you get these numbers from?

    Robert Cruickshank Reply:

    That’s totally untrue – employers are NOT leaving California in droves. This state has lost a lot of jobs over the last 2 years, but so has everyone else – CA’s jobs have vanished, not moved. Most of the states seen as the usual destinations of CA jobs, such as Nevada and Arizona, are themselves facing sky-high unemployment. The notion that regulation and taxes hurt jobs is a standard right-wing myth, even though studies have shown that states that raised taxes during the early 2000s recession not only didn’t suffer as a result, but posted better job and growth rates during the boom years than states that did not increase taxes.

    More importantly, you claim to speak for California business when they themselves are strong supporters of high speed rail. The California Chamber of Commerce, a very right-wing organization itself, is backing HSR alongside the Sierra Club and the California Labor Federation. Groups like the Bay Area Council, whose board includes 200 of the state’s largest companies including Google and Chevron, are very strong supporters of HSR, and have joined other business advocacy groups, chambers of commerce, and labor unions in supporting HSR by creating the Alliance for Sustainable Transit and Jobs. So it’s rather odd for you to be claiming to speak for business’s interests when their own voice says “build HSR! We love HSR!”

    As to the state budget and finances, my point is that it will be resolved one way or another. Either the state increases taxes to help fund economic recovery through restored public services, or we privatize everything in sight. One of those outcomes WILL happen. The present state of limbo is not going to continue indefinitely. There is quite a lot of money being spent and organizing happening behind the scenes on this, and the 2010 elections will do much to determine which outcome the state embraces.

    Alon Levy Reply:

    Actually, on the state level, high state taxes and spending are correlated with less unemployment and less distress in this recession. So whatever the cause of California’s problems is, it’s not big government.

    More precisely, Kaiser State Health Facts has data on per capita state taxes and spending before the recession. It also has data on unemployment and three distress indices: year-on-year rise in unemployment, foreclosure rates, and increase in food stamps eligibility. You can make a 2*4 matrix of correlations, and in all eight cases, bigger government correlates with less distress; almost all of the eight correlations are significant at the 90% level, and one is significant at the 95% level.

    BruceMcF Reply:

    “If this project is done 100% on the federal level, the numbers look very different because projects not funded are much more theoretical.”

    Projects not funded at the Federal level because of finance constrains are just a different way of saying that the decision was made not to do them – while the national government faces real and growing resources constraints in energy and a growing range of other imports that we have become dependent upon, the CA-HSR project is a net saver of those resources over time so the federal government does not face a binding constraint in making the investment.

    And whether the project is done 60% Federal or 80% Federal on the federal level, we are only now recovering in GDP – and not yet recovering in unemployment – from a recession fueled in part by an oil price shock, and the Californian economy is no more insulated from further oil price shocks than any other large US regional economy. Our nation’s two deepest recessions since WWII were both in the aftermath of the two steepest oil price shocks we have faced.

    The idea that California should be building new roads now, while at the same time canceling the CA-HSR because even though it is more cost effective than equivalent interurban road capacity, because California “can’t afford the ROI” suggests an assumption that 2006-2009 were once-in-a-lifetime outliers never to be repeated, and our economy will return to conditions of the twenty years following the Saudi’s opening the spigots in the early 1980’s.

    And that is a reckless assumption indeed.

  10. peter
    Dec 30th, 2009 at 12:54

    California unemployment is improving, but conditions vary throughout the state according to this heat map:

  11. HSR
    Dec 30th, 2009 at 13:10

    Hoping someone can help me understand if the following bill put forward by Darrell Issa (District 49) has the potential to complicate/block rail construction through Southern Riverside (Murrieta HSR stop) and/or Northern San Diego County (Escondido HSR stop).

    Text of H.R. 4304: Beauty Mountain and Agua Tibia Wilderness Act of 2009


    H. R. 4304

    To designate certain Federal lands in San Diego County, California, as wilderness, and for other purposes.
    December 14, 2009
    Mr. ISSA introduced the following bill; which was referred to the Committee on Natural Resources
    A BILL

    I’m not familiar with this area and have come across only a partial map of region in Issa’s bill here:

    Darrell Issa has never been an environmentalist type, and has been all over Fox News and Twitter ranting about how his constituents are suffering from high unemployment, yet he seems to be doing all that he can to keep his constituents unemployed.

    His district runs right along side the proposed Murrieta and Escondido stops, yet his office has given all indications so far that he is against the HSR project. His constituents are largely low information voters, so they would have no idea if he were in fact denying them potential jobs by blocking the project in and around his district.

    Any insight from those familiar with the land area and its relation to HSR, if any, and Issa’s bill mentioned above would be greatly appreciated.

    Joey Reply:

    Oh FFS it’s right along I-15

    jimsf Reply:

    I can explain it. He’s a southern california republican who represents very wealthy constituents, who don’t want icky people having access to their bucolic living arrangements.
    They are part of the rancho mirage, san clemente, etc, bunch. they’ve been around forever. They people in their districts who are unemployed, are only there to be the help. They don’t want them getting good jobs. This has been the case in socal forever.

    you know, just like orange county had to sacrifice santa ana so they’d have a place for all the help to live.

    thats the way they think. They arent’ envirnomentalists. They simply use whatever tools they have to to get their way.
    Thats why when you walk passed a republican, you have to run home and shower right away.

    HSR Reply:

    I agree. I’m trying to figure out if H.R. 4303 is one of those tools. The only map that I could find so far (posted above) is cut off to the west, so I cannot tell whether the region to be considered protected includes the west side of hwy 15 where HSR would likely go.

    Below is a link to Issa’s district. The majority of his constituents are military, low income, rural, and hispanic. Those in the Lake Elsinore, Wildomar, Murrieta, area are in desperate need of jobs.


    After the last election, Issa vowed to stop bringing “pork” home to his district (never stopped him before). His district deperately needs help. While Stimulus $s went to some neighboring districts, Issa’s saw so little. He intentionally denied funding for his voters.

    The purpose of my original question was to determine whether or not he’s gone a step further to make life suck even more for his constituents. I wouldn’t put it past him. I hope that I’m wrong.

    HSR Reply:

    Hmmm, tried to reply to your comment, but my post got disappeared.
    Looked through posting rules, and I don’t seem to be breaking any. Any thoughts for the newb here?

    Alon Levy Reply:

    You need to refresh the page between comments; otherwise, it will look as if your comment was submitted, where in fact it wasn’t. If you’ve just posted a comment, and you’re going to submit another comment on the same thread, then the system will only recognize your CAPTCHA if you refresh. If you see the same CAPTCHA as for the previous comment, already filled, then it’s a sign you should refresh. If you see a new CAPTCHA, it’s fine.

    BruceMcF Reply:

    There are three little buttons in the reCAPTCHA box – an arrow loop, a loudspeaker, and a question mark. Hit the arrow loop, it gets a new CAPTCHA and once you type that in you are good to go.

    HSR Reply:

    Thanks for the tips. When I posted a reply to jimsf, my comment appeared as expected but disappeared upon refreash. When I attempted to repost, I received an error message stating that I had already posted the same message and, therefore, could not post this message again.
    Perhaps, my post contained something considered spam by the system, especially since I’m a newb to the site.

    jimsf Reply:

    this map does not show it in the way though.

    jimsf Reply:

    i think its not a problem for hsr.

    Walter Reply:

    I can’t see an HSR route between Murrieta and Escondido that does not follow I-15 very closely. Sending it along CA-79 through Radec (whose existance I only just became aware of thanks to Google Maps-ing this area) seems ridiculous. We should be okay.

    HSR Reply:

    Digging further, I agree, but I will keep my eye on this just in case. Perhaps, Issa has turned altruistic afterall (unlikely, IMO) or this Agua Tibia Wilderness expansion somehow just aids SDG&E with their high-voltage transmission line project that was denied back in 2002. Who knows. Don’t think power lines would interfere with HSR routes, but I’m just the newb here.
    Thanks for all the replies.

    In case anyone is interested (PDF page 15).


    San Diego Gas & Electric (SDG&E) recently proposed a new
    high-voltage transmission line through the Cleveland National
    Forest, near the Morrell Canyon hydro project. The proposed
    Valley-Rainbow Interconnect (VRI) power line would cut
    through the Wildhorse potential wilderness, ruin scenic views
    and a popular hanggliding area, and could destroy critical
    habitat for the endangered arroyo toad, threatened California
    red-legged frog, and threatened California gnatcatcher. It also
    could impact rare oak savanna and vernal pool habitat in the
    Santa Rosa Plateau Ecological Reserve. An alternate route would
    cut through the existing Agua Tibia Wilderness in the Palomar

    Although the original backer Enron pulled out in February
    2001, the Federal Energy Regulatory Commission (FERC)
    issued a preliminary permit for the Morrell Canyon hydroelectric
    project to the Elsinore Valley Municipal Water District.
    Despite overwhelming local opposition at public hearings, the
    U.S. Forest Service is considering a permit for the project, now
    promoted by Nevada Hydro.
    After several proposed power line routes met stiff resistance
    from Temecula Valley officials and the Pechanga Indian tribe,
    U.S. Representative Darrell Issa introduced legislation in
    September 2002 to route the Valley-Rainbow Interconnect
    through the Cleveland National Forest instead. The bill failed.
    In December 2002 the California Public Utilities Commission
    (PUC) rejected the VRI power line as too costly to ratepayers
    and not needed in the next five years, and found alternate
    routes that would go around the Cleveland. In January 2003,
    SDG&E officials formally asked the PUC to reconsider the route
    through the Cleveland, in preparation for a lawsuit. Rep. Issa is
    expected to reintroduce the bill in Congress this year.”

  12. jimsf
    Dec 30th, 2009 at 16:15

    hot newish vid ( have we seen this version) of tbt just posted on curbedsf more detail

  13. jimsf
    Dec 30th, 2009 at 16:39

    you have to see this city tunnel vid just for the awesome narration voice

  14. jimsf
    Dec 30th, 2009 at 16:53

    and its not high speed but they did it and Im shocked they finally did!

  15. Brandon from San Diego
    Dec 30th, 2009 at 18:48

    This does not affect CHSRA… this is more inland… northeast or east of Escondido…. more rural.

    And imo… San Diego County republicans are a bunch of tools. Half the dems are too. Truely stupid people.

  16. Cynthia Ward
    Dec 30th, 2009 at 20:55

    Robert says, “Some of these decisions may already have been made, such as Curt Pringle’s preference for a tunnel through Anaheim. This would be a very bad and unfortunate precedent. But one of the first things we’ll attend to in 2010 is the situation in Anaheim and getting some clarity on what is happening there and why.”

    I am in the dark here, but keep in mind I am new to this issue. When and where did Curt express a preference for a tunnel through Anaheim? I tried to pin him down and only got the asnwer that legally he has to consider all alternatives, and cannot commit to one.

  17. Richard Mlynarik
    Dec 30th, 2009 at 21:03

    Cynthia Ward :
    I am in the dark here, but keep in mind I am new to this issue. When and where did Curt express a preference for a tunnel through Anaheim? I tried to pin him down and only got the asnwer that legally he has to consider all alternatives, and cannot commit to one.

    That’s the correct and only legal position for a person in his position to take.

    Contrast for example with the illegal and blatantly and typically corrupt lobbying contra Altamont by Rod “Father of VTA Light Rail” Diridon before and while the the Bay Area DEIR was in circulation.

    Say what you will about Quentin Kopp, but at least he has the legal judgment and basic intelligence to do his complete screwing over the public interest off the record and behind closed doors.

  18. Tony D.
    Dec 30th, 2009 at 21:36

    Remember back in November when (I believe in Virginia) the GOP won the governorship and the press blew it up by claiming the Republicans were mounting some great comeback and the Dems and Obama were doomed. Seems all rather silly now, doesn’t it!

    I think we do the same thing locally (Bay Area) with NIMBY’s. A small, rich minority who don’t give a damn about anyone else but themselves cry loudly, the local press blows it up as some great opposition, and all of a sudden they’re labeled as “having to much power” and influence. Nothing could be further from the truth. Other than maybe forcing an EIR to be simply amended and studied further, they haven’t influenced $hit and won’t stop this all to important project for California’s future!

    In 2010, we need to stop giving them so much attention and focus more on 1) implementing our future HSR system and 2) the progressive majority who support HSR. Happy New Years to all and we’ll talk again in 2010!

  19. jimsf
    Dec 30th, 2009 at 23:01

    QUICK! someone put a train in herebefore its too late

    Joey Reply:

    If only rail tunnels were that cheap…

    jimsf Reply:

    I know I was thinkin, only 350mil build two more and lets go!

    adirondacker12800 Reply:

    Water tunnels don’t need track, signals, ventilation, emergency evacuation routes etc. And a 12′ tunnel isn’t big enough for trains unless you want to put one of those trains the model railroader put in their garden. One big enough to put passenger trains into and that’s safe for the passengers would cost a bit more.

  20. jimsf
    Dec 31st, 2009 at 01:43
  21. Elizabeth
    Dec 31st, 2009 at 06:07


    Whatever hopes you have for effecting change in California, the CHSRA should not be providing job estimates based on a potential future reality.

    CHSRA estimates should reflect the current law. Within the program level EIR, they specifically discuss the issues with a constrained budget and then go on to ignore them. If they want to produce a second set showing the difference between a constrained budget and a nonconstrained budget, go for it.

    In the meantime, the numbers are simply inaccurate and misleading.

    Robert Cruickshank Reply:

    Once again, you’re asserting something is true without demonstrating it is true. If you want to call the numbers “inaccurate and misleading” you need to show your work.

  22. fremont
    Dec 31st, 2009 at 08:58

    Haven’t seen anything posted yet on Kopp’s proposal to assemble the trainsets at the soon to be closed NUMMI car plant in Fremont. Any thoughts? It’s a huge place, I think 150+ acres. Set up for the linear production of cars, so not a lot of clear span like you would see for airplane assembly. Right off an active rail line, and on the accesible side of the BART extension that is underway. Not on the current hsr line, but might be on the altamont hybrid line, in any event it would be easy to tow the trainsets 8 miles to the San Jose station upon completion. Would this also make a good location for norcal light maintenance shop?

    Alon Levy Reply:

    Maintenance yards should be accessible from the mainline on electrified trackage owned by the HSRA, as close to the terminals as possible. Eight miles is too far away, and putting the yards by San Jose rather than LA, Anaheim, or San Francisco means deadheading a lot of trains for tens of miles.

    adirondacker12800 Reply:

    Makes a lot more sense to assemble the trains in plants that already exist and tow them cross country. Those plants could wedge the medium sized order California will be placing in between the stuff they do for their larger customers.

    Alon Levy Reply:

    Towing runs into problems of curve radii and gauge tolerance. For example, the Altoona horseshoe curve is too tight for some HSR trains.

    They’ll probably send the trains by truck or on top of flatcars. Or they’ll manufacture them abroad and send them on barges.

    adirondacker12800 Reply:

    Not sending them through Altoona solves the Altoona curve problem and that’s only if they go with Rotem/Hyundai in Philadelphia. If the train gets assembled in Hornell it’s not going through Pennsylvania until it gets to the Erie area. If it’s assembled in Yonkers it’s going to go through Selkirk Buffalo and Erie. If they use one of the plants in the Midwest it’s definitely not going through Altoona.

    Manufacturing cars in Europe means sending the parts from all over the world to Europe, assembling them using high wage Europeans and shipping the cars across oceans. That’s expensive. A lot easier to ship the parts from all over the world to North America to be assembled by low wage North Americans and avoid the expensive ocean voyage for the assembled train. I’m sure the inspectors at the FRA would love it. A trip to France or Germany is a lot more exciting than a trip to Hornell or Yonkers.

    Alon Levy Reply:

    Curve radii may not be a problem on the New York Central route and in the Midwest, but gauge tolerance is. High-speed trains are designed for a gauge of 1,435±1 mm, not 1,435 +25/-13 mm. That reason alone may force the use of trucks or flatcars.

    I’m not sure labor costs at the plants in the US are lower than in Europe, what with the health care markup. The Yonkers plant employs non-union workers, and I presume the other plants serving the MTA have to

    adirondacker12800 Reply:

    The problems of building them outside of the Navel of The Universe a.k.a. California, where ever that turns out to be, aren’t insurmountable. Flat cars or well cars make almost all of the problems disappear. EMD and GE ship much heavier locomotives all over the world. Bombardier ships ALP locomotives to the US so ocean shipping isn’t a problem. Shipping parts versus shipping whole cars along with Buy-American restrictions are probably going to make building in North America very competitive. “build a new plant in high cost California for a one time order”, which is what gets the California foamers all frothy, isn’t going to be competitive.

  23. Elizabeth
    Dec 31st, 2009 at 10:16

    Read the program level EIR I linked to. Read the Highway Study I linked to. Here’s an article on 1-215 widening $800 million = 450 to 600 jobs for 4 years http://online.wsj.com/article/SB125418210352347873.html

    There is extensive BEA data at http://www.bea.gov/industry/gdpbyind_data.htm. BEA has also done work on regional differences. In general, California is an expensive place to do anything. Not as bad as Alaska, but still very expensive.

    As I mentioned, there is a lot of variance in the number employed based on how/ where materials are sourced. In general though, the increased productivity of industry means that the worker intensity goes down every year. Then there are things like fuel costs that almost all end up just being stimulus for the Middle East.

    This is in direct opposition to service industries like health care and education where the employment numbers are much easier to calculate.

    I would encourage you to get the CHSRA to release more precise budget numbers which will allow more precise measurement of numbers. I’ve actually requested (but not yet received) average billing rates for the private consultants. I’m quite comfortable that planning at PB rates will not create more than the ratios given in the memo.

    Alon Levy Reply:

    Does widening a highway create the same number of jobs per dollar spent as building a railroad? I imagine the kind of infrastructure built is different, so the numbers could be very different in either direction.

    Elizabeth Reply:

    When they do detailed numbers for different types of construction projects, the numbers do vary somewhat but not by as much as you might think.

    Trying to calculate the numbers for state specific jobs is actually pretty hard to do precisely for any project, particularly one that is still fairly early in the planning stage, which is why almost everyone ends up using multipliers.

    The HSRA hasn’t released its methodology for job creation, but it almost certainly comes from some sort of multiplier software. The only mention they have is on page 110 of the biz plan, where they say its complicated but you can estimate the number by saying 20,000 direct and indirect jobs from $1 billion of construction spending.

    I’m not an engineer but the meetings I’ve been to indicate that the public works portion is a lot like road construction. A significant portion of the cost will come from actual road projects (many of the grade separations), another chunk utility relocation and a lot will be bridges/ embankments and another big portion tunnels where things like the boring machines will be a big piece. Then of course is all the land and specialized rail equipment.

    Some of the materials like concrete are produced locally. Gravel will be local, although a lot of the cost will just be the gas to bring it onsite and the gravel itself (as opposed to the workers operating the machinery to put into trucks or drive the trucks) . Others like steel are really not produced in California – think of the Bay Bridge and how every time there is some special part it was made in Arizona or China or someplace else.

    The point we are trying to make is that people drooling over stimulus dollars need to step back and realize, that as far as the next couple of years ago, this is not likely to be a jobs machine.

    One interesting side note is that the research I did clearly showed some of the cost of the long term loss of heavy manufacturing to a state’s ability to stimulate the economy with construction projects.

    Elizabeth Reply:

    Here is an interesting article on a 1/2 mile tunnel they are digging for the Washington Metro http://www.washingtonpost.com/wp-dyn/content/article/2009/10/17/AR2009101700716.html

    It will cost $85 million and take almost 2 1/2 years to complete. At its peak, it will employ 70 laborers and a dozen engineers, a hand picked crew from around the world. (It does not say how many people on average will be working). It will use machines that are just as global:

    ” Like the laborers and engineers that drive them, the electricity-driven machines come from far-off places and have exotic names to match: the ITC 312 “knuckle boom” from Germany; the Putzmeister Sika PM 500 from Spain; the ETC18, a.k.a. “drill jumbo,” from Sweden, a colossus that can bore through anything from bedrock to clay, Cerulli says. They’re impressive. But, as Cerulli notes, “every one is operated by one or two guys.””

    Alon Levy Reply:

    $85 million for a half-mile tunnel is a bargain. In most first-world cities I’ve checked, a half-mile of subway costs $200-400 million. Sure, you can employ more people than 70 laborers and a dozen engineers, but that raises costs to the New York level of $1.3 billion per half-mile.

    adirondacker12800 Reply:

    I think the 85 million is for the tunnel itself. Before they do things like put in tracks and signals and doesn’t include ventilation etc.

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