Tim Geithner Speaks Out In Support of High Speed Rail
We know that high speed rail has strong support from the Obama Administration. Both President Barack Obama and Vice-President Joe Biden made it a part of their 2008 campaign and have returned to it several times in office. Transportation Secretary Ray LaHood has taken a lead role in helping support HSR projects around the country.
What was unexpected – and could potentially be very important – is that support for HSR extends to the Treasury Secretary, Tim Geithner. Geithner has become one of the most important and powerful figures in the Obama Administration, directing government economic policy as Wall Street’s man in the White House. Geithner has made sure that Obama’s economic policies benefit the big banks as much as possible, even at the detriment of the economic recovery of the rest of the nation. Because of his relationship to Wall Street, and because he holds such sway over the Administration’s economic policy, his support counts for quite a lot.
So it was a bit of a surprise – but a welcome surprise – that Geithner spoke so strongly for HSR at a Commonwealth Club event in Palo Alto yesterday:
U.S. Treasury Secretary Timothy Geithner told a group that he supports California’s high-speed rail project. He says it gets his vote because it will create jobs for residents, especially construction workers.
“It has the benefit of getting some of the people hardest hit by the recession, people manufacturing autos and construction, back to employment,” Geithner said….
The cost has been estimated at more than $40 billion, but Geithner said that will likely be money well spent.
“Investment in public infrastructure, in transportation, is a very good investment,” he said.
Now there are those HSR critics and deniers out there who are convinced that Wall Street simply won’t fund HSR projects. Geithner’s comments should indicate that’s not necessarily true. Geithner’s primary policy motivation is to do what is best for Wall Street. If he thought HSR was a bad investment or a bad use of money, he’d have said so, and would not have spent his time making a defense of HSR in such a public way.
While this doesn’t mean Geithner will go to his pals at Goldman Sachs and tell them to open up the purse strings for HSR, it does mean that high speed rail has an important advocate who is taken seriously by both Wall Street and the powers that be in Congress. Much depends on who controls Congress after the November 2 election, but if Democrats can hang on, then we might just see the right conditions for long-term federal funding of HSR. Especially if we can get Geithner to act on his words of support.
Off-topic, but haha.
http://www.youtube.com/watch?v=mgGnNUj7aME
Don’t let anybody on Stone Pine Ln. see this. They might have a heart attack.
jimsf Reply:
October 20th, 2010 at 5:06 am
of course the PA version should be a little taller.
Robert Cruickshank Reply:
October 20th, 2010 at 8:10 am
Would be interested to know what the land values are around that aerial structure. My understanding is that land values in Albany near the BART aerial and the Rockridge neighborhood near the huge Highway 24/BART aerials are still quite strong. Rockridge itself is a thriving and prosperous neighborhood, even with 40 years of the aerial structure.
The people flipping out about aerials on the Peninsula are merely whining about aesthetics. Such complaints have no place in the discussion of major infrastructure projects.
Ted Crocker Reply:
October 20th, 2010 at 9:17 am
“The people flipping out about aerials on the Peninsula are merely whining about aesthetics. Such complaints have no place in the discussion of major infrastructure projects.”
And on that we will never, ever agree. Plus, let’s be clear, they are whining about a hell of a lot more than aesthetics.
adirondacker12800 Reply:
October 20th, 2010 at 5:46 pm
THey aren’t whining about whether to use 25kV AC or 3kV DC or if the track should be standard guage or another. Or if reinforced concrete is the way to go or maybe simpler steel trusses. What exactly are they discussing besides the aesthetics.
Ted Crocker Reply:
October 22nd, 2010 at 9:49 am
Standardization between Caltrain and HSR for one.
Peter Reply:
October 22nd, 2010 at 10:08 am
Exactly who is whining about standardization of Caltrain and HSR? You and maybe CARRD are the only ones against HSR who I can recall complaining about standardization. Pretty much everyone else against the project is whining about aesthetics and the alleged effect thereof on their property values.
On the other side of the debate, people are arguing HEAVILY to make Caltrain and HSR compatible.
Spokker Reply:
October 20th, 2010 at 2:03 pm
They could be suffering every day, unable to move because they can afford no better.
They could have also gotten used to it. I see a sound wall on the structure. Residents could have soundproofed their windows. I’m cautious to soundproof windows because if someone screams for help outside you are less likely to hear it, but in relatively low crime areas it shouldn’t be as much of a risk.
I live next to a busy street. It’s amazing how many people have very loud vehicles. Motorcycles are especially bad. Car alarms go off hourly. The hydraulics of the bus are clearly audible. I have found that white noise helps considerably. I always have a little oscillating fan on. I only notice the noise when I’m listening for it.
J. Wong Reply:
October 20th, 2010 at 8:12 pm
“The people flipping out about aerials on the Peninsula are merely whining about aesthetics. Such complaints have no place in the discussion of major infrastructure projects.”
They shouldn’t be worrying about aesthetics at this point in the process. Yes, it would be wonderful if it all could be “out-of-sight, out-of-mind”, but they already have the current Caltrain ROW so it shouldn’t be any worse, and we really can’t afford tunneling or even trenching. That said, once the aerial is decided on, then you can worry about the aesthetics. I expect that the CAHSRA will be much more accommodating in going the distance to make it aesthetically pleasing to the residents.
dave Reply:
October 20th, 2010 at 8:25 am
I think the houses underneath the structure have the best view. They look out one side, not train, they run across the house look out and no train.
James Fujita Reply:
October 20th, 2010 at 3:23 pm
If anybody is interested, that neighborhood is in Odawara, ancient castle town, great place to be if you’re headed for Hakone National Park. Hakone is famous for its relaxing onsen (hot springs).
I don’t know anything about that specific neighborhood, but I suppose it would help if you had Hakone in your backyard… maybe that’s what’s wrong with the Peninsula, they don’t have hot springs….
ot also
The Belgians presentation
http://democrats.assembly.ca.gov/members/a17/ppt/HSL_environment.ppt
rafael Reply:
October 20th, 2010 at 6:16 am
Belgium is a very densely populated country with high taxes and low defense spending. It’s not surprising that it can afford to spend fairly lavishly on mitigating access, visual, noise and vibration impacts.
Note how they built a nearly complete enclosure for HSR tracks running at grade between an existing freeway and a forest, just to mitigate noise impacts on wildlife!
Joey Reply:
October 20th, 2010 at 9:00 am
They also manage to do it for less money per mile than CHSRA is planning to spend on the easiest segments.
OT: Proposal for direct service London to Germany via Channel Tunnel (Midwest HSR link):
http://mwhsr.blogspot.com/2010/10/inside-of-ice-train-in-london-stronger.html
jimsf Reply:
October 20th, 2010 at 5:02 am
Those wacky europeans… all goin’ and doin’ stuff the right way and everything.. God forbid we do anything so bold and sensible around here. Fast convenient network of transportation and all, ha! We won’t hear of it.
BMF From San Diego Reply:
October 20th, 2010 at 6:24 am
You are right. In fact the California version of proper planning is to assure the system is so compromised that quality and safety has to take a back seat. There should be zero sharing of track with freight and other slow heavy clunky trains.
YesonHSR Reply:
October 20th, 2010 at 8:53 am
Just got back from the UK ..after riding the Euro star to Paris for the day leaving and departing in beautiful train stations without touching a car or cab I cannot believe all the backward mindless thoughts on high-speed rail in this country.. guy is right about high-speed rail will be a huge economic benefit for California. Millions of people will do just what I did and travel up and down the state just for the day in comfort. We really cannot let these naysayers and the NIMBYS and all the other backward reasons not to build the system..
Ted Crocker Reply:
October 20th, 2010 at 9:29 am
Seemingly minor issue at this point, but why haven’t they standardaized the stopping mechanisms/systems (red button versus red lever)? Seems like a no-brainer for design streamlining.
thatbruce Reply:
October 20th, 2010 at 1:07 pm
I’m guessing that there is a French decree saying that the ‘all stop’ button shall be big and red and located on the left, and the matching German decree puts it as a red lever on the right. But without input from drivers trained on one or the other, this is just a guess.
jimsf Reply:
October 20th, 2010 at 3:41 pm
It was actually Napoleon who decreed the large red left hand stop button for all high speed trains back in 1799.
rafael Reply:
October 21st, 2010 at 5:37 am
Able was I ere I saw Elba…on the left, always on the left. Sacre Dieu, toujours ces allemands ;^)
I wouldn’t say Mr. Geithner is taken serious by Congress, as many in Congress have called for Tim Geithner’s resignation over the past year. Regardless, this is good to see but I wish Mr. Geither and Larry Summers advocated such robust spending when the Recovery Act was being debated during the beginning of Obama’s administration.
What do Congress members know about financial matters?
Elizabeth Reply:
October 20th, 2010 at 7:19 am
Is that a serious question?
Joey Reply:
October 20th, 2010 at 8:58 am
In light of the recent past, I think it could be semi-serious.
Missiondweller Reply:
October 20th, 2010 at 8:59 am
Yes, and the obvious answer is very little.
Collectively they know virtually nothing about real things outside of Washington which banks have taken advantage of time and again with derivatives. Barney Frank and Chis Dodd, supposed “experts” have often exacerbated problems with Fannie & Freddie, rather than helping. Great example:
just before the financial crisis Frank said:
“Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .”
http://online.wsj.com/article/SB122290574391296381.html
There are plenty more brilliant quotes if you read the article bu this is one of my favorites:
“Rep. Barney Frank (D., Mass.): I worry, frankly, that there’s a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . .”
Elizabeth Reply:
October 20th, 2010 at 9:27 am
There is to be precise one congressman who knows anything about finance.
His name is Scott Murphy and represents a very blue dog upstate New York district. He worked briefly on Wall Street before going on to found several companies and then become a social VC with a focus on creating local jobs. He has a tough race and is taking a lot of heat for supporting the health care reform bill.
If you support actual knowledge in congress, put your money where mouth is: http://www.actblue.com/entity/fundraisers/21699
Ben Reply:
October 20th, 2010 at 9:52 am
I was at the DNC headquarters last night volunteering and several of the people there were making phone calls for Rep. Murphy.
In CA, Ami Bera is in a tight race against Rep. Dan Lungren in the Sacramento-area.
http://www.nytimes.com/2010/10/19/us/politics/19california.html
Alon Levy Reply:
October 20th, 2010 at 11:49 am
Sorry, can’t contribute. Also, if I did, I’d prioritize by contributing to Russ Feingold, who may not have experience in finance or VC, but voted against the Patriot Act.
Brandon from San Diego Reply:
October 20th, 2010 at 7:26 pm
No, it was not a serious question.
(The original post was intended to be a reponse to Ben, immediately above).
I just read:
Geithner is reported as saying he didn’t know much about the California High Speed Rail project, but for him, the project was gong to create jobs, and was therefore a “no-brainer”
The comment then made:
The country has certainly awaken to the reality that the fiscal policies pursued by the Obama administration and led by Geither are “brainless”. This November Obama loses his party’s majority in the house and maybe even in the Senate.
Like they say — you can’t fool all of the people all of the time.
I agree completely. We shall see just home much in funding the next congress is willing to throw away on this boondoggle. I strongly suspect any such funding will go east or south east.
Ben Reply:
October 20th, 2010 at 8:01 am
“We shall see just home much in funding the next congress is willing to throw away on this boondoggle. I strongly suspect any such funding will go east or south east.”
Yes, much better to have massive tax cuts for the wealthiest 2 percent, who have 24 percent of the wealth, instead.
http://www.salon.com/news/opinion/feature/2010/08/02/reich_bush_tax_cut
YesonHSR Reply:
October 20th, 2010 at 8:44 am
Boondoggle is a NIMBY term
Richard Mlynarik Reply:
October 20th, 2010 at 11:59 am
BART to Millbrae? Of direct benefit to me. Boondoggle.
CHSR? Direct benefit to me. Pretty much in my back yard. Boondoggle times 20.
Try again, slogan-boy.
jimsf Reply:
October 20th, 2010 at 3:43 pm
groundbreaking today on the oakland connector.
thatbruce Reply:
October 20th, 2010 at 5:54 pm
Incidentally, is that going to set a new record for BART-related construction on a per-distance measure?
Drunk Engineer Reply:
October 20th, 2010 at 8:50 pm
Not even close.
Though it may set a new record for cost per new rider.
YesonHSR Reply:
October 20th, 2010 at 8:16 pm
The word boondoggle coming from the number one NIMBY in Menlo Park is meaningless… as is the opinion of the most.. earsplitting insulting foaming at the mouth stratosphere in length and width and height, rants of interstellar travel time length is also worthless… millions of people ride BART yet Richard thinks it’s a boondoggle… well enjoy your personal opinion Mr. slogan boy.. now what I really want is for you to get in contact with Robert so that you can post a full report on your idea of how high speed rail should be built..in less than 32MB can you do it? Then we can all post comments on your ideas.
Alon Levy Reply:
October 20th, 2010 at 8:44 pm
Morris Brown is not a NIMBY. He’s against the project because he believes it’s too expensive, and always has; his opposition goes further back than the selection of Pacheco, which means it’s blind to whether the line passes near his house or not.
Spokker Reply:
October 20th, 2010 at 8:52 pm
I’m sure he feels a lot like this little guy: http://www.youtube.com/watch?v=Fqh01iAUFPw
YesonHSR Reply:
October 20th, 2010 at 8:54 pm
HELLO…if HSR would have never passed stone pine lane nobody on this board would have ever heard of M Brown outside of MenloPark ..he may have not liked it or voted for it but it would not be full time job/obsession as now
Alon Levy Reply:
October 20th, 2010 at 8:47 pm
Morris, I think that on the contrary, California is due to receive more money, not less. In many other states, the favorites to win the gubernatorial race are Republicans who oppose constructing rail even with the ARRA funds. Some have pledged to return the money to DOT if elected, in which case the money will likely be redistributed to California, where the favorite to win is a pro-HSR Democrat.
Ben Reply:
October 21st, 2010 at 7:59 am
Jerry Brown is still only ahead by 5-6%. If you support high speed rail and clean energy, it is absolutely essential to get out and vote for him before Nov. 2 There are also several very competitive House races (Jerry McNerry, Jim Costa, Dennis Cardoza, Lorretta Sanchez, Ami Bera– running strong against Dan Lungren in CA’s 3 CD). Control of the House is going to be very close and it is important to have these high speed rail supporters back in Congress next year as Congress begins debating the surface transportation reauthorization bill.
Alon Levy Reply:
October 21st, 2010 at 9:17 am
Control of the House is not particularly close – Nate Silver gives the GOP a 75% probability of winning. The remaining 25% is not sampling error or individual tossup districts swinging the other way, but rather a national mood change shifting the winds back toward the Democrats. And of those swing districts only one is in California, where gerrymandering has made House elections effectively redundant.
Ben Reply:
October 21st, 2010 at 9:27 am
Real Clear Politics has two CA House seats rated as toss-ups. Lorreta Sanchez in CA’s 47th District is only up by 2 pts in the latest poll from that District and Dan Lungren is vulnerable in the CA 3rd district. Most likely, the GOP will get 50-55 seats, with them needing something like 42 to gain control of the House, so yes the 4-5 competitive districts in CA are absolutely critical.
http://www.realclearpolitics.com/epolls/2010/house/2010_elections_house_map.html
Alon Levy Reply:
October 21st, 2010 at 10:33 am
538 gives Sanchez an 86% chance of victory and Lungren an 87% chance. Neither CA-47 nor CA-3 even rates “takeover possible.” It’s CA-11 that’s competitive, with a 70% chance of takeover.
synonymouse Reply:
October 21st, 2010 at 10:33 am
Jerry’s likely victory may very well be only Pyrrhic..
http://www.newsdaily.com/stories/tre69k1xw-us-usa-elections-california/
The US, and California economy, may show some stabilization based upon the undeniable need for maintenance and replacement. Autos, for example, do wear out and have to be replaced. And corporations and some individuals are sitting on mountains of cash. But that does not alone produce broad-based recovery, let alone prosperity. In the post-manufacturing US only a bubble produces the illusion of happy days.
The unions, and particularly their members, will soon tire of any concessions and compromises that Jerry might ask of them. They will want payback for the millions they have blown on the Pelosi machine. If they are going to get more or less Meg why waste the money on Jerry?
My prediction is a tax increase to finance expanded increase welfare spending, which will spark a recall with or without Meg’s money. Hsr funding will be mixed up in there somewhere. The unknown is how motivated are the deep pockets conservatives to fund signature gathering.
Remember how Issa’s recall of Gary Davis just seemed to come out of nowhere?
Ben Reply:
October 21st, 2010 at 10:46 am
Not a chance this will happen. Do you think after the past seven years, CA voters will recall another sitting governor and replace Jerry Brown with an inexperienced political novice?
synonymouse Reply:
October 21st, 2010 at 11:03 am
Oh yeah. Brown will enter with no mandate and is more abrasive and unpopular with conservatives. Even if he tried the Meg austerity approach the Repubs would not trust him and he of course would alienate the machine faithful.
So a tax increase is inevitable and a grassroots uprising will ensue.
StevieB Reply:
October 21st, 2010 at 12:23 pm
Will your tax increase come from two thirds vote of the legislature or by proposition?
I think it was Nadia that asked Robert to define the distance one must live within the ROW to qualify as a NIMBY, but received no answer. Just wondering if I can use the term boondoggle since I live a 1/4 mile from the ROW? What if I lived in Sacramento and called it a boondoggle? Would I not be allowed to say it, or would it just become meaningless? Hmmm.
Arthur Dent Reply:
October 20th, 2010 at 1:00 pm
Sorry, Ted, but no one’s allowed to use it (except in meta-conversations). It’s like the w-word or the other b-word. You can’t use it as an accusation, no matter how true it may be.
morris brown Reply:
October 20th, 2010 at 2:07 pm
Actually, once you have been labeled a DENIER, you are given free pass to use it as you wish.
I wear that badge with honor.
morris
Arthur Dent Reply:
October 20th, 2010 at 2:58 pm
LOL. Be warned, though, that if anyone on your street or in your grassroots group utters the word, you may be called in to do a formal public apology on their behalf.
Spokker Reply:
October 20th, 2010 at 3:16 pm
What are you girls talking about over here?
Arthur Dent Reply:
October 20th, 2010 at 4:26 pm
Bitches and whores. It’s your topic, Spokker.
Spokker Reply:
October 20th, 2010 at 8:43 pm
Clinton is definitely a bitch, but I have always said that is one of her strongest attributes.
StevieB Reply:
October 20th, 2010 at 3:22 pm
Can the word boondoggle be overused? What about San Mateo’s “story poles” boondoggle or Morris Brown’s lawsuit boondoggle? When I hear the word boondoggle I am inclined to look for a cockamamie hornswoggle.
jimsf Reply:
October 20th, 2010 at 3:47 pm
Its usually fussbudgets who proclaim boondoggle.
James Fujita Reply:
October 20th, 2010 at 3:54 pm
This boondoggle ruckus is a load of poppycock.
Richard Mlynarik Reply:
October 20th, 2010 at 4:11 pm
Dagnabbit.
rafael Reply:
October 21st, 2010 at 5:43 am
Runcible discombobulation!
BruceMcF Reply:
October 21st, 2010 at 12:37 pm
Be careful, now, the scuttlebutt is that you could be in deep kimchi for using archaic circumlocutions.
D. P. Lubic Reply:
October 20th, 2010 at 4:14 pm
Literary history lite:
http://en.wikipedia.org/wiki/Boondoggle_(project)
http://www.worldwidewords.org/weirdwords/ww-boo1.htm
http://www.miller-mccune.com/business-economics/derailing-the-boondoggle-4334/
Ted Crocker Reply:
October 20th, 2010 at 4:22 pm
Born out of the last “New Deal”. How interesting!
thatbruce Reply:
October 20th, 2010 at 5:41 pm
The working definition, at least on this forum, seems to be:
Boondoggle(n): Any actual or planned activity which I do not agree with, on grounds of cost, dubious purpose, the wrong selection of decorations or involvement of certain people.
YesonHSR Reply:
October 20th, 2010 at 9:13 pm
BINGO!!
Alon Levy Reply:
October 20th, 2010 at 9:21 pm
You’re saying it like it’s hypocritical. It’s not: people call projects boondoggles when they think those projects cost too much for the benefit they offer, especially when the execution is botched.
bleh Reply:
October 21st, 2010 at 7:29 am
It’s not hypocritical, it’s an empty phrase that’s just a slightly more acceptable version of yo mama jokes.
“xyz is a boondoggle” means “I hate xyz but for whatever reasons I can’t articulate why, perhaps because I don’t have any rational arguments, perhaps they are completely selfish or my arguments have been acknowledged, weighted against the benefits and rejected. So I pretend the whole idea of the project is ridiculous and you are a moron for supporting it.”
It’s like freedom. During the Bush administration it was used for everything from bombing Baghdad to fried potatoes until the word had lost all its power. Boondoggle has a valid meaning. It’s use might be justified in many cases. But it’s been misused so much that it carries no more weight than comparing your opponent to Hitler. =)
Alon Levy Reply:
October 21st, 2010 at 9:18 am
Um, no. Boondoggle is a conclusion. Criticisms of a project for being a boondoggle or white elephant would go something like, “Project ABC is a boondoggle: the initial cost estimate was X, the final cost was 3X, with stupid design mistakes D and E that make it not much better than before.”
thatbruce Reply:
October 21st, 2010 at 10:36 am
That’s more akin to the definition I would prefer to use; for instance, “the BART Oakland Airport Connector is a boondoggle because the price, $500 mil, seems excessive for the short distance to be covered, 3.2 miles”. However, the definition that seems to be frequently used by people on this forum at least seems to be more “Those story poles were a boondoggle because I didn’t like them, even though they actually served a useful purpose.”
Certainly, certain aspects of the CAHSR project, taken in isolation, can be considered boondoggles (mostly along the Peninsula). When considered in the context of the larger project, most of them aren’t boondoggles.
BruceMcF Reply:
October 21st, 2010 at 12:41 pm
Except if it was worth 4x what it was originally supposed to cost, its still not entirely a boondoggle..
There are, however, people who use it by type of project ~ as in “that road boondoggle” for any road project or “that rail boondoggle” for any rail project, without bothering to work out, where the benefit vs the cost analysis is done by pure assumption.
John Burrows Reply:
October 20th, 2010 at 9:07 pm
Boondoggles come in many forms, but they can all be killed by driving a stake through their hearts
YesonHSR Reply:
October 20th, 2010 at 8:26 pm
As the number one NIMBY in Burlingame can you certainly can use the word boondoggle not that it means anything.. much as that overblown propaganda link filled website that you have. Your opinion is yours outside of the fact that you moved near a railroad that’s 140 years old.. the towns along the peninsula have more than enough value to pay the difference between tunneling trenching and high-speed rail’s cost at grade or an aerial.. if you want to bury that 140 old railroad you people pay that difference in cost over 30 years should be about $100 extra per year on already way over valued property near that nasty railroad that you all move next .
BruceMcF Reply:
October 21st, 2010 at 12:44 pm
Yes, the suburban subway would definitely be a boondoggle, but if the residents of the Peninsula towns are persuaded that its a boondoggle that they want to pay for, they should be permitted to do so as long as it does not interfere with the balance of the project.
John Burrows Reply:
October 20th, 2010 at 8:35 pm
NIMBY as we all know is an abbreviation for “Not In My Back Yard”. If I were opposed to High Speed Rail I would easily qualify as a NIMBY using the 1/4 mile rule. However it my front door and yard, not my back yard that face the tracks. So technically would I be disqualified from using the term NIMBY or would the 1/4 mile rule take precedence?
YesonHSR Reply:
October 20th, 2010 at 8:56 pm
A NIMFY???
BruceMcF Reply:
October 21st, 2010 at 12:49 pm
NFMFD (pronounced Nif-Mif-ed), Not Facing My Front Door.
I believe that as an effective NIMBY opposition to a project hinges on building an coaition in opposition to the project, NFMFD’s would be welcomed as honorary NIMBY’s, for the greater functional effectiveness as an acronym.
As for the opposite grouping, those who insist that they want an oil-independent transport system running through their local areas to protect their property values from the risk of Peak Oil don’t need an acronym. “prudent” works nicely.
Part of me is glad to have someone who is not a normal transportation specialist on board, and part of me is leary that this is Tim Geithner of Gold in Sacks, er, Goldman-Sachs. This is one the firms that benefited so much from the “too big to fail” bailout, after profiting mightily in the whole housing bubble affair. One of the things that concerns me is that if he is suggesting this is something for Wall Street to get into. . .well, the Street has not covered itself with glory in the last few years.
Then there is a long history of financial shenanigans in railroads; Credit Mobilier, in the 1860s, comes to mind, as do the antics of “Uncle” Daniel Drew. At least we did get a transcontinental railroad out of Credit Mobilier.
Speaking of Wall Street: I can’t help but wonder if one of the causes of the recent financial bubbles on Wall Street is due to a lack of opportunity for real investment. I’ve spoken of this before, but I think many of the things that have made people rich over the last 150 years or so were once-in-forever chances. Want to transform transportation with a personal travel pod that takes you where you want to go, at any time, and is affordable for most people? Henry Ford’s beat you to it. Want to invent a way to talk to anybody, anywhere, anytime? Alexander Graham Bell started that ball rolling, and since then we have gone through cell phones, i-phones, and whatever other gizmos people have come up with, including the internet and wireless services of all kinds.
On top of that, I believe we are running into operational limits, along with diminishing returns, not just of individual devices, but of our whole technological society. Henry Ford’s Model T helped gety the farmer out of the mud, and a Model A is at least still good on secondary roads. The 1955-1957 Chevrolets were wonderful cars, introduced the small-block V-8 to a line that had been exclusively “stovebolt six” for decades, and made for a car that could run on the new turnpikes and interstates of then–and today. Newer cars are much improved in many ways, especially in reliability, but you can’t drive and faster with them than you could in 1955, particularly down a street in a city or a suburb, where the speed limit is based on what you can see and whether a pedestrian, a dog, or a kid can run in front of you.
Or take a kitchen of today; now, imagine one from 1950, another from 1930, and one from 1900 or before. The 1900 kitchen would have no mechanical refridgeration, would have been unusual to just have a hand water pump to feed the sink, and would have had a coal or wood fired stove for cooking and heating water. The 1930 kitchen very likely would have cold and hot running water, may have had a stove that burned gas or used electricity, and could have had a mechanical refrigerator (the last would be a primitive-looking thing, resembling a robot with exposed legs, a boxy torso, and a turret head where the compressor and heat exchanger were.) The 1950 kitchen will have these things in what would be a form that would be recognisable today, if somewhat retro in styling, and would also have built-in cabinets and shelves in place of “Hoosier cabinets” of the 1930s kitchen. Although costly and thus rare, home dishwashers were available, too. The modern kitchen essentially adds a microwave oven, the dishwasher, and air conditioning. That’s not as huge a technological leap in the second fifty years as it was in the first, although again there are lot of improvements, most notably in energy efficiency.
http://retrorenovation.com/2009/10/26/introducing-my-new-term-mid-century-modest-and-the-mid-century-modest-manifesto/
http://en.wikipedia.org/wiki/Hoosier_cabinet
http://www.bing.com/images/search?q=retro+kitchens&FORM=IGRE&qpvt=retro+kitchens#
With modern markets saturated–soaked!–drowned!–in housing and autos, and with much of our manufacturing now outsourced, where are you going to invest that can actually build real wealth today? Where could you really do so in the last 30 years or so?
It may well be that rebuilding America, including an electric rail system that eventually will include everything from HSR down to local trolleys (and electric cars, too), may be the last great opportunity for the Wall Street crowd. Problem is, will the crooks and parasites there strangle what we want to see, or slow it down like a ship heavily encrusted with barnacles and other bottom growth?
Special to Peter: You mentioned a book, a science fiction work, in which something like this scenario turned out to be an important part of the plot. Do you see the potential for the same thing in this, in America today?
Goldman Sachs now own 25% of Eurotunnel, which makes them its biggest shareholder. They are also bidding, jointly with Eurotunnel, for ownership of HS1. They are obviously eager to have a major role in what they consider a promising market.
On the other hand, they totally ignore American HSR. Has anybody asked them why?
Eric M Reply:
October 21st, 2010 at 9:29 am
Because it hasn’t been built yet!
Peter Reply:
October 21st, 2010 at 9:36 am
Has anyone asked them to come forward with financing proposals for US HSR projects?
Elizabeth Reply:
October 21st, 2010 at 9:41 am
Goldman Sachs was part of the team that told the board that very little financing was coming without a guarantee.
This should not be a shock to anyone. It is very early stage and there is a lot of uncontrollable and unhedgable risk. You are not going to see financing based upon operating revenues until you are in business or close to it, unless there are serious strings attached.
Eric M Reply:
October 21st, 2010 at 11:16 am
I think financing will come forward as soon as the EIR is done and the project goes out to bid. Until then, it’s just getting the ducks in a row.
Andre Peretti Reply:
October 21st, 2010 at 11:26 am
There is also the fact that the shares Goldman Sachs owns give them a say in all decisions. Their influence can be seen in Eurotunnel’s evolution from a technocratic entity to an aggressively run business. An illustration is the recent decision to water down the safety rules (deemed excessive) drawn by the previous board in order to allow more trains in the tunnel and increase revenue.
If Goldman Sachs invested in CHSR, would they have voting representatives on the board?
Elizabeth Reply:
October 21st, 2010 at 12:21 pm
Not in its current form, which is one reason why I said the risk is uncontrollable.
Eric M Reply:
October 21st, 2010 at 12:54 pm
People never get rich by playing it safe!!
adirondacker12800 Reply:
October 21st, 2010 at 3:22 pm
The members of the lucky sperm club do it the old fashioned way, they inherit it.
A massive collection of high speed rail documents relating to the UK is being assembled on http://www.scribd.com/HighSpeedRail