The problem is that this is not what a majority of the population of California actually believes. In November 2008, as the recession was already under way and two months after the global financial system nearly collapsed, 52% of voters approved spending $10 billion in state bond money on the high speed rail project.

Two years later, voters gave the strongly pro-HSR Jerry Brown a 13 point victory over Meg Whitman. Whitman pledged to slash the state workforce by 40,000 employees, whereas Brown didn’t make any commitments of the sort at all. And yet Whitman still lost by a wide margin.

Today Governor Brown announced a plan to raise taxes on the rich to help close the state’s budget deficit. Brown’s proposal is just one of several circulating around California right now to close the deficit by increasing taxes.

What this means is that Californians have rejected austerity. They no longer believe that simply cutting budgets and spending will produce recovery or even a society that provides a good quality of life. They know now that new revenue is needed to restore the California Dream. It’s now just a question of which revenue sources to use.

That’s a bad sign for HSR opponents. If Californians are turning against austerity, then it means that the political will still exists to build high speed rail. It’s the same logic as in the Great Depression, when California built expensive bridges and dams and aqueducts despite the financial problems the state faced. In fact, California built those things because of the problems we faced at the time. Realizing the need for short-term jobs and for infrastructure that could support long-term economic activity, Californians built new infrastructure that nearly 80 years later is still helping create jobs and support economic activity.

For California to not build high speed rail now could save a few billion in the near future. But at what long-term cost? Estimates have placed the cost of expanding freeways and airports at $170 billion. The annual green dividend of the HSR project for LA alone could be up to $10 billion – meaning it would take just ten years for California to recover all the construction costs of HSR from economic activity in just Southern California. That doesn’t include activity in the rest of the state, and doesn’t include the fact that California would only pay part of the HSR cost, with the federal government and private funders picking up the rest.

California would be leaving more than $100 billion in savings on the table if it abandoned the high speed rail project. Yet that is precisely what HSR critics want us to do, because building the trains could cause short-term inconvenience to a few and because it would not be a cheap thing to do.

California did not become great by being cheap. It did not become prosperous by neglecting infrastructure. It did not become a leader by clinging to a failed status quo.

Yet HSR critics and NIMBYs would have us do exactly those things. Californians once before saw through that nonsense and voted for the HSR project. I am confident they would do so again if asked.

What do you think? Should we come out in favor of this in Friday’s pages, or opposed to this? Make your best argument, pro or con.

The flippant answer would be to tell them to read all 1,216 posts on this blog since March 2008. But even I wouldn’t want to wade through all that. It’s reasonable to want a short answer.

So, here it is: Like Boulder Dam, the California Aqueduct, and Interstate 5 before it, the high speed rail project is an essential element of getting out of this economic crisis and building lasting prosperity in California. Current infrastructure is not getting the job done, and expanding what we already have would cost significantly more than building HSR. By providing savings on transportation and environmental costs, the HSR project will spur billions in new economic activity that the state desperately needs. HSR has been a proven success everywhere else it has been tried and there is every reason to believe it will succeed here.

We can go into some depth on these points:

• HSR is essential to lasting prosperity in California. The LA Times has supported the project before, and they know as well as anyone that California is changing. In the mid-20th century the state turned to freeways and cars to meet its transportation needs. That may have worked for a while. But with rising oil prices, building transportation alternatives is absolutely necessary to avoid prolonged economic weakness. After all, it’s rising oil prices that helped get us into this economic crisis in the first place.

The numbers speak for themselves:

Unemployment is sky high and showing no signs of coming down:

One big reason for the crisis is the soaring cost of our dependence on oil. California spent 60 years building a transportation system where people had to burn fossil fuels to drive or fly to their destinations, literally ripping out the efficient and electrically-powered rail systems that had fueled growth and prosperity in the state for 100 years before that. Because oil is not a renewable resource, the price will eventually rise as supplies peak and global demand soars. Sure enough, that’s exactly what happened in the last 5 years:

And all the evidence suggests gas prices will keep rising. In 2009 Deutsche Bank came out with this projection of where gas prices are headed:

When gas hit $3/gal in 2006, it burst the housing bubble and sent the state into recession. An economy built on suburban real estate serving long-distance commuters became unaffordable and in some places has literally collapsed. And it’ll keep rising, strangling recovery in the crib.

The effect would be catastrophic for the state’s already weakened economy. The effect of peak oil – the declining rate of new oil discovery combined with ever-increasing global demand – will push prices upward until there is significant demand destruction. There are two ways demand destruction can happen – either we build alternatives to driving and enable people to use mass transit to continue getting around, or people just stop driving with no alternative in place, and economic activity falls dramatically as a result.

• HSR will spur long-term economic activity. We’re not the only generation of Californians to face a profound economic crisis that required substantial change. In the 1930s, we built bridges, dams, and aqueducts even in the face of higher unemployment and a deeper Depression. We did those things because we knew not only would it create immediate jobs (estimates from the California High Speed Rail Authority suggest there could be tens of thousands of jobs created as a result of just the construction alone) but that it would also serve as the basis of long-term prosperity.

And so it has. LA still turns on the lights with electricity generated at Boulder Dam. It eats food grown with water conveyed by the Central Valley Project (a Depression Era project). Its neighbors to the north in SF use the Golden Gate and Bay Bridges to commute and move goods. And infrastructure built in subsequent years, like the California Aqueduct and the interstate freeways, merely added to the long-term economic activity.

But because oil is becoming too expensive, an alternative is needed. High speed rail from SF to LA and Anaheim isn’t the only electric passenger rail we need. But it is an important part of the need.

There are specific ways this works. One is called the green dividend. The concept is simple: money not spent on buying and burning oil is money that is spent on other things in the local economy. Portland’s green dividend is about $2 billion per year.

A 2010 US Conference of Mayors report found Los Angeles alone could reap a green dividend of $10 billion a year from high speed rail – both in the jobs it creates and the spending on oil it would allow to remain in the community, redirected toward more beneficial projects. Statewide that could reach $25 or $30 billion a year.

We also know from global experience that HSR spurs the development of mid-line cities. In California that is crucial, given the sky-high unemployment in the Central Valley. That unemployment costs the state government billions and acts as a drag on the economic potential of the entire state. California’s recovery requires a Central Valley recovery.

HSR can help provide a boost to places like Gilroy, Fresno and Bakersfield. It brings those cities into the globally competitive coastal economy, allowing residents there to get jobs on the coasts and allowing coastal businesses to set up shop inland where land values are cheaper.

• HSR is the fiscally conservative thing to do. Some “fiscal conservatives” think we should just run away from anything with a big price tag, that spending less money is always good. This is delusional. As the charts above show, we know gas prices will rise. So spending more money on oil-based transportation is absurd if there’s a more affordable alternative. And we know that California’s population will continue to grow. So spending $170 billion to expand freeways (which do not pay for themselves) and airports (which are very inefficient) on top of the increased cost of using those systems is also absurd if there’s a cheaper alternative.

I get that people wish we could just make everything that we have right now cheaper. That we could just continue along with the systems we have in place, just make them work again like they used to.

But those days are over. Cheap oil is never coming back. California will never again be able to rely on freeways and airplanes alone as the basis of our transportation system. Our choices now are to either stick with the failing system we have now and pay huge costs as a result, or invest over the next 20 years to lower our costs for the next few generations.

• HSR is a global success. It’s not like California is proposing to do something radical and untested. We’ve known for 50 years that high speed rail works. And it turns a profit – in Japan and France, Spain, Russia, Taiwan, even the Amtrak Acela. And California compares favorably to those globally successful routes.

Many HSR critics and opponents are motivated by their belief that nobody will ride trains in California. Those arguments are completely baseless, fly in the face of the available evidence, and should simply not be taken seriously. Amtrak California is setting ridership records. Remember that the independent peer review found the HSR ridership numbers to be sound.

And of course, the business plan took those numbers and showed, using extraordinarily conservative assumptions, that HSR will turn a profit. Just like every other HSR line around the globe.

• The new business plan shows a sensible path forward. One could look at the above and say “sure, that’s nice, but will THIS plan work?” The new business plan answers that convincingly. It shows how the system will grow from an Initial Construction Segment in the Central Valley to a system carrying passengers from SF to LA. It is a sound, conservative plan.

The LA Times wonders about federal funding. I do too. But it’s not just HSR that Congress is threatening. Under the Republicans, the House of Representatives appears not to want to fund anything of value at all. They don’t want to create jobs. They don’t want to provide health care or teachers or cops.

Republicans won’t control Congress forever. In fact, as soon as January 2013 Nancy Pelosi may be back in the Speaker’s chair. We need federal HSR funding, but the best way to get it is to be persistent. That’s a problem to solve, not a reason to quit.

Ultimately, the LA Times has to decide a few things for themselves. Do they think the status quo of 12% unemployment and nearly $4 gas is working, or that we can and should do better? Do they think California should be a place that builds and innovates, or a place that stagnates while living on past glories? Do they think investing in the future is a good thing or a bad thing?

I can’t answer it for them. All I can do is show them that a better future never comes cheap, but the rewards are substantial. I hope they make the right choices.

High speed rail has the potential to transform the San Joaquin Valley from a region dependent on agriculture alone to a diverse and prosperous place with a wide range of jobs, tied into the global economy by having a fast and affordable connection to the all-important coastal economic engines.

Others are beginning to make the same point. As Fresno Bee columnist Bill McEwen explains, the Valley has to be willing to take some risks if it is to have any hope of escaping what is an economic depression:

“I see a huge future for high-speed rail. It’s great that the first link that’s going to get built in California is between Fresno and Bakersfield,” says [Mary] O’Hara-Devereaux, keynote speaker at today’s Fresno County Economic Development Corp. annual report luncheon.

Why then is high-speed rail so divisive that polite folks don’t discuss it around the dinner table?

“There is always a lot of controversy around transportation shifts,” O’Hara-Devereaux says.

O’Hara-Devereaux, founder and chief executive officer of San Francisco-based Global Foresight, says that she’s aware of the Valley’s steep economic challenges. But she is of the opinion that the region can prosper by diversifying its economy, continuing to be a world leader in agriculture and forming partnerships with top academic institutions.

“The San Joaquin Valley has struggled and lagged behind other areas in California,” O’Hara-Devereaux says. “But I’m not pessimistic about the future. A lot of it depends on not getting lost in familiar territory and stuck in mindsets.

And that’s exactly where HSR opponents and critics are – lost in familiar territory and stuck in a 20th century mindset where people will only ever want to drive.

We’ve seen around the world that HSR provides a boon to mid-line cities who are suddenly able to attract talent and capital from the major metros that become just an hour’s train ride away. Fresno and Bakersfield are poised to become the next Ciudad Real or Zaragoza. The freeway turned San José from an orchard town to the center of a global industry. HSR can turn Fresno into an important part of the 21st century economy.

After all, HSR allows the global economy to tap into the resources the Valley currently has:

O’Hara-Devereaux’s crystal ball also includes this possibility: a shift in overseas manufacturing jobs to the low-cost Valley.

“There’s a play in strategically thinking about how you bring more manufacturing,”she says. “It has to be done in a comprehensive manner, so you’re also making the investments in education and training. Almost all manufacturing is going to be more high-tech, so you’re going to need more skills.”

The Valley is low-cost, but it’s also geographically isolated. In the ’00s boom that isolation was temporarily overcome when the Bay Area began spilling over into San Joaquin County, but the end of cheap gas stopped that and turned Stockton into one of the most depressed housing markets in the country. But that boom did prove the concept – if the Valley can be linked to the coast with the right kind of transportation, capital, jobs, and people will flock to the Valley.

It’s hard to imagine how anyone in the Valley would want to turn down that opportunity. Because HSR spurs growth within existing urban areas due to the desire to have proximity to a station, it won’t threaten most farmers. And because it will create construction jobs as well as bring jobs to the Valley and put current residents in the market for coastal jobs, it will be as beneficial to the local economy as were the canals and aqueducts of the New Deal era.

The opportunity and the rewards are too great to let a few kinks in the project hold the Valley back from what may be its best chance at escaping long-term economic malaise.

The consequences of Wall Street’s Great Recession continue to hit Kern County with serious ferocity. The unemployment rate stands above 15 percent — fully 60 percent above the national average. In my industry, construction, unemployment rates are even higher, hovering around 20 percent. The underemployment rate in California, which includes workers who have slipped into the underground economy, as well as those who are seeking full-time work but can only find part-time jobs, currently exceeds 22 percent. This is an outright crisis for our community. Projections from the Congressional Budget Office show very little improvement over the next few years in the unemployment rate nationally. Luckily, Kern County and California can start to turn this dire situation around, because we are about to begin building high-speed rail.

These are Depression-era numbers, and it makes sense to embrace a Depression-era solution: build lasting infrastructure that puts people to work now and provides economic growth opportunities for years to come. Spalding understands this quite clearly:

Incredibly, there are still skeptics out there that say we can’t afford to begin the high-speed rail project. High-speed rail opponents have a laundry list of criticisms, but do they have any solutions to the county’s unemployment crisis? No. Rather than embracing jobs at our doorstep, they continue to parrot the nonsense that high-speed rail will bankrupt us. You wouldn’t know it listening to the loudest politicians these days, but Kern Country has for generations benefited from state and federal infrastructure projects like the aqueducts and freeway project that brought fresh water and new customers from other parts of the state to the southern Central Valley.

The fact is, high-speed rail is the only project on the horizon that will create the large number of jobs we need to make a significant dent in our appalling unemployment rates. Therefore, we can’t afford not to start high-speed rail. The choices are quite clear. We begin construction now, or we let other states take our high-speed rail money and our jobs. It is baffling to me that there is even a debate about the economic benefits of high-speed rail for our county.

…If we have the courage to act, Kern County will find itself the single greatest beneficiary of high-speed rail in California. By far, more track will be laid here — well over 100 miles — than in any other county. The project will greatly improve access to Bakersfield, tying our economy to the large urban centers around California. It will also begin to help clear our horribly polluted air.

Spalding understands well what is needed to put Kern County back to work: high speed rail. Nothing else comes close in terms of ability to create a lot of jobs quickly, and in this era of permanently high gas prices, nothing else has the potential to spur as much long term growth. Sure, some people talk about water, but unless they have a method to make it rain more often, it won’t matter since there’s no more water to move.

Spalding expressed incredulity that anyone would oppose this. But judging by a recent hearing in Hanford, it shouldn’t be all that surprising – most HSR opponents are simply Tea Party activists who hate all government spending, unless of course it is in the form of a direct subsidy to themselves:

With a giant tea party banner serving as a backdrop, Kings County residents dominated a California High-Speed Rail Authority hearing in Hanford’s Civic Auditorium Wednesday night with wide-ranging criticism….

“All of us here in this room are taxpayers,” said Hanford resident Paul Rohrbough. “And I’m here to say that we can’t afford this project. Financial common sense must be the rule.”

Here’s how financial common sense works. You borrow money now to build a massive infrastructure project that puts a ton of people to work immediately. That gives you a huge economic boost, without any short-term cost. Money circulates in the economy, those employed on the HSR project spend and help employ others in the community. This fuels growth and generates tax revenue. Over the long term, the economic growth created by the project – estimated at $10 billion a year for Los Angeles alone – helps sustain the economy and helps pay back the money borrowed to build the infrastructure. That’s how the debt taken on during the Depression and during World War II was repaid – paying it back did not crash the US economy in the postwar years, far from it.

Teabaggers complain about the debt causing long-term problems for the country. That’s an absurd claim, at a time when the cost of borrowing for the US government is at record lows.

The economic case for HSR is strong. Those who say it isn’t are peddling Hooverism.

As the global economy teeters on the brink, many leading economic observers are screaming for more stimulus, recognizing that the only way to avoid another crash and a prolonged Depression is to generate new demand by creating jobs and sparking spending. Bill Gross, founder of Newport Beach’s Pacific Investment Management Company (PIMCO) and one of the most influential investors on the planet, called for massive new infrastructure stimulus, between $3 and $4 trillion in size, to avoid a double-dip:

In the near term, then, we should not rely solely on job or corporate-directed payroll tax credits because corporations may not take enough of that bait, and they’re sitting pretty as it is. Government must step up to the plate, as it should have in early 2009. An infrastructure bank to fund badly needed reconstruction projects is a commonly accepted idea, despite the limitations of the original “shovel-ready” stimulus program in 2009.

Nouriel Roubini, who was one of the most prescient voices predicting the 2008 crash and recession, has similarly been screaming about the need for more stimulus:

“You need to restore economic growth, not five years from now, you need to restore it today,” Roubini said. “In the short term, we need to do massive stimulus, otherwise there’s going to be another Great Depression. Things are getting worse and the big difference between now and a few years ago is that this time around we’re running out of policy bullets.”

It’s obvious to everybody who actually understands how the global economy works that we are facing a serious crisis, leading to greater unemployment and suffering, unless we produce more stimulus, focused on infrastructure. High speed rail is exactly the kind of stimulus that we need – it will put a lot of people to work, save money over the long-term, and support new growth for decades to come.

Or we can sit on our ass and do nothing. That is the path advocated by LA Times reporter Ralph Vartabedian in an article full of fear, uncertainty and doubt about high speed rail costs. The article isn’t even very well-informed as to the details of the HSR project, but its primary purpose is to say “omg this might cost a lot of money so we shouldn’t do it!”

It’s the kind of argument made by someone who either has no clue about the economic crisis we face or who simply doesn’t care.

State voters have agreed to issue more than $9 billion in bonds to build the system, but that’s a fraction of the $43 billion projected tab for the initial phase. And those costs could swell to $65 billion or more, by some estimates.

Should federal funds dry up after the scheduled start of construction next year, the state could be left with no more than an unfulfilled dream and some tracks in the Central Valley.

“If the federal government and private investors are not going to provide funds, and California is broke, why would it take on an enormous new commitment?” asked Martin Wachs, a Rand Corp. transportation expert and former director of UC Berkeley’s Institute of Transportation Studies.

This is nonsense. The federal government, in the form of President Obama and the Senate, have shown a strong desire to provide funds. The article quotes Kevin McCarthy, a leading House Republican who represents Bakersfield, as saying the House isn’t interested in more HSR funding:

Rep. Kevin McCarthy (R-Bakersfield), the majority whip whose district would be served by the rail line, said he doubted that any spending measure that contains funding for high-speed rail in California or anywhere else would pass the House.

“I don’t know how anybody can come to the conclusion that the California high-speed rail is a good investment in the financial times we are in,” McCarthy said. “When California has the deficit problem it has now, how can it envision finishing this?”

What Vartabedian doesn’t tell readers is that McCarthy’s party is facing a return to minority status, as polls suggest Democrats will retake the House in the 2012 election.

More importantly, Vartabedian assumes that McCarthy is right that deficits and recession mean we shouldn’t spend money on new things. That is exactly the kind of thinking that has caused the recovery to stall. “The financial times we are in” require us to spend a LOT more money to get out of it, as Gross and Roubini suggest.

It’s not a new lesson. The infrastructure projects of the 1930s helped pull the state and the country out of the depths of the Depression, sliding back only in 1937 when stimulus was withdrawn too soon. The Depression ended for good when a truly enormous government stimulus program, World War II, was launched. It doesn’t require a war to get government to launch a huge spending project. It can and ought to be done in peacetime, especially when the rewards are so obvious.

One reason we’re not seeing that coming out of Congress right now is because media outlets like the LA Times run articles designed to scare people into thinking that doing something to get out of a crisis is somehow worse than doing nothing and ensuring we stay there. Just look at the fear mongering in this article:

The upcoming decisions on the high-speed rail system represent one of the ultimate philosophical clashes in public spending. The sheer size and scope of the rail system makes it one of the most ambitious programs ever undertaken by a state known for gutsy projects….

In scope and cost, it would eclipse any of the state’s dams, office buildings, canals, highways or other government structures, including the Golden Gate Bridge.

Even if there are no cost overruns, it would be twice as expensive as the State Water Project, the 1960s-era system that transports northern Sierra water to Southern California. A study this year estimated the current cost to replace that system of dams and canals at $18 billion.

And the plan would require some ambitious engineering. Tunnels would stretch miles. Trains would soar over cities atop viaducts six stories tall. Three mountain ranges would be crossed. The zigzagging route would gobble up homes, businesses and farmland.

Vartabedian gives this litany to suggest all the things that could go wrong with the HSR project, with the intent of showing people “see? this isn’t a good idea.” But a state that was interested in building a better future rather than wallowing in the gutter would look at these challenges and say “so what? We can solve those problems.”

The article wonders what Governor Jerry Brown will do given these concerns, and quotes Brown’s advisors:

A Brown advisor, speaking on condition that he not be identified, said a “steep erosion in confidence” in the authority has led to concerns about the project. The authority had planned to issue a new business plan in October to support the upcoming bond issue, but that plan may be delayed by Brown’s review, he said.

To accelerate the network’s development, the Brown administration might seek to tie high-speed service into existing urban rail systems.

Yesterday’s news that the ridership projections have been validated by the peer review group should be a big help. Many of the CHSRA’s critics based their arguments in claims that the ridership numbers are flawed. They can no longer credibly make that claim, and that means the Business Plan will be that much stronger once it’s completed.

I don’t think that tying HSR service into “existing urban rail systems” will do anything at all to “accelerate the network’s development,” however. The key is the Central Valley, linking SF to LA. Simply upgrading existing urban rail systems will do very little to help achieve the all-important goal of linking SF to LA, rather than SF to San José or LA to Anaheim. And building in urban areas is going to be much, much more difficult than building in the Central Valley.

Still, we should keep in mind that Gov. Brown understands the need to take risks to embrace a better future:

Gov. Jerry Brown said this afternoon that California’s embattled high-speed rail project should move forward, despite growing criticism about the project’s management and cost.

While the nation is in a “period of massive retrenchment,” Brown told The Fresno Bee’s editorial board, “I would like to be part of the group that gets America to think big again.”

The Obama Administration clearly agrees, as the article closes with this quote from the USDOT:

“I can’t think of any mega-project like this that had all of the funding in place before it began,” said Roy W. Kienitz, undersecretary of the U.S. Department of Transportation. “If you have the ambition to do something big like this, you have to live with the fact that there is going to be uncertainty in the future.”

The project’s details matter. But if we approach them with a constructive and bold spirit, we can solve them. If we approach them with a destructive and timid spirit, we’ll be bogged down by the smallest and simplest problems, paralyzed into inaction.

In short, it’s not really about the details. It’s about our political will to solve them. High speed rail has life in California because enough voters and leaders realized it was part of our economic recovery strategy. Its fate will be determined on the basis of our commitment to recovery – and our commitment to our own future.

What you are hearing in many SJ Valley areas – particularly the southern part of the valley – is how the high speed rail will be an economic boom for the region.

At least when people traveling between San Francisco and Los Angeles today by car they stop at service stations or restaurants and drop some cash to help support local jobs. Just how high speed rail itself will generate permanent jobs is an amazing snow job.

Yes, there will be engineers and maintenance workers needed for the trains. But just how are there jobs being generated in Bakersfield or Fresno unless – and this is a possibility  – people who work in LA with high dollar jobs for some reason opt to live in Fresno and Bakersfield.

That sounds good as it would generate bigger demand for local retail and service jobs not to mention housing but at the same time it is counterproductive.

“For some reason?” Wow. Wyatt is *really* down on the Valley. For a managing editor of a Valley newspaper, it’s quite surprising to see him be this critical of the desirability of Fresno and Bakersfield as a place to live. As he should know, lower housing prices will attract people with “high dollar jobs” – because that’s exactly what happened in Manteca during the 2000s boom. Residents who were priced out of the nine-county Bay Area housing market moved to places like Manteca and other San Joaquin Valley cities in search of affordable housing.

There is every reason to believe this will happen with high speed rail, providing faster transportation service than the car would – thus opening up Fresno and Bakersfield as commuter suburbs for LA and the Bay Area. Because one can work (or sleep) on a train, which can’t be done in a car, it becomes a very attractive proposition to make that commute.

It depends on the cost of the train ticket, of course. But many other countries with HSR have seen this phenomenon develop. In Spain, the city of Ciudad Real was a small out-of-the-way town on the barren plains of Castilla-La Mancha until the AVE opened in 1992 with a station at Ciudad Real, putting it within easy commuting distance of central Madrid. Fresno and Bakersfield have affordable housing and some very interesting neighborhoods, like Fresno’s Tower District, that would attract highly paid Bay Area or SoCal workers.

Similarly, cities on the Spanish HSR route like Zaragoza and Ciudad Real have seen employers locate in those cities because of the HSR station and affordable land.

But Wyatt dismisses all of that because a few gas station jobs will be lost – and that those jobs are more important than the other jobs that would be created by new employers or to serve new residents who move to Valley cities because of HSR. Don’t get me wrong, working at a gas station convenience store can provide important entry-level jobs. But HSR will almost certainly more than make up for it by creating other, better jobs in those cities. Some of those will also be entry-level service sector jobs, whether in restaurants or other such places. There’s no reason at all to believe that the Valley will experience a huge crisis because Chevron doesn’t need so many gas stations along I-5.

In the selection above, Wyatt says it would be “counterproductive” to have HSR attract more residents to the Valley because it would induce sprawl:

A solid reason for supporting high speed rail – cleaner air – almost goes out the window. A trip between Bakersfield and Fresno by car creates an estimated 84.75 pounds of carbon dioxide according to the high speed rail website. If people actually start living in Fresno and Bakersfield to take advantage of cheap housing and commute to LA by high speed rail they will be creating significantly more car trips when at home in Fresno and Bakersfield.

Did Wyatt protest when Manteca grew dramatically in the 2000s because of sprawl? If so, he’d be consistent. In this case, as I have argued before, there’s no reason to assume that sprawl would necessarily follow. HSR stations would act as a magnet for transit-oriented development, as proximity to the station creates demand for nearby housing construction. Rising gas prices will mitigate against so many car trips anyway, even if HSR is never built. And the Valley needs to, and likely will, limit sprawl anyway in order to comply with SB 375 and AB 32 rules as well as to protect farmland. Again, that has to be done even if HSR isn’t built.

Wyatt continues his attack on a better economy for the Valley:

It is doubtful new industries will locate in either city because of high speed rail. The region already has a cheap labor pool and that isn’t doing anything out of the ordinary to attract employers especially in the southern part of the valley.

The primary industry of the region is agriculture. Travel between Bakersfield and Fresno, though, by those in farm support industries won’t be by high speed rail. That’s because most business contacts are done on the farm and not in the urban settings of Fresno and Bakersfield.

As I mentioned above, this is just crazy. Other cities in similar locations around the world have become desirable locations for job creation. There’s a reason why economic development groups in the Valley are so excited and supportive of HSR. That’s especially true in Merced, where local businesses and political leaders are so insistent on bringing HSR to their cities to fuel job creation that they became outraged when Merced was not included in the initial construction segment.

Yes, agriculture is currently the centerpiece of the Valley economy, but that is going to change. With lower land prices, quick train transportation, and a sizable existing population, Silicon Valley and other industries in the Bay Area and SoCal would have a lot of incentive to locate new factories and job sites in Fresno and Bakersfield. It’s exactly what happened in Ciudad Real and Zaragoza, as mentioned above. But according to Wyatt, it’s not even worth taking a chance at getting 21st century jobs to be created in the Valley because it could cost some jobs at gas stations.

Seriously. Here’s how he ends his column:

But in terms of it being a lasting economic boom for the valley if it successfully reduces road traffic, get real. If anything it will kill highway travel service related jobs.

It is a sign of just how desperate HSR critics are becoming. It’s the equivalent of saying we shouldn’t have paved roads in the 20th century because it would cause job losses at stables and corrals, or shouldn’t have installed electric power grids because it would hurt the candlemaking trade, or shouldn’t have built the bay bridges because it would have undermined the ferry system (although in that case, undermining the ferry system was very much intentional, given the Southern Pacific Railroad’s monopoly on the Bay ferries).

Wyatt is scraping the bottom of the barrel here. His absurd column is a victory for HSR supporters. If that’s the best they’ve got, then HSR denial is in a very sorry state, and they are less likely than ever to succeed in their quixotic, regressive efforts to block the bullet trains from being built.

We would have liked to see the first phase started in the Bay Area, but the resistance cast by residents in parts of Northern and Southern California raised enough doubt in the minds of policymakers in Washington that they decided to skip over our region and allocate the funds to the safe choice. While disappointing, that should come as no surprise.

This issue of resistance by some residents frames their op-ed, as does the importance of starting the project somewhere. Wunderman and Guardino point out that no matter what segment had been chosen, it wouldn’t have enabled train service to begin, and that just as the interstate system began in a centrally-located rural area and expanded to the coastal population centers, so too will California’s HSR project:

So those who expected trains to be speeding by on the hour between Merced to Fresno or Fresno to Bakersfield are mistaken. It will happen, just not yet.

As many have pointed out, high-speed rail is akin to the interstate highway system created in the United States in the 1950s. The highways were not created overnight, and when they were created, construction first started in Missouri, not Los Angeles or New York. We need to think of high-speed rail the same way.

From what I can tell, most people are thinking of it in this way – with the obvious and unsurprising exception of the HSR deniers, who are always eager to find anything with which they can attack the project. The recent award of $624 million more in federal HSR funding to California, which will help get the first segment closer to Bakersfield, certainly validates the strategy that CHSRA CEO Roelof van Ark has been employing.

Wunderman and Guardino also join the call for the CHSRA to improve its public outreach, a call I wholeheartedly endorse:

Moving forward though, the High-Speed Rail Authority needs to quell the anger and confusion about the project that is spreading across the state, and replace it with the appropriate sense of urgency and excitement that comes with a game-changing project of this type.

This can only happen if the authority better explains the nuances and complexities of high-speed rail to the public and gets buy-in for the overall strategy to bring the project to fruition over the next decade. Included in that should be a firm commitment that the next segment will connect two major California metro areas.

There’s nothing here I can disagree with – but I would add some points. The Authority’s problems with public outreach stem neither from deliberate failures nor from incompetence (and to be clear, the op-ed does not suggest they do) – instead they are due to the fact that the CHSRA simply has not had the staff to do proper outreach. The Authority was nearly closed down for several years in mid-decade, and when Prop 1A passed, years of legislative underfunding left them unable to do the kind of effective outreach that was needed. Since Roelof van Ark became CEO earlier this year, that has improved, and cities such as Gilroy have expressed satisfaction with those improvements.

Much remains to be done, both in terms of outreach and project planning. But as Wunderman and Guardino correctly explain, that’s to be expected in a project of this scale. High speed rail is going to be the largest infrastructure project built in this state in 50 years – it’s important that we get it right, but it’s also important that we get it done. With groups like the Bay Area Council and the Silicon Valley Leadership Group still on board with the project, again showing that HSR backers remain supportive, California’s HSR project is still in good shape.

Since the summer of 2008, gas prices have retreated from those highs – but even in the depths of the worst recession in 60 years, Californians are paying the same price for gas, just over $3 a gallon, that they paid at the height of the bubble in 2006, as the chart below shows:

And now those prices are rising again:

The average price of gasoline statewide ballooned 12 cents a gallon over the past month, according to the monthly gas price survey released today by AAA Northern California.

The survey put the average price for a gallon of regular unleaded gasoline statewide at $3.26, up from $3.14 in the Nov. 9 survey. The latest figure is 35 cents above $2.91 a gallon a year ago.

To some degree, this is being driven by speculation. But the chart above shows a pretty clear trend that actually began in 1999, but really took off after 2004 or so, of rising prices. This is the new normal; the age of cheap oil is absolutely at an end. Peak oil means supplies are unable to keep up with rising global demand, and if we ever see economic recovery, increased domestic demand will merely drive the price higher, cutting off our recovery in the cradle.

Most economic observers understand perfectly well that this is happening. Last year, Deutsche Bank projected oil will hit $175/bbl later this decade, before leveling off as a result of demand destruction. Here’s a chart based on the Deutsche Bank projections:

Let’s take a look at the right side of that chart, where demand destruction takes hold. That can take several forms. Ideally it would be through increased use of mass transit alternatives that we spend the next several years building – that’s the option Californians chose in 2008. It could also include use of hybrids and electrics, although that has its limits – the cost of car ownership is too high for most people to afford these days, especially buying a costly new hybrid or electric vehicle, and even if people could afford them, then you’ll still have a traffic problem on the roads, since we can’t afford to do much if any freeway capacity expansion.

But if we follow the Congressional Republican argument and refuse to build those alternatives, then there’s another way demand is destroyed – through a severe economic recession. If the price of gas becomes unaffordable, and if there are no alternatives available, then people just won’t buy it and the economy will suffer. We saw this in 2006 – when gas hit $3/gal, the housing bubble burst when homeowners in the exurbs could no longer service both their mortgages and their gas bills. We saw it again in 2008 when the gas price spike helped worsen the recession. And we will see it again sometime this decade, if alternatives are not developed.

High speed rail matters because without it, California will be unable to provide affordable transportation between our urban areas, which is essential to prosperity and business (not everyone can or will work from home, I might add). It needs to be paired with increased investments in bus and rail service within the urban areas, of course, and Californians have shown their support for this as well.

But as we watch the prices at the pump climb once again, we are reminded of the importance of seeing these efforts through to completion. Our prosperity depends upon their success.

First, the project already plans for rail stations in both Merced and Fresno, which is required by Proposition 1A. There is no plan to construct a station in Bakersfield. In fact, the Fresno-to- Bakersfield section actually ends in Shafter and doesn’t even reach Bakersfield. This is important because upon construction of the Merced-to- Fresno section, the project will have a fully functioning line between two points and will then be able to demonstrate its viability and effectiveness. This will be critical in the state’s efforts to attract private sector investment to the project.

It’s true that the Authority’s most recent plans involve building tracks south from Fresno to Shafter, about 20 miles short of Bakersfield itself. It is possible that additional funding, including private sector funding or new federal funding (whether redirected funds from Wisconsin/Ohio or FY 2011 funds) could finish the segment to Bakersfield. Still, Pedrozo makes a strong case here for Merced-Fresno.

Pedrozo’s second and third points have to do with cost:

Second, the Merced-to-Fresno segment will be less expensive. The authority estimates the total construction cost for the northern segment to be $4.3 billion, compared with $4.75 billion to reach Shafter from Fresno. With the federal funding already awarded, there is adequate funding to construct only one segment — Merced to Fresno.

Third, when the voters passed Proposition 1A, they insisted the authority give priority to segments which make the most efficient use of state bond funds. The law requires the authority to give priority to the segment using the smallest percentage of state bond funds as compared to funding from other sources. Basically, the voters wanted the authority get the biggest bang for their buck. Since the Merced to Fresno section commits the smaller amount, it makes the best use of the taxpayers’ dollars.

I’m sure that argument will be quite compelling to the Authority, as well as incoming Governor Jerry Brown and the state legislature. It’s an open question of whether it’s actually “the biggest bang for their buck,” however. The ridership study indicated that Merced would have significantly fewer riders than Bakersfield, at least in 2030. Merced County’s population of 210,000 is much smaller than Kern County’s 661,000, providing for the possibility of greater ridership on a Fresno-Bakersfield segment than on Merced-Fresno. Keep in mind that neither segment will, at this time, serve actual bullet trains, but will be used by the Amtrak California San Joaquin trains to meet the “operational independence” requirements. Faster service between Fresno and Bakersfield might produce more ridership on that segment than on Merced-Fresno.

On the other hand, as Pedrozo points out, there’s enough funding to build both a Merced and a Fresno station on the northern segment, whereas the tracks won’t even connect past Shafter to a Bakersfield station on the southern segment. It’s not clear whether new stations would entice more people to ride the San Joaquins. In any case, it would be good if further study could be done to determine which segment would produce more ridership on the San Joaquins, which in turn would address the “bang for the buck” argument.

Pedrozo’s final two points relate to jobs:

Fourth, the high-speed rail system is expected to create thousands of jobs. The work to be completed between Merced and Fresno is expected to require more hands-on labor than its southern rival. The federal stimulus funding is intended to produce real work for real people, not work for machines. In the Fresno to Shafter segment, they will largely use automated track laying equipment — equipment that requires much less labor than the elevated track and related concrete and construction work that will be taking place in Merced to Fresno. The construction of two stations, rather than just one in the southern segment, also adds to the number of new jobs that the northern section offers.

Lastly, there has been much discussion on where to place the heavy maintenance facility associated with this project. While this funding won’t pay for this facility, it will influence where it’s ultimately placed. The maintenance facility itself is anticipated to create upwards of 1,500 new jobs and thousands more in supporting businesses.

I’d like to see exactly how much difference there would be in job creation between the two segments – Pedrozo doesn’t give details, and the difference might be much smaller than he implies. Still, if partisans of the northern segment can demonstrate greater job creation than on the southern segment, it would undoubtedly bolster their case.

I’m less sure about the location of maintenance facility influencing this decision. Pedrozo is obviously a supporter of Castle Airport as the site for the maintenance facility, a site that faces stiff competition from Fresno and from Kern County. If, as is rumored, Fresno is in the lead for the maintenance facility, then the segment selection won’t affect that location decision much at all. However, a Fresno-Bakersfield selection might hurt Castle Airport’s cause.

I’m not yet ready to pick which segment should get funded, and I would like to see some counter-arguments from supporters of the Fresno-Bakersfield segment. There’s no doubt that, overall, Pedrozo’s arguments are strong, which should give incentive to supporters of the southern segment to make their own case. If and when they do (or if they already have and I’ve missed it) I’ll be sure to highlight it on this blog.

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.