Short-Term Versus Long-Term Transit Problems

Yonah has a post about the predicament facing US transit agencies in bad times. The standard sources of operating subsidy – state and local government support, dedicated taxes – are cyclical, and although federal funds could in principle bridge the gap as Keynesian stimulus, the current mood in Congress and the White House is one of austerity. In addition, House Transportation Committee Chair John Mica’s proposed transportation bill slashes funding to both highways and transit by a third, though Rail Subcommittee Chair Bill Shuster claims large potential savings from streamlining the environmental review process.

In principle, in case the savings don’t materialize, and funding is indeed cut agencies will have to choose between fare hikes and service cuts. In practice, it’s important to distinguish between short-run and long-run budget issues. The short-run problems are fueled entirely by the poor economy. The federal government doesn’t subsidize operations at any case (and the one transit expansion program that’s even mildly good, Los Angeles’s 30/10 plan, would actually move forward under Mica’s plan); despite that, agencies did not have funding shortfalls in 2007.

A related issue is that the US may default on its debt in two weeks, but if it does then everything will suffer rather than just transit, and it’s fantasy to think that fare increases and service cuts would help. In case the US doesn’t default – which is reasonable to plan for, for roughly the same reason US government debt is considered the safest in the world – the short-run problems are not particularly pressing. It depends on the region, of course, but overall, the US economy today is not worse than it was in 2009 or 2010.

Another essentially short-term problem is political: Tea Party politicians make it harder to form a pro-transit consensus (see e.g. here and here), and unexpectedly cut funding to transit projects. In light of the low popularity of such politicians, and the rewriting of federal political power (either completely Democratic or completely Republican) that is expected after the 2012 election, this should also be treated as ephemeral.

In contrast, I encourage everyone to go to the comments to the above-linked post on The Transport Politic, and browse through the proposed solutions. Those include bus stop consolidation, labor force efficiency improvements, consolidation of competing lines across agencies, bus-only lanes to reduce travel time, focusing service on serviceable inner-urban areas, construction cost cuts. In other words, they are all about long-run improvements. I would add two more – namely, the FRA, and stations located in unwalkable areas – but the principle is the same.

The difference is that most long-run problems should be addressed through a prolonged process of new consensus formation. The FRA can be gutted relatively quickly, but everything else requires public consultation and agency reorganization, both of which take time. The rationalizations that could be done quickly and in the guise of a general service cut were already done in 2009; further short-term changes would have to be actual cuts. Long-term changes can’t be done at the drop of a hat.

In addition, anything involving layoffs requires some cooperation from the employees, which requires the agency to find the workers job placement, as JNR/JR did in the 1980s. In Japan, it took almost an entire decade, and that was in an unusually good economy. The US can try to do this a little faster by pursuing rapid growth in transit – diverting the increased labor efficiency into more operating hours rather than reduced operating costs – but this would only mildly soften the blow, unless there were a stellar state of pro-transit consensus allowing for an unusually fast transit growth, which itself would have to be done over the long run. The only other alternative is to engage in the layoffs certain corporations and consultants have been infamous for, which is not guaranteed to produce good results; on the contrary, it would make the employees hate the agency, leading to a dysfunctional corporate culture, in which the line employees with expertise have no reason to share it with management.

It’s critical to avoid confusing short-run and long-run political problems, because their solutions are fundamentally different. In the short run, good transit advocates need to defeat Tea Party legislators and fellow travelers, fight for emergency fixes in the state legislatures such as New York’s transit lockbox, and allow for small fare hikes or service cuts if necessary. Consensus formation has nothing to do with it, and is in fact counterproductive when the other party is explicitly uninterested in consensus.

It’s in the long run that the familiar scourges of this blog become more important. Bottom-up consensus formation, starting from the community level, can be done even now, but it can’t be expected to yield results for the next few years. Once the Tea Party disappears as a political force – most likely 2012 or at the latest 2014 – good transit advocates should look for general good-government approaches, including attempts to revise zoning codes, reform contracting processes to reduce construction costs, and so on; while this can be done early as well, it again should take some time to take effect. Consensus in the long run is critical: it’s important to move away from the state of transportation politics since 2008, in which mode wars have become a partisan issue, and toward a state in which the partisan debates are about whether to improve transit through the application of liberal or conservative ideology. No matter what happens in the next two years, good transit advocates should be planning for the state of transportation funding debates ten years from now to look dramatically different.

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17 Responses to Short-Term Versus Long-Term Transit Problems

  1. Danny says:

    Long Run improvements can’t happen overnight. That much is true. But honestly, do you think that once funding comes through, that those long run changes will happen?

    To anyone with the mildest degree of skepticism in government, the reason should be obvious. They have no incentive to reform, because at the drop of a hat, they can shut down the effing government. Do you realize what kind of power that is? If we don’t give in to their demands, they will turn us into Somalia! There is no incentive to reform. The long run changes will never happen. These government agencies will hold the public goods hostage until the public is begging to give them more tax revenue, and then they will all give each other raises, throw a few parties, and then cut service anyway.

    Their motives are too obvious by the simple consequences they propose. Funding shortfall? Lets shut down the airports, transit, the national parks, and the Washington Monument while we are at it. It is always the most visible or most beneficial aspects of government that they propose to shut down. When was the last time you heard of a proposal to shut down the Sunset Limited when Amtrak faces a funding shortfall? No, no…it is always something way more visible.

    I’m unabashedly conservative, there is no doubt about it. But at what point will we see liberals with the same degree of skepticism in government that they had 50 years ago? When will we have people who can see these ploys for what they really are? The long run changes will never happen unless we force them to happen. It takes more than a consensus to support transit…it takes a consensus to support transit AND hold them accountable.

    • I’m not sure what you are arguing here–you seem to be conflating the Tea Party’s attempt to use the debt ceiling negotiations to force a dismantling of the social safety net (and similar power plays at the state level, such as in Minnesota), with the longstanding bureaucratic trick of threatening to cut meat instead of fat in order to defend their turf. This makes no sense, as the groups trying to “shut down the effing government” are those which, generally, dislike the government. Unless you’re falling for the recent Tea Party line that the Democrats are somehow the “hostage takers”–which I think you’re too smart for–this line of argument goes nowhere.

      As far as the Sunset Limited and other land-yacht Amtrak services go; why do you suppose these things continue to run?

      To answer your final question. Many “liberals” are skeptical about government and actively seek to reform it; the transit blogosphere is full of examples. There’s a difference, however, between skeptical about specific institutions, personalities, or practices; and the whole “government is inherently and uniquely bad” meme pushed by conservatives. I’ll readily concede that government is bad, as all large institutional forms suffer from the flaws of self-aggrandizement, self-dealing, rent-seeking, inefficiency, excessive inertia, turf battling, and so. I dispute, however, the suggestion that the private sector is automatically better–corporations are capable of just as much corruption and malpractice as “the government” is. The behavior you ascribe to public officials–”they will all give each other raises, throw a few parties, and then cut service anyway” is readily observed in corporate America; indeed, the only thing more shocking that the brazenly self-dealing behavior of the executive class (which goes FAR beyond anything ever done by public employee unions) is that despite all the coverage thereof, so little has been done to stop it.

      The profit motive, contrary to so much rhetoric, is not a magic bullet which pierces the heart of bureaucratic sloth; and in the realm of public services, can easily lead to behavior which is not beneficial to the public.

      And as has been recently pointed out on this blog, it is very difficult to get a consensus for reform of a public service, when that service routinely faces existential attacks. If you want to engage in useful reform advocacy, focus on the specifics; not on general attacks on government or public employees.

      • Danny says:

        I’m not arguing anything more than this: Anybody who says that service cuts or fare increases are the only options when tax funds go away is completely full of shit. Yes, that means Yonah Freemark too. Transit productivity has been declining since the 1960′s, and there is no reason it can’t go the other way. The only thing stopping it from happening is our own refusal to hold transit agencies accountable.

        Coincidentally, the parallel you mention with private enterprise is completely apt once you move away from the availability bias. There are some companies for sure that are just as bad, if not worse, than the bloated mess that our public transit agencies have become. But there are plenty of companies that aren’t…and they all have one thing in common: shareholders that demand results and don’t put up with bullshit. Usually this means that the majority of shares are held by individuals instead of mutual funds or hedge funds.

        I am completely comfortable attacking public transit agencies that are acting contrary to the interests of the public they serve. I will continue to do so. In case you haven’t noticed, my blog comments on here as well as other blogs are full of specifics, and there is no reason why I can’t speak in generalities when the generalities are apt.

        I don’t know why you think that consensus for reform can’t be built while the service is under existential attack. In the current state of transit operations in the US, I think Reform vs Dissolution is a perfectly acceptable dichotomy to debate.

      • Alai says:

        Thank you– very well written.

      • Wad says:

        @Danny, you have a mythological view of the vigilant shareholders as guardians of the corporate purse.

        The problem is, individual (retail) shareholders are a mile wide and an inch deep. Annual meetings and votes are not an exercise in corporate democracy.

        The problem with individual investors is that they don’t move needles. Mutual fund managers, hedgers and institutional proxies do. They are the ones who bend companies their way because they have something better than an annual proxy vote: They have enough shares that will noticeably appeciate or decline based on their buying or selling activity.

        Individual investors can’t get together and threaten a sell-off; they will lose their voting rights and the institutionals have their downsides covered by put options, and then go on to snap up the sold shares at a discount.

        An institutional, on the other hand, can clutch an integer percentage of a company’s floating stock. Just the threat of selling off a portion of that percentage, say 20% of a company that the money manager owns 5% off all floating shares — that works out to 1% float — could trigger a massive sell-off that shears off sizable market cap.

        They’ll have more leverage over the company to get a desired outcome, and it’s done for reasons that don’t concern the internal workings of the company.

      • Nathanael says:

        Danny, as an investor I can tell you I currently invest pretty much only in family-run businesses, apart from foreign businesses (which are better regulated by LAW). The toxic habit of corporate looting is so universal in the US that the vast majority of big companies are total messes.

        The US’s laws on corporate governance are among the worst in the industrialized world, so CEOs can get away with looting and burning a company, and there is usually almost nothing stockholders can do about it, even when they want to, and even when they’re a big institution like TIAA-CREF.

        Every single transit agency in the country has better management than the average stock-market-floated US corporation. Period. It’s a really low standard! And it’s because they have more oversight than the unaccountable looter CEOs.

        You want to make them work *really* well, though? Find a strong advocate and devotee of public transit who knows what he or she is doing, give him (or her) total control of the agency *and* the power to levy taxes, for a decade so as to avoid short-term thinking, and you’ll get the sort of success you get from a good family-run company. This hasn’t been politically viable lately.

    • Wad says:

      Danny, interesting that you brought up liberal skepticism in government.

      One of the lesser-known movements during the Clinton administration was Vice President Gore’s hobby-horse, reinventing government (regov).

      There was a whole book on the subject with that title (by Osborne and Gaebler), and various evaluations on actual plans.

      This was mostly an internally led project by government workers themselves to come up with ideas for delivering services cheaper and more effectively. It was counter to the public perception of bureaucrat who only sought to either shirk responsibility, grow turf or protect their job positions.

      They were common-sense and entrepreneurial. At the local level, many of the ideas involve co-location of services — think of an elementary school, that would otherwise be closed during non-school hours, but kept open because it has a public library and playground available to all; or, using high-traffic public venues like post offices to have kiosks for interacting with motor vehicle bureaus or county tax assessors. Even at the federal level, you’d seen a Pentagon defense spending reform movement — from defense and civilian personnel within the Pentagon itself.

      What happened then? Well, Clinton left office and Gore didn’t get the presidency. Since it hadn’t been part of any political program, regov wasn’t out there in the public mind enough to be a winning campaign platform. The other political party, meanwhile, thought that the only thing worse than government was good government and smothered the movement good and dead.

      • Danny says:

        I never knew much about the regov plan, because I was still an ignorant minor that didn’t care about voting because he couldn’t. It sounds like it was a good thing.

        But then, there is a big red flag in my mind, and maybe you can answer it. If it was an internally led project by government workers, why did they need a president in order for it to work? Sorry, but I don’t buy then story of the big bad opposition smothering a true ground up movement. It doesn’t take a president to relocate a school. Even a president and a hoard of firebreathing congressmen couldn’t do that. Remember, Bush’s biggest intervention into local governance, NCLB, couldn’t happen without massive bipartisan support.

        As to your other post…it was a misunderstanding. When I said individual investors, I meant individual large investors. Small individual investors, like you say, don’t have the voice, but large institutional investors rarely stick around long enough to exercise that voice. They are passive, and they don’t gain much by being active, especially when a competitor can leapfrog them by simply moving their portfolio.

      • Danny,

        The sort of proposals and restructring proposed as part of the regov effort require political and administrative support; they’re not things that line civil servants can implement on their own. Indeed, much of the inefficiency of government–including the Sunset Limited–are the result of political interference, not featherbedding from within the civil service. This is a point that needs to be emphasized–the power of the civil service to unilaterally command government revenue streams and divert them to their own benefit–often the subject of wild claims in conservative arguments–is greatly exaggerated. It happens–but generally, it happens when some elected official is looking for political support. In other locales, its private interests (contractors, etc.) who make deals with politicians–with the result that bot the civil service and the public at large get screwed.

      • betamagellan says:

        Building on Engineer Scotty’s point that any sort of civil service reform needs political support, I’d also add that meaningfully shifting policy to the right still requires policy knowledge. I’d say a good example of this was contracting out bus service in Denver, which was mandated by the state legislature. Competitive tendering has, from what I understand, managed to keep the growth in labor costs at or below inflation and the recession hasn’t really hurt service levels there. Enacting that policy wasn’t as simple as just saying “competition=efficiency,” though—it required actual expertise to write the policy and bring it to fruition, and the the public sector still plays a dominant role in Denver’s transit landscape (setting routes, schedules etc.).

        When I look at Republican-supported transit policies I tend to see very little that mirrors this. On the one side there’s rhetoric supporting privatization or removing union labor, with little follow through on how it would be implemented and improve service. On the other side there’s support for suburban light rail extensions, large park-and-rides, and high cost-per-passenger (but low cost-per-mile) commuter rail, which simply brings ordinary, unreformed American transit into areas more likely to vote red. To me, the fact that Denver-style competitive tendering (or European-style franchising) goes unmentioned implies that there’s simply little knowledge (and probably little curiosity) about how more conservative transit policies can be enacted.

      • Nathanael says:

        betamagellan, you may know this, but this is because Republicans don’t support what used to be called “conservative” approaches, and what can accurately be called “market-based” approaches.

        The Republican Party has no use for free markets, open tenders, or bidding; it’s currently bankrolled by *monopolists*. Any calls for free markets by elected Republicans are either (a) ideological shibboleths/advertisements that they are of the right tribe, like the Pledge of Allegiance or calling the US a “Christian nation” ; or (b) cynical attempts to break functioning operations so that they can be looted by cronies.

        If you want to see market forces used effectively as a tool, you have to look to independents and Democrats — and not generally the ones who call themselves “conservative”, either.

        On the original topic, the Civil Service are usually trying to do their best, apart from when they’ve been deliberately stacked with corrupt officials (the drug-addled Minerals Management Service under Bush Jr. comes to mind). Politicians with a bad attitude often make it quite deliberately difficult to reform things, and often they have reasons; making the MMS corrupt and controlled by oil companies was actually the *goal* in the case of Bush Jr.; it was payback to his oil company masters. Under the Bush administration in particular, a tremendous documented effort was made to corrupt the Civil Service so that it could be used more easily for the personal political ends of the Republican Party (the DOJ has the most egregious documented examples) — and in that environment an “efficiency” program like Al Gore’s was DOA, because efficiency was the *opposite* of the goal.

  2. Andy says:

    “In light of… the rewriting of federal political power (either completely Democratic or completely Republican) that is expected after the 2012 election, this should also be treated as ephemeral.” Are you saying it “is expected” that we will have a single party in charge of each of the House/Senate/White House after 2012? What evidence do you have for this theory? And as far as the Tea Party disappearing as a political force by 2014, I’d love for that to be the case, but again, where is the evidence?

    • Alon Levy says:

      I’m saying that; I think it’s very likely. The reason is that winning candidates tend to have coattails and sweep a friendly Congress; it’s not guaranteed (see Clinton 1996), but it’s sufficiently likely both sides have a good reason to wait until 2013 to pass a transportation bill.

      The Tea Party’s basic problem is that it can’t govern, and isn’t interested in governing. It’s just interested in grandstanding, which can make it popular in opposition, but not when in power. Its three rail-killing governors – Kasich, Scott, Walker – have approval rates of 35%, 25%, and 37%, respectively. This burning rejection of consensus and government is the main problem of right-wing populists; the Netherlands’ own Tea Party, Geert Wilders’ PVV, only wins local elections once, and after the national election made it a serious possibility for inclusion in the coalition government, it had to advertise in public newspapers for various positions of expertise.

      • betamagellan says:

        The Senate complicates this: the 2010 crop of senators won’t be up for reelection until 2016, and in 2012 a numbers of Democratic senators from the 2006 wave will be up for reelection in red and purple states, so I’d guess that we’re likely stuck with some kind of Tea Party influence until 2016-18 (I remember reading that, due to the schedule of states’ senate seats, the next likely window of opportunity for any sort of major climate change legislation would probably be after the 2016 election).

    • Wad says:

      Andy, you’re actually asking for evidence of an event in the future?

  3. Nathanael says:

    Nice piece, except that “conservative ideology” now means “a grab bag of nonsense designed to promote looting, dictatorship, and religious theocracy”.

    It would be nice to discuss how best to deal with transportation as questions of to what extent to use markets vs. fiat, to what extent and how to subsidize what, what to provide, what organization should provide it, who should benefit, etc. Unfortunately, with the exception of the dying breed, that’s not how Republicans operate any more. It’s not about comparing choices in reality. It’s about “we make our own reality”.

    So it’s Democrats, third party types, and independents to discuss the matter.

    • Nathanael says:

      Note that I think a lot of the elected Democrats are worthless too, and a lot of the third party types and independents are full of shit…. but at least there isn’t a consistent effort to drive out anyone who dares to base their beliefs in reality.

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