Tag: Ray LaHood

“Smart Growth” from a Dumb Agency

The same federal agency that brought us monumental failures like public housing wants to play a bigger role in fostering so-called regional “smart growth.” HUD secretary Shaun Donovan recently traveled to Portland, Oregon to announce the Obama administration’s new Office of Sustainable Housing and Communities.

This new bureaucracy will distribute $140 million in grants for regional “smart growth” planning:

With OSHC’s grant programs, HUD will provide funding to a wide variety of multi-jurisdictional and multi-sector partnerships and consortia, from Metropolitan Planning Organizations and State governments, to non-profit and philanthropic organizations. These grants will be designed to encourage regions to build their capacity to integrate economic development, land use, transportation, and water infrastructure investments, and to integrate workforce development with transit-oriented development. Accordingly, OSHC’s grants will be coordinated closely with the Department of Transportation (DOT) and Environmental Protection Agency (EPA).

Donovan told a Portland State University crowd that “We at HUD are big admirers of what you’re doing here.” However, Randal O’Toole’s dismantling of the Portland planning utopia myth in a Cato Policy Analysis shows that the city is nothing to be emulated. That is unless other cities want less affordable housing, more congestion, higher taxes, and businesses relocating elsewhere.

Donovan then met up with his EPA and DOT colleagues in Seattle at smart growth conference. HUD isn’t the only one opening up the taxpayer’s wallet:

And the Department of Transportation is proposing $527 million to promote “livable communities” through grants to states and cities. Transportation secretary Ray LaHood says those grants, too, must meet the goals of his partner agencies.

LaHood: “It supports any new initiatives we develop on our own like expanding transit in low–income neighborhoods, or what our friends at HUD and EPA are working on in collaboration.”

Local coalitions are already forming to seek those federal dollars.

Let the rent-seeking begin.

The merits of Portland’s urban planning can be debated all day. But it stands federalism on its head when the federal government takes a particular city’s policies and then tries to shove it down the throats of the rest of the country. Based on what I know of Portland’s planning, I certainly wouldn’t want it where I live. Other cities, like Houston, have reached the same conclusion. But, I guess if Shaun Donovan likes it, then damnit, we’re all going to like it.

Raising an Eyebrow at LaHood’s Toyota Remarks

In response to the large recalls affecting several Toyota models, Transportation Secretary Ray LaHood yesterday advised Americans to “stop driving” their Toyotas. In testimony before the House Appropriations subcommittee on transportation, LaHood said:

My advice to anyone who owns one of these vehicles is stop driving it, and take it to the Toyota dealership because they believe they have the fix for it.

Later in the day, he elaborated:

I want to encourage owners of any recalled Toyota models to contact their local dealer and get their vehicles fixed as soon as possible. NHTSA will continue to hold Toyota’s feet to the fire to make sure that they are doing everything they have promised to make their vehicles safe. We will continue to investigate all possible causes of these safety issues.

As Transportation Secretary in an administration that is politically vested in the success of General Motors (recall how taxpayers were forced to take a 60% stake in GM for $50 billion+), was LaHood exploiting an opportunity to tip the scales further in GM’s favor? I guess we’ll never know for sure, but as long as GM remains nationalized, any comments by administration officials on matters affecting the auto industry should be viewed skeptically and through this prism, as they can irresponsibly move markets.

LaHood Eliminates Cost-Efficiency Rules

Last week, Secretary of Transportation Ray LaHood announced that federal transit grants would now focus on “livability.” Buried beneath this rhetoric is LaHood’s decision to eliminate the only efforts anyone ever made to make sure transit money isn’t wasted on urban monuments that contribute little to transportation.

Back in 2005, then-Transportation Secretary Mary Peters stunned the transit world when she adopted a “cost-effictiveness” rule for federal transit grants to new rail projects. In order to qualify, transit agencies had to receive a “medium” cost-effectiveness rating from the FTA, meaning they had to cost less than about $24 for every hour they would save transportation users (either by providing faster service to transit riders or by reducing congestion to auto drivers). This wasn’t much of a requirement: a true cost-efficiency calculation would rank projects, but under Peters’ a project that cost $0.50 per hour saved would be ranked the same as one that cost $23.50 per hour. But any projects that went over the $24 threshold (which was indexed to inflation – by 2009 it was up to $24.50) were ruled out.

After unsuccessfully protesting this rule, transit agencies responded in one of four ways. Those close to the $24 threshold cooked their books to either slightly reduce the cost or slightly increase the amount of time the project was supposed to save. Those that were hopelessly far away from the $24 threshold, but had powerful representatives in Congress, obtained exemptions from the rule. These included BART to San Jose, the Dulles rail line, and Portland’s WES commuter train. Those that didn’t have the political clout either shelved their projects or, in a few cases such as the Albuquerque Rail Runner commuter train, tried to fund them without federal support.

In 2007, when Congress created a fund for “small starts,” Peters imposed another rule that transit agencies would have to show that streetcars were more cost-effective than buses. This led to further protests because the the money was “supposed to be for streetcars” – the provision had been written by Earl Blumenauer, who represents Portland, the city that started the modern streetcar movement. But everyone knew streetcars would never be as cost-efficient as buses. This meant that, except for Portland, virtually every agency that had wanted to waste federal money on streetcars shelved their plans.

Until now. LaHood’s announcement means that cost is no longer an issue. If your project promotes “livability” (which almost by definition means anything that isn’t a new road) or “economic development” (meaning it will be accompanied by subsidies to transit-oriented developments), LaHood will consider funding it, no matter how much money it wastes.

Many transit agencies are elated. Cities from Boise to Minneapolis to Houston now see that their wacko projects that defy common sense now have a chance of getting funded.

The bad news for transit agencies is that this doesn’t mean there will be any more money for transit. Instead, there will be more competition for the same pot of money. Not to worry: House Democrats plan to open the floodgates to more transit spending as soon as they can get federal transportation funding reauthorized. This means taxpayers can expect to see more of their money wasted and commuters can expect congestion to get worse as more of their gas taxes are funneled into inane rail projects.

Another Dumb “Stimulus” Idea at Taxpayer Expense

Sigh.  Will the error never end?  If you listen to Washington, you would think that taking money from taxpayers, who otherwise would buy cars, homes, computers, and any number of other items, and giving it the same taxpayers to get them to buy cars is a great way to stimulate the economy.

Of course, the Keynesian hope is that Americans will spend rather than save, as if the best way to resolve a crisis  resulting from too much spending and borrowing is to encourage more people to spend and borrow more.  Alas, Washington has never met an expensive new program that it didn’t like.

In fact, the “Cash for Clunkers” program is an even dumber idea than most “stimulus” proposals.  Cato’s Alan Reynolds notes how easily the program can be manipulated to frustrate the objective of improving auto gas mileage.

Moreover, the initiative probably doesn’t increase auto sales.  Rather, it primarily rewards people who would have bought a new car anyway.  Explains Jeremy Anwyl in the Wall Street Journal:

Nearly everyone now seems to be praising “cash for clunkers”—the federal program recently launched that will credit you up to $4,500 to trade in your old car for a more fuel-efficient vehicle. President Barack Obama says the program “has succeeded well beyond our expectations and all expectations.” Transportation Secretary Ray LaHood claims “this is the stimulus program that has worked better than any other stimulus program that was conceived.”

But cash for clunkers is also a program in limbo, having quickly run out of the $1 billion budgeted for it. Congress must now decide whether to let it die or whether to pump more money into it. So it’s time to ask if this program is really a good idea.

It is true that Internet car shopping activity, showroom traffic, and sales are all up, which is why the auto industry wants to keep the program going.

I love a good sales surge as much as anyone. But it’s not that simple. First, it’s not clear that cash for clunkers actually increased sales. Edmunds.com noted recently that over 100,000 buyers put their purchases on hold waiting for the program to launch. Once consumers could start cashing in on July 24, showrooms were flooded and government servers were overwhelmed as the backlog of buyers finalized their purchases.

Secondly, on July 27, Edmunds.com published an analysis showing that in any given month 60,000 to 70,000 “clunker-like” deals happen with no government program in place. The 200,000-plus deals the government was originally prepared to fund through the program’s Nov. 1 end date were about the “natural” clunker trade-in rate.

Let’s hope we can be saved from additional “stimulus” proposals which do far more to waste money than spur the economy.