Too Much Money Going to the Wrong Places

It appears that the Amtrak crash that killed seven people Tuesday resulted from speeding, but big-government advocates are already using this accident to make their case for more infrastructure spending. In fact, the problem is not too little money, but too much money going to the wrong places.

In 2008, President George Bush signed a law mandating that most railroads, including Amtrak, install positive train control (PTC) by December of 2015. PTC would force trains to slow or stop if the operator ignored signals or speed limits.

In 2009 and 2010, President Obama asked a Democratic Congress to give him $10 billion to spend on high-speed trains, and Congress agreed. Not one cent of that money went to installing PTC in Amtrak’s Northeast Corridor.

PTC would have prevented this accident. There was plenty of money available to install it, but the Obama administration, in its infinite wisdom, chose to spend it elsewhere. Two days ago, it would have been embarrassing to think that the government-run Amtrak hadn’t yet completed installation of PTC on its highest-speed corridor. Today, it’s a tragedy. But how is it the fault of fiscal conservatives?

This accident is just one more example of a political fact of life: Politicians are more likely to put dollars into new construction, such as high-speed rail, than to spend them on safety and maintenance of existing infrastructure. As John Nolte says on Breitbart, “Amtrak is not underfunded; it is criminally mismanaged.”

Transportation journalist Don Phillips presents one example of Amtrak mismanagement in the June issue of Trains magazine: instead of promoting a culture of safety, Amtrak has a culture of don’t care. Phillips points to a February report from Amtrak’s Inspector General that found that Amtrak has the least-safe working environment of any major railroad. Amtrak employees are more than three times as likely to be injured or killed on the job as employees of BNSF, CSX, Norfolk Southern, or Union Pacific.

This poor record, says the report, is a direct result of a lack of accountability “at all levels.” Employee injuries in 2013 were only one-twelfth as likely to result in disciplinary action as in 2009, resulting in employees who believe today that they “can ignore rules and safe practices with impunity.” Safety is of so little importance in the organization that three out of four of the employees interviewed by the inspector general believed that Amtrak’s safety record was better, not worse, than other railroads.

One reason why Amtrak has a poor safety culture may be that Congress has legally limited Amtrak’s liability for any single crash to $200 million. Imagine the outrage if Congress limited the liability of oil companies, pipeline companies, Monsanto, or other private corporations. Yet the progressives who wrote Amtrak legislation considered such a liability limit perfectly acceptable.

If Congress were to respond to this crash by increasing federal infrastructure spending, it is all too likely that much if not most of that money would go for useless new projects such as new high-speed rail lines, light rail, and bridges to nowhere. We don’t need intercity trains that cost several times as much but go less than half as fast as flying; we don’t need urban trains that cost 50 times as much but can’t carry as many people per hour as buses; we don’t need new bridges if bridge users themselves aren’t willing to pay for them.

As I’ve documented elsewhere, infrastructure that is funded out of user fees tends to be better maintained than infrastructure that is funded out of tax dollars. User fees also give transportation managers signals for where new infrastructure is really needed; if people won’t pay for it out of user fees, it probably isn’t necessary.

Before 1970, America’s transportation system was almost entirely funded out of user fees and it was the best in the world. Since then, funding decisions have increasingly been made by politicians who are more interested in getting their pictures taken cutting ribbons than in making sure our transportation systems run safely and smoothly.

This country doesn’t need more infrastructure that it can’t afford to maintain. Instead, it needs a more reliable system of transport funding, and that means one based on user fees and not tax subsidies or federal deficit spending.

Insuring John Galt?

Caleb’s latest podcast is an interview with Charles Murray on his new book, By the People: Rebuilding Liberty without Permission. You can watch the podcast below or download the audio here. Be forewarned: if you’re like me, you’ll be Kindle-ing the book before the interview ends.

The word “provocative” is applied to far too many books these days, and often to books that should instead be called “wacky.” Murray’s thesis fully earns the former adjective, and perhaps a touch of the second–and I write that as high praise.

He argues that American government today is so far divorced from the nation’s founding principles of limited government and individual liberty that it can’t be returned to those principles through normal political action. No presidential administration, congressional turnover, or set of SCOTUS appointments will restore the Commerce and General Welfare clauses. Thus, he writes, supporters of liberty should try to effect change through carefully chosen but broadly adopted acts of civil disobedience against publicly unpopular regulations. Some examples that come to my mind: people could become part-time Uber drivers, or cash businesses could routinely make deposits of $9,999, or parents could include cupcakes in their schoolchildren’s packed lunches.

A Spurned Vendor — And a Tip To the FTC

In 2010, the Federal Trade Commission approached an Atlanta-based medical testing company, LabMD, with accusations that it had wrongfully left its customer data insecure and vulnerable to hackers. LabMD’s owner denied that the company was at fault and a giant legal battle ensued. To quote my post last year at Overlawyered:

…according to owner Michael Daugherty, allegations of data insecurity at LabMD emanated from a private firm that held a Homeland Security contract to roam the web sniffing out data privacy gaps at businesses, even as it simultaneously offered those same businesses high-priced services to plug the complained-of gaps.

Last week, finally, after five years, the case reached an administrative hearing at the FTC, which heard “bombshell” testimony given under immunity by former Tiversa employee Richard Wallace:

After LabMD CEO Michael Daugherty refused to buy Tiversa’s services, Tiversa reported false information to the FTC about an alleged security incident involving LabMD’s data, Wallace claimed in his testimony.

CNN headlined its story “Whistleblower accuses cybersecurity company of extorting clients” – that is, by threatening to turn them in to the feds if they spurned its vendor services.

To be sure, allegations are merely allegations, and we haven’t heard Tiversa’s side of the story, except for a statement from its CEO Bob Boback: “This is an overblown case of a terminated employee seeking revenge. Tiversa has received multiple awards from law enforcement for our continued efforts to help support them in cyber activities.” The advisory board of the Pittsburgh-based security services company includes former four-star Army general and former Democratic presidential candidate Wesley Clark.

Federal Spending Cut Plan 2015

According to opinion polls, Americans think the federal government is too big and too powerful. On average, people think that more than half of the tax dollars sent to Washington are wasted. When Gallup asked people what the most important problem facing the nation was, more people identified “government” than any other concern, including the economy, immigration, health care, and terrorism.

The people are right. The federal government is too big, too powerful, and too wasteful. Rather than defending our rights to life, liberty, and the pursuit of happiness, the federal government often abuses those rights. The bigger it is, the more it abuses, and less well it functions.

The solution is a major downsizing. I have posted an updated plan to cut spending and balance the federal budget by 2020. The plan includes cuts to low-value and harmful programs across the government. Whether or not the government was running deficits, the proposed cuts would make sense because they would generate growth and expand freedom.

Political leaders should listen to the public’s concerns about big government. They should help lead a national discussion on programs to eliminate, devolve to the states, and privatize. They can start with the items in my new plan, including cuts to subsidies, entitlements, and state aid.

Why cut? Because Americans would gain more net benefits from the federal government if it were much smaller.

When Are You Going to Get Married?

The Wall Street Journal today reports a policy shift that I had predicted and recommended 20 years ago. Rachel Emma Silverman writes:

Amid a push that has made same-sex marriage legal in 37 states and the District of Columbia, some employers are telling gay workers they must wed in order to maintain health-care coverage for their partners. About a third of public- and private-sector employees in the U.S. have access to benefits for unmarried gay partners, according to a federal tally, but employment lawyers say the fast-changing legal outlook is spurring some employers to rethink that coverage.

“If the Supreme Court rules that suddenly there is marriage equality in 50 states, the landscape totally changes,” says Todd Solomon, a law partner in the employee-benefits practice group at McDermott Will & Emery in Chicago, who has been tracking domestic partnership benefits for nearly two decades.

Such a decision will likely result in more employers dropping same-sex partner benefits in favor of spousal benefits, according to Mr. Solomon.

Over the past decade, a growing share of companies has offered coverage for gay employees and their partners as a way to provide equal benefits for couples who couldn’t legally wed. Others companies offer coverage more broadly to unmarried domestic partners, regardless of sexual orientation. 

Now, some employers who offer benefits targeting same-sex partners say it is only fair to require those couples to marry where legal, just as their straight co-workers must do to extend coverage.

I anticipated that eventuality in a January 4, 1995, op-ed in the New York Times, as the movement for marriage equality, civil unions, and domestic partnership was just beginning:

Instead of the Fed

That, some of you may recall, was the name of a November 1, 2013 conference put on by the Mercatus Center. (The full name was actually “Instead of the Fed: Past and Present Alternatives to the Federal Reserve System”). The proceedings of that conference–or most of them, at any rate–are now available in a special issue of the Journal of Financial Stability, edited by yours truly.

Although online access to the articles is by subscription only, individual contributors have temporary, open links to their own articles. Here is mine on “Synthetic Commodity Money.”

Peculiar Politics in the USA

The controversy over the upcoming military exercise called “Jade Helm 15” is unfortunate.  It is unfortunate because there really are some alarming trends underway here in the United States, but instead of finding common ground, the Right and the Left too often talk past each other.  Some examples:

Recall the militaristic raid to snatch Elian Gonzales?

The Right said, “That’s outrageous!”

The Left’s reply was, “What are you talking about?  That’s just law enforcement.”

Recall the militaristic police response in Ferguson last summer?

The Left said, “That’s outrageous!”

The Right’s reply was, “What do you mean?  That’s just law enforcement.”

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Let’s take a step back from specific incidents and look at some of the broader trends that have been underway.  First, the line between the police and the military has become badly blurred.  The military itself is more involved in policing and the civilian police are now more militarized.  This is worrisome because the military does not typically concern itself with rights of persons on the other side of the battlefield.  Second, the National Security Agency’s powers used to be directed outward, but we now know those powers are directed inward, on the communications of Americans.  Third, presidents (red & blue) claim the power to take our country to war, and that when we are at war, presidential power trumps constitutional rights.  High-ranking officials tell us that America–from Seattle to Miami (and all the tiny towns in between)–is a “battlefield.”  That’s a bold and disturbing claim since there are no rights on the battlefield, only raw power.

As the next presidential contest gets underway, let us hope these important matters get the attention they deserve.