An economic case for high speed rail in America: We, as Americans, tend to have an inherent belief that America is the greatest nation on earth. The metric used to arrive at this belief is typically not one based on stats, figures, or data, but on a sincere love for this country. While there is nothing wrong with loving one’s country, there is something inherently wrong with allowing love to blind us from the facts. Across a multitude of metrics, America falls short of the number one spot. Two of those metrics coincide both in reality and in the reason for this blog; green energy and high speed rail. When discussing the implementation of high speed rail in America there are two numbers to take into account: The roughly $2.2 trillion in infrastructure investments[1] neededby America and the unemployment rate for October 2012, which was 7.9%[2].

Before explaining the need to initiate the implementation of high speed rail in America, we first must define the term itself. The definition of high speed rail varies in the international community and within the United States. The International Union of Railways defines it as systems of rolling stock and infrastructure which regularly operates at speeds of 155 mph on new tracks, while only at 125 mph on older tracks.[3] In the United States the definition tends to vary, with the accepted minimum being 90 mph. A major argument that is used against the implementation of high speed rail in America is that the nation is too large and that it would be too costly. However, while a national high speed rail system would be the end goal decades down the line, it is not the main aim of high speed rail. High speed rail would be used as a viable option to connect “mega-regions” throughout the United States. Mega-regions are defined as large-scale economic units of multiple large cities and their surrounding suburbs.[4] The mega-regions within the USA are responsible for over 75% of our economic activity.  These mega-regions extend over vast areas, ranging from Boston to D.C. and from Pittsburg to Chicago. This writer can attest to the pains of driving from NYC to Washington D.C.

The economic opportunity provided by such decreased times is quite obvious at first glance. The most noticeable is Philadelphia becoming a suburb of NYC.  It then would take me roughly five more minutes to travel to NYC by train while only living within fifteen miles of the city. Many will note that the Acela train, operated by Amtrak, already runs the north-east corridor route. The Acela, despite having limited speeds for most of its journey, as well as no dedicated track, can be deemed a success story. From 2000 to 2010, ticket revenues on the Acela line grew by 87%. Furthermore, despite only accounting for 10% of Amtrak’s ridership, the Acela line accounted for 25% of ticket revenue.  It comes as no surprise then that Acela has the best revenue of any of the Amtrak lines.[5] The success of the Acela line demonstrates both the restrained demand for high speed rail and its viability as a transportation system. Still, some question if high speed rail is worth it. Within the Stimulus, the Obama administration guaranteed money for the purpose of the creation of high speed rail. However, in several cases Republican governors refused the funds on ideological grounds. If we are to look back into history, what would we say to any governor who refused the interstate highway system? We would likely call that individual a fool and rightfully so. High speed rail has the opportunity to be the interstate highway system of the 21st century.

My final point is perhaps a bit existential, but nonetheless is one I feel must be addressed. I began this post discussing the notion of America being the greatest nation on earth.  There is a bridge in Trenton, NJ with the following inscription: “WE MAKE IT, THE WORLD TAKES IT”. To those of my generation, this may seem somewhat ironic; however, this was not always the case. America is still a manufacturing superpower, but it has lost ground. Now we must approach this realistically and recognize that a great deal of our manufacturing success came from the devastation unleashed on the rest of the world during WW2. However, we must also recognize that the demise of American manufacturing is not solely due to the rise of the rest of the world. We celebrate the resurgence of the American auto industry and lament the reign on imports over the past several decades. Yet, we are never told that the manufacturing system that caused Japanese imports to dominate world markets was first offered to American manufactures. Our country turned it down and the rest is history. America’s dominance of the global economy has much to do with the timely decimation of others, but just as much to do with what we produce.  When we look back on times of American prosperity, we find that it was the United States that was manufacturing the world’s most advanced technologies, while inventing many of them at the same time. At some point in time this all changed, and we have witnessed the decline ever since. We decry that supposedly all of our good are made in Mexico and China, yet we must recognize that most of those jobs are not coming back. This must be an accepted reality. If people are already frustrated at t-shirts and iPhones made in China, what happens when it’s our nation’s mass transportation system? Around the world millions of people are being pulled out of poverty and nations that were once written off are becoming some of the most economically developed in the world. Within a decade we will see an explosion of people in the middle income range around the world. High-speed rail has already proven to be a success in Europe, Japan, and China. No doubt others will seek to emulate this success. So where will they turn? The answer can be America, and this country will be able to solve a multitude of our other problems, such as unemployment. Americans tend to hold the attitude that if you are not first, then you are last. In the case of the hegemonic power of the 21st century, whoever dominates the green market will keep or gain that mantle.


[1] http://www.infrastructurereportcard.org/

[2] http://www.bls.gov/cps/

[3] http://www.uic.org/spip.php?article971

[4] http://www.theatlantic.com/national/archive/2009/05/mega-regions-and-high-speed-rail/17006/

Last night, during his victory speech, President Obama made note that in the coming years we must take notice and attempt to neutralize the threat posed by global warming. Of course, this raises the question of how this will be undertaken and how it will affect the economy. When we looked at this election cycle, we did not see climate change brought up as a campaign point, so to sketch out the next four years, we must look at the past four. With regards to climate change and the economy, we can see some key areas that Mr. Obama has at least focused on, if not attempting to enact policy, namely fuel efficiency, green energy and jobs, high-speed rail, and oil subsidies. Let’s take a quick look at each one of these and see how the President’s policy regarding them could affect the economy.
The Obama administration set new standards in fuel efficiency. These standards will increase fuel economy to the equivalent of 54.5 mpg for cars and light duty trucks by the model year 2025. These standards are projected to save US consumers $1.7 trillion at the pump, while decreasing US oil consumption by 12 million barrels.  The adoption of these measures alone will cut down on one of the most painful costs for American families, allowing them to spend more on more beneficial sources of consumption. Furthermore, these standards increase incentives for hybrid and electric vehicles, as well as charging stations. These incentives could help to reduce costs, and as such, decrease barriers to entry into the market. Government assistance also could help propel the US into the coveted position of world leader in the electric vehicle market. The President has made a point to increase exports and promote electric vehicles, and this certainly could play into this.
Concerning green jobs, the President had in the past secured a tax credit for clean energy jobs, research, and production. Many manufacturers awaited the outcome of the elections with trepidation, as Gov. Romney stated multiple times he would end all subsidies to green energy. We will likely see the President push for a continuation, if not an expansion, of these tax credits over the next four years. Justification for these subsidies would be the infant industry theory, wherein the industry would likely not survive for the time being without the subsidies. Another green sector in the economy would be mass transportation. The Administration has laid plans for national high speed rail lines in the past. The stimulus included funds for the upgrading of creating “high speed railroads” as they are known in the rest of the world. The Administration will likely push for high speed rail for both economic and political reasons. Politically, the promise of jobs and a more centralized connection and access to major population centers could entice blue collar voters to go Democrat in rural and economically depressed counties.
Finally, the President has made a continuous push over the last year to end subsidies for oil and gas companies. While it was not discussed much in the election, the fiscal cliff is still on the horizon. It presents a perfect opportunity for the President to press for an end to oil subsidies. Simultaneously extending and or increasing green energy tax credits, while getting rid of oil subsidies, could give the green energy market more of an advantage and make costs of production and prices more competitive.
Regardless of what’s undertaken, transitioning one’s economy is a difficult task. Climate change is very much real, and it presents a very credible threat to our standard of living and economy. However, it also presents new opportunities for economic success. We can either go down with the sinking ship that is fossil fuels or we can jump ship and transition to a green economy. The US has been the hegemonic power for the past century because of its economic might, which has been driven by an innovative spirit and position as the most competitive player on the world stage in the most important industries. For the 21st century, that is green energy. I believe the Administration sees it this way, yet the realities of the world may replace restrictions on what can be done. The President has made climate change an issue.  now he must convince the people and Congress it really of the same.

Sources for this article are:

http://www.whitehouse.gov/the-press-office/2012/08/28/obama-administration-finalizes-historic-545-mpg-fuel-efficiency-standard

http://www.bloomberg.com/news/2012-11-06/green-jobs-depend-on-obama-win-as-fiscal-cliff-approaches.html

http://content.usatoday.com/communities/theoval/post/2012/03/obamas-day-going-after-oil-subsidies/1#.UJp_BcX7J8E

http://www.cnn.com/2012/03/29/politics/oil-subsidies/index.html

http://www.csmonitor.com/USA/2012/0821/Obama-plan-for-high-speed-rail-after-hitting-a-bump-chugs-forward-again

http://www.politico.com/morningtransportation/1112/morningtransportation9414.html?hp=l6_b7

By Sean McGuire