As the Trump administration debates whether to help fund a $1.75 billion transit project in California that will do almost nothing to increase transit ridership, it is time to reconsider whether transit should be subsidized at all. Here are ten reasons to end those subsidies.
1. It’s the most costly transportation we have
In 2015, the transit industry spent $1.15 to move one person one mile, of which $0.87 was subsidized. No other major form of transportation is so expensive or so heavily subsidized. Auto driving cost about 26 cents per passenger mile of which subsidies were 2 cents. Flying was about 16 cents a passenger mile of which subsidies were also about 2 cents. Intercity buses cost about 12 cents a passenger mile of which subsidies were about 3 cents.
Other than transit, the most expensive passenger transport was Amtrak, which cost about 53 cents per passenger mile in 2015 of which 19 cents was subsidies. Not coincidentally, Amtrak is also government owned, suggesting that government ownership either makes transportation more expensive or government is stuck with the obsolete clunkers in the urban and intercity transport markets.
2. Subsidies haven’t increased ridership
Federal subsidies to transit began in 1965, when transit carried 60 trips per urban resident. Since then, federal, state, and local subsidies have exceeded $1 trillion (in today’s dollars), yet annual ridership has dropped to 40 trips per urban resident. Ridership responds more to changes in gasoline prices than to increased subsidies.
3. Few use it and fewer need it
In 1960, when most of the nation’s transit was private (and profitable), 7.81 million people took transit to work. By 2015, the nation’s working population had grown by nearly 130 percent, yet the number of people taking transit to work had declined to 7.76 million.
In 1960, 22 percent of American households did not own a car and transit subsidies were partly justified on the social obligation to provide mobility to people who couldn’t afford a car. Since 2000, only 9 percent of American households don’t own a car, so the market of transit-dependent people has dramatically declined.
Half the households with no cars also have no employed workers in the households. Of the 4.5 percent of workers who live in households with no vehicles, well under half–41 percent–take transit to work, meaning transit doesn’t even work for most people who don’t have cars.
4. Cities need low taxes more than transit
New York City, where 58 percent of commuters take transit to work, is the only American city that heavily depends on transit. Transit carries less than 12 percent of passenger travel in the New York urban area, less than 8 percent in the San Francisco Bay Area, and well under 5 percent everywhere else.
To improve urban vitality, what cities really need are lower taxes. Transit is one of the biggest tax burdens on residents and businesses in many urban areas, and those that spend the most on transit tend to grow slowest, while those that grow fastest are the ones that spend least on transit.
Read more at https://www.cato.org/blog/10-reasons-stop-subsidizing-transit
2017-06-29
Cato: Why Few Americans Use Transit
In 1964, most transit was privately owned, earned a profit, and was used by the average urban American 60 times a year. Then Congress passed the Urban Mass Transportation Act, offering capital grants to cities that took over their transit systems. Since then, most transit has been municipalized, we spend nearly $50 billion a year subsidizing it, and today the average American rides transit just 40 times a year.
Transit advocates complain that Americans have some sort of irrational love affair with their automobiles. But Americans have excellent reasons not to rely on transit. Here are nine of them.
1. Transit is slow.
Most transit is much slower than driving, and a lot of transit is slower than cycling. While the average speed of driving in most American cities is more than 30 mph, and in some it is more than 40 mph, the American Public Transportation Association’s Public Transportation Fact Book admits that the average speed of rail transit is just 21.5 mph while the average speed of buses is 14.1 mph. That doesn’t count the time it takes to get to and from transit stops.
2. It doesn’t go where you want to go.
Most transit is oriented to downtown, a destination few people go to anymore as less than 8 percent of urban jobs and 1 percent of urban residences are located in central city downtowns. If you don’t want to go downtown, transit is practically useless as hub-and-spoke transit systems can require hours to take you to destinations that are only a few minutes away by car.
3. It’s expensive.
The transit industry claims that transit saves people money. But the truth is that, for most people, it costs a lot less to drive than to ride transit. Transit fares in 2015 averaged 28 cents a passenger mile. That’s less than the cost of driving if you count all the costs of owning a car and are the only person in the car. But if you already own the car, the cost of one more trip is less than 20 cents a mile, and you save even more if you carry any passengers.
4. Lack of privacy and security.
Compared with the aura of security offered by riding inside of an automobile, many people avoid transit because they feel vulnerable and threatened by other riders. Teenagers swarm onto San Francisco BART trains to rob passengers. One person was killed and three injured in an Atlanta train shooting. Transit crime is up in New York despite a drop in the city overall. Even if these highly visible crimes had never taken place, sexual harassment of women is a constant problem with transit.
Read more at https://www.cato.org/blog/nine-reasons-few-americans-use-transit
Transit advocates complain that Americans have some sort of irrational love affair with their automobiles. But Americans have excellent reasons not to rely on transit. Here are nine of them.
1. Transit is slow.
Most transit is much slower than driving, and a lot of transit is slower than cycling. While the average speed of driving in most American cities is more than 30 mph, and in some it is more than 40 mph, the American Public Transportation Association’s Public Transportation Fact Book admits that the average speed of rail transit is just 21.5 mph while the average speed of buses is 14.1 mph. That doesn’t count the time it takes to get to and from transit stops.
2. It doesn’t go where you want to go.
Most transit is oriented to downtown, a destination few people go to anymore as less than 8 percent of urban jobs and 1 percent of urban residences are located in central city downtowns. If you don’t want to go downtown, transit is practically useless as hub-and-spoke transit systems can require hours to take you to destinations that are only a few minutes away by car.
3. It’s expensive.
The transit industry claims that transit saves people money. But the truth is that, for most people, it costs a lot less to drive than to ride transit. Transit fares in 2015 averaged 28 cents a passenger mile. That’s less than the cost of driving if you count all the costs of owning a car and are the only person in the car. But if you already own the car, the cost of one more trip is less than 20 cents a mile, and you save even more if you carry any passengers.
4. Lack of privacy and security.
Compared with the aura of security offered by riding inside of an automobile, many people avoid transit because they feel vulnerable and threatened by other riders. Teenagers swarm onto San Francisco BART trains to rob passengers. One person was killed and three injured in an Atlanta train shooting. Transit crime is up in New York despite a drop in the city overall. Even if these highly visible crimes had never taken place, sexual harassment of women is a constant problem with transit.
Read more at https://www.cato.org/blog/nine-reasons-few-americans-use-transit
2017-06-28
Cato: Oklahoma Lawmakers Inadvertently Enact Loser-Pays
According to news reports last week, the legislature in Oklahoma passed, and Gov. Mary Fallin then signed, a bill whose wording directs judges to award reasonable attorneys’ fees and costs in cases of civil litigation. The provision was part of a bill on certain child abuse lawsuits, and its Senate sponsor said it was believed that the fee provision applied only to those cases until on a closer reading “it seems evident that it makes all civil cases … loser pays,” said Sen. David Holt. “But nobody caught that.”
As someone who has been writing in favor of the loser-pays principle since my first book, The Litigation Explosion, you might expect my reaction to this news (once I stopped laughing) to be positive. After all, there’s nothing wrong with a legislature enacting good policies through inadvertence. (For some legislatures, that seems to be the only way they do enact good policies.)
Read more at https://www.cato.org/blog/oklahoma-lawmakers-inadvertently-enact-loser-pays
As someone who has been writing in favor of the loser-pays principle since my first book, The Litigation Explosion, you might expect my reaction to this news (once I stopped laughing) to be positive. After all, there’s nothing wrong with a legislature enacting good policies through inadvertence. (For some legislatures, that seems to be the only way they do enact good policies.)
Read more at https://www.cato.org/blog/oklahoma-lawmakers-inadvertently-enact-loser-pays
2017-06-27
Cato: The Trump-Russia Connection: Context Is Crucial
The Justice Department’s appointment of former FBI director Robert Mueller as Special Counsel takes the ongoing investigation of Russia’s alleged interference in the 2016 presidential election and possible collusion between Trump campaign officials and the Russian government to an entirely new level. If the investigation is to be truly objective and informative, some crucial issues need to be addressed.
Above all, it is imperative to determine the full context of the Trump-Russia relationship. The old parable about a group of blind men feeling limited portions of an elephant and reaching erroneous conclusions applies here. Without context, someone feeling the elephant’s trunk may express unwarranted confidence that it is a thick rope.
One of the issues that must be examined is the extent and nature of the contacts between members of Trump’s election campaign team and Russian officials. To determine that in a dispassionate manner will not be easy. An anti-Russia hysteria has reached alarming proportions in the past few months, eerily resembling the McCarthy era in the 1950s. As I note in a recent article in the American Conservative, there appears to be a concerted effort to make Russia a pariah. Indeed, at least two House Democrats have voiced objections to any contact whatsoever between the Trump administration and Russian officials.
That attitude is both unrealistic and potentially very dangerous. Even during the worst days of the Cold War, U.S. leaders never severed communications with Moscow. In fact, constructive dialogues produced some worthwhile agreements with America’s totalitarian adversary, including the treaty banning atmospheric nuclear tests in 1963. To adopt an unprecedented, hardline attitude now toward post-Soviet Russia, which is a conventional rather than a totalitarian power, would be irresponsible.
Read more at https://www.cato.org/blog/trump-russia-connection-context-crucial
Above all, it is imperative to determine the full context of the Trump-Russia relationship. The old parable about a group of blind men feeling limited portions of an elephant and reaching erroneous conclusions applies here. Without context, someone feeling the elephant’s trunk may express unwarranted confidence that it is a thick rope.
One of the issues that must be examined is the extent and nature of the contacts between members of Trump’s election campaign team and Russian officials. To determine that in a dispassionate manner will not be easy. An anti-Russia hysteria has reached alarming proportions in the past few months, eerily resembling the McCarthy era in the 1950s. As I note in a recent article in the American Conservative, there appears to be a concerted effort to make Russia a pariah. Indeed, at least two House Democrats have voiced objections to any contact whatsoever between the Trump administration and Russian officials.
That attitude is both unrealistic and potentially very dangerous. Even during the worst days of the Cold War, U.S. leaders never severed communications with Moscow. In fact, constructive dialogues produced some worthwhile agreements with America’s totalitarian adversary, including the treaty banning atmospheric nuclear tests in 1963. To adopt an unprecedented, hardline attitude now toward post-Soviet Russia, which is a conventional rather than a totalitarian power, would be irresponsible.
Read more at https://www.cato.org/blog/trump-russia-connection-context-crucial
2017-06-26
Cato: Obstruction of Justice
President Trump is being accused of “obstruction of justice” because of a conversation that he may have had with former FBI Director James Comey. According to the news stories, Trump may have asked Comey to lay off his former National Security advisor, Michael Flynn. In this post I want to briefly examine the legal doctrine of obstruction of justice.
To begin, a basic principle of American criminal law is that the line between what’s lawful and what’s unlawful needs to be clear so we will know, in advance, what conduct might land us in a prison cell. That’s the gist behind the constitutional prohibition of ex post facto laws. Laws with vague terms raise the same danger. When laws are vague, police and prosecutors can abuse their power and trap people. And that’s the danger with a catch-all doctrine such as “obstruction of justice.”
“Obstruction” has sometimes been defined by the authorities as almost any action that “impedes” an investigation. Invoking your constitutional right to silence, your right to speak with an attorney, or the attorney-client privilege are sometimes deemed “obstruction.” Don’t the courts restrain those abuses? Yes, sometimes they do. I’m presently editing a book of Judge Alex Kozinski’s legal opinions. One case, United States v. Caldwell, touches on this subject.
Read more at https://www.cato.org/blog/obstruction-justice
To begin, a basic principle of American criminal law is that the line between what’s lawful and what’s unlawful needs to be clear so we will know, in advance, what conduct might land us in a prison cell. That’s the gist behind the constitutional prohibition of ex post facto laws. Laws with vague terms raise the same danger. When laws are vague, police and prosecutors can abuse their power and trap people. And that’s the danger with a catch-all doctrine such as “obstruction of justice.”
“Obstruction” has sometimes been defined by the authorities as almost any action that “impedes” an investigation. Invoking your constitutional right to silence, your right to speak with an attorney, or the attorney-client privilege are sometimes deemed “obstruction.” Don’t the courts restrain those abuses? Yes, sometimes they do. I’m presently editing a book of Judge Alex Kozinski’s legal opinions. One case, United States v. Caldwell, touches on this subject.
Read more at https://www.cato.org/blog/obstruction-justice
2017-06-25
Cato: Educators Ought to Embrace Educational Choice
The discussion around private school choice legislation is almost always framed as an intense battleground with teachers on one side and families on the other. Political scientists are quick to point out that teachers win the skirmish more often than not because their interests are concentrated amongst a few, while their enemies, the parents, bear costs that are widely dispersed. While the political theory behind the claim is strong, the argument that school choice programs are at odds with the interests of professional educators is feeble.
Discouragement & Hostile Work Environments
The traditional public school system has utterly failed teachers in the United States. Educators operate in a system that does not reward them for performance or determination. Instead, their motivation levels are shattered after they find out that time served and meaningless credentials, rather than effort, lead to career success.
Perhaps even worse, public school teachers must function within a hostile environment where children are compelled to attend and parents are forced to pay. If citizens were forced to read my blog posts, I am sure that many of them would stress and complain. It would be impossible to please the diverse set of required readers, especially if they were grouped primarily by their zip codes. Alternatively, if families could choose their educational services, they could match with educators based on interests and learning styles, creating a friendly and feasible work environment for teachers.
Read more at https://www.cato.org/blog/educators-ought-embrace-educational-choice
Discouragement & Hostile Work Environments
The traditional public school system has utterly failed teachers in the United States. Educators operate in a system that does not reward them for performance or determination. Instead, their motivation levels are shattered after they find out that time served and meaningless credentials, rather than effort, lead to career success.
Perhaps even worse, public school teachers must function within a hostile environment where children are compelled to attend and parents are forced to pay. If citizens were forced to read my blog posts, I am sure that many of them would stress and complain. It would be impossible to please the diverse set of required readers, especially if they were grouped primarily by their zip codes. Alternatively, if families could choose their educational services, they could match with educators based on interests and learning styles, creating a friendly and feasible work environment for teachers.
Read more at https://www.cato.org/blog/educators-ought-embrace-educational-choice
2017-06-24
Cato: Should Taxpayers Back the ‘Organic’ Label?
Why are consumers willing to pay almost double for food labeled organic? The average consumer probably believes that the “USDA Organic” label issued by the U.S. Department of Agriculture implies the food comes from small local farms that use production techniques that are environmentally friendly and result in food that is better for human health. The Washington Post published an article recently about an organic farm that does not seem to be consistent with such perceptions. The High Plains dairy complex in Colorado, the main facility of Aurora Organic Dairy, has over 15,000 cows. In the organic dairy industry 87 percent of farms have less than 100 cows, but farms with 100 or more cows produce almost half of organic dairy products.
The Post article argues that these large dairy operations may be violating the USDA’s regulations for organic milk. Though Aurora officials maintain that they meet all the requirements for the USDA Organic label, the article contends that satellite images, visual inspections by Post reporters, and tests of milk from High Plains all indicate that the company may not be complying with the natural grazing standards of the organic regulations.
Read more at https://www.cato.org/blog/should-taxpayers-back-organic-label
The Post article argues that these large dairy operations may be violating the USDA’s regulations for organic milk. Though Aurora officials maintain that they meet all the requirements for the USDA Organic label, the article contends that satellite images, visual inspections by Post reporters, and tests of milk from High Plains all indicate that the company may not be complying with the natural grazing standards of the organic regulations.
Read more at https://www.cato.org/blog/should-taxpayers-back-organic-label
2017-06-23
Cato: No Regulation by Amicus Brief
Congress passed the Fair Labor Standards Act (FLSA) in 1938 to regulate certain employment practices between employers and employees. In order to put the law into effect, Congress delegated authority to the Department of Labor (DOL) to enforce the statute’s provisions. It’s a fundamental legal principle, however, that an executive-branch agency may only regulate those provisions that Congress has actually put into its authorizing statute. Where Congress has not address a certain practice, the agency has no authority to regulate and the practice is presumptively legal.
Fast forward almost 80 years. E.I. Du Pont De Nemours and Co. (better known as DuPont), following standard industry practice, paid their employees for otherwise noncompensable meal breaks, using that compensation as credit towards the time employees spent performing certain work duties (especially “donning and duffing” special clothing and gear) before and after their shifts. The employees sued DuPont in federal court, arguing that the FLSA forbids this type of crediting and that they must be paid overtime pay for the donning/duffing time.
The district court disagreed, finding that the statute was silent about the practice and so DuPont had done nothing illegal under the FLSA. On appeal, the U.S. Court of Appeals for the Third Circuit invited DOL to file an amicus brief regarding whether DuPont had violated the law—essentially allowing it to regulate. DOL admitted in its brief that the FLSA was silent on the issue, but argue that the statute implicitly forbade the practice. The Third Circuit then adopted that view by granting DOL Skidmore deference (by which judges defer to agency interpretations according to their persuasiveness), and reversed the district court’s ruling.
Read more at https://www.cato.org/blog/no-regulation-amicus-brief
Fast forward almost 80 years. E.I. Du Pont De Nemours and Co. (better known as DuPont), following standard industry practice, paid their employees for otherwise noncompensable meal breaks, using that compensation as credit towards the time employees spent performing certain work duties (especially “donning and duffing” special clothing and gear) before and after their shifts. The employees sued DuPont in federal court, arguing that the FLSA forbids this type of crediting and that they must be paid overtime pay for the donning/duffing time.
The district court disagreed, finding that the statute was silent about the practice and so DuPont had done nothing illegal under the FLSA. On appeal, the U.S. Court of Appeals for the Third Circuit invited DOL to file an amicus brief regarding whether DuPont had violated the law—essentially allowing it to regulate. DOL admitted in its brief that the FLSA was silent on the issue, but argue that the statute implicitly forbade the practice. The Third Circuit then adopted that view by granting DOL Skidmore deference (by which judges defer to agency interpretations according to their persuasiveness), and reversed the district court’s ruling.
Read more at https://www.cato.org/blog/no-regulation-amicus-brief
2017-06-22
Cato: Why ‘Net Neutrality’ Is a Problem
Yesterday, Federal Communications Commission Chairman Ajit Pai announced his intention to reverse Obama administration “net neutrality” rules governing the internet that were put in place in 2015. Some commentators are criticizing the announcement as a give-away to large telecom companies and an attack on consumers. But the Obama rules create some serious problems for consumers—problems that Pai says he wants to correct.
Under the Obama rules, internet service providers (ISPs) are subject to “rate-of-return” regulations, which the federal government previously applied to AT&T’s long-distance telephone service back when it was a monopoly more than 50 years ago. Ostensibly, rate-of-return regulation gives government officials the power to review and approve or reject ISP rates. In reality it basically guarantees ISPs government-enforced market protection and profitability, in exchange for regulators ensuring that ISPs won’t be too profitable.
As explained in this 2014 post, rate-of-return regulation involves more than just telecom. It is an attempt to settle fights between “producers” and “shippers”—whether those are farms, mines, and factories on one side and railroads and shipping lines on the other, or Netflix and Hulu on one side and ISPs on the other. In all those cases, the producers and shippers need each other to satisfy consumers, but they fight each other to capture the larger share of consumers’ payments. If shippers charge more, then farmers, factories, and Netflix must charge less in order to maintain the same level of sales.
The political resolution of the producer–shipper fights was the Interstate Commerce Act of 1887 and its rate-of-return regulations, which were initially written with railroads in mind. Similar efforts were later extended to trucking, air transportation, energy, and telecom. It took about 100 years for policymakers to accept that those efforts hurt consumers much more than it helped them, forcing on consumers too many bad providers with high prices and poor quality.
Read more at https://www.cato.org/blog/why-net-neutrality-problem
Under the Obama rules, internet service providers (ISPs) are subject to “rate-of-return” regulations, which the federal government previously applied to AT&T’s long-distance telephone service back when it was a monopoly more than 50 years ago. Ostensibly, rate-of-return regulation gives government officials the power to review and approve or reject ISP rates. In reality it basically guarantees ISPs government-enforced market protection and profitability, in exchange for regulators ensuring that ISPs won’t be too profitable.
As explained in this 2014 post, rate-of-return regulation involves more than just telecom. It is an attempt to settle fights between “producers” and “shippers”—whether those are farms, mines, and factories on one side and railroads and shipping lines on the other, or Netflix and Hulu on one side and ISPs on the other. In all those cases, the producers and shippers need each other to satisfy consumers, but they fight each other to capture the larger share of consumers’ payments. If shippers charge more, then farmers, factories, and Netflix must charge less in order to maintain the same level of sales.
The political resolution of the producer–shipper fights was the Interstate Commerce Act of 1887 and its rate-of-return regulations, which were initially written with railroads in mind. Similar efforts were later extended to trucking, air transportation, energy, and telecom. It took about 100 years for policymakers to accept that those efforts hurt consumers much more than it helped them, forcing on consumers too many bad providers with high prices and poor quality.
Read more at https://www.cato.org/blog/why-net-neutrality-problem
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