People who hate inequality want poor Americans to pay for a $30 billion Wall Streeter tunnel

A Facebook friend posted “Words fail me … #Trumpanitcs” on top of “Trump Pushes Republicans in Congress to Oppose Funding Hudson Rail Tunnel” (nytimes):

President Trump is pressing congressional Republicans to oppose funding for a new rail tunnel between New York and New Jersey, using the power of his office to block a key priority for the region and his Democratic rivals, according to several people with knowledge of his actions.

Mr. Trump urged Speaker Paul D. Ryan this week not to support funding for the $30 billion project, two people familiar with the conversation said.

$30 billion for a short tunnel? The world’s longest and deepest tunnel, opened in 2016, cost roughly $10 billion (Wikipedia). I accepted the assumption that the president of a country that is $21 trillion in debt wouldn’t oppose this purely on the grounds of efficiency and a theory that, if $30 billion must be borrowed, it could be better spent elsewhere. The same friend, when professing his love for Hillary Clinton and/or hatred for Donald Trump, tirelessly beats the inequality drum. So I asked

If you’re concerned about inequality, why would you want the Federal government to subsidize this $30 billion project anyway? Wouldn’t it make inequality in the U.S. more extreme if low- and middle-income taxpayers in the Midwest or South have to pay for a train tunnel to be used by high-income residents of the NY/NJ region? If it actually does make sense to spend $30 billion, why not have NY/NJ fund this themselves?

The consensus response among the virtuous Trump-haters on the thread:

The mid-west has not pulled its own weight in federal taxes in 40 years

Pull their weight means those states get more in Federal funding than they pay

ÇA subsidizes about 5-7 of those states if you count the state budgets as well, and more like 10 if you only count federal tax xfer

In fact if these states were to pay back the coastal Blue states over the next 30 years and balance their own budgets, they would have to triple their state taxes on average

if “we are concerned about inequality,” should’t we be asking states that aren’t solvent and can’t afford the price of admission to politely exit through the rear door?

These folks don’t have any problem with individual Americans being on welfare for decades and, in fact, consistently vote to expand government handouts (free housing, free healthcare, free food, free smartphones, etc.) to individuals. But they don’t like Americans collected into a state not “pulling their weight”? [Note that the assumption that a river of cash is flowing from correct-thinkers to Deplorables may be incorrect: “Against a national average of $1,935 in intergovernmental spending per American, red states receive just $1,879. Blue states get considerably more, at $2,124 per resident.”]

Taxpayers in KY and AL don’t even fully fund the projects they receive. They fund NOTHING out of state

we give them HUGE subsidies, and yet they believe they get none.

if they are going to vote to cut the benefits they receive, let’s accommodate them

I asked why it mattered what “they” believed (assuming any of these virtuous coastal dwellers actually have personal contact with Deplorables in the Midwestern and Southern states). Would it make sense to deny state assistance to people who don’t believe the same things as the elites? Someone living in means-tested public housing has to leave and pay market rents because he or she has incorrect beliefs? They want to reduce inequality, but only among those who believe the same things that they believe?

On the subjecting of voting, I pointed out that fully one third of folks in West Virginia virtuously voted for Hillary Clinton. Why punish them because of the incorrect political beliefs of their neighbors? Aren’t they already suffering sufficiently in having to live near Trump supporters?

Maybe some of those low income states need to be depopulated?

It’s painful, but if a state’s economy for example grew around coal and coal is no longer in demand (or auto manufacturing, steel production, etc) how can one possibly fix that other than by the most artificial means?

I responded by pointing out that schoolteachers in West Virginia are on strike right now and say that they get paid less than teachers in other states. Why not give them the $30 billion so that this inequality is rectified? None of the inequality-obsessed coastal dwellers wanted to do that.

Why is it obviously fair, though, for someone in Kentucky to pay for a tunnel for use by the Wall Street folks who trashed the economy in 2008? Suppose that it were true that Kentucky has been collecting federal welfare for decades. If there is still inequality, with people in Kentucky being less wealthy than people in New Jersey and New York, wouldn’t it make sense to increase the federal welfare flow to Kentucky rather than trying to pull the money in reverse for this new tunnel?

In short, if the answer for a low-income individual is “more welfare” (not to be confused with “more cowbell”) why is the answer for a low-income state “less welfare”?

[We can’t say that the U.S. has historically run this way, can we? During the Great Depression, for example, the Tennessee Valley Authority was created to build infrastructure in a comparatively poor region of the U.S. They didn’t have a “let’s make the rich states even richer” spending plan back then, did they?]

Related:

  • “The Most Expensive Mile of Subway Track on Earth” (nytimes) on how New Yorkers will pay themselves $400/hour when they do get hold of tax dollars harvested in Alabama and Kentucky
  • Oresund Bridge (5-mile suspension bridge and 2.5-mile tunnel connecting Sweden and Denmark, built essentially without taxpayer funds for roughly 1/10th the cost of this proposed NJ/NY link (a 2.5-mile tunnel))

18 Comments

  1. Jack

    March 5, 2018 @ 7:00 pm

    1

    The corruption and incompetence so well documented by the NYT in the linked article regarding the building of the extensions to the NYC subway system seem to have been largely ignored. I guess the NY prosecutors have their hands full with the State Attorney General going after the oil companies for causing Hurricane Sandy and the NYC District going after Harvey Weinstein for his boorish behavior.

  2. Jack

    March 5, 2018 @ 7:03 pm

    2

    “District Attorney” sorry

  3. philg

    March 5, 2018 @ 7:04 pm

    3

    Jack: “allegedly boorish” please! In our 21st century age of Tinder hookups and binge drinking by folks of all gender IDs, is it fair to judge Harvey for wanting to shower with friends? What would the standard for decorous behavior actually be?

    Also, I don’t think it is “incompetent” to pay workers $400/hour. New Yorkers like to pay their stagehands $400,000+ per year (see http://www.nytimes.com/2013/12/28/arts/hey-stars-be-nice-to-the-stagehands-you-might-need-a-loan.html ). My point was mainly that if they want to pay $400/hour to their friends they shouldn’t be taxing $20/hour workers in Kentucky to do it.

  4. toucan sam

    March 5, 2018 @ 8:01 pm

    4

    I think your facebook friends just hate Trump so much they want to always “resist” him. If Trump was in favor of the tunnel they would probably be opposed.

  5. tekumse

    March 6, 2018 @ 8:59 am

    5

    How the fuck is this a “Wall Streeter” tunnel? It is part of the NE corridor linking DC to Boston. Better rail in the NE is great for everyone by reducing the insane traffic.

  6. philg

    March 6, 2018 @ 9:11 am

    6

    tekumse: That makes sense. Amtrak needs a $30 billion tunnel for its peak operations of four trains per hour.

    This will definitely reduce traffic on the road!

    https://media.amtrak.com/wp-content/uploads/2015/10/Amtrak-FY16-Ridership-and-Revenue-Fact-Sheet-4_17_17-mm-edits.pdf

    says that there were a total of roughly 12 million riders on Amtrak in the Northeast Corridor. Assuming that 100 percent of them were going into Manhattan, that’s 32,877 per day. Compare to 1.6 million total commuters into Manhattan per day (https://www.census.gov/newsroom/press-releases/2013/cb13-r17.html ). So… if 100 percent of Amtrak riders from DC to Boston are Manhattan commuters, they’re handling 2 percent of total commuter load (at a cost to taxpayers in Kentucky, Alabama, etc., of $1.8 billion federal dollars per year). Just imagine what they could do with a $30 billion new tunnel (costing more than 15 years of the amount that currently funds Amtrak nationwide).

  7. Paul A Sand

    March 6, 2018 @ 9:30 am

    7

    Another obvious point: if they’re saying $30 billion now, it would wind up being a multiple of that in actuality. To repeat what the Globe said about the Big Dig: reporters would have “plagued by cost overruns” in their copy-and-paste buffers.

  8. Anon

    March 6, 2018 @ 12:40 pm

    8

    I am not defending the high cost of the project but these tracks will carry more than Amtrak trains. I think they also carry NJ transit trains as well. Therefore, the total number of customers served is higher.

  9. rjh

    March 6, 2018 @ 1:41 pm

    9

    It’s a very complex situation being made worse by tribal ignorance. First, a couple points:

    1) The tunnels currently carry 24 trains per hour at peak. It’s primarily Amtrak and NJ Transit. In terms of head count NJTransit dominates, with about 200,000 per day.

    2) It’s very odd to point at wall street as the primary beneficiary. The ordinary workers on wall street prefer the PATH tunnel, it’s much closer to wall street, but if PATH is not practical they will use NJTransit. The wealthy don’t usually take the subway or train. Its mostly the business travelers and vacationers that fill Amtrak, and the ordinary office workers that fill NJTransit.

    3) The main beneficiaries for Amtrak are spread all up and down the Northeast Corridor. It’s an inter-city service, not a commuter service.

    4) For the NYC DC city pair, Amtrak is about two thirds and air travel about one third total headcout. If these tunnels are lost, where will you find air space and air port facilities for a triple size air traveler count. It would be a nightmare.

    5) The 30 billion includes some major bridge replacements, rail line replacements, and other activities. It’s not just the tunnel. Even so, this cost reflects the staggering level of in fighting, mismanagement, and corruption that plagues the tri-state area.

    Unfortunately, the NJ-NY-CT tri-state politics have turned every transit operation and new plan into a byzantine nightmare of back stabbing, corruption, and mismanagement. These tunnels and bridges have been caught in that swamp for decades.

  10. philg

    March 6, 2018 @ 1:47 pm

    10

    If it is mostly NJ Transit, isn’t that mostly local passengers then? Why can’t they pay for their local infrastructure if they are richer than the average American?

    No Wall Streeters going to Midtown? If we consider “Wall Street” as an industry rather than a geographical destination, wouldn’t JP Morgan qualify? They’re headquartered at 48th and Park, no? And wouldn’t there be other financial industry firms in Midtown?

    Regarding the politics… apparently people in NJ-NY-CT like back stabbing, corruption, and mismanagement because they keep re-electing the same politicians and the same political party. Paying workers $400/hour apparently makes these voters happy so why should the rest of the country stand in the way of their happiness? My point was only that the rest of the country shouldn’t have to fund their $400/hour happiness!

  11. rjh

    March 7, 2018 @ 10:11 am

    11

    I don’t keep track of the myriad shifting proposals for funding, but all of them have had significant local contributions. One of the earlier scuttling of proposals came from Gov. Christie who killed one approach when they could not agree on a construction plan and funding allocation that would limit New Jersey’s liabilities. (I know enough of the politics to be confident that there were dozens of other reasons involved too.) All of these should involve a mix of city, state, and federal funding.

    The bridges and tunnels are essential to NE corridor service, and they are owned by Amtrak. So there should be a significant Federal contribution. There is also a Federal contribution for general infrastructure, just as there is for airports and highways. The trains are a substitute for airports and highways, so they should get the same treatment.

    If they had labelled this as “to benefit the NYC economy” that would be fair. It’s “wealthy Wall Street stockbrokers” that is inaccurate. There is a Federal benefit for intercity traffic. The air traffic and airports already suffer a lot of problems in the NE corridor.

    The right overall sharing of burden is tricky, since economic impacts ripple. Should the Federal government fund interstates that basically serve just California? No, if you only count the cars being driven. Yes, if you consider the ripple effects. It’s similar for these tunnels and bridges.

    It’s very unfortunate, and I have no easy answer for this, that the construction management for large projects like this has been one disasater after another.

  12. philg

    March 7, 2018 @ 11:02 am

    12

    rjh: Southwest pays about $40 million for a factory-new Boeing 737 (see https://leehamnews.com/2012/05/18/wells-fargo-estimates-southwest-paid-base-price-34-7m-for-max/ ). If the goal is getting people up and down the Northeast Corridor, that $30 billion would pay for 750 Boeing 737MAX-8 airplanes (slightly more than the entire Southwest fleet size). In an all-economy configuration each will hold 200 passengers (15,000 total). If each airplane makes two flights per day, this fleet can completely replace Amtrak service in the Northeast Corridor. Given the short length of the flights, something like 8 flights per day per airplane is probably more reasonable. So for $30 billion we could finance a Northeast Corridor air transportation network with 4X the capacity of Amtrak.

    If the goal is to help the national economy, and we are hellbent on borrowing another $30 billion, why not take the money and use it to finance a 750-B737 airline to serve the growing demand in Asia? Then use the profits from that investment to cut tax rates nationwide.

    To your point about funding airports… I think runways are funded by user fees, not harvesting general tax dollars from the Feds. See https://www.faa.gov/about/budget/aatf/ ; the terminals can be funded by gate fees charged to airlines. See https://chicago.suntimes.com/chicago-politics/ohare-expansion-gates-terminal-space/ for how Chicago is going to spend $8.5 billion on a new terminal and, supposedly, without using any tax dollars.

  13. toucan sam

    March 7, 2018 @ 1:28 pm

    13

    Phil, as a Santa Monica airport user I have always thought about creating an “air train” from Santa Monica to the bay area. The bullet train project costs around 100 billion. But who knows maybe it would cost 200 billion. What sort of air train could be set up from Los Angeles to the Bay Area? To complicate matters let’s also assume that the ticket prices could cost no more than 50 dollars per ticket. What do you think 100 or 200 billion could get us in terms of capacity? Would it be cheaper than a train. People seem to prefer the train because they do not like airport security. Why not just fix airport security? We should budget some money to make airport security swift!

  14. philg

    March 7, 2018 @ 1:35 pm

    14

    Toucan Sam: Boeing calculated that, considering the all-in costs of infrastructure, a B747 was much cheaper per passenger-mile than any other form of transportation.

    https://www.accessmagazine.org/fall-1996/the-full-cost-of-intercity-travel-a-comparison-of-air-highway-and-high-speed-rail/

    is a 1996 study that comes to the same conclusion. That’s based on “A high-speed rail system would cost $10 billion to $15 billion”. so the author did not adjust for the likely real cost to build high-speed rail in the least efficient state within the least efficient country. The author does say “Considering all relevant costs, high-speed rail would be California’s most expensive mode of intercity transportation.” But, again, that’s using Chinese-style costs to build the rail system. It looks like rail built the California way will cost closer to 10X the cost of air.

  15. toucan sam

    March 7, 2018 @ 2:28 pm

    15

    Thanks Phil! Just as I thought.

  16. rjh

    March 7, 2018 @ 4:13 pm

    16

    There are plenty of things wrong with the $30 billion pricetag. Ten years ago it was only $7 billion estimate. A big part of this is massive corruption and mismanagement of construction in the NYC area. MTA construction costs are running 7 times higher than average costs for similar construction in other cities. The $30 billion incorporates this waste.

    The original split for the predecessar ARC project was about 40% NY, 40% NJ, and 20% Federal. Both then and now the approach is to cover these costs through tolls and ticket fees. There is no agreed split on this project yet.

    A part of the mismanagement and corruption in NYC corruption is bitter and destructive behavior by all parties. Before becoming President, Trump was part of this nastiness and was famously litigious and vindictive with construction contractors. I’m sure that’s part of this problem, and just like all the other NYC politicians he is getting in a lot of personal revenge.

    But your cost comparisons are still apples to oranges. If you limit the services to inter-city only, then take the 20% number as the base: $6 billion. Then take into consideration the lifespan of the equipment 30-yrs for airplanes, 120-years for bridges and tunnels. I get 35 737MAX. And if you can cut the graft and corruption in half, it’s 20 airplanes. That’s not bad for a service that is significantly faster and more reliable than air travel. NE Corridor is not CA. It’s 160 minutes downtown DC to downtown NYC. It’s less than that for PHL, BAL, WIL, etc. Part of the bridge/tunnel replacement is to reduce that to 150 minutes. Reliability is 90+% ontime rail vs 70-80% ontime for air. Weather delays hit NE corridor a lot.

    And treat airports and related costs the same. The tunnel project is cost complete. The airport and related facilities (like transit/parking) upgrades need to be included in alternatives.

    I see the core problem as the hugely inflated costs of construction. NYC is complex underground, but not 7X the cost of simpler cities. This project should be costing more like the earlier $6-8 billion estimates. The $30 billion is probably accurate but reflects corruption and mismanagement. If they could cut corruption and mismanagement in half, that’s $15 billion. Maybe this current posturing is part of the politicing to do that.

  17. philg

    March 7, 2018 @ 4:57 pm

    17

    rjh: Is it obvious that this is needed at all?
    https://en.wikipedia.org/wiki/Gateway_Program_(Northeast_Corridor) doesn’t suggest that there is anything seriously wrong with the old infrastructure. One stated goal is to run more trains per hour at peak times. But what if it turns out that robot-driven electric buses are a better solution for commuting? They can pick people up much closer to their houses (or maybe right at their houses). With Singapore-style congestion pricing, the bridges and road tunnels would be clear at all times. If a bus costs $1 million, the $30 billion would fund 30,000 buses, each of which could hold 50 people. That’s the total commuting load into Manhattan.

  18. rjh

    March 8, 2018 @ 12:57 am

    18

    My understanding is that the requirement is the age and repair needs of the current tunnels. This was made worse by hurricane damage from Sandy. They are presently 110 years old and need major reconstruction.

    Right now the Port Authority run a dedicated counter-flow bus lane for three hours during morning rush hours through the Lincoln Tunnel. It carries about 1800 bus transits each. That’s an average of 6 seconds per bus. It is presently near capacity and there are discussions about introducing automated platooning to allow tighter spacing of buses and higher bus speeds, and possibly a second lane.

    It is not clear whether those steps would be effective because the surface street congestion may become the bottleneck when many more buses flow through. Platooning is the most likely first step, since platooning can also be used on limited access highways and involves no new construction.

    30,000 buses would take 15 lanes of tunnel. It’s not a serious consideration if you are not willing to build new tunnels.

    (Apparently the traffic pattern and road pattern allow westbound evening buses to meet the transit demands without a dedicated lane. The buses get a dedicated entrance lane and that appears to suffice. This also points to surface road congestion on the Manhattan side being a traffic limit. The westbound traffic has limited access highways for the exiting traffic.)

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