The sad saga of California’s “high speed rail” boondoggle continues as Joe Biden reverses Trump Administration policy, restoring $929 million federally-procured tax dollars to the state’s massive waste of resources.
MRCTV readers and viewers will recall that I have reported on this rail project twice before – a plan that, according to politicians ranging from former Governor Jerry Brown to current lockdown-meister Gavin Newsom, would connect southern California to lovely northern San Francisco and Oakland.
In 2018, I noted how, in just two years, cost estimates had risen more than $13 billion, to $77.9 billion, and could rise to $98.1 billion for a project that might – MIGHT – see a few trains run on it in 2029. And I discussed the fact that in 2017, the Democrat-led CA Assembly raised income taxes, claiming, in part, that the money was needed for “high speed rail." Brown signed a bill increasing gas taxes and vehicle fees by $5.2 billion annually, and that Republican California State Assembly member Melissa Melendez revealed nearly 30% of that tax cash was not used on roads and bridges. Some was spent on university projects, some for felon “job training,” and some for parks, to name just a few extravagances.
In 2019, I noted that current Governor Gavin “Slick” Newsom seemed more than a wee bit out of sorts because President Trump had ordered the Federal Railroad Administration to NOT shower $929 million on the CA boondoggle. In a great eruption of righteous indignation, Newsom had claimed, “This is California’s money, appropriated by Congress…” never bothering to note that, just because Congress appropriates cash, it doesn’t mean it’s “yours,” and that the feds already had spilled $2.5 BILLION into the sinkhole of California’s rail project.
Now, Reason’s Scott Shackford reports that Choo-Choo Biden is restoring the federal subsidy as part of his plan to burn TRILLIONS in multi-generational tax debt on his beloved rail travel.
Trump used the terrible state of the rail project—years behind schedule, billions over budget, and without a realistic plan for actually connecting Los Angeles and San Francisco—as a reason to shut the funding down. His feud with California political leadership certainly played a role in the decision, but the reality is that the entire train project has been an expensive disaster that has lined a bunch of contractors' and consultants' pockets.
Of course, Newsom opposed Trump’s move, took it to court, and, with the change in Administrations, is back on the only train that seems to be operational – the government gravy train.
California sued the Trump administration to try to get the money back. Yesterday's (June 10) announcement is the result of a settlement agreement between California and the Biden administration to restore the grant.
And, of course, Biden “settled.” Biden's team never would have fought what Choo-Choo Joe clearly loves: political glad-handing, and giant toy trains.
As Shackford notes:
(A)t this point, California's bullet train is estimated to cost somewhere between $69–100 billion, and California voters only initially authorized a $10 billion bond for the program. Cap-and-trade auctions, in which companies purchase pollution credits, have not been bringing in nearly as much revenue for the project as had been hoped. California will likely be going to the feds, hat in hand, looking for even more grants to pay for the project to continue.
And here’s why the current Biden transfer of wealth to the project, and all government rail projects are wrong.
First, as noted, it’s a transfer of wealth, which is morally and ethically unconscionable, and has ramifications inextricably linked to economics. The only way something can be determined to have value is if people voluntarily spend their money on it. If politicians like Biden and Newsom want to open their sizable wallets and start their own rail services, asking riders to pay their own fares, sans subsidies from other taxpayers, they are free to do so. But to politically mandate that others pay for what one thinks is a good idea? Something that subsidizes riders and the businesses close to the rail lines? That’s the height of arrogance and conceit, and it prevents free choice from showing what people in the market actually value.
Second, can any one of these political blowhards cite an enumerated power in the US Constitution that allows for a Federal Railroad Administration to exist?
They’ll search forever, because it doesn’t exist. Yet they swear oaths to abide by the Constitution.
Third, this lack of constitutionality has an effect on the political-economic problems. Even something many Americans mistakenly celebrate, the “Transcontinental Railroad”, was not only one of the world’s biggest boondoggles of the 19thCentury, but, it was not sanctioned by any provision of the Constitution. It was years overdue, deep, deep in the red, zigzagged through politically favored regions to politicians were able to sell land to the feds, and it was beaten by a private cross-country rail line built by the Great Northern Railway.
As I reported in 2019:
(W)riters such Burton Fulsom and Tom DiLorenzo have noted on the federal ‘Trans-Continental’ scheme, contractors laid rails on permafrost knowing the foundations would move, and then double-billed when they had to do repairs. There never has been a government rail or subway system that has ever turned a profit. In all of human history.
So, folks like Joe Biden are economically, constitutionally, and morally wrong to tell you that you have to pay for a California rail boondoggle.
But they are wrong to tell you to pay for any rail program. History, economics, and ethics demand that we recognize this fact, and pass it on.