Waking Up from the Railroad Pipedream to the Nightmare of the Vampire State

Well, that was fun. How realistic do I believe the railroad pipedream outlined in the previous posts is? I had outlined and researched this series of posts in early July, but I didn’t find the motivation to write it until November. Now those who read all the posts might be in agreement, or disagreement, with the particulars of what I have suggested, and the economic, demographic and commercial real estate trends I have described. (Bear in mind that I write reports on those subjects every day, reports people pay to read). You may have other thoughts on the issue. You may be thinking about the possible effect of different decisions on the well being of large number of New Yorkers in the future, and how priorities might be set. You might even be thinking about construction methods, rail operations, and government contract law, commercial real estate trends, global economic trends, and demographic trends.

But I assure you, based on 20 years of observation, that none of those things mean much at all in the state legislature in Albany, New York. There the credo isn’t what is best for us, but what is in it for me and mine. And none of the parties involved could be expected to approach the issue of rail freight from any other perspective. In Albany it is never about “what,” and always about “who.”

Take Governor Cuomo. He allegedly wants to run for President in 2016, and everything he does, and everything he doesn’t do, is being analyzed by the political class on that basis. As if nothing matters except what would make him look good or bad that year, to people outside New York State. There is no way the kind of investments contemplated in the pipedream could show the kind of 2016 results a candidate for President would want that year.

Moreover, bad things happen when New York’s Mayors and Governors run for President, generally involving big increases in debt so money can be thrown around in the short run to make the prospective candidate’s constituents feel prosperous, and retroactive pension deals to garner the support or at least acquiescence of the public employee unions. Such was the case with Mayor Lindsey and Governor Rockefeller, Mayor Giuliani and Governor Pataki, and Mayor Bloomberg. Would Governor Cuomo the first have pushed through the sell out the future “big ugly” budget of the early 1990s if he wasn’t entertaining a Presidential run himself?

But let’s imagine that Governor Cuomo II were to introduce a proposal along the lines of the railroad pipedream. That would make him look good, the state legislature would think, so how much could be extracted for those cashing in and moving out in exchange? What kind of hostage taking could be engaged in? After all, Mayor Bloomberg agreed to a 25/55 retroactive pension deals for New York City teachers when he wanted to United Federation of Teachers to let him crow he was the education Mayor, and actual education in the schools is being defunded to pay for it. Even as the union cries crocodile tears over the cuts need to pay for their own pension sweetener.

In exchange for approving a railroad pipedream, wouldn’t the state legislature demand a 20/50 pension for the TWU, followed by the re-collapse of New York City’s subway system? Having a three-quarters pension at the current retirement age for all public employees over age 50, allegedly paid for by higher taxes on the rich but more likely paid for by the serfs in diminished services after the rich move out? Would they want an end to ethics investigations, always a nuisance for their kind? Or just lots more short term goodies funded by lots of long-term debt, to be paid back when they and theirs are collecting tax-free pensions and living somewhere else? These are the sort of things the New York State legislature has done, over and over again, generally without a single “no” vote for 20 years – a period when they have been described as too divided and dysfunctional to get anything done.

How about if the pipedream were suggested by Mayor Bloomberg? Given that for most of those in the political world, and it is a very separate world than government, egos, gossip and alliances matter more than substance, state legislators who agreed with the proposal might come out against it just to stick a finger in the Mayor’s eye. Or approve it because they are afraid of him, but then undermine it to try to make it fail so he looks bad, the way they have worked to undermine school reform. It’s about them vs. the Mayor, not about the other 19 million people in the state.

What the legislators respond to very well is special deals for special interests. So how about if the railroads were to make the proposal, and start showing up and fundraisers handing out cash, donating to non-profits that hire the friends and relatives of the legislators in little-show jobs at high salaries, and hiring the political consulting firms of their backers? The whole pipedream assumes both the interest and goodwill of the railroads, but neither is to be taken for granted. Particularly if they got advice from some of those political consultants. The state’s cost and their profits would soar, as none of the transportation or economic development goals were achieved. That’s what happens when you dice with monopolies.

And just forget having the Port Authority involved. You’d end up with New York City paying for spending that primarily benefits people in New Jersey, “suburbanites like us” to those in the rest of the state.

Yes, there are many examples of major infrastructure investments being made a reasonable cost in Europe. And I’ve given some examples of major rail freight investments right here in the U.S.A., by the railroads or in public-private partnerships. But after the major public policy push of the 2000s, the recovery of the New York City schools, ended with all the additional money diverted to earlier retirement on better terns as a result of the deals of 1995, 2000 and 2008, there is a lesson to be learned. The Campaign for Fiscal Equity, which filed school funding lawsuits, has disbanded now that there is more money for the retired, even there is less and less money for schools. Don’t believe the hope in the Vampire State.

After that 2008 deal, I had sworn off making suggestions, and took it as a symbol of the inevitable future in the wake of Generation Greed as I noted in this post. So aside from some data and occasional rants against hypocrisy, I’ll try to stop dreaming and come up with some adaptive suggestions in future posts. I just hope that as a result of the freight transportation issues discussed in this series, a gallon of milk doesn’t up costing twice a much east of the Hudson as west of the Hudson.