QB 52.32 wrote
2nd Trick and UPRR, how do you square your pessimism about our nation, its politics and railroading with Warren Buffett's $44 billion investment and complete purchase of BNSF?
Doesn't that give you some optimism about the future of our country, how it will be governed and its railroads?QB 52.32
That's a fair question, and I'll try to answer it without resorting to simplistic ideology; I'm bullish about the third, regardless, and about the first, over the long run; it's the second that leaves me a little uneasy.
My personal politics are Libertarian -- socially liberal with a free market conservative underpinning. But while many people who subscribe to that philosophy like to point out that Ayn Rand's
Atlas Shugged was written around a fictional railroad, they neglect to recognize that Rand herself had a flawed understanding of the evolution of capitalism from sole proprietorships to outside-financed corporate entities which tend to succumb to the oxymoronic concept of "state capitalism".
What's more, technological progress, as evidenced particularly in the development of the Internet, sometimes tends to favor the development of new industrial sectors along monopolistic or oligopolistic models. A sudden swing between monopoly and instense competition, as evidenced by the trucking industry in the wake of deregulation, can have disastrous consequences for many players large and small. And I need only point out that the air industry, which shows a loss if the financial records of all domestic carriers are aggregated, is the most vunerable of all due to the necessity of cooperation with the state.
Back in 1965,
Trains editor David P. Morgan observed that only one major industry (gas) had ever recovered after falling from a dominant position in the economy; the railroads have now been added to that list, but the industry has become intensely concentrated at a time when public opinion seems to be swinging back toward both a suspicious view of the private sector and a misguided faith in greater concentration of authority at the Federal level.
And finally, it's worth noting that the industry itself is far, far removed from a day when the average American male could name a few major railroads without much effort. A glance at a passing freight provides a very distorted view of the industry's players, and the convoluted story of the decline and rebirth of that industry 1945-2000 --- a rare instance in which limited and temporary public-sector participation paid off.
I believe that an expansion of the number of players within a field of enterprise, as opposed to the nuturing of a handful of corporate dinosaurs operating on a bureucratic, rather than a competitive model, is the surest path toward prosperity. Within that framework, preservation of the asset base, as in the case of both the AT&T breakup and the metamorphasis of a few of the remaining mega-truckers, should be the next consideration, and that
can be reconciled with some moderation on the open-access issue.
To summarize, the nation appears to be on the verge of a transportation/infrastructural restructuring on a par with the "information revolution" whch began around 1975. And while all but the most strident free-marketers should acknowledge that some degree of public/private-sector partnership is necessary, the extreme concentration of the rail industry continues to make it a target for a misguided faction of the present Administration's clientele, which has been gaining influence and power. With the possible exception of Union Pacific, I don't see much evidence of an overly defensive stance or "bunker mentality ", but a strategy of open communication and a willingness to innovate might pay even bigger dividends.
