Sell Amtrak, Sell it Now

July/02/2008 0:42AM
2 interesting comments, join the discussion
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He’s an idea you haven’t heard yet. The government, especially Obama and Reid think we should nationalize the oil industry. I would guess about 90% of the voting public think that’s a very bad idea. 

Let’s look at a different approach. Sell Amtak and sell it now. Sell it to a bidder who will make it a world class rail transportation company. The government has dumped $30 billon of your tax dollars into Amtrak since 1971. I have no idea what the company is worth since it hasn’t run like a business since 1971. It has run like the post office. Now that demand is sky-rocketing Amtrak executives say they can’t handle it. They say it will lose more money with higher demand. Please President Bush and Congress take this problem off their hands. 

Let a group of business people and shareholders take over. Give us back some of the $30 billion in tax dollars you have spend on inefficiency in the form of a dividend. A chit dividend that can only be used for future transportation on the new replacement for Amtrak. Rebranding will be necessary since no one wants to keep the Amtrak brand. 

Here’s my bet. The private sector will make it a big success. There will be new modern high-speed trains that will be a pleasure to ride. Customer service and accessibility will be vastly improved. And, just in time to help us with our airline problem congress created with no energy policy.

So, congress you want to reduce demand, here’s the first step. Give us a low-cost efficient alternative to driving or air and we will use it. You can’t make it work, so let someone who can run a business do it. Sell it now while it’s worth something. If you keep trying to run it you will make it harder to sell. 

Obama, you want to get out of Iraq. Here’s something to get out of instead. 

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Comments (2)

  1. Tom says:

    So if Amtrak can be run more efficiently, why hasn’t a private company come along already and tried to privatize it? When the post office was inefficient at parcel post, UPS said, hey, we can do it better, and made a business out of it. When the post office was inefficient at air mail, Fedex said, we can do it better, and made a business out of it. Where are the private companies clamoring to run passenger rail better than Amtrak?

    Remember the joke about the economist who passes by the $100 bill lying around on the street. "If it were a real $100 bill, then someone else would have picked it up already." Did we have to knock on UPS’s or Fedex’s door to get them to start their business?

    ALL the European nations subsidize their rail system. The difference is, they put the subsidies into an infrastructure company which makes a 100% loss. Once you’ve done this, the operating companies then make a nice little "profit." Britain, France, Germany — all an accounting fiction. http://www.amtrakoig.com/reports/E-08-02-042208.PDF See especially the graph on page 5 — the German railways get 18 times more in subsidies than they make in "profit." If it were structured like Amtrak, this would be called a "loss."

    So let’s do the same thing. We run the interstate highways at a 100% loss (excepting toll roads), we should also run the underlying railroad at a 100% loss. Then Amtrak would become an operating company and would magically, instantaneously become "profitable." Then, and only then, companies will come knocking on our door, clamoring to operate trains. Right now, we wouldn’t be able to give the franchise away.

  2. Bill Robertson says:

    Tom:

    Demand for rail travel in the US has been limited. Part of it is the one option choice with Amtrak. Now that energy prices are up and going up more demand for rail traffic will go up too. Amtrak will not move quickly enough to meet the demand. With demand up, why subsidize.I say, put it on the market and see what happens. My bet is it will sell and sell fast.

    Bill

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