On Rail (Victor)

While I have long been a fan of rail transport, I am not a fan of doing things simply for the sake of doing them.  Many of the modern rail projects often seem to be just that.  Here I will present a plan that is rather bold and would, I believe, have a major transformational impact on transportation in the US and bring about huge economic benefits for generations while making our country stronger in the process.

One of the reasons why our railroads are in poor shape compared to other countries is because in many ways we are still stuck in the 19th century mindset of how railroads are built and managed.  First let’s use the highway system for comparison and contrast.  Imagine if Federal Express, in order to deliver packages from Boston to Chicago had to build their own road.  Even though roads already exist, those roads do not belong to them.  They must build and maintain that road and in so doing become not only in the freight hauling business, they are also in the road construction business.  This road construction and maintenance operation adds to their cost of hauling freight. No competitors use that route but if for some reason they do, they must pull over to the side and allow the owner’s traffic through.  Any competitor on that route is automatically at a disadvantage.

Now, I am not proposing a system such as Europe or Asia where the government owns all the rail traffic but something of a hybrid model where we duplicate the success of our highway system and extend that success to the railways.  First, imagine a long haul rail route from coast to coast or one from border to border.  Imagine that rail bed is owned by the people but anyone may put trains on that line.  Traffic is dispatched in a model something like the air traffic controls system where all carriers are given equal access.  This route could also be electrified and powered by nuclear energy giving a reliable power source at a stable cost.  In case of a crisis situation where other fuel sources are interrupted, we could still transport vital goods, services, and passengers from coast to coast.

So now let’s imagine several of these long haul lines being owned by the people much like the interstate highway system but also like the highway system, the traffic that operates on these routes is privately owned.  The barrier of entry to getting into the freight or passenger business is reduced because one does not need to purchase a right of way and build/maintain a rail line.  Current trucking lines could also purchase locomotives or possibly contract to a locomotive service who would pull their cars of containers that can be switched from truck to rail to ship.  Where the highways or ports intersect with these lines we can build inter-modal transition yards where goods can be moved from road to rail or ship. Now maybe UPS can drive trucks to the rail line, place the container on a UPS rail car and ship that car coast to coast.

In addition, now that the cost of building and maintaining these rail lines are spread across all of the users of the line, we can begin upgrades that increase speeds.  If we made a world class engineering effort, we could shoot for a modest goal of a national coast to coast 100MPH corridor.  This would require bridges, tunnels, and massive upgrades.  We could double track portions that are currently single tracked and run the slower very heavy freight out of the way of the faster traffic.   Currently existing freight and transportation companies could become inter-modal.   If Chicago is socked in due to a blizzard, people could be placed on a sleeper train to Denver or Pittsburgh on a train owned by American or United.  An ad hoc “traction” company could have locomotives on standby and pull mixed trains of cars owned by smaller firms.  It basically allows nearly anyone to get into the railroad business.

Such a system would reduce costs, increase competition, and would be a strategic asset as those same rails could be use to move defense related trains in an emergency.  High speed segments for handling passengers could also be created but again, the use of the rails would be open to any company that wanted to get into the business of moving passengers.  This would be a uniquely American design for a rail system leveraging the best of government stewardship where that part makes sense and unleashing private enterprise to use that asset to the benefit of everyone.   It simply takes our success with our highway system and expands that same concept to the rail system.  The road is publicly owned but the rolling stock is privately owned with equal access to all comers.

We don’t need to build a new rail system from scratch to do this.  That is one aspect of the current rail boondoggles.  For example, California wants to build high speed rail from San Francisco to LA but we already have rail right of way between San Francisco and LA.  Rather than build a new one at huge public expense, in this case it would be a GOOD use of eminent domain to obtain the current right of way from the owner, allow the owner to continue to use the route, upgrade the route to support faster speeds, and open the route up to competition.  Rather than having the government in the train business, we should have the government only in the business of the rails themselves and let private industry compete over those rails just like the highway system.

A Health Insurance Alternative Solution (Guest Post from Victor)

Thanks to George for letting me scribble on the white board here in Conference Room B.

I was watching things roll across my screen this evening and noticed a news item where Gov. Bobby Jindal of Louisiana had pledged to find a way balance their budget despite the federal government reducing the amount of Medicaid appropriation to the state by millions of dollars.  I then recalled a threat by the federal government to withhold funds because Texans wanted to defund Planned Parenthood.  That’s when I got an idea that could go a long way toward solving this problem for both states.  This requires (to the best of my knowledge) no involvement by the federal government and can be done by the states on their own.  This is a package of suggestions and not all of them could be adopted or different ideas could be adopted that I haven’t presented here.  Mainly this is food for thought.

I call it the Confederated Health Plan and it is not a federal program but a confederation of states that agree to combine resources in a way that makes it cheaper for health insurance companies to do business and therefore reduce costs for everyone involved from the government all the way down to the individual.

For the sake of this illustration we will pretend that Texas and Louisiana are going to form a confederated health insurance program.  The first rule is that the top 10 health insurers in each state plus any insurer providing health insurance in 35 or more of the 50 states may operate as one entity within the confederation.  What this does is removes the requirement that each insurer maintain a separate business entity for each individual state which drives up costs.  Rather than a company such as Kaiser Permanente having a separate business unit for each state, they would require only one business unit to operate within the confederation.

One thing you can spot right off the bat is that this idea gives the confederation an economy of scale.  The more states in the confederation, the lower the operating costs are to provide insurance because the companies can eliminate a business unit and all of the overhead expense associated with it.

The second thing that needs to be done is to standardize some of the laws across the states.  Texas and Louisiana should standardize their pain and suffering, malpractice, and “without merit” limits.  In Texas, for example, if someone brings a lawsuit that a judge rules is “without merit”, the plaintiff pays the legal fees of the defendant.  This prevents people from bringing a suit for a relatively small amount which would be less than the cost of defending the suit.  In those cases the companies usually settle for the amount demanded but it costs insurance companies millions.  This law prevents that from happening because if it is ruled to be without merit before trial, the plaintiff pays the cost of defending against the claim.  Once these rules are standardized, the result is lower cost in providing services because they don’t have different sets of requirements.  Lawsuits in one state won’t be able to drive up costs in another state in an unpredictable way.

Third, any tax incentives given to employers to provide health insurance to their employees should also be extended to individuals buying their own health insurance.  If employers gets a tax deduction for insurance then the individual providing their own insurance gets the same deduction. If the adjusted income from federal taxes after deductions for health insurance to employees is used to figure state tax, then individuals should be allowed to also deduct their insurance from their federal adjusted income when filing their state tax.   The idea here is to make it easier for individuals to have their own insurance that can move with them from job to job and isn’t tied to an employer.   There are too many people in jobs they don’t want just because of insurance and losing a job can make keeping the insurance impossible.  Any help in that regard helps everyone.  Every person able to keep their insurance as a result of these rules saves the states money in having to handle uninsured folks.  It decrease in tax revenue pays for itself in a reduction in coverage the state must provide or assist with.

Fourth, individuals and small employers  too small to qualify for group rates should be able to band together and get insurance on more favorable terms.  These would operate much as credit unions operate in the financial market and would be certified and regulated by the confederation.  These would replace the “exchanges” proposed by the Affordable Care Act and allow people to shop a choice of several to find the one that best meets their needs.  The individual states would be free to sponsor such a coop for the lowest income citizens if they wished. The coops could contract directly with pharmaceutical manufacturers, distributors, and retailers for reduce prescription pricing for their members and to the various health insurers for group coverage.  Again, this adds another way to ease people carrying their own insurance and reduces medical costs.  It also provides a mechanism to care for those at the bottom of the economic ladder by having a coop that is state sponsored that those people may join with some assistance but anyone would be free to join it as well albeit at less or no state sponsored assistance.

The philosophy behind these suggestions is not for government to take a ham-handed approach and mandate how services are to be delivered.  They remove barriers that prevent people providing for themselves by getting the government out of the way, allowing small employers and individuals to work with insurance providers and health care providers and gives the people choices so they can find the coverage that suits them best.  It works in partnership with everyone involved rather than in a patronizing fashion.

Anyway, thanks, George, for letting me post this thought, and I will be interested to know what anyone thinks about it.  Your first comment will likely be moderated but you should be fine after that and you can follow me on Twitter @VictorB123 .

How Many Months Is “Context”?

June 2012: “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/07/06/employment-situation-june)

May 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/06/01/employment-situation-may)

April 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/05/04/employment-situation-april)

March 2012: “Therefore, it is important not to read too much into any one monthly report, and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/04/06/employment-situation-march)

February 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.” (LINK: http://www.whitehouse.gov/blog/2012/03/09/employment-situation-february)

January 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.” (LINK: http://www.whitehouse.gov/blog/2012/02/03/employment-situation-january)

December 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2012/01/06/employment-situation-december)

November 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/12/02/employment-situation-november)

October 2011: “The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. There is no better example than August’s jobs figure, which was initially reported at zero and in the latest revision increased to 104,000. This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/11/04/employment-situation-october)

September 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/10/07/employment-situation-september)

August 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/09/02/employment-situation-august)

July 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/08/05/employment-situation-july)

June 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/07/08/employment-situation-june)

May 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/06/03/employment-situation-may)

April 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/05/06/employment-situation-april)

March 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/04/01/employment-situation-march)

February 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/03/04/employment-situation-february)

January 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/02/04/employment-situation-january)

December 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/01/07/employment-situation-december)

November 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/12/03/employment-situation-november)

October 2010: “Given the volatility in monthly employment and unemployment data, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/11/05/employment-situation-october)

September 2010: “Given the volatility in the monthly employment and unemployment data, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/10/08/employment-situation-september)

July 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.  It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.” (LINK: http://www.whitehouse.gov/blog/2010/08/06/employment-situation-july)

August 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/09/03/employment-situation-august)

June 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/07/02/employment-situation-june)

May 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/06/04/employment-situation-may)

April 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/05/07/employment-situation-april)

March 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/04/02/employment-situation-march)

January 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/02/05/employment-situation-january)

November 2009: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2009/12/04/employment-situation-november)

We Are Quantum Uncertainty

The older I get, the more I believe that we are the manifestation of quantum uncertainty.  Imagine seeing an object traveling from point A through point B in space.  Using well rather simple calculations, one can calculate the trajectory and know where the object will be along its path at any given point in time.   Have that object controlled by a human being and it might just suddenly veer in one direction or another “because it felt like it” with no model able to predict it would have moved in that direction at that time.

 

Heaven Cracks, Earth Shakes

Just read a book with the above title by James Palmer.  Amazing is the only word I can use to describe it.  It has completely changed my perspective on Chinese politics.  It is an extremely interesting read with footnotes and references.  I have the Kindle edition on my laptop.

I would give this book 4 out of 5 stars only because I reserve 5 stars for extremely extraordinary works.  This one is just extraordinary but well worth the price.

 

Desperate Times

I happened across this article from KABC Channel 7 in Los Angeles.  The meme is that burglars are now breaking into homes through doggie doors.  I would go a step beyond and say that one can gauge the severity of economic troubles by the size of the doggie doors used for burglary.  The smaller the door, the more desperate / hungrier the burglar.