Obama Re-elected. Market Drops 2%. So What?

I am sure that my Obama loving friends celebrated well last night. I'm glad they did because it's pretty much downhill from here.  This market reaction is only a tiny harbinger of what's to come.

Nothing personal with the President, but as Margaret Thatcher put it, Socialism lasts only as long as other people's money last. The math is both simple and brutal.

I hope you don’t think that only the top 1% of income earners lost a bit of wealth overnight.  Government and private company retirement funds, individual 401Ks, university endowments and most other savings and investments of the remaining 99% are in the stock market. (And in US bonds and T-bills that pay less than inflation so people's savings diminish with time while pension under-funding is growing.)

Of course Californians voted for added taxation to themselves. The outcome of this will be none other than ... Ross Perot's "giant sucking sound..."

These days the world is running at the speed of the Internet. Trends develop and bubbles burst quickly. So all of us under 75 stand a good chance in finding what Greece is all about where, among other things, unemployment for people under 25 yo is at about 50%.

Celebration will quickly turn into sequestration. The Treasury has quietly informed the President that the debt limit will be reached before the year is out.

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On November 7, the day after the election the DOW dropped from 13,300 to 13,000. Some said that this was a temporary knee-jerk reaction. By November 15 the DOW had slid further to 12,500.

Rail Is Not a Path to Prosperity for Honolulu

ENERGY.  Rail may be electric but 85% of electricity production on Oahu comes from oil and coal. This won't change much with the current intermittent renewable energy schemes. So rail does not reduce our economic dependency to imported fuels but it increases our dependency to imported sole source equipment and parts for which knowledge base is absent throughout Hawaii.

DEVELOPMENT.  Rail is not needed for TODs and other development. To be done successfully, these need a solid business foundation and strong demand. Neither is present for major development. US Census statistics clearly show that Oahu and Hawaii are in prolonged and perhaps permanent "sideways" trends.  See here [link].  How can a place prosper when prime agricultural land is turned into cookie cutter sprawled homes and fake gentleman farms?

JOBS.  It is bad policy to develop transportation solutions in order to provide jobs, particularly by selecting a type of transportation that will take the transit subsidy share of the city budget from 11% to 19%. This is the path to bankruptcy, not the path to prosperity.

TRANSIT SHARE.  It is counterproductive to develop a form of transportation that will take the current mass transit share from 6% to 7.4% at a cost of over $4 billion for the local economy. Unsurprisingly if one looks at the Final EIS, all freeway and main arterial screen-lines are shown to have similar or worse congestion with rail. Congestion chokes our economy. Fake relief will provide fake results.

CONGESTION.  Honolulu has a modest tax base and it clearly cannot support mega-projects such as the proposed rail. Honolulu has relatively severe congestion because it is among the most lane deficient cities in the union.

ECONOMY.  Despite having the best bus system in the nation and very expensive fuel pricing, the demand for independent travel is very strong, partly due to tourism, military and people having multiple jobs. A single rail line does very little for tourists, too little for people with multiple jobs and nothing for the military.

MOBILITY.  A lot of our traffic is school and college based and rail does really nothing for these trips. Over half of the traffic on the roads is pickup trucks and SUVs of plumbers, electricians, distributors, repairmen and soccer moms. Rail does nothing for them too.

PRODUCTIVITY.  Adding a lot of nothing gets us nothing. In fact the FEIS clearly shows that 70,000 daily riders will switch from bus to rail.  Add a few carpoolers and the 1% who may abandon their car and that's how the rail ridership comes about. Where is the productivity in this?  Even of rail had no construction cost, one would be hard pressed to come up with positive productivity for it.

GUT TheBus.  Last but not least, the rail will dismantle the No.1 system in the nation. All TheBus routes listed below (copied from the rail FEIS) will be terminated at the nearest train station or eliminated altogether: B, C, E, 3, 9, 11, 20, 43, 53, 73, 81, 90, 91, 92, 93, 94, 96, 97, 98A, 101, 102, 103, 201, 202.

An abbreviated TV editorial of this article appeared on Hawaii News Now on October 29 and 30.  Mahalo to Rick Blangiardi, General Manager of KGMB and KHNL for this opportunity.

Nimitz Flyover Cost Estimate Suggests that Rail Will Cost $7 Billion

In comparison, the structural and construction cost of the rail viaduct per mile will be similar or higher than $270 million per mile. So 20 miles of rail at $270 million per mile will cost $5.4 Billion. The rail's budget is $5.16 Billion. This means that the rail project will have no money left for trains, stations, a rail yard, etc. after 20 miles of viaduct has been built. Or that the rail will cost well more than $7 billion to complete.

Read full article in Honolulu Civil Beat.

Bus vs. Rail – 2007 Comparison and 2012 Opinion from Los Angeles

2007

The Gold Line BRT opened in 2003, the Orange Line Rail in 2005. Each is about 14 miles long, and each has 13 stations, about a mile apart. How do they compare?

• The BRT line was expected to start out at 5,000 to 7,500 average weekday boardings, growing to 22,000 by 2020. It actually achieved the 2020 goal by its seventh month.
• The LRT, by contrast, was supposed to start off with 30,000 weekday boardings and double that by 2023. But its actual ridership has been lower than that of the BRT line—well below projections.
• The capital cost of the BRT line was $349 million. The Light Rail cost was $859 million.
• The operating costs also favor BRT, with the Orange Line costing $0.54 per passenger mile compared with $1.08 for the Rail. On a cost per boarding basis, it’s $3.79 for BRT versus $7.54 for Rail.
• Lesson: A high-end BRT is far more cost-effective (bang for the buck) than a typical LRT, meaning you get a lot more transit per dollar spent.
• If a city is short on transit dollars, then a simple express bus service on a major arterial can provide tremendous value per dollar spent.

Source: REASON FOUNDATION’S SURFACE TRANSPORTATION INNOVATIONS ISSUE NO. 45 - JULY 2007

2012

"When you look at the size of Honolulu (and) you look at the transportation problem they're seeking to solve, BRT is almost certainly a better investment,"

UCLA Prof. Brian Taylor said.

Taylor's research shows one of the greatest factors in determining a transit system's appeal is the ease with which riders can get to a transit line, whether it's BRT or rail. If a rider needs to go through various steps like walking, driving or transferring to get to a final destination, the less likely he or she is to use public transportation. "So, making the vehicle a little bit faster is not nearly as important as having a cutting down of the wait time," he said.

While the overall number of projected riders appears impressive, Taylor says it's not nearly enough to offset the tremendous capital cost needed to build the system, as well as the additional expenditures required to operate and maintain it. Heavy rail is much better suited for large, metropolitan cities like Tokyo, New York and London, which generate extremely large numbers of riders.

Source: UCLA expert weighs in on transit debate, Andrew Pereira, KITV

 

Honolulu Transit Megaprojects Compared

The same consultant conducting transit system estimations 6 years apart for the City and County of Honolulu has produced the figures tabulated below.

The conclusion is clear: BRT would provide the same transit ridership for about one tenth the cost.

All these figures are from official Final EIS documents.

 

 The final word is that the Rail Emperor truly has no clothes.

A Train Has the Capacity of Five Buses. So What?

Published on page 3 of Honolulu's Filipino Chronicle.