$10 Gas? Not Really!

Gas at $10 is a myth. China's big boom is over. Their cities are so congested and polluted that they can't absorb more cars so their demand for gasoline should level off.

Similar story for Brazil where Sao Paolo just exceeded 19 million people. In such vast and growing cities rail systems are an obvious need. The explosive growth in demand for oil distillates from the BRICs (Brazil, Russia, India and China) will subside significantly soon. Most of the problem in gas prices is actually created by the restrictions of the EPA and the President.

$10 per gallon of gas is called ... Greece, Italy and several other countries where most people drive 40+ mpg cars instead of 20 mpg cars. In this way, their relative cost for fuel is roughly the same as ours. People find a way to assure themselves independent, flexible transportation. See more in this post: Gasoline Price Comparisons: Taxes not Octanes Matter

People in Hawaii can adjust should gas prices "explode." I am still amazed at the $30K to $50K trucks people buy when a hybrid family sedan is much safer and less than $30K to buy -- let alone the sub-$20K and over 35 mpg compact cars available in the market. There is a lot of room for downsizing in Hawaii.

What Has Been the Biggest Failure in Transportation in Recent History?

A well known transportation academic posed this question recently to other transportation experts.

Failure he said. You decide the criteria. Failures could be big small, but not too small and localized.

I am looking for projects, systems, technologies, or policies that have been failures.

To provide a response in a general way, I had to define failure in a general way. So I defined it as “the usefulness of a transportation mode or infrastructure to my adult life and the quality of it—the mode with the least usefulness would be a failure.” Here’s my assessment looking back in the last 30 years which also coincides with the length of my adult life, more or less.

Roads and cars allowed me to access everything that was out there… people, sights, activities, opportunities.

Roads and buses let me travel intra- and inter-city when I was making little money.

Roads, bicycles and mopeds made college life much easier and efficient. The bicycle as exercise on public roads and bikeways is among the least demanding and most enjoyable. It works for me.

Airplanes took me the world over. Nowadays, large airports like Incheon in South Korea allow me to get to Asia in one flight from the US and then the rest of Asia is one flight away.

Helicopters allowed me to study the main freeway in Honolulu and observe traffic shock waves in action. They are the best mode to view volcanoes in Hawaii and among the best means for rapid rescue the world over.

Bridges and tunnels. All had an obvious utility in time savings and safety.

Small ferries took me to islands with my car, large ferries took me to countries with my car, and container ships got me food, TVs, furniture and cars. Tanker ships bring oil to fuel most of the transportation I listed above. I love fish, so many thanks to the global fishing fleets and their harbors.

Freight trains. Without these trains and coal the US would not enjoy the cheap power it used to propel it to a global dominating status and the highest standard of living. Their indirect effect to my well being has been substantial.

Cable systems and telepheriques have a practicality all of their own and once built they are not too expensive to operate. The alternative, if one exists, is typically a long drive along narrow, winding and occasionally icy roads.

Passenger trains. There was always a substitute and they never were a necessity. I took the TGV in France, Shinkansen in Japan, and China’s fast trains. Without exception, all of them were one way trips, just to try them out. All of them were expensive and difficult to handle with two suitcases. They were much more crowded than airplanes. I also use metro rail in Europe and Asia, and in a handful of very large cities in the US chiefly because their downtowns are devoid of parking and their bus systems are too complex to learn in a short visit.

Thus, in relative terms, rail systems have done too little for my life experience and quality of life, thus, almost all rail systems built in the last 30 years were a failure. Add to this that all but Shinkansen are constant loss-makers and their first place as modern era transportation failures is assured.

ENDOTE
One maybe tempted to say that my response is skewed because Honolulu does not have rail. I've been in Honolulu for 22 years and my residence and work locations have been in a triangle formed by Kalihi, Kailua and Kahala. Rail would not be useful to me.

I spend a lot of time in Athens and my brother, sister and their families reside there. Less than 1% of our trips use any of Athens' multiple rail lines. For most people, a rail line makes no difference in their 21st century life style.

What Year Is It In Economic Times?

In the recent article Lost Economic Time, The Economist argues that the economic clock went back several years in terms of the economy for several developed countries.

While few would argue with the economic back-tracking of Greece, Ireland, Portugal and Spain, many would be reluctant to admit that the US economy has gone substantially backward. Yet The Economist data show that US is third worst.


This prodded me to do some basic analysis of my economic situation relative to the cost of living. I was further surprised to realize that this was also true for me!

I thought I was doing quite well in my professional and professorial career, but a reduction in my university salary, a drop in consulting (I wonder why nobody hires me to do work for the rail...) and the ever advancing Consumer Price Index or CPI have taken their toll. Indeed my CPI adjusted income average for the last three years took me back to ... 2001.



Time to redouble our efforts and claw ourselves out of our economic 9-11.

Notes: (1) The income trend in the graph is based on my federal tax adjusted gross income or AGI at the bottom of the first page of my annual tax return. (2) The CPI trend is from the annual average tabulated by the U.S. Bureau of Labor Statistics. (3) Both trends are normalized to start at 100 in 1994.

Dear FTA ...

... a little less pork will be good for you!

Anti Rail Plaintiffs to Federal Transit Administration: City Rail Project is Fundamentally Flawed, Based on Weak Financial Plan

Solar Paint

It is understood that by the end of the century the use of fossil fuels will be substantially reduced either because we have largely exhausted them or because we regulated their use to a minimum.

What's next is unclear because at the present time, other than nuclear energy, nothing comes close to the energy density and portability of fossil fuels.

However, disruptive technologies are in the horizon that may change the way we make power. One such technology that recently crossed my radar screen is solar paint developed at the University of Notre Dame in Indiana.

Called “Sun-Believable,” the paint is still a ways from being commercially available. But its development could ultimately lead to a new generation of inexpensive power generation.

Once able to be produced at a reasonable cost this paint would combine well with neighborhood large battery storage for 24 hour power supply.

The Seven Rules of Bureaucracy

The Seven Rules of Bureaucracy by Loyd S. Pettegrew and Carol A. Vance presents an insightful and succinct list of routine actions by "successful" bureaucracies. Their article provides many examples. Most of these are directly applicable to the education and traffic congestion problems in Hawaii. Both come with huge bureaucracies that lie about the issues and maintain poor performance.

Although politicians of all colors and persuasions have used these one time or another, the rules also read like the manifesto of a major political party in the US, don't they?

1. Maintain the problem at all costs! The problem is the basis of power, perks, privileges, and security.
2. Use crisis and perceived crisis to increase your power and control. Force 11th-hour decisions, threaten the loss of options and opportunities, and limit the opposition’s opportunity to review and critique.
3. If there are not enough crises, manufacture them, even from nature, where none exist.
4. Control the flow and release of information while feigning openness. Deny, delay, obfuscate, spin, and lie.
5. Maximize public-relations exposure by creating a cover story that appeals to the universal need to help people.
6. Create vested support groups by distributing concentrated benefits and/or entitlements to these special interests, while distributing the costs broadly to one’s political opponents.
7. Demonize the truth tellers who have the temerity to say, “The emperor has no clothes.”

HART's Job Estimates Are Wrong

Back in 2009, UHERO provided some rail jobs estimates that said employment will start with 300 jobs, and at the peak of construction, there may be 2,000 jobs, but at that time UHERO did not know that a $1.4 billion contract to build the rail cars would go to Ansaldo Breda in Italy.*

However HART testified at City Council that the rail will create 4,000 to 17,000 jobs. These estimates are flat out wrong if people believe that these are Hawaii-based jobs. Here is why:

• Material costs are not jobs and most materials like steel, concrete and glass will be imported, thus those jobs are not local.
• Finance charges are not jobs.
• Equipment and outside purchases are not jobs in Hawaii. These will be a huge portion from trains, escalators and elevators to ticket machines, tickets, bolts and nails.
• Also many large and "linear" infrastructure projects like the rail are of a "copy-paste" nature, that is, the people who build the first mile will also build the second mile, etc. There are no 10 groups of workers building 10 separate miles.
  

In sum, a very large portion of the $5.3 Billion pie is not labor related. The part that is labor is not very large for Hawaii because (1) a portion of the labor is outside Hawaii or imported expertise, and (2) Linear infrastructure does not need a large number of workers. Therefore UHERO's estimate that the maximum likely number of jobs is around 2,000 is the best answer. This makes Rail smaller in terms of jobs than Hilton Hawaiian Village. Of course the Village is a sustainable job supplier, whereas Rail is not.

It is also a fact that tax-based infrastructure development causes major job losses because the taxes taken from people to build the rail were not spent elsewhere in the economy.

If infrastructure projects can be made with all-local materials and labor, then the projects simply circulate monies in the same market (Oahu in this case) but they do not create real growth. This circulation also has "parasitic losses" due to the bureaucracies involved and, on occasion, lawsuits and other penalties.

Rail, unfortunately, uses so many imported components and expertise that local taxes will be exported in the billions of dollars, so its net effect will be strongly recessionary.

Two years ago based on UHERO's 2009 estimates of rail jobs I wrote the article
Proposed Rail Creates 1,000 Local Jobs and Destroys 4,000 Jobs (the bold part is UHERO assessments):

UHERO estimates that first year rail construction job count will be about 360 jobs and only in peak years the construction job estimate will reach about 2,000 jobs. But most of them will be unsuitable for carpenters that are suffering the brunt of construction sector unemployment now. Also almost all of the rail construction materials and technology comes from off-island sources, so at best 1,000 of these jobs are local. The City estimates for rail jobs are false. They are advocacy estimates.

More on this in Malia Zimmerman's article Honolulu Rail Sold to City Council, Public, on Jobs Boost, But Will the Promise Hold Up? in the Hawaii Reporter.

Public Education Systems. There is Hope, but not in Hawaii. Yet.

"Nevada and New Mexico are among a growing number of states that are looking to Florida and Mr Bush’s time in office for inspiration on school reform. Many of these, such as Indiana, New Jersey, Oklahoma, Louisiana and Arizona, have Republican governors, while others, such as Colorado, have Democratic governors but influential Republican education leaders. Many are also known for mediocre schools. That, indeed, was Florida’s situation: its schools were among the nation’s worst in 1999 and are now among the best."

So there is hope in Hawaii, but another set of players will be required.

The quote above is from a great article in The Economist last month: The Floridian school of thought.