Tuesday, June 9, 2015

Understanding Public Transportation Policy

This is a eureka moment.  The following is the only rule one has to know to understand public transportation policy in the US and first world socialist countries.

"It must always be remembered how cost-effectiveness works in the public sector: the cost is the benefit." --Thomas Rubin

It is finally distilled!  The Cost is the Benefit.

A region or a nation prospers when benefits outweigh costs for all public projects.  If Benefits are $$$$ and Costs are $$, then the benefit/cost ratio is 2.  That's a good project. It yields $2 of benefits for every $1 spent to build it!

But look at Honolulu's rail where the benefits are $ and the costs are $$$$$$$$$$. The benefit/cost ratio is less than 0.1 and the entire public sector and political elite are strongly in favor. Why? Because, following Rubin's Rule, its enormous cost of $6 Billion and counting is the benefit!

The alternatives analysis eliminated a $2 Billion light rail and a $1.5 Billion HOT lanes.  Not enough Cost... excuse me, not enough Benefit.

Unfortunately this is a certain indicator that a society has began its Roman Empire decay.