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Re: Is RR antitrust exemption near the end of the line?
Author: Hipshot
Date: 05-09-2008 - 22:57
Much like economists, you can’t string together enough non sequiturs to ever reach a conclusion.
The traffic expropriated from the railroads by the interstate highway system included, without limitation, substantially all U.S. Mail (except for heavy catalogs and flyers), REA small parcel business, all railroad freight forwarder business, passengers, most perishable commodities, and the like. Similarly, livestock moves were lost when the meat processing industry moved its processing plants to rural areas, near their sources, allowing trucks to handle both the livestock from ranch to processor and boxed beef from processor to market.
Before demand pricing became legal for railroads, the above markets were the high-revenue markets the railroads counted on for revenue adequacy and – until the highway network emerged – there was nothing “marginal” about the returns on these lines of business. To the contrary, rates on bulk commodities, being so-called “low value commodities” were capped at non-compensatory levels. For much of the last century, and until deregulation, the only contributions to the railroad industry arising from the interstate highway system were creation unused capacity (which the industry was barred from jettisoning) and an loss of investor appeal due to inadequate earnings. It is purely phantasmagorical to expect the railroads to attribute to the highways anything more constructive to their well-being than a sense of satisfaction for having not succumbed to intensely subsidized competition.
OBTW, of the 1.8 million TEUs handled through the Port of Oakland in 2003, only 28% were handled by rail, 72% went in or out by truck.
Lost utilities included Samuel Insull’s Midland Utility, American Commonwealths Power Corp., and 51 other public utilities which went into bankruptcy during the Depression and most never recovered with their assets sold to stronger competitors. More recently, Pacific Gas & Electric (which has been reorganized) and the Public Service Company of New Hampshire (which won’t be reorganized) have been among public utilities that failed. Like the Staggers Act of 1980, in 1935 Congress passed the Public Utilities Holding Company Act (PUCHA) to rescue and protect the utilities from the kind of mismanagement and anticompetitive dealings that lead to failure. However, unlike the old Interstate Commerce Act, the PUHCA did not bar public utilities from earning adequate returns under the guise of protecting the weakest. Consequently, no public utility in the company failed until the PG&E and New Hampshire cases – both of which are arguably the result of uniformed and misguided regulation. Oh, the PUHCA was repealed in 2005.
The traffic expropriated from the railroads by the interstate highway system included, without limitation, substantially all U.S. Mail (except for heavy catalogs and flyers), REA small parcel business, all railroad freight forwarder business, passengers, most perishable commodities, and the like. Similarly, livestock moves were lost when the meat processing industry moved its processing plants to rural areas, near their sources, allowing trucks to handle both the livestock from ranch to processor and boxed beef from processor to market.
Before demand pricing became legal for railroads, the above markets were the high-revenue markets the railroads counted on for revenue adequacy and – until the highway network emerged – there was nothing “marginal” about the returns on these lines of business. To the contrary, rates on bulk commodities, being so-called “low value commodities” were capped at non-compensatory levels. For much of the last century, and until deregulation, the only contributions to the railroad industry arising from the interstate highway system were creation unused capacity (which the industry was barred from jettisoning) and an loss of investor appeal due to inadequate earnings. It is purely phantasmagorical to expect the railroads to attribute to the highways anything more constructive to their well-being than a sense of satisfaction for having not succumbed to intensely subsidized competition.
OBTW, of the 1.8 million TEUs handled through the Port of Oakland in 2003, only 28% were handled by rail, 72% went in or out by truck.
Lost utilities included Samuel Insull’s Midland Utility, American Commonwealths Power Corp., and 51 other public utilities which went into bankruptcy during the Depression and most never recovered with their assets sold to stronger competitors. More recently, Pacific Gas & Electric (which has been reorganized) and the Public Service Company of New Hampshire (which won’t be reorganized) have been among public utilities that failed. Like the Staggers Act of 1980, in 1935 Congress passed the Public Utilities Holding Company Act (PUCHA) to rescue and protect the utilities from the kind of mismanagement and anticompetitive dealings that lead to failure. However, unlike the old Interstate Commerce Act, the PUHCA did not bar public utilities from earning adequate returns under the guise of protecting the weakest. Consequently, no public utility in the company failed until the PG&E and New Hampshire cases – both of which are arguably the result of uniformed and misguided regulation. Oh, the PUHCA was repealed in 2005.
