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Monday, December 22, 2008
Add road capacity for traffic relief
The Atlanta Journal-Constitution
A group that had difficulty mustering a quorum for its meetings is recommending a $50 billion proposal, more than twice the entire state budget, for commuter rail, rapid-transit bus and street cars in metro Atlanta.
“Whether that’s an urban fantasy or the seeds of Atlanta’s next great rebirth, only time will tell,” writes the AJC’s Ariel Hart about the Transit Planning Board, a group that includes representatives of the Georgia Regional Transportation Authority, MARTA, the Atlanta Regional Commission and local governments.
With the wish list, the group will reform itself next year as the Transit Implementation Board to start searching for money, $2.4 billion per year through 2030.
With the incoming administration of Barack Obama assembling an economic stimulus package that could exceed $850 billion with a goal of preserving or creating 3 million jobs over two years, infrastructure money may flow. More likely, the full debate on transportation infrastructure and funding will come in the next Congress with the reauthorization of a highway and transit funding bill with the garbage title “Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users” due to expire Sept. 30. A higher federal fuel tax, now 18.3 cents per gallon, is one “stimulus” possibility.
Traffic congestion is, no doubt, getting worse in urban areas across the country, including metro Atlanta. The question, however, is whether significant relief comes with an expenditure of $50 billion.
Ronald D. Utt, a senior research fellow at the Washington-based Heritage Foundation, and Wendell Cox, a visiting fellow, offer insights into the effectiveness of transit spending that should be weighed by every state legislator, congressman and policy guru engaged in the transportation-funding debate.
Some of their findings:
While “about 20 percent of federal surface transportation spending is devoted to transit, only 1.9 percent of all urban passenger travel and 4.9 percent of all commuters use transit.”
Portland, Ore., “has made massive investments in a light rail system and transit-oriented development,” yet just 5.5 percent of commuters used transit in 2007, down from an 8.4 percent share of 1980, before light rail was constructed.
While high gas prices are credited with prompting drivers to switch to transit, “detailed analysis of recent trends reveals that only 3 percent of the reduction in auto use shifted to transit by early 2008.” Carpools, smarter trip-planning and working from home accounted for 97 percent of the drop in miles driven.
A single metro area — the New York City area — accounted for 60 percent of the 10.8 percent increase in transit ridership nationwide between 2005 and 2007.
Amtrak requires a federal subsidy of $210.31 per passenger per thousand miles, while intercity buses require $4.66 and commercial airlines $6.18. “Automobiles earn a ‘profit’ for the federal government since only about 63 percent of the federal fuel taxes paid my motorists are spent on roads; most of the rest is spent on transit.”
It is routinely said that “we cannot build our way out of highway congestion.” In a practical sense, that’s true. But if the question is whether traffic congestion relief is more likely to come from added capacity or from “alternatives” that include commuter rail and streetcars, the answer is clear. Nostalgia loses.
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Bad shopping, good shopping?
The Atlanta Journal-Constitution
An Atlanta businessman who says he has a perfect payment history with American Express and a high credit score is angry that his credit card spending limit was reduce — and that one of the factors used to make the decision is where he shops.
“Other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express,” the company said in a letter to Atlantan Kevin Johnson. Among other factors considered are debt levels, repayment and credit histories, the letter said. Johnson said none of the latter factors applied to him.
Consideration of where cards are used strikes Johnson as “consumer profiling of the worst kind.” A company representative told AJC reporter Carrie Teegardin that it does not discriminate and complies with all fair lending laws.
My view is that credit card companies or any other lender should put together any profile it chooses that doesn’t discriminate on the basis of legally prohibited categories — race, for example. There’s no evidence that American Express is discriminating unlawfully.
Beyond Johnson’s personal situation, which I don’t know and therefore have no opinion on, his story does touch on larger, more important issue.
The subprime mortgage debacle that has visited this recession on America, got its start in an effort by politicians and advocacy groups to push mortgage lenders to waive credit-worthiness as the primary consideration in making loans. The financial sector, to its ever-lasting shame, was much too eager to comply, due in part to greed and to a system that held nobody accountable for extending bad loans. That chain of irresponsibility has, as we all know, brought down some of the icons of Wall Street.
The credit card industry has its own money-printing machine. When it extends credit to those who may be swamped by too much debt, it invites a second wave of financial disaster that could turn the recession into Depression. It therefore should employ every legal screen to determine whether it’s printed more credit-money than a consumer can repay. If it determines, for example, that people who drive red cars and shop at Joe’s Fruit Stand begin to make late payments when debt reaches $600, it should limit credit to $500.
These are, after all, debts borne by those who are managing credit responsibly. If we believe that computer models can predict global warming, then surely we can believe that computer models can predict consumer financial trouble even before individual borrowers recognize it.
The better companies manage the credit they extend, the less likely that fees and interest rates will be raised for others.
