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July 17, 2012

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Recommendations for Improving Airport Screening

Testimony to the Committee on Homeland Security Subcommittee on Transportation Security

Robert Poole

Testimony of Robert W. Poole, Jr.
Director of Transportation Policy, Reason Foundation
July 10, 2012
Committee on Homeland Security Subcommittee on Transportation Security

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Rahm Emanuel and Big City Democrats Embrace Privatization

Leonard Gilroy

We often hear that America's infrastructure is crumbling, but did you know that tens and possibly hundreds of billions of dollars in private infrastructure funds are waiting to be spent? It's money that Chicago Mayor�and Democratic Party powerhouse�Rahm Emanuel has spotted, rightly calling it "a tool here that takes some of the pressure off taxpayers."

In April, the Chicago City Council overwhelmingly approved Mr. Emanuel's $7 billion program to "rebuild Chicago" by constructing two new runways at O'Hare Airport; replacing 900 miles of water pipes and 750 miles of the sewer system; creating special routes for rapid bus transit; modernizing schools, transit stations and city buildings; and building 12 new parks and 20 playgrounds.

To pay for these projects, Mr. Emanuel is turning in part to private firms including Citibank and Citi Infrastructure Investors, Macquarie Infrastructure and Real Assets Inc., J.P. Morgan Asset Management Infrastructure Investment Group, and union-held Ullico. These firms say they are ready to provide at least $1.7 billion to help build the "new Chicago."

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5 Reasons the California High-Speed Rail Project Shouldn�t Get More Money

Gov. Brown asks for billions in borrowing even as train system gets slower, shorter and more expensive

Joseph Vranich, Wendell Cox, Adrian Moore

Despite California’s budget deficit rising to $16 billion recently, Gov. Jerry Brown is asking state legislators for $6 billion in bonds to launch construction on the proposed high-speed rail system. Voters approved a $9.95 billion bond package for the “bullet train” in 2008, but just about everything about the rail system has changed since then. 

The California High-Speed Rail Authority (HSRA) issued a revised business plan in April that calls for a 130-mile segment running from Bakersfield to Madera in the state’s Central Valley. If the Central Valley leg is built, the plan says the system would eventually connect to, and share, tracks with commuter trains in the Bay Area and Los Angeles, in what it is calling a “blended” approach. Not exactly the bullet train from San Diego to Los Angeles to the Bay Area and Sacramento that voters were sold back in 2008. 

The last thing California should do right now is add billions more in bond debt. Beyond the most obvious – the state simply cannot afford it – there are at least five major reasons California shouldn’t move forward on this rail project.

 

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Cities Taking Mortgages with Eminent Domain is a Bad Idea

Both Robert Shiller and city officials in San Bernardino County should reconsider their support for condemning underwater mortgages

Anthony Randazzo

Professor Robert Shiller argues that there is a collective action problem slowing down the housing market and that we should use eminent domain to "condemn" underwater mortgages, forcibly buy them from mortgage-backed securities (MBS) investors at rates below face value, then sell the new mortgages with lowered principal balances to other private investors. City officials in San Bernardino County are considering this approach, but before they go any further they should know this is a terrible idea.

The reason so many homes remain underwater is because of intentional, subjective investment decisions made by banks, hedge funds, and institutional investors. Many of them could act, many of them choose not to. Just because the investment choice of mortgage-backed securities investors is undesirable doesn't mean investors are incapable of doing their own analysis. It is certainly likely that some principal has not been written down because of paperwork backlogs, poorly trained customer service reps, incompetent managers, and other unfortunate problems. But this is not cause to make a utilitarian argument that what is good for the whole should be valued over the good of the few and rights trampled for a supposedly righteous cause.

The reality is that sometimes write-downs are helpful, other times they are not. There is no universally accepted, objective, single course of action that the masses just have not seen. Moreover, this idea is detrimental to property rights and abuses the power of eminent domain. The only collective action problem here is that the collective have not acted as Shiller would prefer.

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Join Reason On an Alaskan Cruise

Reason's Alaskan cruise will depart from Seattle on August 11, 2012. We'll visit Juneau, Glacier Bay, Sitka, and Ketchikan, Alaska, before visiting Victoria, British Columbia. Join Reason's Nick Gillespie, Matt Welch, Jacob Sullum and Peter Suderman, plus featured guests:

For more information about the Reason cruise, please click here.

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Problems with the Government's Transportation Investment Generating Economic Recovery Grants

How TIGER grants fail to prioritize national needs

Baruch Feigenbaum

Creating a successful discretionary grant process is very challenging. Getting applicants to conduct cost-benefit analysis, creating a fair review process, and dealing with the political hurdles are difficult. Despite criticisms from the Office of Inspector General and others, USDOT has failed to make major changes to its program.

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Local, State Governments' Assets Causing Budgetary Pains

Why all levels of government should apply the "Yellow Pages Test" to its activities

Leonard Gilroy, John Palatiello

For too many years, government at all levels has failed to apply the "Yellow Pages Test".  That is a simple process of getting government out of activities and lines of business that are commercial in nature and otherwise available from private enterprise - businesses on Main Street USA and listed in the yellow pages of the phone book. When governments opt to conduct these activities in-house-with the lavish pay and retirement benefits for public employees that do the work-then they are taking away economic opportunities for the private sector and making government unnecessarily bigger than it needs to be.

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