What Do You See In Your Wallet?

The American economy is coming back. At least according to most of the news reports that you hear. Wall Street is again climbing to within a thousand or two of its peak in October of 2007 and the corporate bigwigs are getting their outrageous bonuses, despite the so-called limitations that were enacted. It seems like these guys are winning the lottery every year. But I have not seen this recovery in my wallet.

In this recently completed first fiscal quarter, many of the railroad companies that I follow are now reporting that they have done very well. Over at CSX, the reported revenue climbed 13% to a record $2.8 billion, operating income at an all-time high of $773 million(up 22%) and an operating ratio at 72.5 compared with last year and also a record. Not bad for having many severe winter storms to deal with and a steep rise in diesel fuel prices.

Union Pacific also had problems with the weather and fuel prices but that didn't prevent them from chalking up some equally impressive record gains in revenue, operating income and ratio. Overall U.S. Rail volumes have remained above the typical carload growth rates for the first quarter. Shipments are up, revenues are up and profits are up, but I have not seen it in my wallet.

The workforce headcount for all 7 of the Class I railroads increased by 4.4% over last March's count and the majority of that came in the maintenance of way and structures group. Our railroads are beginning to upgrade and expand their infrastructure for the anticipated uptick in demand for freight. Remember that these guys are not interested in passenger rail, high speed or not. Rail travel of every kind is growing all across the U.S. But I don't see the benefits of that growth showing up in my wallet.

I read someplace the other day that the large multi-national corporations based in America have roughly $1.3 trillion in liquid assets which they are holding on to. That is trillion with a T, and yet they are not actively working on creating jobs or investing in America's growth. They are just sitting on it.

Are they waiting on the government to create to jobs? I don't think so. If the government began creating service jobs then the TEA Party would claim that they are expanding government. If the government began creating construction jobs then the taxes would have to help fund the building projects. Private industry will not create these service or construction jobs because the general public is unwilling to pay the full and unsubsidized cost of such a venture nor can the return on investment be fully realized in the now standard depreciation timetable. We have let the Wall St economy call the shots for so long that they can no longer help the little people while failing to maintain a reasonable, or sustainable growth rate. They have taken us to the brink in the past and we seem willing to let them continue an their merry way again.

Wall St has led an effort to subtly bring about a stealth redistribution of wealth and we have willingly bought into the apple. Mass production and automation have consistently brought lower production costs and cheaper prices but have also resulted in fewer jobs and social benefits are the first to be affected. We want the former and complain about the latter. And we go along with it. The Wall St CEOs eat from the big table and we wait for the trickle-down to reach us. I haven't seen it in my wallet.

I saw on the news this morning that John McCain, the former Republican presidential candidate, was in Libya to meet with the rebel coalition and discuss some sort of aid. There was also some comment about using the frozen assets of Gadhafi and supplying weapons and medical aid. Is this not a redistribution of wealth in the country of Libya? From the rich and powerful to the working masses? I guess it is good enough for them but not for America. And what about the comments from The Donald the other day? That the Libyans PAY us for the moral support(and a few specially aimed Cruise missiles) so that when we win the war for them, we would take( not pay for) all the oil that we need. Don't you just love where Trump's heart is at? I'll bet that I never see that show up in my wallet either.

What I DO see in my wallet is a pending 10% (Mrs Sweeper says probable) pay cut in an effort to balance the budget.

Sometimes, One Can Make A Difference

I received a comment today to an older post about the trolleys and Chevy Chase. I infer that this reader found the scuttlebutt going around, concerning the alteration of the Blue Route trolley, was suspiciously the similar to what I had proposed. I too, thought the same thing when I read the 5th District newsletter which came out last week. Does the Councilman read my stuff or does he have friends that do. Either way, the thought of being useful gives me a good feeling.

Below is the text from the newsletter;

For the past several weeks, I have been working with LexTran to devise a Colt Trolley route that would circulate through Chevy Chase then back downtown with a stop by the Lexington Farmers Market. I am pleased to inform you that on April 30th, the Blue Route Chevy Chase “Hop” will do just that.

The trolley will run from 10:00 a.m. until 1:00 p.m., and LexTran estimates that a full loop will take approximately 20 minutes, arriving at either end of the loop in 10-minute intervals. The Blue Route will maintain its Main and Vine Street course with the following deviations:
• Old Vine to Woodland Ave.
• Right on Woodland Ave.
• Left on Maxwell/High St. to Euclid
• Right on Euclid to Ashland Ave.
• Right on Ashland Ave.
• Left on Main St. to Jefferson St.
• Right on Jefferson St. to 2nd St.
• Left on 2nd St.
• Follow Regular Route to Old Vine at Woodland

There are some discrepancies in the newsletter and the posted trolley routes and times on the LexTran site. First, while April 30 is a Farmers Market day, if the route begins at 10 (the LexTran site says 11:30) those who get downtown after that will find far fewer good choices to pick from. Second, the route needs to go beyond 1:00 (LexTran says 2:00) if those who ride from downtown for lunch are to get back in a timely manner. And lastly, I hope that LexTran quickly updates their list of destinations along the route as this new alignment greatly expands the current list.

I guess that I can also claim at least a 66% success rate in being right about the Corman railroad display track at the corner of W. Main St and Oliver Lewis Way. I had theorized that they might place their existing large boxcar along with the two locomotive shells, or they might place the steam locomotive there. As it is they just put the two display units, so I was somewhat right.

Greying In Lexington

I read an interesting piece the other day out of St. Louis County, Mo. Interestingly enough, St. Louis County and the City of St. Louis are not a merged government nor is one inside the other. The city of St. Louis is called an independent city and is separate from any other city or county in Missouri. This story had to do with the suburbs and exurbs of the city of St. Louis and their governmental futures.

In the once bustling communities on the outskirts of the city proper, many aging baby boomers are now finding that their comfortable homes, designed for life built around the auto and deemed a safe place to raise kids, have become much more quiet in the last few years. Most of the kids have been raised and sent off to college, but the parents have remained and life has taken on a whole new set of challenges. These places are becoming the land of the empty-nesters.

Homeowners in communities like these seem to have just two choices when this happens, move downtown or move away completely. Rarely will it be in their best interest to remain as they are.

These homeowners will look much closer at the availability of shopping and the need to drive everywhere. They will be less inclined to vote for tax increases for schools and parks. Their need for medical services and transportation will increase. Their isolation will grow as their ranks thin and the look and feel of the neighborhood will change as they can participate in the daily activities of suburban life.

This environment is a product of the monoculture of development that has been the norm since the sixties. Building block upon block of cookie-cutter style houses, each one similar enough to its neighbor that they could be easily confused at night. All of the daily needs of the residents are carefully placed far enough away so as to not intrude on the calm residential feel of the area. There is no way to remain in the neighborhood while downsizing or even getting out to the market or community center to shop or visit friends. Such neighborhoods are designed and built for one thing, raising kids.

Think of it like you would a thoroughbred horse operation, laid out and developed for specific uses in a certain pattern. Very difficult to use for other crops be they animal or vegetable. Any change from one style to another is costly and unprofitable. And seldom do horses grow old on a typical breeding/racing based horse farm.

For many, this rollover of neighborhoods is natural and cyclical and has been going on for decades, but honestly the older neighborhoods (pre-1950) were not of such sweeping magnitude as those built in the '60s and later. The creation of Levitttown in New York brought examples of larger and larger subdivisions and the autos and Interstates made the possible. When you reached the end of particular phases of child rearing, you just moved. Today's economy will not allow such luxury.

The subdivisions of the last half of the last century also were built with housing stock which was designed for active families. They had great rooms and vaulted ceilings, three car garages and pools. Fine for raising a growing family or entertaining but way too much for an aging empty-nesters or a widow to take care of. Should we make our elderly move from their homes simply because we forgot to plan for their needs as they aged?

Other communities have begun to see their populations dwindle in these types of developments and with it a decline in tax revenue. This decline is accompanied with a rise in demand for services both of the transportation and emergency medical variety, many of them very specialized in nature. Lexington is fairly lucky in this regard as all of Fayette County is covered but the examples from St Louis County is a compilation of small cities and many unincorporated places. We shall see these same problems arise here but the impact should be lessened.

The upcoming Comprehensive Plan process will give us a chance to consider how we can set about to correct some of the possible problem areas and prepare solutions. Now is the time to begin thinking about it. How will you like to age in Lexington over the next ten years?

This Weeks Rail Thoughts

I have been kind of quiet on the subject lately, but the things that I have been reading in the past week have brought the regional rail idea more to the fore.

First off, the work that R. J. Corman Railroad is doing along side the Rupp parking lot and the intersection of W. Main St and Oliver Lewis Way is progressing smoothly. They have installed a fairly short (and steep) section of track that branches off of the main line just south of its crossing at Second St. This track then runs up a nearly 6% grade until it levels out parallel to the crest of the embankment which overlooks the rail yard.

This clearly has one sole purpose. To display some of the various rail equipment used by the Central Kentucky Lines portion of Corman rail group. They are also almost ready to place the rail under the new bridge now that the drainage and electrical line placements have been resolved. There is a location for a transformer pad and what I'm told will be a “glass house”. I am supposing that this will look similar to the architecture of the aviation facility in Nicholasville and will be used to protect some railcars (and /or people) should they establish a dinner train style operation. A Corman spokesman has continued to say that the railroad has “no formal plans for an excursion train”but all the construction, both here in Lexington and in Midway are some of the many pieces that “need to come together before an excursion train becomes reality.”

In Midway, if you don't know, the track runs right through the middle of Main St. and leaves little room for a long train to stop without blocking one of two city streets. The right of way for the railroad actually is wide enough for two parallel tracks without eliminating traffic or parking. The railroad is working with the City of Midway in building such a parallel track and doing some streetscape improvements.

Neither of these two track work projects are part of the TIGER (Transportation Investment Generating Economic Recovery) grant recently awarded for track upgrading on several of the Corman lines in a few states. One more piece of the puzzle was the wye that they re-established near Christianburg and provides a beautiful place in which to turn a train.

Corman has nearly quadrupled the amount of rail traffic on the line to Louisville in the 5 or 6 years that he has controlled it and its soon-to-be-completed upgrading will allow more freight traffic just in time for the price of fuel to make long-haul trucking cost prohibitive. The trucking industry has not made their trucks any more fuel efficient than the auto industry has cars. That said, the idea of a regional commuter rail service to Louisville, though interesting, is made just a little bit harder.

I hear of many commuters who travel from Lexington to Frankfort or Louisville daily who say that they are willing to go by rail, but I am not sure that they have thought it completely through. Many of them have found their efficient route via auto, and many of them avoid the normal rush hour snarls of downtown. If they were to go by rail and the station is downtown, then they are now a part of the traffic that they have so far avoided. There is also an added level of commute time involved which needs to be considered. For all of their talk, we are still at least ten years late in beginning to think about commuter rail service.

On the topic of High Speed Rail, it now seem clear that the Republican majority in the House is set on erasing all gains that the present administration has attempted to make. Without requiring vastly more fuel efficiency in autos and trucks and better alternatives to the fossil fuels we currently use, I think that they are wanting the country to live in the status quo. Other countries are not so conservative about it.

We cannot let the market decide about these things. Consider this. Based on extensive research Airbus committed, back in 2000, to build a massive 4 engined aircraft seating 500-800 passengers. The demand would come from the Asian market and a large part of that from China. Boeing, interestingly enough, came to a eerily similar decision. With the emergence of the Chinese market and the need for large numbers of people to travel between China's major cities and internationally, this looked like a sound decision. Now, 11 years later, one and just one southeast Asian airline has taken delivery of any of these super jumbo jets. That is one A380 out of the five ordered. Boeing has sold none of the passenger models but has orders for the freight versions What, pray tell, is the difference in the past 11 years. China's high speed rail.

This decision was basically an economic one. One 16 car-long 300 km/h train set costs roughly $80 million and seats 1050 while one Airbus A380 costs $360 million and seats 650. You can do the math.

Although the A380 is perhaps the most fuel-efficient large airliner in the sky today on a per-seat/km or seat/mile basis, figures from Airbus and Siemens show that at A380 burns nearly six times as much energy per seat/km as a modern high-speed train. The Chinese will buy from the Western world, but not if what they can build is cheaper. The Chinese have built over 6300 miles of high speed rail line in the past 10 years and the Europeans are continuing to expand their high speed routes while we worry about who will or will not benefit from building it. The answer is definitely the Chinese, they win if the build their own and the win if we don't build ours.