Search

Thursday, December 13th, 2012

Is the Acela Killing America?

Has the finance industry trainjacked America?

By all accounts the Acela has been a success. Thought it is far from perfect and constitutes moderate speed rail for the most part, it seems to have attracted strong ridership. A midday train was totally packed on both the BOS-NYC leg and NYC-DC leg the last time I rode it. I didn’t see an empty seat anywhere. Which is pretty amazing given how much more expensive it is than the regional, and frankly not that much faster. It does seem to have accomplished its mission of more closely linking Boston, New York, and Washington.

The question is, is that actually a good thing? Or has the improved connectivity the Acela brings had unforeseen negative consequences? I believe you can make an argument that the Acela has actually helped birth the stranglehold the finance industry has over federal fiscal and monetary policies, and thus has hurt America.

I don’t have time to fully develop that here, but to anyone who has been following any of the many excellent sites tracking the financial crisis over the last few years, it is obvious.

There is now a near merger between Wall Street and K Street. During the financial crisis, the government and the Fed have kept Wall Street well supplied with bailouts and nearly free access to capital that allows them to literally print risk free profits by recycling in the free loans into interest bearing government debt, all while Main St. businesses and homeowners have borne the full brunt of a credit crunch, state and local governments fiscally starve, and infrastructure funds dry up. Finance industry insiders have now obtained a near lock on the position of Treasury Secretary. When a president like Bush dares to appoint someone with actual industrial experience, Wall Street’s displeasure is made manifest, and it generally succeeds in undermining him. New laws like Dodd-Frank strangle new entrants to the field while enshrining the privileged status of the too big to fail. The fact that it allows government to seize these “systematically important financial institutions” shows not the industry’s weakness but its strength, as big banks de facto function as instrumentalities of the state, but with profits privatized and losses socialized. Not a single major figure in the events causing the financial meltdowns has gone to jail or even been prosecuted (only a collection of ponzi schemers and insider traders who, despite their criminality, had no systematic impact – the crisis blew up their scams, their scams did not cause the crisis). The list goes on.

The geographic proximity of New York to Washington, with quick trips back and forth on the Acela, facilitates this. Clearly, you could get back and forth on the shuttle without it, but given the Acela’s popularity, it does seem to have some big benefits in shrinking the distance between New York and DC. I’d argue this has been unhealthy for America. If true high speed rail ever came to the NYC-DC corridor, who knows what might happen?

Perhaps you don’t agree and will feed me to the dogs for this post. But I think it’s very clear that transportation networks have vast impact on the structure of society, not just how people and goods get from Point A to Point B. The interstate highway system is proof of that. Indeed, advocates of high speed rail (and I’ve been a qualified one myself, supporting it clearly in the Northeast Corridor but being skeptical about most others) boast of the positive transformational effects of HSR as one of the reasons to build it. But as with the interstate highway system, we need to be aware of the hidden risks as well.

The Acela is perhaps living proof that high speed rail can reshape America. It is literally helping rewrite the geographic power map of America. Unfortunately, at this point don’t think that’s been a good thing.

40 Comments
Topics: Transportation

40 Responses to “Is the Acela Killing America?”

  1. Don K. says:

    Airports, by this same logic, are also killing America, as the truly well-off can fly from New York to Washington. I suggest that we blow up all airports, disrupt all interstates, and strip railroads for metal. Only by doing so can we revive America.

  2. Rich says:

    Most of this post is just ridiculous. Acela to blame for the power of Wall Street & K Street? Absurd. Your fourth paragraph tirade does nothing to advance your argument that Acela is at fault. You think none of this would have happened without Acela? A laughable contention.

  3. jason says:

    I’d say the guys running things are much more likely to travel via private jet or helicopter than a trainload of plebes. (Upper-middle class plebes, perhaps, but everything’s relative.)

  4. CityBeautiful21 says:

    This column reminds me of the episode of the Simpsons where the comet almost destroys Springfield and the show ends with everyone running off to burn down the observatory “to make sure this never happens again.”

  5. Let’s just say I didn’t expect a warm reception for this post :)

    @Don K, airports indeed have transformed cities. I’ve read a lot recently about how mid-sized cities are struggling economically because of poor air connections versus better connected places. This is pretty standard in global city theory. That doesn’t mean that we should dismantle air travel, but we should recognize its downsides. You may not that despite my aggressive tone with the piece, I also noted that I’m on record as a supporter of NEC high speed rail.

    @Rich, I didn’t say none of it would have occurred, but I certainly believe the Acela is a facilitator.

    @jason, the guys running things yes, but there’s tons of people under them. Mid-level execs don’t necessarily fly private jets, so even if the big boys fly private, there are still plenty of folks working for them who could be on the Acela.

  6. aim says:

    Aaron, seriously, you’ve waded into tin hat territory with this piece. I don’t even know where to start with this. There are thousands of ways that technology of all kinds have shrunken the distances between NYC and DC. Of all of those, the Acela is so far down the list of those technologies and the number of people who use the Acela is such a small fraction of the number of people involved that why you ever latched onto it as having any involvement in the causes of the financial crisis and response to it is a bit mind-boggling. How in the world did this idea ever get started?

  7. Brett says:

    You could just as easily make an argument that the problem is the rest of the country is not connected enough to Washington.

  8. Brett says:

    Also, if you are going to make an assertion like this, you can’t just punt and say you don’t have time to develop the idea. That is shameful and does a real disservice to your mission with this site. It’s very disappointing.

    The world is going to end on December 21. I don’t have time to develop that here, but you can trust me on it.

  9. @Brett, the idea I didn’t have time to develop was not the Acela NYC-DC link, it is the control of government policy by the finance industry. That’s completely orthogonal to my blog, and vast quantities of ink have been written about it already.

  10. I should mention that had I taken the same causal agent – Acela-based NYC-DC integration – and mentioned some positive spin off of it, such as arguing it contributed to the rebirth of the District itself during the 2000s, I have no doubt I would not be hearing the idea so resolutely pooh-poohed.

  11. Sean says:

    I don’t understand how this is such a contentious claim to make. Nobody would disagree that the transportation revolution brought on by highways has and continues to significantly alter the balance of power on a municipal, regional, state and certainly federal level, so there is plainly a basis for the argument that transportation can have a significant impact on society in the way Aaron describes. Even co-location of workers and industries supports this phenomenon; people who work across the street from each other are far more likely to work together and influence one another, than people who have to travel by boat or jetliner across an ocean.

    Regardless of how wealthy executives choose to get between two places, the actual work being done everyday to support them by an army of professionals- from lawyers to lobbyists- is enabled and strengthened by resources such as high speed rail (as Aaron already asserted).

    A more compelling discussion might be to understand the dynamics of this relationship and how it can be managed, since high speed rail certainly isn’t going away anytime soon (or maybe it is if we go over the fiscal cliff?).

    Finally, a relevant (but unrelated) idea was recently explored in the New York Times’ magazine in an article titled “Empire of the In-Between” that is worth a read, if anyone hasn’t already seen it.

  12. Adam H. says:

    This article is all kinds of ridiculous. How is it a high-speed train’s fault that the US government is corrupt and is favoring big business over small, local ones?

  13. DaveOfRichmond says:

    If your main point is just an observation that the Acela makes it a bit easier for the powers that be in NYC and DC to work with each other, then yes, right. As to your opinion that this is bad for America, I’m not so sure.

    The way I remember the history of the crisis, the Feds engineered some buyouts of some of the troubled banks (Bear Stearns by JPMorgan; Merrill by BOA, etc) and everyone started screaming about how Wall St was being taken care of while Main St. suffered. So, they let Lehman go under, and it looked like the whole financial system was going to collapse. Thus, they were too terrified to let another major player crash.

    In other words it was plain old fear that led to TARP, not so much this cozy relationship thing. How would America be doing if the financial system collapsed? In any case I don’t think the train had anything to do with the bailouts, just fear.

    I guess you could agree with that and still say that there is too cozy a relationship between the two – I defer to Sean’s comment that this just needs to be managed. I don’t know of any major economy that doesn’t have a pretty close relationship between its gov’t and major financial institutions.

  14. Carolyn says:

    I appreciate you having the guts to throw an unpopular idea out there (albeit with a jarring title that certainly stirred up some emotions!). You bring up an interesting question: are there instances in which greater accessibility and connectivity are not the goal? Perhaps the answer ends up being no, but it’s still important to consider.

  15. Alex B. says:

    1. The connection between finance and lobbying certainly didn’t magically start as soon as the Acela entered service. The timing of your argument is suspect. The seeds of this crisis certainly predate 2008, and they probably go back to the 1980s.

    2. Other industries have successfully earned massive subsidies from Washington, special treatment, etc. Are you going to say that subsidies to the energy sector are killing America thanks to the fact that IAD and IAH are both United hubs? The link between place and industry is also suspect. Plenty of other industries influence Washington without the benefit of a rail connection.

  16. david vartanoff says:

    paraphrasing Diamond Jim Brady on the premier of the Twentieth Century Limited (providing faster rail service between NY & Chi than is available today) in 1902, now Chicago is a suburb of NY.
    As to the Acela (round 3 of the High speed ground transportation project–remember the original Metroliners?) What it is has done is reclaim the bulk of DC-NY travel for rail as it had been before Eastern Airlines’ shuttle poached the lower patience/higher spending market segment. The Sept 11 hijackers gave Acela a boost by sparking HS/TS theater. Even Amtrak, not renowned for catering to customers, is much more pleasant than ANY airport.

    Now, is the ability of crooked bankers to rapidly shuttle to/from the world of bribers (lobbyists) a detriment to what’s left of democracy in the US? Yes, but so is the oxygen some of these persons waste.

  17. Max Power says:

    The Wall Street – Waskington rail link has been a connection of corruption for well over a century.
    The Federal Reserve was designed by a cabal of Wall Street and Congressional insiders, who met up on Sen. Nelson Aldrich’s private car in Hoboken.
    See the initial pages of “The Creature from Jekyll Island”
    http://www.amazon.com/gp/product/091298645X/ref=pd_lpo_k2_dp_sr_1?pf_rd_p=486539851&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=0912986212&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1EBPSS1FWM44M57P52VN#reader_091298645X

  18. Chris says:

    For the sake of argument, let’s say the Acela does facilitate access by the NY finance industry to the DC power structure.

    Fine, if there is too cozy of a relationship between Wall Street and the White House and/or Congress, then it would seem the solution might be to have more regulation of lobbyists, or even better, educate voters so they are more likely to elect representatives who will enact tighter regulation of the finance industry. But, none of the possible solutions involve anything to do with the Acela.

    So, why bring up the Acela, when it is, at best, one of many factors contributing to a closer connection between Wall Street and the government? (And, by the way, long before the Acela, Wall Street hired attorneys and lobbyists on K Street to represent their interests to Congress and the White House, you don’t need a train when you can hire local talent).

    I do not get the point of this post unless it was simply thrown out as bait to provoke negative responses.

  19. Chris Barnett says:

    Aaron has simply taken the pro-HSR arguments and turned them on their ear here: what hath HSR (or higher-speed rail) wrought?

    I read this post as being in the “be careful what you wish for” vein, with a healthy dose of Aaron’s native Hoosier skepticism mixed in.

    Union Station DC is, after all, only a short walk from Capitol Hill and K street, halfway in between the two.

  20. John says:

    Maybe we should blame telephones or e-mail too? I’m very close to unsubscribing from this blog in my RSS feed.

  21. Chris says:

    Chris B., I am a Hoosier, too, so I know all about so-called “Hoosier skepticism,” but I still don’t get the point of this post. “Be careful what you wish for,” simply doesn’t make sense in this case.

    The fact that any technological or infrastructure improvement may indirectly help some people to do undesirable things is not a good argument not to implement the technological or infrastructure improvement.

    You prevent financial corruption through good regulation. You address the issue of big industry’s undue influence on government through a free press and grass-roots advocacy and voter education campaigns. Again, none of the solutions to the problem involve slowing down a commuter train.

  22. Brett says:

    Correlation is not causation. This blog post only brings up the correlation of the implementation of Acela with the increase in influence of Wall Street over Washington. Maybe there is more to it, but you are going to have work a lot harder on your argument. I’m skeptical.

    The argument also borders on inanity. Others above have pointed out you could make the same argument about other technologies such as air travel, telephones and email. All increase connectivity. We like to talk about the positive effects of this. It’s more optimistic. We don’t always ponder the negatives enough. Maybe we should do that more, but there is a better way to bring it up than this argument you have proposed. Wall Street is massively rich and therefore its influence seems inevitable. Maybe Acela helped that, but its hard to see how to pick that out among all the other things helping Wall Street (mainly the giant pile of cash).

  23. marko says:

    Proximity between the two power centers has certainly hurt the rest of America, but thats more a function of historic artifact: the country started on the east coast. Where I live their is a growing distrust of the coasts, maybe it’s midwestern provincialism or something deeper, but we feel sold out – again. Maybe the Great Lakes industrial states should join Canada? We probably have more in common culturally. I think you’ve scratched at something in the post – but its deeper than just the Acela. If you recall millions of Americans told their congress people to reject the Economic Stabilization Act in the fall of 2008 and they did, only to roll over to the financial elite’s threats of meltdown a week later and pass it. Americans remember and still feel slighted, especially out here. The next time Americans might start voting with all those guns their hording. Theres a strong belief that DC and Wall Street have become delinked from the productive center of the country – where would the new financial centers be if Wall St. was allowed to fail? This could have been a paradigm shifter to a decentralized financial system with new hubs in the south and midwest, but instead we got a larger, even more centralized financial system, and thus ultimately a weaker country, fracturing by the region before our very eyes.

  24. flavius says:

    If the Acela is killing America, then I’m afraid to hear what Citizens United v. FEC is doing to it.

  25. Frank Navarrete says:

    Fortuately, the NY-DC link also facilitates interchange between government and Wall St watchdog groups.

  26. Charlotte Allen says:

    I hate to puncture anyone’s balloon, but the Acela train shaves off about 15 minutes from the DC/NYC run. That’s supposed to have facilitated some sort of Wall Street-K Street convergence? C’mon!

  27. Oldfogey says:

    On the Acela, you don’t have to wait until you’re in the air to hit Ctrl-P as every banksta knows. Too bad you didn’t bold that sentence in the article. Hey, The VP takes the train, too: what does he know that we don’t? A lot, I guess.

  28. Tom Perkins says:

    “You could just as easily make an argument that the problem is the rest of the country is not connected enough to Washington.”

    Which is why there should be 5,000 representatives, not several hundred, all subject to recall and no consecutive terms permitted.

  29. Steve Bailey says:

    Peter King sports writer for SI has to inform the other 90% of the country of his acela informed political views as if he was the chosen one here to educate the masses. Barry Ritholtz same tone deaf arrogance on a different topic. No doubt the country would be better off without corridor views polluting the rest of the country on any topic.

  30. BinhT says:

    Apparently the legalization of recreational marijuana in WA is already resulting in some bizzare rants. If you subscribe to this nonsense, then it’s really private/corporate jets – not passenger trains – that are “killing America”.

  31. Seerak says:

    I believe you can make an argument that the Acela has actually helped birth the stranglehold that federal fiscal and monetary policies have over the finance industry, and thus has hurt America.

    FIFY.

  32. Andy Freeman says:

    > then it would seem the solution might be to have more regulation of lobbyists

    “more regulation” doesn’t imply “good regulation”. In fact, it’s unclear that “good” regulation is possible. These people are related to one another.

    If you don’t want govt to be bought, don’t insist that it be worth buying.

    > Citizens United v. FEC

    It’s unclear why my movie about Hillary Clinton is bad but MGM’s is good. Or, why the NYT’s opinions should be treated differently than mine (or even the Koch Brothers).

    You do know that the NYT is a corporation, right?

    And no, “they’re journalists” doesn’t cut it. My press isn’t any different than theirs. And, unlike NBC, I haven’t been caught doctoring tapes.

  33. Joey Joe Jo Shabadoo Jr. says:

    Having worked for a senior, beloved, and liberal member of the House Finance Committee, I can assure you that your premises have no basis in fact. Top Congressmen and bankers use Blackberries and iPhones far more often than in-person meetings.

    Also, why wouldn’t you recruit top regulators from within the industry, as opposed to outsiders who don’t have intimate knowledge of the wrongs they propose to right? Police officers don’t go to the boy scouts when they need a tip, they go to people in the grey area. Case in point: Joe Kennedy Sr. was the undisputed grand master of financial irregularity at a time when securities markets were truly unregulated anarchies. But after Franklin Roosevelt appointed Kennedy to head the Securities and Exchange Commission, he brought more fairness and transparency to the finance industry than anyone has before or since.

    Now let me make an outlandish speculation. I think that your anger is misdirected, and the source of that anger is not your belief that power corrupts. Rather, it is because you are simply ignorant about the methods of wielding real power. You see only light and shadow but there is a full spectrum in between.

  34. CAL says:

    What is more lame …your dumb born in 1988 post ..or the white Repub pigs that kill the American Dream??..found this on a link via a TEAbagger rail website

  35. Brown Line says:

    For all you literal-minded folks who are ripping Aaron a new one, hold on, because I’m going to use a fancy word: “metaphor”. Acela’s whisking trainloads of paper-shufflers between NYC and DC is a *metaphor* for the ever-closer relationship between big capital and big government.

    As to the nature of the relationship, one might use a sexual metaphor to describe it, except that it’s the people out here in flyover country who are being screwed.

    So, take it easy. Aaron is not *literally* advocating shutting down Acela as a way of halting the tsunami of regulations coming out of Washington. But Acela is a useful metaphor, to help us think about the relationship. Nothing more – and nothing less.

  36. Chris says:

    Brown line,this is an urban development blog, not a political commentary blog.

    Also, Aaron made it clear in his post that he was speaking literally, even if just to play devil’s advocate (about whether better transit connections are always a good thing), he was NOT speaking metaphorically.

    This was not one of his better posts, nor was it his worst, as he has written some other clunky nonsense before, too.

    36 comments on this stupidity is 36 too many, it is time for us all to move on.

  37. David says:

    I guess I am the only one who thinks this post makes a lot of sense.

    Look in countries like the U.K. and France the country’s elite are concentrated in one city (London and Paris respectively). These cities have a very different feeling from cities like Brasilia, Bonn/Berlin, and Ottawa which are cities where industrialist and financiers are not well represented in the city elite. Instead these cities are dominated by government, education and the arts (but mostly government).

    The advantage of a London and Paris is that they make for very interesting dinner parties and urban environments. The disadvantage is that not coincidently the U.K. and France have strong intertwining of governmental elite with financial elite as reflected in their laws. And why not? All these people know each other and all agree what is good for London and Paris is good for Great Britain and France.

    The U.S. has always been a strange case. Washington D.C. is its own city with its own social scene. The social scene by the standards of New York or L.A. is not that exciting because at its heart Washington D.C. is a one industry town. Federal workers and contractors tend to be highly competent, but as a whole they are not exactly a colorful bunch. However, D.C. for quite some time has identified itself with the Northeast. In my parents’ lifetime it did not, and many in D.C. basically saw it as a southern city.

    However, if as Aaron speculates, the traveler distance between New York and Washington becomes negligible for a variety of reasons including better transportation (the true elite travel my private plane or helicopter, the upper middle class by Acela, and the middle class/job seekers by Bus) then you have turned D.C./New York where the job markets and the elite merge.

    The proof for Aaron’s speculation that D.C. and New York are merging? Aaron points out the the financial bailout. The bailout is a lot closer to something that would traditionally be crafted in a city like London than in the U.S. where politics and finance have had a long love/hate relationship.

    I think Aaron should have started by noting the merging job market between New York and D.C. Then what sort of financial policies Washington would come up with during the crisis, if the dynamics of the city were more like London. And only then mention how it is the law partners, mid level bankers, and mid to high level government functionaries who are the glue merging New York with D.C. generally all routinely travel back and forth on the Acela. I know for a fact that a lot of business gets conducted on those trains.

  38. James says:

    I am always skeptical of the populist mentality. And it is popular to be angry about the bank bailout. But keep in mind that the bank bailouts under TARP have recovered 91% of their loans. Most of the remaining ledger is owed not by financial institutions but by General Motors.

    http://www.treasury.gov/initiatives/financial-stability/about-tarp/Pages/default.aspx

    The Federal Reserve’s bond buying program has netted billions of dollars in revenue for the treasury.

    http://www.federalreserve.gov/newsevents/press/other/20110110a.htm

    And don’t forget that many smaller financial institutions were the recipients of loans. It wasn’t exclusively to large firms like Bank of America:

    http://www.nytimes.com/packages/html/national/200904_CREDITCRISIS/recipients.html

    The problem here is that you are badly uninformed. Instead you are relying on populist hysteria to shape your worldview. So when you talk about a train line from New York to DC killing America, it sounds rather hysterical. Because it is. And when you talk about how financial institutions that were given loans should have members jailed, it reminds me of the reign of terror in revolutionary France. People assume that cadres of fraudsters could easily be punished. But in reality proving fraud in a court of law is incredibly difficult. People acted foolishly during the housing bubble, but so far as I know foolishness is no crime. God help us if it is.

  39. Matt says:

    I think that if I read between the lines here I might sort of see what the mentality is.

    Basically if you live in a city and have to take a form of rail or plane or even by car THAT far to another city for work then what does that say about where you live?

    A city should at the very least have employment to validate living there. If there’s no jobs in a city or somewhere within say a half hour then why live there?

    To try to make an argument on political connections I’d argue is invalid here. The population density of the northeast alone validates as to why the northeast corridor exists. To argue that somehow this enabled lobbiests to flood DC from NYC or members of congress to go to NYC from DC ignores the fact that planes can easily do the same.

    Ironically I heard nearly the same arguments from those in China about high speed rail going from Beijing to Shanghai as it tends to be a bit more free thinking on its own.

    As the cluetrain manifesto stated more than 10 years ago the idea of place being a factor is slowly ebbing. People in office don’t go to people all the time they simply send emails via black berries and iphones etc.

  40. Nathanael says:

    “But in reality proving fraud in a court of law is incredibly difficult.”

    Not when the major banks are openly forging documents using “DocX”, which advertised its document-forging services.

    No, the fact is it’s trivial to prove the frauds. It might be hard to pin knowledge on the execs, but it’s trivial to prove the frauds.

    The trouble is that the Attorney Generals and DAs have been bought by the bankers. And the bigger trouble is that there is no way around them — no private prosecutions.

The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism. Included are 28 carefully curated essays out of nearly 1,200 posts in the first seven years of the Urbanophile, plus 9 original pieces. It's great for anyone who cares about our cities.

Telestrian Data Terminal

about

A production of the Urbanophile, Telestrian is the fastest, easiest, and best way to access public data about cities and regions, with totally unique features like the ability to create thematic maps with no technical knowledge and easy to use place to place migration data. It's a great way to support the Urbanophile, but more importantly it can save you tons of time and deliver huge value and capabilities to you and your organization.

Try It For 30 Days Free!

About the Urbanophile

about

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.

Full Bio

Contact

Please email before connecting with me on LinkedIn if we don't already know each other.

 

Copyright © 2006-2014 Urbanophile, LLC, All Rights Reserved - Copyright Information