“We’re the country that built the intercontinental railroad,” Obama says. “So how can we now sit back and let China build the best railroads?”
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The transcontinental railroad lost tons of money. The government never covered its costs, and most rail lines that used the tracks went bankrupt or continued to be subsidized by taxpayers.
The Union Pacific and Northern Pacific — all those rail lines we learned about in history class — milked the taxpayer and then went broke.
One line worked. The Great Northern never went bankrupt. It was the railroad that got no subsidies.
Of course US dollars are paying for China’s new railroads, so it’s not like they are their own using .
You’d think that after Solyndra even full-patch statists would question Team Obama’s ability to impartially “invest” taxpayers money. Nah, those people are dangerous misfits.
Darn, that was supposed to be preview not post.
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Of course US dollars are paying for China’s new railroads, so it’s not like they are using their own money.
What has changed? The Chinese built the railroads then and now. Dangerous, back-breaking work, little pay, next to no skill.
Those who do not know history….
So which intercontinental railway did the Americans build? Europe to Asia? Eurasia to Africa? North to South America? Australia to Antarctica?
Right James J. Hill built the Great Northern Railroad with no government subsidies and when many of the rest went bankrupt his remained solvent. For some reason Hill is called a “robber baron”. At least some of us remember his name while his lackey competitors are forgotten.
Osumashi:
Lots of other ethnic groups worked on the railroads besides the Chinese. And many of them were abused too.
Stossel overstates his case. The railways of north america made plenty of money – on freight. And the western lines were milked for income to the wholly private lines of the east. Passenger traffic around the globe with very few exceptions is a money loser – a loss leader to get people to and from the production sites for the freight that needs to be shipped. That is what Obama is missing or perhaps is ignoring – north Americas freight rail is world class in its efficiency and we have pretty much all we need in terms of economically viable capacity.
@Joe: good point! The only intercontinental railroads that exist run from Europe to Asia, and of course the Europeans built those.
I’ve heard some harebrained schemes to build Siberia to Alaska (or even Labrador to Newfoundland 🙂 ) lately, but nothing serious.
As for *Transcontinental* railways, we have a fascinating example in the CPR. That railway should have been impossible to build.
If it weren’t for huge government subsidies, loans, and loan guarantees, on top of monopoly land grants, wild land speculation, incredible feats of engineering, investors and board members who got caught up in the project and poured their wealth into it, and a war (the Riel Rebellion) that needed troop transport, the railway would have failed spectacularly.
This is a case where government intervention actually worked, because they invested in something that had a great business model once it was built. But it was a huge gamble at the time.
Since the CPR is generally credited with keeping together a struggling young nation, one must assume that the railway’s failure would have meant that Canada’s Western border today would be not so far from Sudbury. (An interesting speculation if nothing else.)