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  • China's Bullet Train Fiasco: A Warning to America

    Well, the Chinese finally have a green-energy idea worth stealing: arrest government officials who foist overpriced, underperforming, debt-ballooning, money-losing projects on taxpayers.

    Earlier this year, Liu Zhijun, Minister of Railways in the People’s Republic of China, was arrested following investigations into cost overruns and poor performance of the ministry’s showcase bullet trains. To be fair, the arrests were made when the investigations uncovered potential corruption in addition to the mismanagement. But the corruption problems likely would have gone unnoticed had the bullet train program not become such a boondoggle. (The railway debt alone is about 5 percent of China’s GDP.)

    According to Charles Lane of The Washington Post, the bullet-train fiasco was not stopped earlier because “Liu exploited the communist leadership’s fascination with bigness and national prestige.”

    Rail-Rider-in-Chief Joe Biden recently promoted the Obama Administration’s $53 billion high-speed rail package with his own appeal to national prestige: “If we don’t seize this future, how will America ever have the opportunity to lead the world in the 21st century?” Here’s an alternative the Vice President might want to consider: allow entrepreneurs to seek the opportunities without subsidies and without burdensome regulation. It worked pretty well in the 20th century.

    Bullet-train cheerleaders at the Center for American Progress also seem swayed by bigness and national prestige: “Today, it is China that is leading the world in a key next-generation transportation technology: high-speed rail. … China already boasts a rail network that, including both standard and high-speed rail, is more than 53,000 miles long.”

    Lane had additional insight regarding the process that led to such a hugely costly mistake: “Rather than demonstrating the advantages of centrally planned long-term investment, as its foreign admirers sometimes suggested, China’s bullet-train experience shows what can go wrong when an unelected elite, influenced by corrupt opportunists, gives orders that all must follow—without the robust public discussion we would have in the states.”

    How much better the process would be with honest opportunists is not clear, but President Obama has praised bullet trains, and the 1,000-page stimulus package included an $8 billion deposit for our own bullet-train network. For the next installment, the Obama Administration proposes the $53 billion mentioned by Vice President Biden.

    Of course, we shouldn’t criminalize mere incompetence, but is it too much to ask of Congress that they quit subsidizing inefficient energy projects? If consumers will not cover the costs of production, it means the product is wasting resources better employed elsewhere.

    Posted in Energy [slideshow_deploy]

    14 Responses to China's Bullet Train Fiasco: A Warning to America

    1. Ethan Davis Meadvill says:

      China’s bullet-train experience shows what can go wrong when an unelected elite, influenced by corrupt opportunists, gives orders that all must follow—without the robust public discussion we would have in the states.”

      May I replace "unelected" with elected and the thought would still be valid?

    2. Bobbie says:

      Awesome write, Mr. Kreutzer!

      I love where you wrote: "Here’s an alternative the Vice President might want to consider: allow entrepreneurs to seek the opportunities without subsidies and without burdensome regulation. It worked pretty well in the 20th century."

      That is BEAUTIFULLY HONEST!!!

    3. david kerr, Redding, says:

      I hope that all the states cancel their high speed trains, except California. That will give a nice test of what it does to an economy.

    4. George Colgrove VA says:

      This is chilling considering most of DC could be put behind bars for just about everything they push on taxpayers. Obamacare being the premier program that will sink this country.

    5. coveri says:

      It's not a fiasco at all. You have to keep in mind the growth of the Chinese economy. In 2000 there were empty expressways in Shanghai. In 2009, China became the largest auto market in the world and traffic became notorious.

      In 2010, the Chinese per capita was $4500. In 2015, the projected per capita will be $9000. China will go from a relatively poor country to a middle income one in a short period. That's a lot of new demand on freight and passenger rail. There was only one non-air solution and that was high speed rail.

      It's a concept most of the world isn't used to: the government gets things done even before consumer demand.

      -CoverI

    6. Cincinnati OH says:

      Now let's see. One billion people living in some of the largest, highest population density cities on the face of the earth and money to burn (our money by the way) and it still doesn't make economic sense. Oh, and least we forget China's bullet train was built with cheap Chinese labor. A US bullet train built with union labor on private access right-of-ways with delays due to Environmental Impact Statements and related law suites will cost 5X the Chinese bullet and it will be cheaper to fly.

    7. Lefty says:

      Train go fast! I like! Go train go!

    8. Todd, Virginia says:

      What article did coveri read? I must of missed that one.

    9. Joel Z, Illinois says:

      coveri: And if the consumer demand never materializes for the central planners' expensive toy, then what?

    10. WesternCowgirl says:

      Dear CoverI:

      "It’s a concept most of the world isn’t used to: the government gets things done even before consumer demand." I am not even sure how to respond to such a statement! It is hard for me to even imagine what that means.

      But here's a thought for you: take into consideration just the past two years with unemployment of 9+%, people loosing their homes and health care in question, unreported inflation, devaluing of the dollar, blah, blah, blah.

      THEN you talk about spending money . . . billions of dollars . . . on something that is NOT in demand? How about you try spending money to drill for oil so we can drive our cars without using our corn crops to make ethenol; how about we use our grain products to produce food because our food prices are rising exponentially; how about we LET the taxpayers keep their hard-earned money so they can add jobs to their businesses and employ the millions out of work.

      The only money the government has to spend BELONGS to the taxpayers, and it should be up to the taxpayers what that money is spent on. THE TAXPAYERS are the boss, and government works for THEM, not the other way around.

      Did you even READ this article? "The railway debt alone is about 5 percent of China’s GDP." Does this figure even register with you?

    11. Norma in Nebraska says:

      So CoverI says, "It’s a concept most of the world isn’t used to: the government gets things done even before consumer demand." Gosh, must be a died-in-the-wool liberal because I just can't of anyone else that would think it was just fine to spend taxpayers' money on something they don't want . . . and then want to RAISE taxes to pay the bill!!!!!

      One thing about it, if you are looking for work I bet Big O can find a place for you . . . he is in the market for more radicals to work for the government!

    12. Leon Lundquist, Dura says:

      Best leading paragraph of the day! I laughed out loud! No doubt High Speed Rail is futuristic. I never understood why the Monorail never caught on. What? Too efficient? Too cheap? The argument isn't that a bullet train is wonderful! This stuff is CRAZY Expensive! The data point that is relevant is "How do we waste so much money it wrecks the whole Economy?" What were they thinking? VP Biden gets his subsidized ride, but do you know what we get out in the Nations? Nothing! No! Worse than nothing! Total Interference!

      It is 'The Economy Stupid!' And Stupid is to ruin ideas like fast trains by paying off your friends, GE and SIEMENS, whoever Captive Corporation is willing to pay off the Captive Media! It isn't about Spending so much as it is about Wasteful Spending! Socialism never works, it is always Wasteful Spending! Look at Europe! They're so broke they can't even Defend Themselves! We have to do it! Fine if we got something for it, like Iraqi Oil, or Libyan Oil! Hell! Give us a Kudo, anything. No. Progressives make sure it is all Waste! "Let's have the most expensive System imaginable!" Same with Medicine, the highest imaginable Health Care costs! The highest imaginable Energy Costs! The highest imaginable Food costs! Welfare for the International Bankers! No. Worse, unimaginable waste because the Banks Won't Lend!

      In Durango we have FIVE Bridges to Nowhere! Five! Obama's gang put up a $10,000 sign that said "Your Stimulus Dollars At Work!" And extra funny, they put up the sign long after the work was done! It isn't that they are Spending! They are Wasting our grandchildren's money! Wasting it!

    13. Jeff, Los Angeles says:

      @coveri…

      1 word: Amtrak.

      2 words: Social Security

      3 syllables: Medicare (couldn't think of a 3 word government insolvency)

      4 words: United States Postal Service

      Ignorance certainly is bliss.

    14. dave, ca says:

      I think we would get much more bang for the buck by extending BART from Dublin over the Alamont Pass. IMO

      The way it is now we are going to have Billions invested and no rider income . We dont need a 200 mph train just about a 125 would do . Most folks are going to drive and the folks that want to ride will have to be subsidized like seniors and lower income .

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