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Nose Under the Community Tent

By Paul Losch

About this blog: I was a "corporate brat" growing up and lived in different parts of the country, ending in Houston, Texas for high school. After attending college at UC Davis, and getting an MBA at Harvard, I embarked on a marketing career, mai...  (More)

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High Speed Rasputin

Uploaded: Nov 30, 2011
It took a great deal of effort by certain Russians to kill Rasputin, the minion of the final Czar of Russia. The guy did not go down easily or peacefully, nor does that appear to be the case with High Speed Rail in California.

I shudder to think how much money has been wasted and will continue to be wasted studying this thing to death. The clowns at HSR continue to produce, at taxpayers expense, fatuous analysis which is shot down, at taxpayers expense, by reasoned experts who have no skin in the game except their reputations, as objective observers about the HSR proposal in this state. (Nothing wrong with the concept of HSR. But like many things in life, there is a time and a place.)

Let us simplify the complexity here. There are 3 issues around HSR:

1. Spending decision

2. Financing decision

3. Policy decision

I do not want to get into the legalities and technicalities. To my way of thinking, that is just jumping into the mud wrestling match instead of looking at this thing with basic common sense.

I also find tiresome that those who find fault with CA HSR being accused of NIMBYism. There are plenty of things about this flawed concept to kill it without the NIMBY moniker.

So, point by point:

1. Spending decision: is this a worthwhile expenditure? The cost/benefit analysis has been shaky at best, and has gotten worse with each iteration. Change the folks on the HSR management, get rid of the people (such as Kopp and Diridon) who sold this pig in a poke to CA voters in 2008. It still is a pig, and it even lacks lipstick.


2. Financing decision: to quote a Dan Hicks song from more years ago than I care to admit, "Where's the Money?" Assume for a moment that this was a viable project, which it is not. How will it be paid for? Non-profit organizations are struggling right now as their supporters have had to reduce their support. This proposed new "non-profit" organization has ludicrous and poorly thought through expectations of how it will work economically to persuade taxpayers and private investors to pay for this boondoggle. Dirty little secret? No private investors will materialize, they know what a turkey this thing is.

3. Policy decision: is this what is the best use of funds? No. If the funds were applied to local transit development, where most of the trips take place, it would have substantially more benefit than would an HSR artery between our part of the world and the southland of California.

My suggestion is that the HSR people propose a tax hike on Californians to pay for this directly. That will bring out another irrational group, the "Jarvis" people, and this thing will be put to sleep once and for all.
What is it worth to you?


Posted by Wayne Martin, a resident of ,
on Dec 1, 2011 at 8:20 am

While Paul Losch makes perfect sense in this bit of opinion, the problem is that his opinion is not how the process works, or at least it is not working for this project.

California is well known for failures of ?big ticket?/capital projects:

CA Large Project Failures:
Web Link

Just this week, there was a problem with a new CalPERS computer system:
Web Link

The venture has had a rocky history, coming in two years late at an estimated $507 million. That's $228 million over the original budget, including $74 million in features added later. CalPERS figures the true cost overruns total $154 million.

The idea that Californians, with a single vote requiring only a 50%+1 approval level, should be able to commit (possibly) hundreds of billions of dollars to a project that has no solid planning in place at the time of the election, provides for virtually no oversight, and might never have any strict oversight, demonstrates another of the many flaws in ?democracy?, California style.

We elect people locally that claim to be our ?political betters?--people who claim to know more about ?governing? that ordinary people. And what do we get?a government that is chronically living on money that is being ?borrowed? from our children and grandchildren (via bonds), without their consent, or knowledge. A government that is increasingly opaque, often caught up in lies that hide the truths of government mismanagement, and malfeasance.

If we had knowledgeable, and honest, legislators, they would have created the HSR Project with ?off-ramps?, so that if after sufficient study, it could have been legally, and effectively, terminated.

Unfortunately, we have elected a bunch of people who are more beholden to special interests, than to the people of California. The Legislature simply created a ?spigot? for HSR spending, that once turned on, will be very hard to turn off.

California government, at every level, is broken. Maybe the HSR quagmire will be a big enough issue to start the pendulum swinging back towards some point of common sense, and ?live within your means? governance. But somehow I doubt it.

Posted by Dr Doodle, a resident of ,
on Dec 1, 2011 at 2:54 pm

I don't want to sound mean here, because I generally understand where Mr. Losch is coming from. But this commentary is just so full of inaccuracies that it doesn't really do any favors to HSR opponents. For example:

Get Kopp and Diridon off the Board? They're already off!

The "nonprofit organization" model doesn't fly? Of course not, which is why it's never been associated with HSR. (There are some people who want a nonprofit to take over Caltrain, and I would agree with Mr. Losch that that's a ludicrous notion).

Reasoned experts with no skin in the game? Do you mean people like Alain Enthoven, who, long before ever attacking the financial structure of HSR, was complaining about how the noise of trains would disrupt dinner parties at his home near the tracks?

There's no money to do this project? AND the money should be spent on local transit? So is there money or not? The fact of the matter is that there is SOME money to start the project, and that money is available ONLY because the project is HSR. Take away HSR, and the money goes away too.

Where's the money? Okay, this actually IS the question. $98 billion project, and $6 billion in the bank. Even though I like HSR, I have a hard time believing that this scheme is really going to work out.

Posted by Robert, a resident of ,
on Dec 2, 2011 at 10:52 am

@ Dr. Doolittle,

Re your "Get Kopp and Diridon off the Board? They're already off!" Did you note the word "still" in Losch's commentary (last sentence of his paragraph 1)? Apparently not. That shows that he realizes they're already gone from the board of directors. Please read more carefully before criticizing. (Caveat: they're probably gone in name only. If you think they're not still involved as promoters and influencers in board deliberations or on behalf of the project, then I've got a used bridge I'd like to sell you cheap.)

Yes, "reasoned experts with no skin in the game," like the folks at UC's "Institute of Transportation Studies" who found the methodology and assumptions of HSR's consultant's predictive ridership model problematic.

Re funds being used for local transit, Losch obviously knows that (a) at present the money to complete this project is not even close to being in hand, and is contending that (b) such money as the state would likely have to come up with in the future to complete HSR would be better spent on local transit improvement. There's NOTHING INCONSISTENT WITH THAT POSITION AT ALL.

Thanks for your comment.

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