In the wake of the sheer madness, no that’s too kind, outright stupidity, flagrant self-satisfaction and puerile cuteness of yesterday’s “Why Leftists want to pull you all on mass transit” piece, we offer you some brief words of respite taken directly from Paul Krugman’s 7 October piece in his “The Conscience of a Liberal” blog from the New York Times. Our bottom line: Don’t give up on America yet. We may be in the slow lane, but with a lot more hard work and hard thinking we just may get there yet.
Transit Economics (It’s not just about the money)
The usual suspects on the comment board are, inevitably, arguing that rail transit should pay for itself. The obvious response is that road transit doesn’t; why should only public transit have to self-finance, when private vehicles generally drive on free roads built and maintained out of taxes?
But in a way that misses the larger point: urban transportation is an area in which we know that market prices bear very little relationship to true social costs. Even if you ignore environmental impacts and the national security implications of oil imports, the fact is that driving in an urban area, especially in rush hour, imposes huge congestion externalities on other people. And I mean huge: Felix Salmon had a nice piece last year putting the external cost you impose on other people by driving into lower Manhattan at $160 a day. (I can’t find the reference, but Dave Barry once had an “ask Mr. Question Authority” about how long it takes to drive across Manhattan during rush hour. The answer was that nobody has ever succeeded in driving across Manhattan during rush hour.)
Now, Econ 101 says that the first-best answer to these externalities is to make people pay these social costs; if we did, New Jersey Transit could charge much higher fares! But since that isn’t going to happen — at best, we may someday get a modest congestion charge — we’re into second-best territory.
And rail transit takes people off the roads, thereby yielding a large benefit that doesn’t show in NJT’s books.
So anyone who tries to make this into some kind of issue of principle — we should never, ever subsidize any form of transit — is just out of touch both with economic analysis and with the realities
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About the author:
Paul Krugman is a Times columnist and winner of the 2008 Nobel Memorial Prize in Economic Science. His latest book is “The Return of Depression Economics and the Crisis of 2008.” You can read his Conscience of a Liberal blog at www.krugmanonline.com/. And as you see here he can also ride a bike (at least he could back in 1973 when this picture was taken.)
Thanks to Dave Brook of the www.carsharing.us blog for this good heads-up.