PEOPLE RESPOND TO INCENTIVES. I'm skeptical of second-best arguments that use other countries' distortionary subsidies as arguments for offsetting subsidies or taxes in the United States. If other countries are prepared to tear up their economies to make some U.S. citizens better off it's probably better to let it happen, even if border region residents of California, Arizona, New Mexico, and Texas benefit by it.

Gasoline is selling for six pesos per liter across the border in Tijuana, which works out to about $2.50 a gallon, way cheaper than gas prices approaching $5 a gallon in San Diego County. Diesel fuel is cheaper still -- $2.19 a gallon.

All of this is a boon for James Blue's auto shop, located in a strip mall in the arid hills east of downtown San Diego. His business, Express Performance Center, installs extra-large fuel tanks in pickups and other work vehicles used for runs to fill up with cheap gas in Mexico.

"Purpose of your trip to Canada?"

"Buy some of Her Majesty's cheap gas."

Yes, I actually got away with that one in the spring of 1980. After President Reagan removed the price controls on U.S. produced new oil (it's too late in the evening to get into "old oil", "new oil", and "subject to windfall profit tax") that particular reason for a lunchtime trip to Canada went away.

The article explains the way in which the subsidized price rips up Mexico's economy.

There is another reason Mexicans do not like the American invasion of their filling stations. Even though Mexico is an oil exporter, it doesn't have the refinery capacity to turn enough of the oil into gasoline, and therefore imports much of its gas from the U.S. By subsidizing the fuel and reselling it to Americans at cut rates, the Mexican government loses twice.

The same argument applies to Chinese subsidies to its steel industry, intention of exporting to the United States notwithstanding, or to any other national policy that might provoke allegations of "dumping".

As Dave Tufte notes, You Can't Make This Up.

So ... get this ... they sell crude oil to the U.S. at the going rate, buys back gasoline at the going rate (about 1/3 higher), and then knocks over 40% off of that price to sell to consumers.

Taxpayers foot the bill.

Conjecture: if a trade practice is really "dumping" it hurts the dumping country more than it hurts the country being dumped on.

BROKEN WINDOW ALERT. In my back yard.

Local experts say although recent floods have caused plenty of misery, they do have a silver lining, and may in fact, stimulate our economy.When severe floods hit the stateline, people fled their homes, only to return to find carpeting ruined, furniture trashed and walls and floors warped. While no one wanted the floods, they do have a silver lining.

Insurance proceeds as well as loans and grants from FEMA, may actually help stimulate our economy. Residents and businesses may need to hire contractors to refurbish their homes. Retailers may also see a spike in business when flood victims may buy new carpet and appliances.

Floodwaters damaged more than 650 stateline homes along the Rock River.

In Minnesota.

Builders and contractors who have taken huge financial losses in recent years are finding some relief in Hugo and other east- and north-metro cities where marauding spring storms hammered thousands of houses.

Phil Miller pinch-hits for Frederic Bastiat.

The problem, as any economist worth his salt will tell you, is that disasters divert resources that would have been used more productively elsewhere. Instead of creating economic activity, disasters destroy wealth, and make the affected society, as a whole, worse off.

Consider this waterfront bar in Love's Park, Illinois that has to replace flooring it just replaced.

Business is down 75 percent, costing [owner Therese Ann] Dobson and her two daughters thousands of dollars. This after they poured more than $100-thousand into renovating the place. It was only open three weeks, before the Rock started to rise.

Then the task turned to sandbagging and pumping. But despite their best efforts, Dobson saw the water start to seep in last Wednesday.

"She came running into the kitchen and said get a mop, it was all coming through the wall actually, it wasn't coming through the door. So we had to move the sandbags," says [co-owner Paula] Schwartz.

PREDATOR CYCLES. Sometimes, the invasive species become part of the food chain.

Native walleye appear to be surviving the quagga invasion, and native lake trout seem to have adapted to eat round gobies, another freighter-borne invader that eats quaggas. Lake trout are what now sustains [Lake Huron fishing captain Janice] Deaton's charter business.

The fact that these two native species appear to be outlasting the more popular exotic salmon give conservationists some hope.

"There are native species left," says Jennifer Nalbone of the conservation group Great Lakes United. "There is some integrity to the system left, and it's our responsibility to protect it."

[National Oceanographic and Atmospheric Administration scientist Gary] Fahnenstiel says there is a chance [Lakes Huron and Michigan] can ultimately reach a balance with the invaders where they will have a self-sustaining but less productive - and lucrative - recreational fishery.

Self-sustaining does not rule out population fluctuations. We've already noted that Erie Island sea snakes also snack on gobies.

OBSERVATION OF THE DAY. Michael Totten goes adventuring in Albania, Kosovo, Montenegro, and Serbia.

Albanian pro-Americanism resembles that of both Poland and Iraqi Kurdistan. The unspeakably oppressive communist regime pushed Albanians strongly into the U.S.-led Western camp, and the humanitarian rescue of Albanians in Kosovo from Slobodan Milosevic's tyrannical despotism bolstered that sentiment even more.

Read the full story. The old squabble between Mao and the rest of Communism left some souvenirs on the Albania-Montenegro border, and going from one country to another is not always easy, with centuries-old disagreements leading to border guards allergic to some license plates and passport stamps.

IT'S NOT WORTH IT. A Milwaukee Journal-Sentinel article asks readers to consider the potential loss of the Great Lakes.

What price would you put on our Great Lakes - the sand beaches and rocky shores; the salmon, perch and rainbow trout; the smell of a freshwater breeze? Should we give it all up so that international shippers can save about $55 million a year?

That $55 million figure appears to be valid.

Only about $55 million a year, in terms of transportation savings over truck, rail and barge alternatives, according to a 2005 Joyce Foundation-funded analysis of cargo flows on the Great Lakes. The study has been ferociously criticized by shipping interests as an overly simplistic look at a complex transportation system, but it was successfully defended before an independent panel of transportation experts.

"I don't think there is any disputing the study," says Dennis Schornack, a former President Bush appointee who served as U.S. chair of the International Joint Commission, a binational panel created to resolve boundary water disputes between the U.S. and Canada. "It was peer reviewed, and they say if anything it erred on the high side of the benefits."

Though the raw numbers indicate the public might be getting a raw deal, you are not likely to find protesters on the lakefronts.

This doesn't surprise Notre Dame biologist David Lodge, who has been working with economists for more than three years to find the shipping-specific costs tied to invasive species in the Great Lakes. He explains that most people are unaware of the scale of the problem. At the same time, the shipping industry that benefits from the traffic - and the ability to pollute - reaps most of the gain.

"The damages of invasions are spread thinly over every member of society, and the benefits of the status quo are more concentrated," Lodge says. "So the incentive to maintain the status quo is strong for the people who benefit, and the incentive on the part of society to advocate for change is small for each individual. So we don't get the political reaction."

What the article does not spell out is how small, in the scheme of things, that $55 billion is. I have been following the St. Lawrence Seaway story for some time. The overseas business for the Port of Milwaukee works out to fewer freight car loads per day than a now-abandoned Wisconsin electric railroad handled in its final years. Elsewhere, the traffic is bulk cargo in relatively small ships (ocean going tankers and container ships are larger than the Seaway permits) that serve as transportation for invasive species. The tankers will dock where the refineries are, on the coasts. The container ships will dock at Halifax, because the Canadian rail system can get those containers inland much faster than the ships can.

Meanwhile, the lake life appears headed for a Lotke-Volterra crash.

While politicians dawdle and scientists scratch their heads over how to keep the lakes safe from the next invader, a Darwinian drama plays out at a Pentium pace under the waves.

This year the U.S. Geological Survey released its annual prey fish survey for Lake Michigan, and it showed a jaw-dropping plummet in the numbers of little fish that sustain the lake's prized salmon and trout species.

The estimated "biomass," or overall weight, of prey fish in 1989, the year after the zebra mussel's discovery in the Great Lakes: about 450,000 tons. The estimated biomass now: about 31,000 tons. That's a drop in half from the approximately 60,000 tons recorded in 2006, itself a record low since the annual surveys began in 1973.

At the same time, there has been an explosion in the number and range of quagga mussels on the lake bottom. Quaggas were first documented in Lake Michigan in 1997, but remained a bit player in the lake's ecology until five years ago.

Quaggas have since squeezed out most zebra mussels and have expanded their range well beyond that of the zebras, which can survive only in shallower waters.

Quaggas are proving to be far more disruptive to the lake than zebra mussels, which must cling to a hard surface and normally don't live in water deeper than 75 feet. Quaggas can lurk at depths exceeding 500 feet and can make a living on both rocky and clay bottoms. Zebra mussels essentially formed a necklace around the lakebed's perimeter. Now quaggas are carpeting it.

As a result, the lake's invasive mussel numbers have increased a hard-to-comprehend 16-fold in just the past five years, and are spreading so fast that the biologists who make their living studying them have a hard time finding the words to describe what's happening.

"I've calculated that there are 380 trillion mussels in Lake Michigan," says Tom Nalepa of the National Oceanic and Atmospheric Administration. "That was based on estimates in 2005, and I know the quagga mussel population has increased three- to possibly fourfold over 2005, so you can multiply that by threefold. I don't even know what that number is. Quadrillions?"

Yes.

"It's clear as a bell, it's like distilled water out there," says University of Michigan limnologist and Great Lakes fishery expert David Jude. "But there are all these implications for the food chain, and we haven't seen the end of it all yet."

At this point nobody can say what the lake will look like when the population of quaggas finally plateaus.

But zebra and quagga mussels are already implicated in the demise of a fatty shrimp-like animal called diaporeia that once flourished on the bottom of Lake Michigan at densities as high as 20,000 per square meter.

Diaporeia have almost completely disappeared from vast expanses of Lake Michigan. Though scientists have yet to prove the link between their demise and the mussels' arrival, few doubt the connection.

This lost battle for the bottom of the food chain affects everything above it.

Lake Michigan's struggling whitefish are an example. The regional favorite at restaurant fish boils evolved to depend heavily on nutrient-rich diaporeia. The average weight of a 7-year-old whitefish was more than 5 pounds in 1988, the year zebra mussels were found in the Great Lakes. It has since crashed to barely a pound.

With their main source of food disappearing, whitefish are trying to eat the mussels, shells and all.

The likely outcome will be a collapse of the whitefish population. But when the quaggas exhaust their food supply, the quagga population collapses? The article mentions a seaweed called cladophora that prefers clearer water. What is cladophora's food supply? What fish use cladophora for food?

BARRIERS TO MOVEMENT. Higher transportation costs have the same effect as tariffs. That dynamic is not yet evident, but a case study of a coat hanger manufacturer in Monticello, Wisconsin illustrates how that will play out.

The manufacturer is anticipating an increase in business, in response to a new tariff on coat hangers imported from China.

[In Monticello], a hanger plant that closed as the Chinese came to dominate the market has reopened, with management in the process of hiring 20 workers to add a second shift.

"Thank goodness the tariff is in place," said Jeff Bosen, manager of the plant that is owned by Shanti Industries Inc. of Foothill Ranch, Calif. Without it, "we'd be shutting the plant down."

Further into the article, one notes that dry cleaning establishments are not necessarily cheering.

John Krantz is at the center of the situation.

He is the president of Tri-Supply Co. of Loves Park, Ill., which for many years bought its hangers from the Monticello plant. Tri-Supply serves about 300 Wisconsin dry cleaners among its 1,700 customers in the upper Midwest.

In 2002, Krantz started to buy from Chinese suppliers. Although he has to order two months ahead instead of having a truck come to his warehouse daily, Krantz said he had no choice. "I started losing too much business" to competitors who were buying from China, he explained.

As more and more hangers came from China, U.S. plants began to close until only one, M&B Products Co. in Leeds, Ala., remained open. It started the case that eventually led to the tariffs. They were imposed on "wire garment hangers, fabricated from carbon steel," which were being sold for "less than fair value," according to the U.S. Department of Commerce. The tariff is from 33.85% to 221.05%, depending on what Chinese plant made the hangers.

We must have a tariff to protect our right to get just-in-time delivery of more expensive but U.S. made coat hangers, which sounds fair for U.S. makers of coat hangers, but consumers of dry cleaning services might have a different sense of fair.

According to Richard Klinke, president of the Wisconsin Fabricare Institute in Greenfield, a box of 500 hangers "is pushing over $50."

When M&B started its case, Klinke was able to guess the outcome. He is the owner of Klinke Cleaners, Madison, which has 19 outlets across the state.

As the case was pending, Klinke stuffed his warehouse with hangers. He now has about 375,000, purchased at old prices.

At the moment, he has other more pressing cost problems. "Utilities, health care make this look kind of small, to be honest," he said. But he added that eventually the hanger shortage will show up in his retail prices.

It already has at other, smaller outlets.

Some of those dry cleaners are asking consumers to return their coat hangers for recycling. That way, however, leads to the point I suggested in my title. The scrap -- the article mentions it earlier -- goes to China.

[The manager of the Monticello factory] cannot produce as much as he would like because of another challenge facing the U.S. hanger industry - a shortage of scrap steel, an important raw material.

"The availability of steel is very difficult," said Bosen. "If we had an unlimited supply of steel, we would be trying to get to 24-hour production" instead of the 16-hour days the plant will run once the second shift is hired and trained within the next two months.

The steel shortage, too, is the fault of China, industry officials say. As they see it, the Chinese have been aggressively buying scrap steel in the U.S. only to send it back across the Pacific Ocean as coat hangers, among other things.

The tariff will compel U.S. scrap dealers to sell less scrap to China. More jobs making coat hangers in Monticello, fewer jobs making coat hangers in U.S. junkyards (apologies to David D. Friedman).

That's where the transportation costs come in. More expensive oil means more expensive shipment of scrap and coat hangers overseas. On the other hand, perhaps the Chinese government will subsidize its steel industry in order to overcome either the higher transportation costs, or to overcome the tariffs. Questions: are the policies distinguishable in any way, or sustainable in any wayy?

QUOTE OF THE DAY. Glenn Reynolds.

My response to those who say that increased drilling is pointless because it won't yield immediate results -- like Arnold Schwarzenegger --is why worry about the greenhouse effect, then? Nothing we do will cool the planet immediately. Yet we're told immediate action there is vital. In fact, we're told that by none other than Arnold Schwarzenegger, in the very same speech.

Follow the links.

THE SUMMER BEFORE AMTRAK. The Milwaukee Road still offered weekend excursions to the Wisconsin Dells.

Brochure from the Cold Spring Shops research collection.

Note the timings: leave Chicago at 8.00 and arrive across the street from the boat dock at 11.30. The steam excursion out of Milwaukee has a three-hour schedule. I'm not sure what adjustments for inflation and for the additional expenses of a steam special I should make to that $8.15 fare. In those days, a box lunch with a standard-issue meat sandwich was probably less likely to provoke finicky kids or diet-obsessive parents.

The Milwaukee used push-pull gallery coaches from the Chicago commuter train pool. Those cars would otherwise sit idle the entire weekend. (Such cars made one regular round trip between Milwaukee and Chicago at the time.) Finding train crews qualified to work the cars posed no problems.

It's the ability to shift equipment from one use to another that makes me skeptical of proposals to further fragment the U.S. passenger train service, such as this offering by Green City Transit.

Amtrak should operate into brands much like European rail travel does. This will help Americans identify with what particular service they want. You can read below.

Not a good idea. In the United Kingdom, the continual and fearless shuffling and rebranding of passenger carriers spawns confusion, as well as added expense hiring-in stock. Operators borrow stock that does not bear the operator's service marks, and passengers are not sure whether their tickets are valid. (We have the same problem with Metra tickets around Chicago or Metro-North and New Jersey Transit tickets around New York not being good on Amtrak). Better to have a smaller number of operators, with more freedom to shuffle equipment as traffic warrants.

Back to that history lesson: in that summer of 1970, there still was train service from Chicago to Wausau, Wisconsin, involving a connection at New Lisbon. (The service ended in October.) The passenger, however, was dealing with one issuing carrier, The Milwaukee Road, no dealing only with Badger Cross Country at the Chicago ticket office and then finding the Marathon County Passenger Transport Executive's vending machine at New Lisbon.

EVERYTHING WE LIKE GOES AWAY. Shakey's once bragged, "We serve fun at Shakey's, also pizza." No longer in the Midwest. The pizza at Madison and Oshkosh was once pretty good, although a visit to one a few years ago, after the chain went to the everything fried buffet format, disappointed. One habitue of the Oshkosh pizzeria liked that format.

DEALING WITH COSTLY INFORMATION. Tim Harford's The Logic of Life: The Rational Economics of an Irrational World attempts to understand more challenging topics than The Undercover Economist. Book Review N^o. 23 suggests that the supporting material is not as carefully developed as was the case in Undercover Economist (or perhaps I'm more familiar with Undercover's supporting material). That noted, the book sheds light on a number of phenomena that appear strange if one's prior exposure to economics is to the principles style complete and perfect information (the distinction is important) economy. The chapter on business follies is instructive. (Whatever headquarters rewards, headquarters gets more of, and in a world of costly information, conflicts of interest between wealth-pursuing owners and emolument-pursuing administrators managers are inevitable, and winner-take-all tournaments with rewards out of proportion to productivity likely.) The chapters on residential self-segregation and the emergence of stereotypes, which Mr Harford refers to as "rational racism", are sobering. Agglomeration economies are non-trivial. There's more to come in an upcoming book review on that point.

Some of the stories call for further work. A mating market in which there are 19 identical men and 20 identical women leads to a Bertrand dissipation of all the gains from trade available to the women. Does that model generalize? Mr Harford doesn't tell us.

(Cross-posted to 50 Book Challenge.)

THE COFFIN MEDAL, THE SPEED TROPHY, AND A CENTURY OF SERVICE. The centennial of the South Shore Line features a quasi-academic conference with a visit to the repair shops (which to this day have a Midwest interurban look to them). The railroad has become such an institution in northwest Indiana that this promotional model (somebody had a lot of fun with Play-Doh) from a special section of the Northwest Indiana Times includes a stylized interurban train.

RETAINING EARNINGS. It's a good idea for a business. The rules for higher education are different.

Why don't public colleges and universities salt away large sums of cash during good times to tide them over during bad times? Because the internal politics won't allow large sums to sit undisturbed. Because the external politics are such that when times get bad, legislators see those reserves as excuses to cut funding. (Apparently now in Massachusetts, the state is even applying this to endowments at private universities!)

Imagine, though, if a well-regarded and flush with cash private university used some of its retained earnings to set up a new campus. Cross-subsidy! Predation! Entrenchment! (I'm only half kidding: I have seen scholarly works suggesting that Philip Morris, by disinvesting in cigarettes, which is what happens when it buys Miller Beer, was lessening competition in brewing.)

OIL WILL BURN, AND PRICE WILL BUBBLE. Not so fast. Here's Brad DeLong, with figures, and Arnold Kling, and Greg Mankiw, and King Banaian.

WHY WE'RE NOT SPEAKING GERMAN. Nothing fascinates military historians like "what if," particularly if it's speculating about the bad guys winning. Thus How Hitler Could Have Won World War II. Book Review N^o. 22 will be auf Englisch. Some of the German errors are familiar: Hitler stopping the armour with the British and French bottled up at Dunkirk, whether with hopes of negotiating a separate peace with the British or as a favour to Hermann Goering, Hitler ordering three fronts into the USSR, leaving insufficient forces to invest Moscow and force the Soviet government to flee east of the Urals before winter came, the complete failure of German thinking in the Mediterranean, where author Bevin Alexander argues Malta was much more important than Crete, and that giving Erwin Rommel his head and free rein to capture the Suez Canal en route to the former British colonial oilfields in Iraq, a linkup with Reza Shah, who fancied himself an Aryan, and a linkup with the Japanese in India, bypassing the Soviet Union completely.

I'm not familiar enough with the arguments to be able to evaluate the author's claim that the Soviet Union could have been isolated without a single German boot in the workers' paradise, or that the North Africa - Suez - Asia Minor - India strategy would have fractured the British Empire and crippled the Royal Navy by splitting the fleets, let alone that such an approach would have kept the United States out of Germany's war. Perhaps more space devoted to such claims and less space devoted to Sicily, Italy, Normandy, and the Ardennes (by which time the outcome in western Europe was settled) would help the casual reader. The analysis of those western campaigns is similarly sketchy. For example, Mr Alexander suggests that a different deployment of German armour, with two fast panzer divisions waiting behind the limited number of landing sites within fighter range of England, including several ports and the Normandy landing sites, would have enabled the Germans to react more rapidly and more effectively to the landings, wherever they came. Perhaps so. On the other hand, the Germans might then be less able to flood fields in order to drown paratroopers and discourage glider landings, or their tank parks might have attracted a lot more air attention in the two months before the invasion, or the idea of using aircraft carriers as air-to-tank launching platforms. I'm sure other quibbles have occurred to people more versed in such things than I. The book's coverage prevents more substantive discussion of such things. The footnotes provide additional documentation of facts and analyses offered in the book: there is neither survey of the controversies nor anticipation nor debate of differing points of view.

(Cross-posted to 50 Book Challenge).

REVISITING HISTORY. Despite recent wishful thinking, it's unlikely anyone is going to dust off the plans for the Chicago - New York Electric Air Line in the near future. More obscure interurbans, on the other hand, are getting a second life. The Overhead Wire connects to a news article from Hampton Roads praising local legislators for writing a Virginia Beach extension into a proposed light rail line for Norfolk. It is difficult to agree with legislators proposing such a thing for their constituents' own good, which is the tone of their quotes. We are, however, anticipating a return of electric cars to Virginia Beach. Check Hilton and Due, here it is at page 331.

The Norfolk Southern, a railroad, operated 48 miles of electrified trackage, making a loop from Norfolk to Virginia Beach and back to Norfolk, serving the important resort area of Virginia Beach and nearby points. This operation was converted to gasoline rail-bus service in 1935, which was provided until all passenger service on the line was abandoned, November 8, 1947.

The electric service, which enthusiasts of the Norfolk Southern Railroad (it later became a Southern Railway property and ultimately lent its name to the merged Norfolk Southern system) have not yet mentioned in their chronology, required the railroad to note on its 1931 timetable listing Pullman service to points north and west that this timetable was for the Steam Division.

CONDOLENCES. Phil Miller remembers his nephew, Roger Goetsch.

IF IT SOUNDS TOO GOOD TO BE TRUE, THE FAST TALKER AT THE END EXPLAINS WHY. Modern data base management makes it possible for businesses to tailor services precisely to the requirements of consumers, and to price things accordingly. Thus there are charges for things that used to be free, and goods or services that used to be sold as bundles currently can be priced component by component. It's enough to make an economist rethink what life in a costless-information economy would be like.

Sometimes, however, there are information asymmetries. The seller knows the foibles of the buyer, but the buyer doesn't know the foibles of the seller until that late charge or peak period surcharge or inactivity charge kicks in. Such things provide the material for Gotcha Capitalism, which Book Review N^o. 21 recommends if for no other reason than the hints for dealing with customer disservice phone lines or writing letters of complaint or identifying government agencies that exist to enforce contracts and property rights, which do exist for buyers as well as for sellers.

To an extent, the book is an endorsement for living simply: make do without a mobile phone, don't subscribe to pay-per-view, pay off your credit cards in full each month, make relatively little use of rebates and gift cards, and buy only a house that you can finance on a thirty-year fixed-rate mortgage and you avoid many of the most common hidden fee traps.

(Cross-posted to 50 Book Challenge).

OVERNIGHT, EVERY NIGHT. A Pajamas Media correspondent (who is a Four Block World fan) explains Why Trains Just Don’t Work in America. Well, at least he explains why the long-distance train is a non-starter for transcontinental business travel.

Let’s just compare passenger trains and airplanes on three trips I’m likely to take for business in the next few months: Denver to Los Angeles, Denver to New York City, and Denver to Washington, DC.

Suppose fossil fuel prices are permanently higher. What happens to the value of Denver or Salt Lake City or Sioux City or Cheyenne or Phoenix as a location for a corporate headquarters as the air carriers retrench? The existing Amtrak long-distance service is pathetic. But in the days when the Union Pacific and Santa Fe offered Denver connections to the City of Los Angeles or the Chief, and the City of Denver and Denver Zephyr raced to Chicago to connect with The Twentieth Century Limited or The Broad Way Limited (or The Erie Limited if you were adventurous) to New York or to The General or The Capitol Limited to the District, that's still two days in travel. (It is no accident that Major League Baseball extended no further west than St. Louis or south than Cincinnati prior to large propliners.)

If you're going shorter distances, the train doesn't have to run terribly fast to beat the plane.

So why are trains so popular in Europe? Simple: Europe is smaller. My Basel to Paris trip is 250 miles; Denver to New York is 1,625 miles. Why is Amtrak popular in the Northeast? Because, here we go, the distances are comparable to Europe: Washington, DC, to New York is 203 miles.

That's been my message. It calls for a different kind of train service, though: frequent memory-pattern services calling at substantial intermediate cities add to the value of the network. Unfortunately, state and federal legislators have never been able to put together a coherent policy. Federal dollars underwrite the Northeast Corridor and contribute to the Michigan service, but it's up to the states to underwrite the trains and, as in California, provide the rolling stock. That fragmentation of government responsibility hampers the Midwestern services, which are not coordinated in such a way as to expedite connections between Milwaukee and Ann Arbor or Springfield and Lansing or Indianapolis and anywhere in the Chicago area, and it's killing any chances of an early development of additional Midwestern services (multiple frequencies Kansas City to Chicago, multiple frequencies Omaha to Chicago on the old Rock Island, possibly even multiple frequencies Chicago - the Cities - Fargo - Winnipeg) let alone the creation of some Ohio corridors.

TO MEET THE COMPETITION, DON'T PLAY ITS GAME. Bill Quinn does not like Wal-Mart, and he wrote How Wal Mart is Destroying America (and the World) And What You Can Do About It. We've been here before, and I hesitate to do much by way of Book Review N^o. 20. The opening of the book is the usual recitation of small businesses and small towns emptied by the big box, often at a distance (that consumers might be willing to trade transportation costs for a wider variety of cheaper stuff doesn't come up) and the tales of monopsonistic exploitation of suppliers (who might have problems of their own, and suppliers can tell big buyers no, as long as we're not talking about the government using its monopsonistic power to buy drugs or surgeons.) So far, so standard. Mr Quinn finishes with some advice to small business owners such as offering products not sold by Wal Mart, or twitting the Redneck Universalnya Magazin by offering to service the products they sell, or by offering delivery, or by setting up a coffee bar, at least for the regulars. We've been here before as well.

(Cross-posted to 50 Book Challenge).

FEASIBILITY, SUSTAINABILITY, SUBADDITIVITY, NONCONVEXITY, AND SPECIAL PLEADING. Wall Street Journal commentator Holman Jenkins sees doom for the air carriers.

Smart businesses ask themselves how they can make themselves more popular with customers by "unbundling" the goods or services they provide. Burger joints charge extra for cheese, but not usually for lettuce and tomato. Yet fairness is surely served by letting haters of lettuce and tomato escape the burden of subsidizing those who love them?

Provided the self-selection constraint is sufficiently cheap to implement. Consider McDonald's. Their "Speedee Service System" depended on consumer willingness to purchase a standard product, and Burger King, early in the 1970s, teased them with "Hold the pickle, hold the lettuce, special orders don't upset us." I don't recall if the cheeseburger was part of the original McDonald's lineup: in the early 1960s it was 18 cents against the hamburger's 15 cents, and the cook staff had to learn the mix of orders that would not leave people waiting more than 30 seconds for their hamburger or with cheeseburgers that would have to be thrown away after going unsold for 15 minutes. Bundling can be a way of exploiting cost complementarities (this appears to be the case for packet services carrying telephone, television, and computer signals, and such cost complementarities may be present in fast food). It can also be a way of segmenting markets according to ability to pay, something the airlines have been doing for years, and something that Mr Jenkins fails to understand.

Carriers are slicing away at services to create options for the most price-sensitive fliers to avoid services they don't want to pay for: checked luggage, meals, pillows and blankets.

To some extent, they've always done this: how else describe three-class cabins? Here, however, the problem is not one of bundling, it is one of pricing each component of the service in order to encourage proper self-selection by passengers -- a dodge that I think Jules Dupuit discovered was the railroads making third class miserable in order that none of the intended first class passengers would ever ride at the much lower rate -- while ensuring a total revenue high enough to make the operation of the service worthwhile.

To keep fares low, airlines also skimp on backup planes and empty seats -- even if this makes it harder to get home if your flight is cancelled.

D'oh! How much more are the time-sensitive travelers willing to pay to be sure a spare is available? There's an upper bound on what an airline can charge, as there are hungry charter operators out there. (The best way to make a small fortune in aviation is to start with a large fortune.)

Even so, it's far from enough as fuel costs price the flying public out of the air. Herb Kelleher was speaking for Southwest when he observed a basic economic reality: "Our only competition is the car or the television set. People who fly us are people who weren't going to fly in any case." He might have been speaking for all airlines. Their fleets and networks today are designed to fly thousands of people who don't have to fly. If ticket prices fully reflected current fuel prices, by common estimate the industry would have to be 20% smaller.

A supply curve shifts to the left. There is excess demand at the old price, but (barring annoying discontinuities) there will be a new equilibrium, involving a higher price and a smaller output. Some of Southwest's passengers might well be the marginal consumers, buying at the old price but substituting to something else at the new higher price.

Contrary to Mr Jenkins's lead, without the supposed subsidy (it's too late in the evening for me to spell out all the conditions for subsidies, which involve an excursion into something called stand-alone costs) from the price-sensitive coach passengers, there's no plane for the inframarginal passengers (there being no such thing as people who "have to fly" although there can be people who are willing to pay more than the cut-rate price to get on the plane.) The inframarginal passengers, who in the absence of the competition for the marginal passengers, would harvest a smaller consumer surplus, are not happy with their inframarginal status being recognized by the air carriers.

No wonder there is panic at the Business Travel Coalition, representing corporate travelers who need the discretionary grannies and backpackers to sustain a system of frequent connections even to smaller cities. "Brand name legacy carriers that we and American communities from coast-to-coast have depended upon for decades to provide us with affordable, frequent air service are running out of cash, and therefore, toward a date with bankruptcy, and even liquidation," the group warned last week.

Boo hoo. Their website has a typically vapid mission statement.

Founded in 1994, the mission of Business Travel Coalition is to bring transparency to industry and government policies and practices so that customers can influence issues of strategic importance to their organizations.

I see nothing on the main site about Passenger Rail, although I smell a quest for corporate welfare, in the form of more road and airport construction. Perhaps there are some nonconvexities in the provision of air service. Fewer passengers on fewer (smaller?) planes at lower frequencies are the logical outcome.

Mr Jenkins sees an intriguing replay of Penn Central, with one amusing twist.

Because even in the unlikely development that regulators would welcome capacity-shrinking mergers, the immediate costs and disruption would likely bankrupt the combined carriers before any benefits materialize. Continental and US Airways, looking at United as a potential life raft, looked closely and now see a ticket straight to Chapter 11.

Let's also dispense with any idea that Southwest, which continues to be profitable thanks to prescient fuel-price hedging, offers an answer. Southwest, though not much of a "low-fare" carrier anymore, sticks to its business model of mostly flying point to point.

Of the 50,000 city pairs served by the U.S. airline industry, only 3% can sustain such direct service. If you want to fly from most places in America to most places in America, you need your own plane -- or a legacy carrier's hub and spoke system.

That is, if there are any benefits to mergers. A combination of suboptimal-sized weak companies tends to create a suboptimal portfolio of capacity in a weak company: Penn Central, LTV Steel, Stroh's Beer. Then there's that hub-and-spoke reference. The rigamarole of getting cleared to land, landing, taxiing to the gate, unloading passengers, loading passengers (there's a reason air carriers have a "boarding process"), taxiing to the runway, getting cleared to take off, and heading to the next airport renders a multi-stop flight a losing proposition (in the time it takes to carry out all those steps, a Wolverine is nearly to Kalamazoo, even without benefit of the 110 mph track, and the Wolverine will unload and load through more than one door.) On the other hand, many of the speed advantages of direct flights from regional airport to hub are dissipated in the delays of changing planes at the hub.

JUST SLIGHTLY AHEAD OF MY TIME. Cross Price Elasticity of Demand: Push Reel Mower Edition. As the newspaper puts it, High gasoline prices changing lawn-mowing habits. The margin of substitution is still small.

American Lawn Mower Co., a Shelbyville, Ind., manufacturer of manual and electric lawnmowers, says sales are up 60 percent to 70 percent over last year.

"It's unbelievable," said Teri McClain, inside sales administrator. "I think gas prices are playing a part in this."

McClain estimates that about 300,000 push reel mowers are sold annually in the United States. That's about the same number of electric mowers that are sold. Though growing, sales of both still are dwarfed by the roughly 6 million typical gas-powered, walk-behind mowers purchased every year.

Although American are a long-time manufacturer of reel mowers, their more recent products are not as durable as their predecessors. I've been making the case for the people-powered mower for years. I got eighteen years out of their Model 1403-14, which I then replaced with a Model 1404-16. They're using a cheaper grade of steel in their handles. I've worn out two sets of handles on it in two years. Nobody'd mistake me for a retired Green Bay Packers linebacker, but apparently a lifetime of bicycle commuting to work and thirty years of dinghy sailing gives me quite the punch when it comes to using lawn implements, particularly if they're not made of the finest Ohio tool steel. That's one reason for the new Mantis Cordless. Now the grass is in its early summer dormant phrase, and I can do most of the back yard without help from the battery.

IN BASEBALL, YOU GET TO GO HOME. At Wisconsin Sports Bar, Paul Noonan has posted the George Carlin sketch comparing football with baseball. Professor Althouse has several other sketches.


The Fat Controller has not yet told me when the railways on the Island of Sodor will pause in respect.

THANK YOU FOR YOUR SUPPORT. 200K. Visitor 200,000 by Site Meter's accounting stopped by at 8.36:19 from 98.28.75.# somewhere in the Eastern Time Zone and looked around for 4 minutes 51 seconds.

INSTRUCTIONAL AIDS ARE SUPPOSED TO BE HELPFUL. Economists grapple with what ought to be-self evident when it comes to presenting Marshallian crosses and Viner diagrams and level sets of quasiconcave functions. They're great fun for spatial-quantitative types but a pain for everybody else. For the record, I've removed almost all of those from any introductory class I teach.

Something similar might be said about sentence diagrams. Sister Bernadette's Barking Dog: The Quirky History and Lost Art of Digramming Sentences, the direct object of Book Review N^o. 19, makes that case. Perhaps it's a lost art in part because the main title parses as DOG \ SISTER BERNADETTE'S \ BARKING. Author Kitty Burns Flory enjoyed showing off her skills to Sister Bernadette. She also demonstrated other methods of modelling sentence structure, some of which were less intuitive than the manual according to Sister Bernadette and John E. Warriner. A passage that refers to a model called a tree diagram notes (p. 138)

These are considered more complete and, according to a friend of mine who teaches them, easier: traditional diagrams not only distort the original word order of a sentence, but, as I've mentioned, can also be insanely complex even when they're dealing with a relatively ordinary sentence.

Never mind some of the constructions of poets and novelist, see chapter 4. And perhaps the method does not help distinguish sensible from incoherent writing. Quickly: diagram "Farmer Bill Dies in House." (See p. 61). If it did, perhaps we could ask Congress to use a diagramming method as part of crafting legislation. Try this.

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.

Does that prepositional phrase "in restraint of trade or commerce" attach to "conspiracy" or to all three of "contract, combination, conspiracy"? Would the Supreme Court have an easier time discerning the Intent Of Congress with sentence diagrams in the Congressional Record?

(Cross-posted to 50 Book Challenge).

PATH DEPENDENCE. At the beginning of the month, I suggested the possibility of an inspection of the Chicago-Detroit corridor. With the postponement, until August, of the steam train to the Wisconsin Dells, I had the time and the inclination to travel.

To continue a recent theme, I'll open with an inspection of the timetables. In the summer of 1954 (and the world has been a better place since the summer of 1954 than it otherwise would be, this history notwithstanding) the New York Central offered a morning schedule called train 376, The Chicago Mercury: Chicago (Central Station) 8.30, Woodlawn 8.40 central, Niles 11.14 eastern, Kalamazoo 12.01, Battle Creek 12.30, Jackson 1.15, Ann Arbor 1.58, Detroit (Michigan Central Station) 2.45. The train offered "Reclining Seat Coaches - Porter Service, Dining Service, Observation Parlor Car (N.Y.C. Car) and a Tavern Lounge Coach." You could look it up: page 189 of the June 1954 Official Guide. New York Central passengers had to know their Chicago. The Cleveland, New York, and Cairo service, as well as The Wolverine, in those days the Chicago - Detroit - St. Thomas and points east sleeper train, left from LaSalle Street Station (behind the Board of Trade) while the Detroit, Indianapolis, Cincinnati, and Charlotte service left from Central Station (lost under the Central Station towers today, and not to be confused with Grand Central Station, the vacant lot south of Congress at Franklin). The reference to "N.Y.C. car" tells us the parlor car is not operated by The Pullman Company. By 1954 the train was probably diesel-hauled, although there were a few Super Hudsons (not as fast as Milwaukee's, streamlined or not, not as pretty as Boston and Maine's Pacifics) left on the ready tracks.

In the summer of 2008, Amtrak's morning service is called Train 350, Wolverine: Chicago (Union Station) 8.30, Hammond-Whiting 8.57 central, Niles 11.09 eastern, Dowagiac 11.21, Kalamazoo 12.10, Battle Creek 12.40, Jackson 1.30, Ann Arbor 2.09, Dearborn L2.46, Detroit L3.15. The train offers "Business Class Service, Cafe, Coaches." Business Class is Amtrak's parody of what we used to call Parlor Car service. The carrier has imposed on us 2-1 non-rotating seating, a configuration that the New Haven Railroad attempted to impose on passengers 60 years ago to great resistance. The L notation indicates the train will receive or discharge passengers but warns the train may leave ahead of the scheduled time.

The trains are on different routes between Chicago and the east interlocking limits of Porter, Indiana, where the Michigan Central used to cross the Lake Shore and Michigan Southern. Penn Central routed the Detroit trains onto the Lake Shore at Porter and onto the Pennsylvania at East Chicago.

In the intervening years, Amtrak has obtained ownership of the trackage between Porter and Kalamazoo, and in cooperation with the Michigan Department of Transportation, it has upgraded the line with fencing, signs warning HIGH SPEED TRAINS at all the level crossings, and improved track and signalling with the intention of running 110 mph trains. There are a few more stops on the line now, and a more frequent service, which has advantages and disadvantages.

A few years ago, the Michigan Department of Transportation, Amtrak, and the operating railroads rearranged the service to avoid using Detroit's crumbling and badly located Michigan Central Station and to expand service as far northeast as Pontiac. Thanks to the Bluewater Michigan Chapter's excursions, I had already logged trips on the trackage. If mileage collection is not the objective, where to turn back? (A trip out on the first eastbound train in the morning is a guaranteed return, as the same stock returns as the last westbound train.)

Consider the possibilities. The street view feature in Google Maps can be helpful.

Ann Arbor? Plenty of time to stroll uphill, browse the original Border's, check the used book store, find some exotic eats, marinate in the academic-blue-state-smug. If you seek the fruits of their policies, look around you.

Dearborn? Ample parking for commuters, if they ever ran commuter trains, but with all the office parks around this would be where the commuter trains set down passengers, not take them up. No services.

Detroit? The new station is at New Center and close to the Cultural Center. There were a few no-walk zones between the New Center and Wayne State, and on a summer Friday afternoon, Wayne was pretty buttoned up even years ago.

Royal Oak? Until the end of Grand Trunk's commuter service, there was an agency station at Eleven Mile, with a downtown including boutiques and cafes nearby.

Birmingham? Grand Trunk planned a four-track, electrified suburban service with Bloomington playing the role of Homewood and Pontiac the role of Markham. They built a fancy station that was at one time converted to a restaurant. Get off the train, get in the Escalade, fort up in the trophy house, appease the trophy wife. I never could come to terms with the social stratifications of Southeastern Michigan. Smug without the pretensions of a better world is still smug.

Pontiac? Log the entire route. Get off where Woodward Avenue turns into Wide Track Boulevard. Possibly some downscale fast food or some party stores nearby. At one time, there were more Michigan Lottery outlets along Woodward Avenue than there were in the entire Upper Peninsula.

Decisions, decisions. Come along for the ride.

Amtrak Wolverine 350, Chicago to Pontiac, 20 June 2008: P32 diesel 29, Amfleet business-cafe 48165, Horizon short distance coaches 54554, 54526, 54550, P32 diesel 32 (to save fuel, shut down.) Temperature in the 70s, partly sunny conditions, dry rail. I bought a Business Class seat, boarded at 8.05, and found some Chicago Tribune material to post on. Leave Chicago 8.29:38 (I did not synchronize my watch with a standard clock), Hammond 9.01:05 - 9.02:03 central, Niles 11.10:24 - 11.12:20 eastern, conductor announces we will hold for two trains, stop at east end of two tracks 11.15:44, first Amtrak, probably 365 off Port Huron by 11.37, second Amtrak, probably 351 off Pontiac by 11.50, moving again 11.52:03, Dowagiac 12.02:10 - 12.03:20.

The path dependence really matters on this corridor. At one time, the Michigan Central was a double track railroad. During Alfred Perlman's presidency, New York Central very actively removed tracks and installed centralized traffic control. Kalamazoo to Porter was one of the first sections converted and singled. Jackson to Kalamazoo was reduced after 1975. New York Central had a freight line from Jackson to Elkhart that was its preferred routing for westbound freight. Conrail initially planned to abandon that line but concentrate the freight on a Kalamazoo to South Bend line, and it later moved the Michigan traffic to the main line by way of Toledo. (I don't know what Norfolk Southern is now doing. They had a strong freight presence in Kalamazoo and Battle Creek.) Thus did Amtrak become the owner of the Porter to Kalamazoo trackage. It's still a one-track line with controlled sidings. A few delays elsewhere on the corridor (not unexpected, the freight railroads are keeping commerce moving despite much of Iowa and some of Missouri and Wisconsin being out of bounds) more than negate the faster running possible (twelve miles in ten minutes is a 72 average, not bad for start-to-stop) with the upgraded track. On the other hand, more second track is also expensive, and a completely two-track line is an extravagance for a corridor with three Pontiac trains and one Port Huron train each way. Frequency matters, and additional trains reduce the fully-allocated deficit ignorant number-crunchers like to assign to individual trains or individual passengers. Kalamazoo 12.31:15 - 12.36:10. That's 36.1 miles in 28 minutes, not bad. Higher speed limits, however, might buy all of five or ten minutes, still not enough to salvage that 37 minute hold.

The long dwell times at stations illustrate one of the values of a corridor: the traffic is not so much Chicago - Detroit as it is Chicago - Ann Arbor, Niles - Jackson, Kalamazoo - Birmingham, Jackson - Pontiac, Ann Arbor - Royal Oak.

The train passes Western Michigan University's sports complex west of Kalamazoo: two new practice facilities adjacent to the enlarged hillside football field. More evidence of the positional arms race in the Mid-American, including our new locker room.

Restrictive signals west of Battle Creek, freight train crossing to the Grand Trunk at the west end of shared trackage. Battle Creek 1.02:29 - 1.07:12. Restricted speed through Albion. There's recent wind damage in the adjacent trees, or is the city issuing speeeding tickets (I'm not making that up) to trains? Westbound 353, due out of Jackson 1.34, waiting in siding west of Jackson (thus do the delays accumulate); Jackson 1.57:59 - 2.01:15. Still thirty down. The stock of the Michigan Artrain, including former New York Central observation Babbling Brook, is in siding west of the Ann Arbor Railroad overpass. The bookstores will make do without my money. Ann Arbor 2.40:54 - 2.45:36, Dearborn 3.17:34 - 3.20:29.

Classic Rust Belt. Two abandoned factories frame the ruins of the Michigan Central Station and office tower, behind the trees in the middle ground. I understand some of those office towers downtown are also abandoned.


Slow running on the belt railway to the new Detroit station, an Amshack above Woodward Avenue. Arrive Detroit 3.41:22. On one hand, we're less than 30 minutes late. On the other hand, we haven't done any better than Penn Central did for Amtrak in the summer of 1971. The Detroit school board tower is in the middle ground of the picture. The art institute, library, and Wayne State are nearby. The walk south does not look inviting.


Leave Detroit 3.45:43. The connection from the belt line to the onetime Grand Trunk mainline is slow and convoluted, and we're running on restrictive signals. In the 25 years since the commuter trains stopped running, the railroad has become a single track freight line, and the crossing that allowed the commuter trains to get to the Renaissance Center terminal has been removed. The train crew is coming to terms with being delayed getting out of Pontiac (and we've seen what out-of-course running does to timekeeping.) Arrive Royal Oak 4.26:32. (You might have surmised this was where I would turn back.)

I don't recall sidewalk cafes on Main Street 25 years ago. They were already well-patronized, apparently early summer Friday getaways aren't limited to Chicago. A suburb of the Motor City uses traffic-taming recesses for parking and provides bike racks?


Fifth Avenue has been closed to vehicular traffic for a beach party, apparently under the auspices of the Irish-themed tavern hard by the tracks. I found a cafe that sold a decent baguette sandwich across the street from that tavern.


The weather cooperated for this stroll around downtown. I don't recall this much commerce, or as edgy a mix of enterprises, 25 years ago.

Train time. The Eleven Mile overpass and the right-of-way north are wide enough for those four tracks. The concrete pad is where the agency station once was.


Amtrak Wolverine 355, Royal Oak to Chicago, 20 June 2008: P32 diesel 32, Horizon coaches 54550-54526-54554, Amfleet business cafe 48165, P32 diesel 29 now along for the ride. Temperature in the low 80s, clear skies, dry rail. Leave Royal Oak 5.37:20, operate somewhat more expeditiously toward Milwaukee Junction, no tower interference at Milwaukee Junction, Detroit 5.56:12 - 6.00:21, Dearborn 6.20:37 - 6.22:40, train making up some time, runs over something west of Dearborn, much clatter on the undercarriage, stop for inspection 6.31:44 - 6.40:28, eastbound 352 holding east of Wayne Junction 6.47 (perhaps laid out by 353 which was laid out by 350 west of Jackson earlier in the day), Ann Arbor 7.06:29 - 7.10:00, Jackson 7.50:07 - 7.52:30. Stop for another inspection west of Jackson, 8.08:10 - 8.15:45, crew reports no defects, Battle Creek 8.54:18 - 8.58:25, smokers hit the platform with the departing passengers and get on behind the boarding passengers, held at CP Custer 9.08:25 - 9.15:27, no eastbound train, meet on-time 354 just east of Kalamazoo 9.33, Kalamazoo 9.36:03 - 9.39:51, Dowagiac 10.07:38 - 10.09:00, Niles 10.19:42 - 10.20:19 eastern. Fast running is possible with no opposing traffic A proper corridor, however, has sufficiently frequent trains as to provide opposing traffic. Set down passengers Michigan City 9.51:32 - 9.52:10 central, ride yellow blocks Gary to Hammond, eastbound Lake Shore by near Inland Steel, Hammond 10.47:27 - 10.49:40, held at Bridge Junction 11.00:03 - 11.02:36, arrive Chicago 11.26:56, plenty of time to make the 11.40 to Elburn as planned.

MIXED STRATEGIES. Switch hitter faces ambidextrous pitcher. The rulebook has provided for this contingency.

CRUSH LOADINGS. The Naperville Zephyrs are standing room only.

It begins with a trickle, when the 8:06 a.m. Metra express rolls out of Aurora half-full—nine cars headed for Union Station.

Minutes later, at a stop on Naperville's edge, the gates open and bleary commuters fill more than three-quarters of the train. Minutes after that it's a flood, with hundreds of travelers competing for any open seat to read the newspaper, listen to an iPod and, most important, get to work.The unluckiest are left applying makeup in the vestibule, surfing the aisles or sitting on the stairs to the second level with their cups of steaming coffee.

Sometimes passengers will sit on the steps or stand rather than ask a seat-hogging passenger to move over. Recent ridership increases have, however, made standing-room-only less exceptional than it once was. This graphic probably does not capture a long-delayed reaction to the abandonment of the North Shore Line: rather, it reflects ongoing construction on Illinois 53 and Interstates 290 (the Tri-State) and 94 (the Edens Expressway), all to provide new surfaces for overweight trucks to wreck.

A related article reports that Metra bought back, from Virginia Railway Express, five coaches it had once sold as surplus to its requirements. The legislature's failure to pass a capital spending bill hampers the agency's ability to purchase additional new coaches (the Virginia agency likely encountering capacity constraints of its own.)

Yes, that's the same capital spending bill that's required before our Stevens Building and Cole Hall are renovated.

FIFTY YEARS AGO. Chicago's last streetcars lowered their poles on Midsummer Day. (With video.) The last streetcars to run were relatively new, and the Chicago Transit Authority salvaged some electrical equipment and all the window cranks for use in rapid transit cars. The last example of those streetcars is car 4391, which occasionally transports visitors around the Illinois Railway Museum.

Illinois Railway Museum, 1 September 2007.

The museum also operates several Chicago Surface Lines cars, a number of which required extensive work to convert them from work motors (particularly salt cars) back into streetcars.

A CHICAGOAN ASKS. Which team's fans are fatter? He's comparing Thirteenth Generation widebodies with loyalties to the Cubs or the White Sox. There's nothing in the column that Wisconsinites haven't suspected for years. It prompts two social-scientific observations. First, I'm waiting for the popular press to get beyond the balding yet ponytailed hippie and contemplate those Thirteeners as they approach middle age. Second, it's probably asking too much of Pigouvian taxation to apply it to those widebodies with mid-calf shorts and inverted-bowling-pin lower legs. Not pretty, gentlemen.

ALMOST TIME FOR A VIDEO.

All the motion components are in place, although they require a bit of fine tuning before I decide to apply power.


The geared axle also has the eccentric crank, which poses all sorts of engineering problems if something binds.

LIMA, LIMA, LIMA. Brewers sweep, Cubs swept. Lynne, Phil, the flag hoist and the Sprecher are for you.

GETTING THE OBJECTIVES RIGHT. Megan McArdle is taking requests, including "Why does [passenger] rail suck?" Some of her post focuses on the government's schizophrenic role in funding on the one hand and doing environmental protection on the other hand, and there is a followup on the peculiarities of fully allocated cost accounting as well as a response to Chris Lawrence weighing the costs and benefits of a less dirigiste structure for government. Vermont Tiger's Geoffrey Norman offers a less cheerful view of public servants.

When the Chris Dodds of the world are running the railroads, they'll get sleepers and eat off good china in the dining car.

The rest of us will be packed into boxcars and eating stale bread.

That's not far from the perception many Midwesterners have of Acela Expresses for Boswash and standing-room-only three car Horizon rakes in Illinois and Indiana.

But it's a response to the lead-in to Chris Lawrence's post inviting me to weigh in that I'll work on here. Consider the example Ms McArdle uses to introduce the procedural thicket.

Why isn't there a high speed train from New York to Chicago? Well, first of all, this would greatly anger legislators from New York and Michigan, who like the fact that the Chicago train must pass through Buffalo and Detroit, even if this assures that almost no one with a job will actually use it.

She rules out partial privatization of Amtrak.

Amtrak can't be even partially privatised, because then who would run trains from New York through Buffalo and Detroit to Chicago in a speedy eighteen hours?

Here's why the objective of the rail system matters. At one time, The Pennsylvania Railroad and the New York Central reached New York from Chicago in sixteen hours (for one brief shining moment, in 15:30) with steam power. (The Pennsylvania had the more direct route, but east of Pittsburgh comes The Mountain, while New York Central used Lake Erie and the Mohawk and Hudson Rivers to run a longer distance at a faster speed.)

Going the great way around struck some railroad promoters as silly, particularly because that New York Central train headed west by way of Albany, which left the passenger at a greater air distance from Chicago than he or she was at Grand Central Terminal.

Thus, the figure of merit for a genuine high-speed train service linking Chicago and New York begins at ten hours.

Promotional poster image from Mary MacLane's Air Line historical photos. Click to enlarge.

If your objective is to provide a high-speed rail line that permits ten-hour timings, your railroad will be an undertaking of Biblical proportions. Ev'ry valley shall be exalted, every hill made low, the crooked straight, and the rough places plain.

Air Line proposal map from Mary MacLane's Air Line historical photos. Click to enlarge.

On the other hand, that's only a 90 mph railroad. Upgrade it for field-shunted Electroliners and you're in New York about 7 1/2 hours after you've left Chicago, and if you give it the fourth-generation Electroliner treatment and you can have your coffee in New York and meet a client for lunch in Chicago. On the other hand, you've laid out a railroad that misses the intervening cities, precisely the problem that would prevent politicians in those cities from committing public monies to be treated as a third-rail equivalent of flyover country.

(A historical note before I get back to the objectives: there really was an attempt to build the Chicago-New York Electric Air Line, which rather cheekily advertised its initial service between Gary and La Porte, Indiana. The aforementioned Mary MacLane has assembled a comprehensive Air Line website, including a page of contemporary images of its ruins. La Porte County in Indiana is home to two historical associations that include Air Line material on their websites.)

The problem of blending long-distance and short-haul corridor services has long challenged railroads. Those sixteen-hour flyers tended to be overnight sleeping car trains that called at Pittsburgh or Buffalo at times used by the military to begin invasions, and New York Central's Twentieth Century Limited, perhaps the most famous of the flyers, rolled through Cleveland without stopping. In the year or so leading up to the Penn Central merger, New York Central conducted a speed test with a jet-assisted rail diesel car, announced its plans to restructure its passenger train service, discontinued the Twentieth Century Limited, and introduced a memory-pattern service between Buffalo and Grand Central Terminal. No other corridors were set up at that time. The Pennsylvania Railroad discontinued the Broadway Limited and renamed the General as the Broadway Limited. After the merger, the resulting railroad was too overwhelmed with other problems to be able to set up promising corridors such as Pittsburgh-Cleveland-Detroit, Pittsburgh-Columbus-Indianapolis-St. Louis, Cincinnati-Indianapolis-Chicago, or Cleveland-Columbus-Cincinnati. A Trains speed survey of the era noted that those cities would have merited Trans-Europ Express service, the precursor to the TGV and ICE and Eurostar and Great North Eastern. Even with the skimpy offerings, the Penn Central timetables offered more frequent New-York Chicago services over more routes (via Pittsburgh on The Pennsylvania Railroad, via St. Thomas and Detroit west of Buffalo on the Michigan Central, and via Cleveland and Toledo on the Lake Shore and Michigan Southern). The grubby day trains that remained in Ohio and Indiana all died before Amtrak, although the memory pattern service east of Buffalo persists under the same Empire Service label.

And thus the problem facing people who wish to expand Amtrak. That north central corridor service in the region west of Pittsburgh and Buffalo and east of St. Louis and Chicago would be a very different service from one predicated on longer distance high-speed service, such as Denver-Chicago (doable dawn to dusk with existing technology) or Chicago-New York. But perhaps people who wish to expand the passenger rail network as a way of coping with (permanently?) higher gasoline prices would do well to study old timetables. Thanks to that Vermont Tiger post, we discover editorialists at The Brattleboro Reformer doing just that.

It's 1938 and you want to take a weekday trip from Brattleboro to New York City. A glance at the Boston and Maine Railroad's turntable shows six trains to choose from.

The Washingtonian, the top overnight train run jointly by the Central Vermont, Boston and Maine, New Haven and Pennsylvania railroads between Montreal and Washington, D.C., leaves Brattleboro at 3:30 a.m. and arrives at Penn Station at 8:12 a.m.

If you're not that much of an early riser, Train 74, the Connecticut Yankee, leaves Brattleboro at 4:35 a.m. and gets you to Grand Central Terminal by 9:45 a.m. -- the quickest train to the city. Or you could catch Train 78, which leaves Brattleboro at 5:52 a.m. and arrives at Grand Central at 11:40 a.m.

If you're sleeping in ...

They conclude,"There is no reason for rail service to be worse today than it was in 1938." That was a very good year. The Milwaukee Road introduced the world's fastest steam locomotives. But perhaps there are good reasons for the rail service to change (somehow the Boston and Maine enlarging Hoosac Tunnel for double-stacks, which hadn't yet been invented, strikes me as an improvement in rail service.) All the same, the renewed focus on passenger rail is reason for advocates and policy makers to review the best practices, and the errors, of the late steam era.

PAGING AMERICAN FLYER. The elder Walter Dorwin Teague, who design historians tend to recognize for his work on consumer goods and airliners, also worked with Pullman's Osgood Bradley division and the New Haven Railroad to design a fleet of streamlined passenger coaches that were on northeastern rails a little bit ahead of the Union Pacific's and Burlington's motor trains and well ahead of the Hiawatha (or the Coronation). The largest fleet was on New Haven, with Bangor and Aroostook and Boston and Maine also using the design. (A few railroads outside New England also bought such cars.)


The design allowed for easy tooling in a tin shop, with New Haven's A.C. Gilbert quickly turning out S (and later O-27) approximation of the cars, which may be the first time in ferroequinology that a fleet of prototype cars received a nickname based on a model. (Yes, American Flyer put names on incorrect cars: only Bangor and Aroostook had Teague baggage cars.)

I just received the 40^th anniversary issue of Passenger Train Journal, which included an intriguing article on the Alaska Railroad's passenger trains, including an interior shot of what looked like an updated American Flyer car. The article mentioned some Pullman-design cars licensed to Daewoo. I did a bit more research and came up with some exterior shots.

Going shot of a train Near Denali, from the Alaska Railroad gallery.

Here's a roster shot.

Alaska Rails image.

I suppose the roof had to be squared-off for manufacturing practicality. Now, if Amtrak ever had a proper capital budget, wouldn't a rake of these look good on the Downeasters or the Northeast Regionals? Heck, I wouldn't mind some being assigned to the Hiawathas and the Illinois service. The Passenger Train Journal article noted that Daewoo built the cars for Alaska in order to establish a presence in the North American rolling stock market.

TIT FOR TAT. I've previously reviewed books about the very real Cold War conflict under the sea. In one such review, I wrote,

The official explanation for K-129's loss depends on who one asks. The authors of Rogue suggest that escorts of a Soviet fleet exercise later detected and sank SSN-589 Scorpion in retaliation for the sinking of K-129 by collision with SSN-579 Swordfish. As the book alludes to highly placed anonymous sources and documents not yet declassified, it's up to the reader to decide.

That's precisely what All Hands Down: The True Story of the Soviet Attack on the USS Scorpion argues, which makes for a pretty brief Book Review N^o. 18, inasmuch as the subtitle, as well as the suggestion in Red Star Rogue, tell the main story. Turncoat naval officer John Walker gets an assist helping a Sov fleet locate Scorpion to sink it. Maritime archaeologist Robert Ballard turns out to have been busy locating the sunken Scorpion, using searches for Titanic as cover. The Navy's treatment of the crewmens' families was less than exemplary. Did the Sovs do Scorpion, with high officials in the District and Moscow independently backing off from investigating the mysterious sinkings of one submarine on each side so as to avoid further conflict? I don't know enough about the other explanations of Scorpion's sinking to fully evaluate the claims in the book.

(Cross-posted to 50 Book Challenge).

EXPECT PERMANENTLY HIGHER PRICES. President Bush, today, asking Congress to authorize oilfield development and new refinery construction.

For many years, the high cost of extracting oil from shale exceeded the benefit. But today the calculus is changing. Companies have invested in technology to make oil shale production more affordable and efficient. And while the cost of extracting oil from shale is still more than the cost of traditional production, it is also less than the current market price of oil. This makes oil shale a highly promising resource.

Yes, but if oil prices are in a rational expectations hyperinflation, the current price is not necessarily the best signal of an investment opportunity in a backstop technology. On the other hand, the Hotelling valuation principle for an exhaustible resource suggests the existence of a price at which the backstop technology becomes an investment opportunity. That price has never been exceeded long enough to make the oil shale or tar sand development worth doing. Perhaps that fear is behind U.S. automakers requesting federal assistance for plug-in hybrids.

Does [a Ford special pleader] mean that $4 gas, which has torpedoed the market for Hummer, isn't shifting consumer demand sufficiently to create a near-term business case for plug-in hybrid R&D?

Cynical answer: if someone is willing to help pay for it, why not ask?

Somewhat more theoretical answer: perhaps the near-term business case is only to undertake exploratory investments in concepts and in laboratory work, not in the scaling-up to actual building. Perhaps I should dust off some of my work on economic hysteresis and technology diffusion.

Next question: is there a speculative bubble at work? This post suggests not.