TRADE THEORY IS TRANSPORTATION THEORY.

Higher transportation costs have the same effect as tariffs.  The academic study of international trade and finance generally considers a different class of problems than the academic study either of industrial location or of transportation.  In part that is because some problems of international trade and finance are tractable using a general equilibrium framework, while problems of industrial location and transportation involve nonconvexities that foul the works where general equilibrium is concerned.  Paul Krugman, qua regional economist (rather than in his court-intellectual-for-Democrats role) has done good work on urban and regional economics that exploits some of the insights from trade theory.

General equilibrium models of trade tend to abstract from transportation costs in contemplating the effects of tariffs or factor intensity or factor price equalization.  To a first approximation, though, we can evaluate the effects of space on wage and price differentials in the same way that we'd evaluate a tariff: prices differ by transportation costs, and a tariff has a further effect on price differences on the dock of the exporting country and offloaded at the importing country.  Heck, "tariff" refers both to a schedule of import duties and a table of transportation rates.

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?

BARRIERS TO MOVEMENT. Last month, I noted, "Higher transportation costs have the same effect as tariffs." The self-styled newspaper of record just figured it out.

Cheap oil, the lubricant of quick, inexpensive transportation links across the world, may not return anytime soon, upsetting the logic of diffuse global supply chains that treat geography as a footnote in the pursuit of lower wages. Rising concern about global warming, the reaction against lost jobs in rich countries, worries about food safety and security, and the collapse of world trade talks in Geneva last week also signal that political and environmental concerns may make the calculus of globalization far more complex.

Trade-offs everywhere. On the one hand, more costly transportation means more local production, which the article would have readers believe would restore the "broadly shared prosperity" of the 1950s. On the other hand, more costly transportation means only local consumption, which is a hard constraint on consumers.

[A] study, published in May by the Canadian investment bank CIBC World Markets, calculates that the recent surge in shipping costs is on average the equivalent of a 9 percent tariff on trade. “The cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today,” the report concluded, and as a result “has effectively offset all the trade liberalization efforts of the last three decades.”

Higher energy prices are incentives to use less energy, and that is likely to check the ambitions of some of the newly industrialized countries.

The spike in shipping costs comes at a moment when concern about the environmental impact of globalization is also growing. Many companies have in recent years shifted production from countries with greater energy efficiency and more rigorous standards on carbon emissions, especially in Europe, to those that are more lax, like China and India.

But if the international community fulfills its pledge to negotiate a successor to the Kyoto Protocol to combat climate change, even China and India would have to reduce the growth of their emissions, and the relative costs of production in countries that use energy inefficiently could grow.

It's also likely to redefine "upscale".

What may be coming to an end are price-driven oddities like chicken and fish crossing the ocean from the Western Hemisphere to be filleted and packaged in Asia not to be consumed there, but to be shipped back across the Pacific again. “Because of low costs, people were profligate,” said Nayan Chanda, author of “Bound Together,” a history of globalization.

The industries most likely to be affected by the sharp rise in transportation costs are those producing heavy or bulky goods that are particularly expensive to ship relative to their sale price. Steel is an example. China’s steel exports to the United States are now tumbling by more than 20 percent on a year-over-year basis, their worst performance in a decade, while American steel production has been rising after years of decline. Motors and machinery of all types, car parts, industrial presses, refrigerators, television sets and other home appliances could also be affected.

That is, if the knowledge to produce these things hasn't all been pensioned off. Then there's food.

Higher shipping rates could eventually transform some items now found in the typical middle-class pantry into luxuries and further promote the so-called local food movement popular in many American and European cities.

“This is not just about steel, but also maple syrup and avocados and blueberries at the grocery store,” shipped from places like Chile and South Africa, said Jeff Rubin, chief economist at CIBC World Markets and co-author of its recent study on transport costs and globalization. “Avocado salad in Minneapolis in January is just not going to work in this new world, because flying it in is going to make it cost as much as a rib eye.”

Next, some relative price movements. If storage is expensive relative to local labor or to transportation, business logistics take a very different form than they do if storage is relatively cheap.

In addition, the sharp increase in transportation costs has implications for the “just-in-time” system pioneered in Japan and later adopted the world over. It is a highly profitable business strategy aimed at reducing warehousing and inventory costs by arranging for raw materials and other supplies to arrive only when needed, and not before.

Jeffrey E. Garten, the author of “World View: Global Strategies for the New Economy” and a former dean of the Yale School of Management, said that companies “cannot take a risk that the just-in-time system won’t function, because the whole global trading system is based on that notion.” As a result, he said, “they are going to have to have redundancies in the supply chain, like more warehousing and multiple sources of supply and even production.”

Ultimately, the results will leave everybody poorer.

“Despite everything, the American economy is still the biggest Rottweiler on the block,” said Jagdish N. Bhagwati, the author of “In Defense of Globalization” and a professor of economics at Columbia. “But if it’s expensive to get products from there to here, it’s also expensive to get them from here to there.”

We make economics majors sweat out isoquant maps and reciprocity conditions of dual cost functions precisely so that they understand how inescapable Professor Bhagwati's logic is.

IN THE PUBLIC INTEREST TO LET IT CRUMBLE.

It's late July, and again Congress are dilly-dallying about re-authorizing the so-called Highway Trust Fund.  First, various guardians of the public purse have engaged in the usual maneuvering to attach irrelevant amendments to the transportation bill, hoping that their colleagues and the President will sign off on crap in their sandwich rather than go hungry.

Good luck sorting through the parliamentary details of what the Senate will do next to try and jam through a transportation bill this week before the House (which previously passed a six-month extension) goes on August recess, though you can bet that we'll see the issue cross-pollinate with such wholly unrelated issues as the Ex-Im, and Planned Parenthood funding, and Obamacare, and God knows what else (including, possibly, giving the IRS power to revoke the passports of citizens owing more than $50,000 in back taxes).

As of this morning, a relatively clean, meaning there's only transportation pork in it, bill that will inter alia extend the Highway Trust Fund for three months, might clear Congress.  And there's material for a future post buried in the story -- the federal motor fuels taxes are per unit.  With fuel prices fluctuating, ad valorem taxes may not provide sufficient resources to buy future pork, so four of our political masters propose to index the motor fuel taxes to general inflation.

The legislation, proposed by Reps. Jim Renacci, R-Ohio, Bill Pascrell, D-N.J., Reid Ribble, R-Wis., and Dan Lipinski, D-Ill., if passed, would index gas and diesel user fees to inflation. Additionally, the legislation calls for the creation of a bipartisan, bicameral Transportation Commission no later than Sept. 1, 2015.

Funding through the Highway Trust Fund comes from the federal gas tax, that hasn’t been raised since 1993. Some industry stakeholders, such as AAA, favor an increase in the federal gas taxing order to keep up with inflation while detractors argue fuel-efficient cars and the growing popularity of hybrids no longer make a tax increase viable solution.

The lack of funding has created an environment for creativity. Several states over the course of the last several years have raised the state fuel taxes to make up the difference for a lack of federal funding; others have postponed, delayed or extended projects across multiple construction seasons.

Apparently, I have to repeat myself from last summer.

Thus, if the Highway Trust Fund is worth saving, it ought to be set up in such a way as to hold the highways in trust.  Thus:  Special movement permits for any trailer exceeding 40 feet.  Permit fee to be substantially higher if the movement can be by rail over part or all of the trip.  Federal excise tax on retreaded tires.  And some money devoted to improving railroad tracks for faster trains, with the stipulation that the owning railroads be allowed to path intermodal trains at speeds of 90 or 100 mph on those tracks.

I haven't seen any arguments that would cause me to change my position. I found an interesting confession from Iowa's director of the state department of transportation, Paul Trombino.

I said the numbers before. 114,000 lane miles, 25,000 bridges, 4,000 miles of rail. I said this a lot in my conversation when we were talking about fuel tax increases. It’s not affordable. Nobody’s going to pay.

We are. We’re the ones. Look in the mirror. We’re not going to pay to rebuild that entire system.

And my personal belief is that the entire system is unneeded. And so the reality is, the system is going to shrink.

There’s nothing I have to do. Bridges close themselves. Roads deteriorate and go away. That’s what happens.

And reality is, for us, let’s not let the system degrade and then we’re left with sorta whatever’s left. Let’s try to make a conscious choice – it’s not going to be perfect, I would agree it’s going to be complex and messy – but let’s figure out which ones we really want to keep.

And quite honestly, it’s not everything that we have, which means some changes.

City Lab offer elaboration, and additional evidence that per capita miles traveled have decreased, and yet states put money into expanding the network rather than repairing the existing roads.  (That decision is not baseless, perhaps there are parts of a county or a state where human activity is stressing the existing network, and repairs are deferred or implicitly cancelled in the declining parts.)

THE BEAT GOES ON.

Our President:  Let's put tariffs on primary metals from China.

China:  hold my beer.

China announced new tariffs on 128 American imports yesterday, primarily targeting agricultural products such as pork, nuts, fruit, and wine. In a statement, the Chinese government said it was imposing the new tariffs "in order to safeguard China's interests and balance the losses caused by the United States' additional tariffs."

You don't have to be a reader of Cold Spring Shops to see this coming.  "Chinese tariffs will hit a wide range of American-grown fruit as well, including apples, oranges, watermelons, strawberries, raspberries, cranberries, cherries, grapes, and pineapples."  And ginseng.  "Ginseng growers in Wisconsin are worried about the future of their business after a tariff went into effect overnight in China."  Canadian ginseng farmers will see an export opportunity, never mind that connoisseurs of the stuff have awarded Wisconsin the blue ribbon for quality.  There's no futures market for ginseng, which is going to make life interesting for people who dislike futures markets.  (Farmers cannot hedge against a price drop by contracting now for delivery in September.  Sometimes the speculators guess wrong.)  The retaliatory tariffs might also affect the Foxconn factory deal.  "Ginseng growers throughout central and upper Wisconsin are hoping that their own deal with tech giant Foxconn can help them reach new markets."

I may have been groggy this morning, but I thought I heard the tariffs also included scrap metal.  That's priceless.  Our steel producers complain about Chinese steel dumping, and somehow the feedstock goes overseas, gets recycled into steel, then sent back here: and all those transportation costs aren't enough of a trade barrier for the domestic industry?  Sad.

Meanwhile, Stephen Moore expands on the second-best-optimal-trade-war argument.  "In recent weeks, Trump apparently delivered two big and underappreciated victories as a result of his threat of stiff tariffs and renegotiated trade deals."  Somewhere, Pyrrhus is nodding.

First, Seoul has agreed to reduce long-standing non-tariff trade barriers ‎that have reduced American exports to South Korea. Though the details are still sketchy, it appears that the Koreans will buy more Ford and General Motors cars and trucks and other U.S.-made products. ‎ This can be only good news for American workers. The Koreans have also agreed to increase reimbursement rates to American drug and vaccine producers.

Even The New York Times begrudgingly conceded that the deal the president secured "represents the type of one-on-one agreement that Mr. Trump says makes the best sense for American companies and workers." The Koreans called it "significant progress" in the U.S.-Korea trading relationship. But make no mistake about it: The nation that made concessions here was Korea, not the U.S.

Also in recent days this week, China folded in response to Trump's jarring announcement of a record $50 billion in tariffs on Chinese products. China at first reacted by threatening to retaliate with barriers on American soybeans, wheat, blue jeans and bourbon. The American financial markets tumbled and some bears even moaned we were facing a 1929 crash.

Perhaps, also, Mr Moore is correct on national security grounds.  "You can't have free trade with a country that steals $500 billion and arms your enemies. Period. End of argument. Why couldn't George W. Bush and Barack Obama figure this out?" He continues,

Trump was announcing to the world that if you want to continue to have open access to America's multitrillion-dollar consumer market — and nearly every nation in the world, most of all China, needs that passport — you are going to play by rules that benefit Americans, abide by the rule of law and promote American security interests.

Yes, this is a dangerous game Trump is playing for sure. He risks upending three decades of progress in opening markets for international trade that have benefited the citizens of the world in lower prices for nearly everything. He may be risking another 1930s-style trade tariff war that shut down global trade and cratered the world in depression.

If that happens, Trump's trade strategy will have clearly backfired.

But Trump recognizes what many of the globalists don't: the enormous leverage ‎America has on the world economic stage. He told voters that he can get a much better deal for American companies and workers. He punched China in the nose with the tariff announcement, and guess what? China, at least for now, has backed down.

Singeth the skald, Praise ice when you're across it, and (more expensive?) beer when it's drunk.

BABY STEPS TOWARD A STATE OF GOOD REPAIR.

This morning, the United States Supreme Court ruled against Our President's tariffs-by-ukase.  A week ago, Craig "Streetwise Professor" Pirrong got off a doozy.  "On economics, he's often Dumb Donald."

Although I broadly support Trump on foreign policy and many domestic issues (notably immigration) I find his pronouncements and policy proposals on economic issues to be cringey at best, and downright idiotic at worst. As I discuss below, the emphasis is on “his”–many administration policies are actually quite laudable. But when he pontificates on economics–oi.

Tariffs are obviously front and center of any discussion of Trump policies. Here matters are more complex, precisely because one cannot evaluate them purely in terms of economic policy. Yes, like most economists, I believe tariffs qua tariffs are objectionable (with a caveat–see below). But with Trump, tariffs are a negotiating tactic, and even as such not just a means of extracting trade concessions from other countries. He employs them to achieve geopolitical objectives, such as forcing India to wean itself from Russian oil.

Even though one cannot evaluate Trump tariff-o-philia in purely economic terms, certain aspects of his tariff policies are positively daft. The most principled economic argument one can offer for tariffs is derived from the “theory of the second best.” Specifically, yes, tariffs are distorting, but so are other taxes. It is at least conceivable that raising revenue via tariffs is preferable to doing so through other taxes (including future income taxes, capital gains taxes, etc.).

In "Supreme Court Strikes Down Tariffs," Power Line's John Hinderaker notes,

On a 6-3 vote, the Supreme Court ruled this morning that the International Emergency Economic Powers Act does not empower the President to impose tariffs. As a result, President Trump’s “drug trafficking” and “reciprocal” tariffs have been struck down.

Today’s decision is not a surprise.

The first step toward a state of good repair is in the Court holding that when the Federal Constitution grants Congress the authority to levy taxes, it takes an Act of Congress to levy taxes.

The majority opinion ultimately agrees with the main argument of the plaintiffs, a slate of small businesses suing the government on the grounds that Trump’s IEEPA tariffs are illegal. Tariffs are a tax, the plaintiffs had argued, and taxing authority rests solely with Congress.

Quoting Alexander Hamilton, the majority noted that the nation’s founding was inspired in large part by “taxation without representation.” Congress would not have delegated its taxation power to the executive branch using ambiguous language like “regulate,” Roberts wrote.

The Court also referenced its own decision in the 2023 student loan forgiveness case, in which the Court used the major questions doctrine to rule former President Joe Biden did not have the authority to cancel more than $400 billion in student loan debt. The major questions doctrine holds that in the event a president issues a policy dealing with what the court labels as an issue of “vast economic and political significance,” the statute used must explicitly grant the executive those powers. Scholars had referenced that case when considering how the Supreme Court might rule on this one, recalling that the Court blocked Biden’s executive authority to cancel student loans, but weighing the conservative Court’s tendency to contort itself to Trump’s will.

Roberts’ majority opinion lingered on the government’s opinion that specific words in IEEPA, “regulate” and “importation,” granted the president tariff powers.

“It does not,” the opinion said.

Although Our President's most vocal detractors hail the ruling, they also note he is already working on a new executive order.  "This leaves open the possibility that Trump will use some other contorted legal mechanism to set tariffs, but we don’t yet know what that is or why the SCOTUS wouldn’t strike that down also. The Constitution is crystal clear that the authority to set tariffs belongs only to Congress."  Hot Air's Ed Morrissey concurs in part: "The 6-3 decision this morning at least makes them mostly dead."  Read his essay to get an idea of how successful Our President's lawyers might be at drafting a work-around.

TAKE TWO DEEP BREATHS.

Please. There's a right way and a wrong way to use the Minneapolis bridge collapse to make the case that public moneys can be allocated more efficiently.

Last week’s tragedy in Minneapolis, as terrible as it was and is for those directly involved, should come as a surprise to no one. Readers will remember past editorials here and elsewhere about the sorry condition of America’s infrastructure – roads, airline systems, and, especially, the decrepit freight and passenger rail system --- and even the very same, somewhat offensive headline, cribbed from that 1992-election-campaign’s related, “It’s the economy, stupid.”

Decrepit freight system? Not in my experience. The reference to past editorials detracts, sounding much like "told you so." There are more substantive problems with the essay.

When I-35’s westbound span hit the waters of the Mississippi last Wednesday afternoon, ending the lives of many and ending as well any illusions that we can continue to ignore the maintenance of our infrastructure.

The problem is, of course, we’ve built more highways than we can maintain, and we continue to build them even though it is clear that highway congestion can not be cured by more ribbons of concrete: there are more miles of cars than there are miles of highways, and pretty soon after they are built/widened/lengthened/ or “improved,” highways fill up again. One recent example: in Boston we just spent $16 billion on the so-called Big Dig traffic improvement program, which buried the old Central Artery and all its exit ramps and entrances under the city. The result: within two years of the opening of the road, starting at 2 p.m. every day, the Southeast Expressway begins to back up, and stays backed up for about six hours. Your tax dollars at work!

I'll not disagree with the Law of Peak Hour Traffic Congestion. I will disagree with the assertion that "we've built more highways than we can maintain." When revenues from taxes specified as sources of funds for the Highway Trust Fund are commingled with other funds in order for the government to report a smaller deficit, it's not an issue of "can maintain," it's an issue of "failure to maintain." Or to build -- one cannot encourage greater labor force participation by women and immigration without preparing for more commuting.

In Minneapolis, five people (at least) died because a bridge that had for decades been officially labeled “deficient” was never properly repaired, or even maintained. And it is not alone. You can be sure that, in a neighborhood near you, a similarly neglected span sits similarly awaiting the day when the “deficient” rating makes it into the local headlines, along with a few fresh obituaries. It doesn’t have to happen. But it will. To change that fate, which others will share, requires several steps, which we (once again) call for here today:

• Raise the gas tax by at least 50 cents a gallon and create a true infrastructure (not “highway” trust fund). That tax will produce an extra $100 billion a year, less than we are spending in Iraq but still, better than a poke in the eye with a sharp stick. Won’t that tax hurt people? Well, we have $3-$4/gallon gasoline right now, up from $.99 a few years ago; and all of it is going to a part of the world perpetually in flames. The law of supply and demand, like the law of gravity, still works. With a serious Infrastructure Tax, consumption will drop over time, along with oil’s base price. Then, the extra money will stay in America and build its future infrastructure – and rebuild our ability to compete in the world --- rather than go overseas to further enrich Sheik Yamani Or-Ya-life.

Wow. Talk about a hodge-podge of points. Defunding oil exporters with ties to the jihad is a different objective than raising money for infrastructure repair. It does not have to follow that a higher tax will bring in more revenues -- indeed, the editorialist is betting on the kind of substitution that would reduce gas tax revenues, particularly as the rail projects come on line, and there is no reason to rule out governments appropriating less money from general revenues for infrastructure improvements.

• Then, spend some of that money --- not all! --- to fix the roads and bridges that already exist, and the rest to build modern high speed freight and passenger lines across the country, not for long distance luxury trains – although some markets will see that --- but for goods and people. The existing freight railroads own that track right now, except for Amtrak’s Northeast Corridor, and have largely exclusive access to it. They will lose their exclusivity of access --- and their ability to gouge captive shippers --- but gain capacity at no expense to themselves. If they really do know how to run a railroad, not just extract money from hapless “captives,” they and their shareholders can profit hugely from this, as will states and the U.S Treasury from taxes paid on those profits. Some will oppose this idea, because they would rather have captive shippers than operate in a competitive environment. Too bad!

Again, a jumble of points. Why not use the tax money to build passenger-only railroads? In some ways, using a freight railroad to run passenger trains is akin to using a reheat furnace to bake pizzas. Or does the editorialist envision something like Britain's Network Rail offering franchises to train operating companies? What would prevent the railroads from engaging in rent-seeking behavior such as, for example, Dakota, Minnesota and Eastern proposing a granger corridor service in order to be able to tap the Powder River coal traffic? That infrastructure investments are case studies in indivisibilities and irreversibilities does not automatically render them the province of government.

• Reform the Congressional committee structure, so that the House Transportation and Infrastructure Committee, and the Senate Commerce Committee, are organized around geographic regions rather than different modes of transportation. We don’t need separate plans for roads, tracks, and ports. We need a transportation system. Some fear this would lead to geographical divisions and fights. Well, it would, to some degree. But despite years of mismanaged government mixed with mendacity, Americans still have a basic sense of fair play and some very talented political leaders in Congress such as Jim Oberstar, Gerry Nadler, and Bob LaTourette in the House and Frank Lautenberg and Trent Lott in the Senate. That kind of leadership can make this work. You’ll notice we don’t mention their political parties, because transportation has long been a bipartisan concern.

Catch the Utopian Wonkery? There will be partisan fights, but we'll manage? Government has mismanaged transportation policy, but it's the proper instrument for change?

IF MASS TRANSIT REDUCES TRAFFIC CONGESTION, SHOULDN'T MASS PACKAGE DELIVERY ALSO DO SO?

Perhaps not, particularly in the big cities.

An Amazon order starts with a tap of a finger. Two days later — or even in a matter of hours — the package arrives.

It seems simple enough.

But to deliver Amazon orders and countless others from businesses that sell over the internet, the very fabric of major urban areas around the world is being transformed. And New York City, where more than 1.5 million packages are delivered daily, shows the impact that this push for convenience is having on gridlock, roadway safety and pollution.

Delivery trucks operated by UPS and FedEx double-park on streets and block bus and bike lanes. They racked up more than 471,000 parking violations last year, a 34 percent increase from 2013.

Put another way, the mass transit vehicles get reserved spaces, while the mass parcel delivery vehicles have to make do as best as they can, on roads that are not rationed by price.

While the rise of ride-hailing services like Uber has unquestionably caused more traffic, the proliferation of trucks has worsened the problem. As a result, cars in the busiest parts of Manhattan now move just above a jogger’s pace, about 7 m.p.h., roughly 23 percent slower than at the beginning of the decade.

Neighborhoods like Red Hook, Brooklyn, are being used as logistics hubs to get packages to customers faster than ever. At least two million square feet of warehouse space is being built in New York, including what will be the largest center of its kind in the country. Amazon added two warehouses in the city over the summer.

Gosh, that Manhattan traffic was moving at all of about ten or eleven m.p.h. at the beginning of the decade, which was also during that era of macroeconomic torpor we call the Obama recovery.

RETHINK THE BUSINESS MODEL.

The latest Destination: Freedom meditation on Amtrak at 40 years suggests that airline envy might have made sense when the carrier began operation, but it's hampering progress today.

In 1966, the back of the Pennsylvania Railroad’s system timetable featured a drawing of a duck with an obviously fearful expression on his face. He was afraid that he would soon become dinner for a happy passenger on the railroad’s fabled Broadway Limited train. The ad praised the railroad’s dining service and said that riders could enjoy a fresh-cooked and properly-served dinner in the dining car because the Broadway Limited was not an airliner; “it’s a train.”

Today, that duck’s descendents [c.q.] need have no fear of being sacrificed to the artistry of a dining car chef. The Broadway Limited been relegated to history, at least for the foreseeable future. So have many of the traditional railroad practices, from a standard tariff of fares, to certain on-board services. In many ways, today’s Amtrak travel experience seems closer to airline travel than to traditional rail travel.

When Amtrak took over the few intercity trains that remained in operation in 1971, it began life with an airline-style orientation. Roger Lewis, Amtrak’s first president, came from the airline industry. At that time, it was at least arguable that adopting the style of the airlines would be good for Amtrak. The 1960s was the era of the “jet set” who believed that trains belonged in the past, not the present or the future. After all, trains were slow and air travel was fast and “glamorous,” to use a word of the period that now appears quaintly obsolete. The 1960s was a decade of change on many fronts, and one of the changes was that passenger trains were removed from the rails as airlines caught on with the general public. Everybody seemed to believe that “Pan Am makes the going great,” and that they somehow needed to “fly the friendly skies of United.”

Airline deregulation turned the airplanes into flying buses, and "transportation security" has destroyed the speed advantage on trips in the 200-400 mile range.  Amtrak has been too busy with institutional survival to distinguish its product.

Today, America’s [passenger] railroad serves airline food, distributes airline-style miniature pillows, uses airline terminology and adheres to airline fare practices. New stations look more like airport interiors than train stations (examples are located in Milwaukee and Trenton), but at least they are still located downtown.

Some of the airline fads of the 1970s that Amtrak incorporated are gone, while others remain. Lewis made his crews get rid of their railroad uniforms and exchange them for new ones that made them look like airline pilots or flight attendants. When the disco-era uniforms eventually looked too dated even for Amtrak’s management, traditional uniforms came back. Amtrak redecorated the interiors of most of its cars in the 1970s in paint schemes of purple, orange, magenta and other “mod” colors. Fortunately, these garish cars can only be seen in railroad museums today. Unfortunately, this was some of the best equipment Amtrak ever ran, and most of it was taken out of service in the 1990s. Amtrak’s Amfleet equipment assumed an airline look, as well. The transverse cross section of those cars is more cylindrical than that of conventional railcars, mimicking the cross-section of an airliner. These cars have less headroom, side-room and luggage rack space than the “heritage” cars offered. The same is even more true of the cars that run on the extra-fare, high-speed Acela trains in the Northeast Corridor.

Yes, those heritage cars were good-riding cars, and the airline-emulating Amfleet cars (the author forgot to mention the rifle-slit windows designed with urban rock-throwers in mind) are now approaching the age at which many of those heritage cars were taken out of service.  (Some of them were restored to a more railroadlike interior look at the time they were converted to electric heating and air-conditioning.)

FACILITATING A BROADER DIVISION OF LABOR.

The electric interurban cars had their shining moment, just after the introduction of practical electric motors for transportation but before the Otto cycle engine and the Good Roads movement made private motor-cars look like a winner.

They look less like a winner today, but I'll take a break from fighting it out on that line, even though it has taken multiple summers.

Rather, let's look at the marvelous interurban conveyances still in preservation.  Yes, that's a regular Cold Spring Shops ritual, but with the Illinois Railway Museum just a short ride away, it's going to continue to be a regular ritual.

Saturday and Sunday, it was high volume interurban operation.  The Chicago area interurbans and Illinois Terminal regularly ran long consists; Milwaukee Electric would on occasion multiple a single car with a duplex, and in days past one motor car would pull two or three trailers.

Here, an Illinois Terminal train with a parlor car (for a while, that observation car was a business car) and a North Shore Line train await passengers.  There was also a three wooden car Roarin' Elgin train roamin' the line.

The museum has the trackage to have four long trains roaming the railroad at any one time.  Here's the view from the observation platform of the North Shore train heading west; the track and overhead catenary is in the style of the South Shore Line.

There are South Shore cars in the museum collection, and the museum probably could roll out a three or four car train if somebody got the urge.  Those cars are in their as-retired condition, though, with 1500 volt wiring (the interurban standard is 600 volts) and pantographs.  But they look pretty set out at the L station for viewing.

If it's functioning South Shore cars you want, the nearby East Troy Electric Railroad has enough to re-enact a long train, as well as some refitted as table cars for a dinner train.

The interurbans were primarily passenger carriers, although a few of them attempted to offer freight service.  That often came to naught as the steam railroads didn't want to establish interline tariff agreements.  The joys of transaction costs ...

Around the Midwest, a few interurbans did last as freight railroads, latterly diesel operated.

That's a Charles City Western locomotive, ahead of South Shore line car 1100, quite possibly the fanciest interurban line car ever to grace either a revenue railroad or a museum.

The photograph is also a tease: if you're following the peregrinations of Big Boy 4014 around the Upper Midwest later this month, do you know where there are locomotives older than 4014 still moving freight cars in regular service?

There are additional Interurban Weekend photos at Hicks Car Works.

Thomas and Percy will be returning to the museum later this month, and Uncle Boris is in fine form to help out.

Is there a more fitting way to Fly the Flag on Independence Day than on a steam locomotive?

The Republic still stands, in all its contested turbulence!

LET'S MAKE THE STATION WAGON GREAT AGAIN.

Now that the election returns are in, dear reader, let us consider a few topics that might not have been top of mind during the hype and hysteria.  "Sustainable transport" advocates called attention to one I have been following for a long time.  "The feds won't be restraining car bloat."

Well, no, nor can they, because they caused the problem in the first place.  Bruce "Bootleggers and Baptists" Yandle might have begun thinking about that phenomenon when he worked on technology-forcing legislation during the Carter administration.

Back in 1977, as a senior economist on President Jimmy Carter's Council on Wage and Price Stability, I participated in Department of Transportation (DOT) proceedings that set the first fuel economy standards for the U.S. fleet. What transpired is a great example of what can happen when federal regulations become completely entangled with a major economic sector. The forces at play help to explain why a woman happily drives a 5,000-pound SUV to transport 10 pounds of groceries.

I can assure readers that no one in those proceedings thought the Ford F-150 pickup, beginning in 1982, would top the all-vehicle bestseller list for 41 consecutive years. And we could have never guessed that truck-like SUVs would become vehicles of choice for U.S. consumers. We couldn't have; SUVs did not exist at the time.

We expected just the reverse. Cars would get smaller, we thought. Fuel economy would rise, and large, weighty vehicles would be a thing of the past, primarily because of the regulations being put in place.

The F-150 of the time was smaller than its current version, and the Suburban and assorted Jeep knock-offs were utilitarian, intended to be a cheaper version of the Land Rover for going bushwhacking.  These days, whenever commentary about the size of those land yachts and the hazard they pose to pedestrians comes up, it quickly degenerates into slanging matches about whether the skippers of those land yachts or their critics have the lowest testosterone.  And thus serious policy analysis goes by the board.

PUT THE LIBERTARIANS IN CHARGE.

Perhaps, if the Governance by Wise Experts part of the Knowledge System is part of the collapse, which is the simplest interpretation of "public distrust of experts has reached an intensity never seen before," the best way forward might be to put less public trust in experts.  Here's Cold Spring Shops in October, 2016.

Joel Kotkin cautions that a bad Republican-by-courtesy presidential candidate who loses badly does not mean a mandate for more Governance by Wise Experts.  Follow both links, read and understand, and follow additional links if you wish.  Politics is downstream from culture, and it's fifty years since the Consciousness Revolution led to the destruction of presidential politics as it is currently playing out.  The correction might also take fifty years.  But there are rumblings of a correction, if you know where to look.  Thus Mr Kotkin.  "Relative few Americans have much patience with such things as “micro-aggressions,” “safe spaces,” the generally anti-American tone of history instruction whose adherents are largely concentrated in the media and college campuses. Fewer still would endorse the anti-police agitation now sweeping progressive circles."

Yes, dear reader, your Superintendent was among the observers of the political scene resigned to Hillary.  What we had to look forward to in earnest then presented as farce during the Jarrett regency.

Thus, the Fatal Conceit of the latter-day Platonists (the self-styled progressives) is in creating that cadre of Wise Experts who are going to protect the masses from their own foolishness. And if you like your doctor, you can keep your doctor. I like the idea of limiting and enumerating the powers of government, something that neither major party shows much interest in. That way, there aren't as many things the Wise Experts can screw up, and the opportunities for those in the masses who give in to their sheer foolishness to live at the expense of everyone else are fewer.

Which for all its faults put Donald Trump back in the White House and we could sure use a chronicler like Theodore H. White to tell that story.