CUT TAXES. DEREGULATE. RELY ON MARKET TESTS.

Regular readers know that North American freight railroads rule.  Because even the brightest among you can benefit from a modicum of repetition, here is today's review.

America’s inter-city freight rail system is a different story. In the last four decades, the nation’s seven Class I railroads—those with the highest annual revenue—have lowered their rates, increased rail mode share, and caused usage to skyrocket, making the U.S. freight system indisputably the world’s best. This rise is a deregulation story that could inform policy for other transport sectors.

There is still work to be done.

Another challenge is that the freight transport market isn’t on a level playing field with trucks. That latter mode uses roads, which for over a century have enjoyed subsidies and eminent domain carveouts in America. Even today, interstate highways generally cannot be tolled, and gas taxes are not high enough to cover road maintenance costs, meaning they’re subsidized through general taxation.

But the deregulation that occurred 40 years ago via the Staggers Act has still been a massive boon—possibly the lifesaver—for America’s freight rail industry. Policymakers should heed its lessons when setting policy for other transport modes. Fifty years after Amtrak was formed, it continues to require taxpayer subsidy. The same happens with intra-city bus and rail transit, with its politically-mandated “coverage” goals, price caps, resistance to automation, and rules that keep private competitors out. If market forces could flip a dying freight rail industry into the world’s best system, think what it could do to these other industries.

The beginning of wisdom is recognizing that "crumbling infrastructure" is a government failure.