There were plenty of winners and losers in last week’s election. But perhaps the biggest loser of all was conventional wisdom.
Consider the national election. As of late 2007, conventional wisdom asserted that Hillary Clinton had the Democratic nomination sewn up, and that McCain ought to pull the plug on his faltering, underfunded campaign.
Conventional wisdom went 0-for-2 on that one.
If anything, political prognosticators in Washington State fared even worse. Consider the Puget Sound light rail vote. Time and again, political insiders billed the 2007 “Roads-and-Transit” package as the last, best hope for rail transit in greater Seattle. The roads were considered crucial to the train’s chances: there was simply no way, the wise ones intoned, that the electorate would approve a multi-billion dollar train system unless it was leavened with some road projects to lure suburban voters. And if voters rejected the package in 2007, we were assured, the train would be dead for a decade; politicians would never put a tax increase on the ballot two years in a row, especially with an economic downturn on the horizon.
How’d the wisdom do? 0-for-4.
Confounding the politicos and pundits, the roads didn’t lift the 2007 package, they sank it. Light rail made it to the ballot the very next year. Puget Sound voters approved of the transit-only measure in a landslide. And the shaky economy may actually have helped light rail: the train was seen by some voters as an economic stimulus, and by others as a way of protecting commuters from high gas prices. In the end, all of the prognosticators who lectured the 2007 Roads-and-Transit naysayers about “political reality” got their heads handed to them.
The failure of conventional wisdom was no better regarding Washington’s Initiative 985. Political observers thought that I-985 would be as irresistible to voters as leftover Halloween candy is to a four-year-old (a subject I now know quite a bit about). I-985 had fantastic soundbites and a charismatic proponent—and everyone knows that voters don’t really care about substance. But the confident predictions were exactly backwards: a ragtag campaignwiped the floor with I-985, and voters proved perfectly able to ignore soundbites and focus on substance. (It didn’t hurt, of course, that I-985 was comically stupid transportation policy).
I could go on. History is chock full of examples of long-shot causes that scored victories that at one point seemed impossible: women’s suffrage, the temperance movement, civil rights. Conventional wisdom—especially the confident assurances of political insiders—is absolutely no guide to what’s possible in the world.
The fact that conventional wisdom is so often foolish is both confounding, and excellent news. Confounding, because it shows that the future is fundamentally unknowable; even sage advice can be worthless, and what counts as political “inside baseball” is anything but sage. And excellent news, since it shows that political certainties aren’t certain. Long-shots and pie-in-the-sky ideas are far more possible than anyone dares hope.
So if you’ll excuse us, we’ve got some windmills to tilt at. We suggest you do the same.
Photo courtesy of Flickr user marttj under a Creative Commons license.
Jon Cecil
Conventional wisdom in Idaho’s Treasure Valley would not have thought that a Nov. 4th ballot measure to increase motor vehicle registration fees would have passed in tax averse Idaho. A super majority of voters said they were willing to pay a little more for projects to fight traffic congestion and provide more Safe Routes to School and miles of sidewalks and bike lanes.Motorists registering their cars on January 1, 2009 will be subject to the new fees.Today, the average motorist pays $13 annually for the local fee to register a vehicle, a cost that will rise to $24 after approval of the ballot measure. Owners of new cars (those one or two years old) will pay $40, while owners of vehicles that are three to seven years old will pay $36. Vehicles more than seven years old are subject to the lowest fee, $24. The age-based fee formula parallels the approach of the State of Idaho and was a requirement for ACHD to collect the fee in Ada County.The Ada County Vehicle Registration Fee is separate from the State of Idaho registration fee, which is a maximum of $48 for a vehicle that is one or two years old and less for an older model. Ada County motorists pay both registration fees.
John Niles
The Sound Transit expansion just approved is forecast by the agency to cost $486 million (2007$) in 2030 using annualized capital expenditure and the operating cost forecast. (Page C-7 of ST2 Plan.)The highest, most optimistic GHG reduction forecast for 2030 coming out of this expenditure is 178,334 metric tons for the year (Page 12 of ST’s Environmental Assessment.)That computes to $2,725 per ton. Talk about going against conventional wisdom! I’ve read that below $50 per ton is where a responsible society needs to be for GHG reduction and economic sustainability. We must be rich?
Matt the Engineer
Yeah, that’s why we voted for it. It had nothing to do with having an alternative to being stuck in traffic. (/sarcasm)Trading an old car in for a hybrid will cost around $1,000 per ton of GHG saved. That sounds like a much better deal than light rail, until you realize you haven’t gained anything in the trade. (ok you also save thousands in gas, but you’re not counting that – or savings in vehicle maintenance, road building, asthma rates, value of time saved, etc. in your analysis)
morgan
(The following is a bit of a thought experiment.)What about the differences between economic drag vs economic investment? What if we consider the differences between policies that restrict certain economic activities with those that expand other economic activities? I contend that the $10 – $50 refers to economic drag exclusively.On the one hand, we have traditional ‘market mechanisms’, like carbon taxes and caps. These policies increase costs at the point of pollution and are negative feedback loops restricting economic activity we don’t want. Of course, they also stimulate supplementary activity of less emission burden.On the other hand, we might choose policies that are beneficial to both emissions goals and to the economy. These would be positive feedback loops expanding economic activity we want. Examples include investments in clean technology R and energy efficiency through loans and grants. But, this category also includes direct capital investment into projects like light rail, bicycle corridors and safe routes to school. These projects are expensive in terms of $/ton; the Kinsey report and that new one out of Berkeley agree.However, these reports and the Sound Transit EIS don’t allow us to understand total economic effects. If we believe that expansionary/Keynesian fiscal policy creates jobs and wealth by speeding up the multiplier effect, then shouldn’t we believe that capital investments into dual-benefit programs cost us no more than the expenditure of savings, materials and energy required to create them plus-minus the opportunity costs? What I’m getting to is the misleading comparison that John offers where he compares economic drag to economic investment while completely missing not only the co-benefits of a transit system, as Matt refers to, but also the significant economic benefits of rail investment that ripple throughout the economy.
Matt the Engineer
[morgan] I think you’d appreciate the chart on page 38 of this pdf (I think I originally found that here). It has cost of abatement per ton of CO2, and starts quite negative at a savings of 150 euros per ton for building efficiency. Of course I would think the exact analysis you’re talking about is difficult to impossible to do. Sound Transit used quite conservative models in even GHG emissions savings. To really do this analysis you’d have to somehow calculate the productivity improvements by reducing commutes, adding in all of the vehicle cost and fuel savings experienced, business efficiencies involved in connecting two cities together, additional development caused by this efficiency, infrastructure reduction associated with transit oriented development, etc.So what we were really left with is the anti side screaming about high costs without the pro side having many hard numbers regarding the benefits. Luckily, the voters approved it anyway – hopefully because they understood these benefits.What would change this bias? Better models that take some of this into account would be great. But until then, we’ll have to rely on the voter’s gut.
morgan
I’m reasonably familiar with the McKinsey report, which I accidently refered to as the Kinsey report. I first saw it a year ago and browsed it again yesterday. It’s not the kind of economic analysis I was trying to point to. I would say the McKinsey report is a cost-benefit analysis that mainly focuses on abateent costs and emissions reductions. What it doens’t do is talk about what happens when, in say an isolated commnity for the sake of simplicity, a company chooses to locate there as the result of, say, a tax incentive. McKinsey-ish analysis is limited to talking about the financial-capital costs of creating and operating the company, the upfront tax losses and comparing this to the GHG reductions associated with the deployment of whatever it is they do or make. McKinsey-ish analysis doens’t have anything to say about the broader impacts when employees spend their incomes – the whole multiplier concept. Likewise, when we build a rail system, the $/GHG analysis doesn’t address the shifts in land-use that result – co-benefits. And, if you read Ackerman-Heinzerling’s “Priceless”, you get expoed to how most analysises of this type can be grossly misinforming. At any rate, I know that deeper analysis has been done in all kinds of economic sectors and examples, but I haven’t seen anything in the area of green energy. Not that I’ve seen everything.
John Niles
OK, ST2, other benefits beyond GHG reduction:Federal Transit Administration endorses the Sound Transit calculation that the addition of University Link (the next 3 miles of light rail to go into construction, to Husky Stadium, not part of the Prop 1 just approved) generates 14,500 hours of travel time savings daily on an average weekday at a cost of $22.21 per hour. This comes from a complex calculation that encompasses time savings of people who take the train instead of drive, including those bus riders who get a faster ride by transferring to the train, and even including drivers who face less impedance on the road because some people have switched to transit. Lets extrapolate this saving to the Sound Transit phase 2 plan just approved on November 4. As a base, University Link is a $1.9 billion project that produces 40,200 light rail boardings per day, including people who formerly took the bus all the way. ST2 is a $11.8 billion project that produces 158,000 more light rail boardings per day, on top of what University Link yields. I’m OK in this quick exercise with assuming that the time saving benefit coming out of ST2 light rail expansion is proportional to the light rail boarding in the same ratio as U Link, and that the conservatively estimated cost per hour for achieving these benefits in ST2 is at least $22.21 per hour (which includes operating cost) as with University Link, given the respective ratios of boardings to project expense.Therefore, travel hours saved per day from ST2 computes to (158K/40.2K)*14,500 hours = 57 thousand hours, which when priced at $22.21/hour, yields a total cost of $1.27 million per day.So here’s the cost-benefit deal we have with ST2’s light rail on an average 2030 weekday: one point three million dollars per day in public costs to let the commuting public save 57,000 hours per day from embracing the new choice of taking the train and not being stuck in traffic.I’m summarizing and exploiting hundreds of thousand of dollars in computer modeling expense by taxpayer-funded agencies.What does this benefit and associated cost look like against a 2030 ballpark estimate of one million workers spending an average of 50 minutes commuting per day? That’s roughly 830 thousand hours per day. 57 thousand is about 7% of that total.One point three million bucks per day to take down regional weekday travel hours by 7 percent. That benefit would be for the travelers in the light rail corridors.Pretty good, huh? //sarcasm Maybe there’s another way of looking at this.Oh yes, in addition, Seattle is now a world class city with a subway. //no sarcasm intended.The theory is that people and businesses will move closer to the subway stops around which there will be more development and benefits will go up and up. And up. That gets to the “but it’s only four-car trains” problem, with speed restrictions at a number of point, but I’m stopping for now.Try to help me feel better about this deal we have approved, against conventional wisdom. How “transformative” will it be? How will it be transformative?
morgan
Rail most certainly is expensive. You must admit that this is still a very flat/limited analysis. The real analytical point isn’t to asses the cost of rail but to asses the wisdom of choosing rail over automobile over congestion. I question the first apparent assumption, which is travel time should be a central metric. The way I see it, shifting from SOV travel to rail travel can be as much as a 100% reduction in wasted time. Time lost is what we should be thinking about. And since the point of thinking this way is to help us choose among alternatives, we should also be considering the ‘ancillary’ burdens from driving such as loss of life, health & property, and we should be internalizing all pollution costs that result from our roadway system. We should note here that road surfaces are a primary cause of water pollution, and the PS Partnership recommends spending a half a $billion per year cleaning up the Sound. And, are the direct costs of driving included in this analysis? I generally estimate these at $10/hr, when fuel, repairs and insurance are included.John, are you also saying that the cost per day to build and operate the ST2 system is based on daily ridership? I would think the $22.21 is the average cost of providing one hour of expected service rather than the marginal cost of new ridership. If my suspicion is true, why do all the algebra if the total daily cost of the system is available? After all, the hourly system-costs were derived from this, right? Anyhow, $22.21 to conserve one hour of life on this planet seems like a good deal. That lands us right close to the median hourly wage in King County.My apologies for the hasty & jumbled presentation.
John Niles
No, $22.21 is NOT the average cost of providing one hour of expected light rail service.This number is a computer-modeled forecast of the marginal cost of providing an hour of traveler time savings because of University Link in operation in 2030 compared with an alternative computer-modeled 2030 scenario where the light rail investment—3 miles of subway from Pine Street to Husky Stadium—is not made.The alternative 2030 scenario does NOT encompass an optimized bus solution, but rather is an extrapolation of the way buses operate in the present day.This calculation is done under Federal rules that provide the justification for the $813 million University Link construction grant approval that ST is going to achieve in the final days of the Bush Administration, bringing this Administration’s support of Sound Transit’s Central Link light rail to $1.3 billion.
John Niles
Vis a vis Sound Transit light rail and traffic congestion, the original EIS for Central Link Light Rail from Northgate to S 200th, as well as the draft EIS for East Link Light Rail from International District to Redmond Town Center, both make clear that the mass transit investment under examination does not materially change the official forecast of future traffic congestion.There is more choice, but not less traffic congestion on the roads and highways.This is because the official forecast does not show a very large increase in daily transit ridership as a result of the light rail investments. For example, the draft EIS for East Link shows a net region-wide increase of about 10,000 daily one-way transit trips in 2030 as a result of light rail, compared to the forecast for 2030 without this light rail having been constructed and transit continuing with bus service expanded slightly.5,000 daily round trip commuters added to transit volume is not very many additional customers compared to, say, the daily forecast of 2030 cross-Lake volume of people and vehicles. The draft East Link EIS, page 3-38, table 3-19, lower right hand corner, shows that the PM peak hour forecast for 2030, both directions, for both bridges across Lake Washington is 20,650 people in 14,000 vehicles without light rail having been constructed (that’s ONE busy hour’s worth). It’s 21,200 people in 12,950 vehicles with cross-Lake light rail operating in the same hour. The change is in the right direction, slightly more people in slightly fewer vehicles.This is the forecast result of a $5 billion mass transit investment. The level of traffic congestion is forecast to be about the same either way. Table 3-3 of the draft EIS shows traffic a little worse in the evening eastbound, a little better in the evening westbound. The relatively few people in the train would be getting a smoother, faster ride … for $5 billion, I should hope so!