Is transportation the new housing?

Kyle Wingfield wrote a column discussing crony capitalism in the case of Fannie Mae that gave me an epiphany of where the next government created disaster will occur.

Kyle’s column explored the idea that political elite of both political parties in the United States have been guilty of spending taxpayer money to benefit themselves, their friends and their supporters. Wingfield used Fannie Mae to point out that the crony capitalism inherent in our current political system is the driving force behind our nations rush toward bankruptcy and that the backlash to this unsustainable trend has given birth to the Tea Party movement. I suggest you read the whole column here.

One particular section of Kyle’s column struck me because I see a clear parallel between what occurred with Fannie Mae and what is now going on with the sudden rush to subsidize transportation and transit projects with more taxpayer money. Below is the section I am referring to:

Fannie Mae co-opted relevant activist groups…. Fannie ginned up Astroturf lobbying campaigns….

Fannie lavished campaign contributions on members of Congress. Time and again experts would go before some Congressional committee to warn that Fannie was lowering borrowing standards and posing an enormous risk to taxpayers. Phalanxes of congressmen would be mobilized to bludgeon the experts and kill unfriendly legislation.

Fannie executives ginned up academic studies. They created a foundation that spent tens of millions in advertising. They spent enormous amounts of time and money capturing the regulators who were supposed to police them.

A government entity co-opting activist groups, ginning up academic studies and spending tens of millions of taxpayer dollars to finance astroturf lobbying campaigns? Well that might have happened when Fannie Mae spent hundreds of millions creating a housing bubble that drove this nation into a depression…. but something like that couldn’t happen again. Could it?

Surely government organizations like the Federal Department of Transportation, Federal Transit Authority and the Environmental Protection Agency would never spend hundreds of millions of dollars promoting ideas and policies that will lead this nation further down the path toward bankruptcy… would they? Well according to the Center for Transportation and Livable Systems:

The U.S. Department of Transportation supports a network of University Transportation Centers throughout the nation to advance technology and expertise in transportation through combined efforts of research, education, and technology transfer. Within the federal SAFETEA-LU legislation, the Center for Transportation and Livable Systems (CTLS), formerly the Center for Transportation and Urban Planning, was designated the University of Connecticut’s University Transportation Center in August 2005. CTLS began its first year of operation in 2007 and since then has supported dozens of researchers and students through its research activities and helped inform the public and the scientific community in its workshops, seminars and symposia.

The theme of the Center for Transportation and Livable Systems is Livable and Sustainable Transportation Systems for Smart Growth — a holistic theme that incorporates walking, bicycling, transit and automobiles in an integrated multi-modal system

But that must be an isolated example. It’s not like the federal government would spend $175 Million on some ridiculous initiative to expand transit into low density suburban and rural communiites. Would it? Apparently so according to this press release on the Federal Transit Authority website: 

U.S. Transportation Secretary Ray LaHood today announced the availability of up to $175 million in livability grants to help urban, suburban and rural communities develop transit options to better connect people to where they live, work and play.  Local transit agencies will be able to compete for livability dollars from the pool of up to $175 million. The competitive grant program will
begin accepting applications when announced in the Federal Register during the week of June 20.

It seems everywhere I look there are indications that the federal government along with many state and local officials have begun the process of screwing up America’s transportation infrastructure the same way they managed to destroy the nation’s real estate industry. But it isn’t just politicians. It is also their cronies in the infrastructure and real estate development industries that are helping to create this mess.

Remember the first scandal to break for Georgia’s new Speaker of the House, David Ralston, back in 2010? Maybe a clip from this AJC article will refresh your memory:

House Speaker David Ralston and his family spent part of Thanksgiving week in Europe on a $17,000 economic development mission paid for by lobbyists interested in building a high-speed train line between Atlanta and Chattanooga.

Commonwealth Research Associates, a D.C.-based consulting firm, paid for the trip, which also included Ralston’s chief of staff Spiro Amburn and his spouse, to Germany and the Netherlands the week of Nov. 21-27, according to records filed with the Georgia Government Transparency and Campaign Finance Commission, formerly known as the State Ethics Commission.

The trip was the most expensive single expenditure reported by a lobbyist since at least 2005.

Coincidentally another article explains that Speaker Ralston is now proposing that the state of Georgia use the train those lobbyists wanted as leverage in the water wars between state of Tennessee and Georgia:

Georgia’s House speaker says leaders from his state need to sit down with Tennessee officials and discuss trading transportation enhancements for access to the water in the Tennessee River.

During a recent radio interview with WABE-FM in Atlanta, Speaker David Ralston, R-Blue Ridge, said his state might be willing to offer improved rail, roads or other links between Chattanooga and Georgia air and sea ports in exchange for access to the river.

Isn’t that special? Sure is funny how the push for inefficient and unbelievably expensive trains shows up in the oddest places.

Between the early 1990’s and 2008 the federal government along with willing accomplices at the state and local level worked hand in hand with banks, governmental agencies, developers, builders, land speculators and a host of other cronies to create a real estate bubble that has staggered this country. In the process a lot of people made a lot of money at the taxpayers’ expense.

I see many of the same people doing almost the exact same thing now. The only difference is that now they are salivating over the billions of dollars to be made from creating a transportation bubble.

So the question I leave you with is this: Is transportation the new housing?

Flying coach is for the little people

Kyle Wingfield of the AJC is fired up about Georgia politicians accepting free perks from Delta and he’s right to be disappointed. Can you imagine if Delta were the defendant in a trial and gave the judge free frequent flyer miles during pre-trial hearings? That would be absurd. So what is the difference? From the article:

The upgrades are properly understood as gifts — lobbying gifts — from a company seeking an extension of the partial exemption on sales tax for jet fuel it’s enjoyed since 2005. Delta got just that when HB 322 was passed this spring, saving the company tens of millions of dollars.

No wonder it passed: Besides Ralston, Delta contributed to Speaker Pro Tem Jan Jones, House Majority Leader Larry O’Neal and House Transportation Chairman Jay Roberts, who sponsored HB 322. On the Senate side, it wasn’t only Cagle and Williams but Majority Leader Chip Rogers and Ronnie Chance, a floor leader for the Deal administration.

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For some reason, this story got my goat more than the typical campaign-money revelation. Maybe it’s the obviously false pretext that these gifts were election-related.

More likely, it’s the reinforcement that our elected officials believe they deserve a cushier lifestyle than their constituents. Not because they can afford it, but just because they’ve been elected.

As Bob Irvin, former House minority leader and past chairman of Common Cause Georgia, told me, “This just ought to be stopped. It feeds the entitlement mentality of people in government. And while we’re fixing the entitlement problems for the country as a whole, we ought to be fixing it for government officials and staff, too.”

Every single day there are thousands of people in Georgia volunteering their time on behalf of their community. These people volunteer in soup kitchens, teach Sunday school classes, coach baseball or softball and donate time to the local PTA just to name a few. And not a single one of them expects to get free gifts worth thousands of dollars for their service to society. Yet for some reason many of our current political “public servants” seem to think their contribution is so singularly important that they should be entitled to special privileges.

Former Speaker of the House Nancy Pelosi dictated that the “little people” of the United States had to use low flow toilets and cfl light bulbs while she flew around on gigantic military aicraft stocked with enough booze to supply an entire Russian village for a year. Before Dominique Strauss-Kahn was arrested for raping a hotel maid, the head of the International Monetary Fund was staying in $3,000 a night hotel rooms while he redistributed wealth from the United States to people all over the world.

Membership in the ruling class does have its privileges.