I'll be the first to admit that Sen. Rockefeller's crusade to regulate the railroads is a long shot indeed.
In fact in an earlier post I made that point.http://boards.fool.com/this-is-a-long-running-theme-every-ti...
However we should at least be aware of this faint but persistent undertone, even if we assign low probability. Rockefeller's most recent report (notice he actually does cite Buffett's investment as 'evidence'):
OFFICE OF OVERSIGHT AND INVESTIGATIONS
MAJORITY STAFF
THE CURRENT FINANCIAL STATE OF THE CLASS I FREIGHT RAIL INDUSTRY
Staff Report for Chairman Rockefeller
September 15, 2010
Executive Summary
"Thirty years ago, Congress made sweeping changes to the laws regulating freight railroads to give the industry the opportunity to improve its finances and its ability to compete against other transportation modes. The Staggers Rail Act of 1980 allowed freight railroads to get rid of unprofitable lines and to consolidate their operations. The law also allowed the railroads to charge lower rates to their customers who operated in a competitive environment, and higher rates to customers who were ?captive? to one railroad carrier for transportation service.
"A review of the Class I railroads’ recent financial results shows that the Staggers Act’s goal of restoring financial stability to the U.S. rail system has been achieved. The restructuring of the industry that the Staggers Act set into motion thirty years ago has produced a so-called ?rail renaissance.? The four Class I railroads that today dominate the U.S. rail shipping market are achieving returns on revenue and operating ratios that rank them among the most profitable businesses in the U.S. economy.
"After struggling with declining market share and rates in the years after the Staggers Act became law, the railroads have now regained their pricing power and begun increasing railroads’ share of the freight transportation market. Unlike other transportation modes such as trucking, the railroads have been able to maintain their high profit margins even during the sustained economic downturn of 2008-10. Freight railroads have been assuring their investors the companies will take advantage of this ?robust pricing environment? and continue to push rate increases on their customers.
"While the freight railroads have been investing record amounts of their profits into much-needed capital projects, they have also doubled dividend payments to their shareholders and spent billions more dollars repurchasing their publicly-traded shares to boost the short-term value of their stocks. These large expenditures undermine the railroads’ argument that they still lack the income to invest in their long-term capital needs. In addition to their own capital investments, the railroads have recently received hundreds of millions of dollars from state governments and the federal government to support their network improvement activities.
"The companies’ strong financial performance has attracted billions of new investment dollars, including the unprecedented $34 billion dollar purchase of the BNSF railroad by Berkshire Hathaway, the operating company of the investor Warren Buffett. Buffett predicts that BNSF and the other large Class I railroads will show ?steady and certain growth? over the coming decades.
"In spite of the obvious financial strength of the Class I railroads, their industry association, the Association of American Railroads (AAR), continues to tell Congress and the Surface Transportation Board (STB) that the freight rail industry is not yet financially stable and is not yet capable of meeting its capital needs without the differential pricing powers the Staggers Act gave the railroads in 1980. As the rail industry continues to operate profitably and to aggressively exercise its pricing power, these claims need to be more carefully scrutinized...."
.......
from the body of the report:
"In November 2009, the investor Warren Buffett expressed his great confidence in the financial sustainability of the railroad industry by announcing that his company, Berkshire Hathaway, would purchase the 77.4% of the BNSF railroad his company did not already own. The deal was valued at approximately $34 billion, making it the largest ever acquisition in Berkshire Hathaway history.24
"In discussing his acquisition of BNSF, Buffett said he believed his investment in BNSF would deliver ?steady and certain growth? over the coming decades.25 He also predicted that the U.S. rail industry has a ?dynamic and profitable future? and that all four big freight railroads will ?do very well? in the coming decades because they are the only mode of freight transportation that will be able to keep up with the American economy’s increasing demand for consumer goods and raw materials.26
"Analysts suggest that as much as $18 billion poured into the rail industry in the wake of Mr. Buffett’s BNSF announcement.27
In his annual letter to Berkshire shareholders, Mr. Buffett noted the similarities between the capital-intensive railroad industry and the regulated electric utilities his company already owned. Like electric utilities, railroads ?provide fundamental services that are, and will remain, essential to the economic well-being of our customers, the communities we serve, and indeed the nation.? He predicted that Berkshire’s investment in BNSF would ?deliver significantly increased earnings over time, albeit at the cost of our investing many tens – yes, tens – of billions of dollars of incremental equity capital.? 28".....
"One of the recent structural changes that the railroad industry does not highlight is that since 2004, railroads have regained their ability to raise prices on their non-captive customers. One leading industry analyst, Wolfe Research, refers to this change as the industry’s ?pricing renaissance.?31 As Figure IV demonstrates, for a number of years after the Staggers Act was enacted, rail prices measured against inflation fell by an average of 3.6% a year. Since 2004, however, Class I railroads have been raising prices by an average of 5% a year above inflation.32 And even during the recent recession, while other modes of freight transportation have cut their rates, the Class I railroads have been able to push year-over-year price increases onto their customers.33....
"In recent conversations with their investors, the rail companies have discussed this increase in pricing power and their expectation that it will continue in the future. In a recent investor call, Union Pacific’s CEO, James Young, commented, ?[t]he pricing environment is stronger today than it’s been in a long time…I feel very good about the potential"
.............
http://commerce.senate.gov/public/?a=Files.Serve&File_id=154d36ff-af01-428d-80c0-14e32563b31d
.............
The probability of anything coming of this is so low - again as I've pointed out here in the past - that it hardly is worth us noticing, let alone discussing. But we should at least be aware that some folks who are less business-savvy than us here - but unfortunately perhaps with more congressional influence than we have - are talking about this subject behind our backs.
______________________
More:
"This new ?pricing power? has led to significant top-line revenue growth for Class I railroads and has resulted in the swelling profit margins described in the sections above. And according to Wolfe Research, because railroad rates are still below their inflation-adjusted 1980 levels, the freight rail carriers believe they will have a ?solid multi-year glide path to continued strong rail pricing hikes regardless of the economic environment.?34 A recent Morgan Stanley analysis of the rail industry notes that in the current environment of strong railroad pricing power, ?[r]ate negotiations continue to be difficult for shippers and competition remains minimal.?35
Figure
"In recent conversations with their investors, the rail companies have discussed this increase in pricing power and their expectation that it will continue in the future. In a recent investor call, Union Pacific’s CEO, James Young, commented, ?[t]he pricing environment is stronger today than it’s been in a long time…I feel very good about the potential in the pricing side going forward.?36 A CSX senior executive, Clarence Gooden, made a similar prediction in his company’s second-quarter 2010 investment call, when he said, ?[l]ooking forward, we continue to expect core price increases to exceed rail inflation.?37
"A number of factors seem to lie behind the railroads’ new ?robust pricing environment.?38 Post-Staggers Act industry consolidation and capacity reduction slowly eliminated the excess supply of rails and rail service, while the railroads invested in making their remaining operations more productive. One industry analyst estimates that the railroads moved from a position of ?material excess capacity? to ?tight capacity? in the late 1990s or early 2000s and that the pendulum has continued to swing further in the industry’s favor as demand for rail services continues to grow, particularly in the intermodal, coal, and grain markets.39
"Another factor that has contributed to the industry’s renewed pricing power over the past few years is its shift to short-term contracts with its customers. After the passage of the Staggers Act, during the time they had weak pricing power, the freight railroads entered into long-term contracts with many of their customers. As these so-called ?legacy contracts? are expiring, railroads are replacing them with shorter-term contracts—sometimes for terms as short as one year—at significantly higher rates. Shippers also report that railroads are more frequently offering unilateral ?take-it-or-leave-it? contracts to customers, a practice that bears more resemblance to setting a tariff rate than establishing a price through negotiation.40
"Analysts view these expiring legacy contracts as an important source of pricing gains over the next few years. According to Wolfe Research, ?[a]s these rail contracts are repriced over the next several years for the first time since the rails gained pricing power in 2004, we believe the rails will be recording material rate increases that could exceed 100% in some cases of very old and underpriced business. (e.g., ten-year old coal contracts).?41 Morgan Stanley recently rated Union Pacific as its top Class I rail stock based on the fact that the company has the largest percentage of ?revenue under legacy contract left to reprice.?42"
.....
btw - for those who didn't get to the report's conclusion:
"Conclusion
"Thirty years ago, in order to restore the financial stability of the U.S. rail network, Congress gave railroads the authority to charge captive shippers higher rates than other shippers. Today, the goal of restoring the financial health of the rail industry has been achieved. Class I freight railroads have regained the pricing power they lacked in the 1980s, and are now some of the most highly profitable businesses in the U.S. economy. The railroads have high levels of capital investment and consistently produce strong results for their shareholders throughout the economic cycle. As Congress and the federal government look to the nation’s rail system to meet the United States’ future transportation needs, they also need to evaluate whether our country’s current rail policy needs to be changed to reflect this new
reality."
_______________________________________
..for pure unadulterated slow heavy freight going many hundreds of miles steel wheels on steel tracks already laid are cheap cheap cheap."
***************
But who really benefits from this? The American consumer? The farm-worker? Or some member of that 'top 1%'? When rising fuel costs make trucking prohibitively expensive, redirecting even more shipping onto those efficient trains, the improvement in railroad capacity utilization means the average cost per ton of shipping is actually reduced (despite their own rising fuel costs). Add more cars and fill them to capacity. Yet do rates go down? No! If anything, they go up. They go up as far as the monopoly railroad owners can get away with pushing them.
Who pays that inflated rate? Who pays for those windfall profits? They're paid for by struggling families just trying to feed their children nutritious meals. Single working mothers agonizing over how to make ends meet. The middleman's actual cost per unit has dropped, yet the costs to decent Americans everywhere goes up. Why? Who benefits? Once again, just as with all profits these days, it all goes to that nefarious 'one percent' (and in our case, his fat cat shareholder/partners). Profits to the middleman jump. Shareholders who haven't lifted a finger, or missed a meal, or even work on Wall Street, cheer. To our mogul, owning an American railroad is a right, not a privilege, which he will exploit every bit as much as he can. If he's allowed. He really is that greedy.
Consider this. This one mogul's railroad earns more in profit each year - profit to just him (and his shareholder cronies) - that's profit after paying all the costs to run the railroad - more profit - than all of the entire year's wages of all the farmhands on all of the farms in the entire states of Nebraska, Kansas, Iowa, and Missouri. Combined. That single 'one-percent' mogul sitting in an office in Omaha. Alone making more than all those farm-workers working all year on all those farms in all those states, actually out doing the work. And we wonder why the wealth gap is widening so far and so fast.
Now fair is fair. But in good times, instead of all the additional profits going to one person, shouldn't they be shared? If this were years ago, with dozens of railroads operating hither and yon, tracks being built, real risks being taken, letting some capitalists get away with predatory pricing might have been rationalized. But in these modern times the is competition long gone and the railroad is living large because of the government's generosity in giving them the very land their track is on. Given to them for what at the time was thought to be the 'public good'. Why? So for generations they could then exploit both their customers - decent farmers trying to get a crop to market - and just as bad, the American Consumer?
That railroad mogul is far, far wealthier, and increasing his wealth far faster than any of the hardworking Americans he serves. Government gave the fat cat and his railroad that license to steal - or at least price gouge. Can't they take it away?
_______________________________
Why would the government want to interfere? There's a powerful and beleaguered constituency that desperately needs help..that's why. Our most American of entrepreneurs, the American farmer, is getting shafted by that huge railroad monopoly yet again. These aren't our fathers' railroads, on the brink of failure and as likely as not to be operating in receivership. These are monopolies that are so profitable that they are being snapped up by the very wealthiest of our modern day moguls. They're the latest manifestation of the concentration of American wealth - unavoidable middlemen who using that privileged position to rob both the ever-struggling farmer and the strapped American consumer, taking their middleman's toll on a wide range of crops and consumer products. Politicians on both sides of the aisle can get behind this, but for different reasons of course.
Besides the farmer and consumer, who are the other victims (excuse me, 'constituents') in this exploitation? The monopoly's employees. More accurately, it's union employees. Who should be running this railroad, anyway? (Deja vu, anyone?) After all, government now has a proven track record as a successful investor for the benefit of the real 'stake-holders' vs those short-sighted fat cats who had merely economic claims on assets.
And as to those assets....used for freight right now, but coveted for their high speed passenger potential. Who would want them? We would, of course. As in the public (and union) 'we'. Just because private capital can't see its way clear to invest in a passenger rail system that nobody will use beyond a novelty ride doesn't mean its not the right thing for this country's future. And freight? If that's so good, let it help shoulder the costs of the passenger boondoggle with whatever scraps the price-control folks throw its way. Better that than to let railroads contribute even further to this country's growing 'wealth gap'. In any event, the assets won't go to waste. This has almost unlimited potential for infrastructure investment ramp-up. Besides, if things don't work out from a going-concern standpoint, we can always look to Amtrack to get us back on somebody's track.
Far-fetched, of course. But stranger things have happened.
In fact in an earlier post I made that point.http://boards.fool.com/this-is-a-long-running-theme-every-ti...
However we should at least be aware of this faint but persistent undertone, even if we assign low probability. Rockefeller's most recent report (notice he actually does cite Buffett's investment as 'evidence'):
OFFICE OF OVERSIGHT AND INVESTIGATIONS
MAJORITY STAFF
THE CURRENT FINANCIAL STATE OF THE CLASS I FREIGHT RAIL INDUSTRY
Staff Report for Chairman Rockefeller
September 15, 2010
Executive Summary
"Thirty years ago, Congress made sweeping changes to the laws regulating freight railroads to give the industry the opportunity to improve its finances and its ability to compete against other transportation modes. The Staggers Rail Act of 1980 allowed freight railroads to get rid of unprofitable lines and to consolidate their operations. The law also allowed the railroads to charge lower rates to their customers who operated in a competitive environment, and higher rates to customers who were ?captive? to one railroad carrier for transportation service.
"A review of the Class I railroads’ recent financial results shows that the Staggers Act’s goal of restoring financial stability to the U.S. rail system has been achieved. The restructuring of the industry that the Staggers Act set into motion thirty years ago has produced a so-called ?rail renaissance.? The four Class I railroads that today dominate the U.S. rail shipping market are achieving returns on revenue and operating ratios that rank them among the most profitable businesses in the U.S. economy.
"After struggling with declining market share and rates in the years after the Staggers Act became law, the railroads have now regained their pricing power and begun increasing railroads’ share of the freight transportation market. Unlike other transportation modes such as trucking, the railroads have been able to maintain their high profit margins even during the sustained economic downturn of 2008-10. Freight railroads have been assuring their investors the companies will take advantage of this ?robust pricing environment? and continue to push rate increases on their customers.
"While the freight railroads have been investing record amounts of their profits into much-needed capital projects, they have also doubled dividend payments to their shareholders and spent billions more dollars repurchasing their publicly-traded shares to boost the short-term value of their stocks. These large expenditures undermine the railroads’ argument that they still lack the income to invest in their long-term capital needs. In addition to their own capital investments, the railroads have recently received hundreds of millions of dollars from state governments and the federal government to support their network improvement activities.
"The companies’ strong financial performance has attracted billions of new investment dollars, including the unprecedented $34 billion dollar purchase of the BNSF railroad by Berkshire Hathaway, the operating company of the investor Warren Buffett. Buffett predicts that BNSF and the other large Class I railroads will show ?steady and certain growth? over the coming decades.
"In spite of the obvious financial strength of the Class I railroads, their industry association, the Association of American Railroads (AAR), continues to tell Congress and the Surface Transportation Board (STB) that the freight rail industry is not yet financially stable and is not yet capable of meeting its capital needs without the differential pricing powers the Staggers Act gave the railroads in 1980. As the rail industry continues to operate profitably and to aggressively exercise its pricing power, these claims need to be more carefully scrutinized...."
.......
from the body of the report:
"In November 2009, the investor Warren Buffett expressed his great confidence in the financial sustainability of the railroad industry by announcing that his company, Berkshire Hathaway, would purchase the 77.4% of the BNSF railroad his company did not already own. The deal was valued at approximately $34 billion, making it the largest ever acquisition in Berkshire Hathaway history.24
"In discussing his acquisition of BNSF, Buffett said he believed his investment in BNSF would deliver ?steady and certain growth? over the coming decades.25 He also predicted that the U.S. rail industry has a ?dynamic and profitable future? and that all four big freight railroads will ?do very well? in the coming decades because they are the only mode of freight transportation that will be able to keep up with the American economy’s increasing demand for consumer goods and raw materials.26
"Analysts suggest that as much as $18 billion poured into the rail industry in the wake of Mr. Buffett’s BNSF announcement.27
In his annual letter to Berkshire shareholders, Mr. Buffett noted the similarities between the capital-intensive railroad industry and the regulated electric utilities his company already owned. Like electric utilities, railroads ?provide fundamental services that are, and will remain, essential to the economic well-being of our customers, the communities we serve, and indeed the nation.? He predicted that Berkshire’s investment in BNSF would ?deliver significantly increased earnings over time, albeit at the cost of our investing many tens – yes, tens – of billions of dollars of incremental equity capital.? 28".....
"One of the recent structural changes that the railroad industry does not highlight is that since 2004, railroads have regained their ability to raise prices on their non-captive customers. One leading industry analyst, Wolfe Research, refers to this change as the industry’s ?pricing renaissance.?31 As Figure IV demonstrates, for a number of years after the Staggers Act was enacted, rail prices measured against inflation fell by an average of 3.6% a year. Since 2004, however, Class I railroads have been raising prices by an average of 5% a year above inflation.32 And even during the recent recession, while other modes of freight transportation have cut their rates, the Class I railroads have been able to push year-over-year price increases onto their customers.33....
"In recent conversations with their investors, the rail companies have discussed this increase in pricing power and their expectation that it will continue in the future. In a recent investor call, Union Pacific’s CEO, James Young, commented, ?[t]he pricing environment is stronger today than it’s been in a long time…I feel very good about the potential"
.............
http://commerce.senate.gov/public/?a=Files.Serve&File_id=154d36ff-af01-428d-80c0-14e32563b31d
.............
The probability of anything coming of this is so low - again as I've pointed out here in the past - that it hardly is worth us noticing, let alone discussing. But we should at least be aware that some folks who are less business-savvy than us here - but unfortunately perhaps with more congressional influence than we have - are talking about this subject behind our backs.
______________________
More:
"This new ?pricing power? has led to significant top-line revenue growth for Class I railroads and has resulted in the swelling profit margins described in the sections above. And according to Wolfe Research, because railroad rates are still below their inflation-adjusted 1980 levels, the freight rail carriers believe they will have a ?solid multi-year glide path to continued strong rail pricing hikes regardless of the economic environment.?34 A recent Morgan Stanley analysis of the rail industry notes that in the current environment of strong railroad pricing power, ?[r]ate negotiations continue to be difficult for shippers and competition remains minimal.?35
Figure
"In recent conversations with their investors, the rail companies have discussed this increase in pricing power and their expectation that it will continue in the future. In a recent investor call, Union Pacific’s CEO, James Young, commented, ?[t]he pricing environment is stronger today than it’s been in a long time…I feel very good about the potential in the pricing side going forward.?36 A CSX senior executive, Clarence Gooden, made a similar prediction in his company’s second-quarter 2010 investment call, when he said, ?[l]ooking forward, we continue to expect core price increases to exceed rail inflation.?37
"A number of factors seem to lie behind the railroads’ new ?robust pricing environment.?38 Post-Staggers Act industry consolidation and capacity reduction slowly eliminated the excess supply of rails and rail service, while the railroads invested in making their remaining operations more productive. One industry analyst estimates that the railroads moved from a position of ?material excess capacity? to ?tight capacity? in the late 1990s or early 2000s and that the pendulum has continued to swing further in the industry’s favor as demand for rail services continues to grow, particularly in the intermodal, coal, and grain markets.39
"Another factor that has contributed to the industry’s renewed pricing power over the past few years is its shift to short-term contracts with its customers. After the passage of the Staggers Act, during the time they had weak pricing power, the freight railroads entered into long-term contracts with many of their customers. As these so-called ?legacy contracts? are expiring, railroads are replacing them with shorter-term contracts—sometimes for terms as short as one year—at significantly higher rates. Shippers also report that railroads are more frequently offering unilateral ?take-it-or-leave-it? contracts to customers, a practice that bears more resemblance to setting a tariff rate than establishing a price through negotiation.40
"Analysts view these expiring legacy contracts as an important source of pricing gains over the next few years. According to Wolfe Research, ?[a]s these rail contracts are repriced over the next several years for the first time since the rails gained pricing power in 2004, we believe the rails will be recording material rate increases that could exceed 100% in some cases of very old and underpriced business. (e.g., ten-year old coal contracts).?41 Morgan Stanley recently rated Union Pacific as its top Class I rail stock based on the fact that the company has the largest percentage of ?revenue under legacy contract left to reprice.?42"
.....
btw - for those who didn't get to the report's conclusion:
"Conclusion
"Thirty years ago, in order to restore the financial stability of the U.S. rail network, Congress gave railroads the authority to charge captive shippers higher rates than other shippers. Today, the goal of restoring the financial health of the rail industry has been achieved. Class I freight railroads have regained the pricing power they lacked in the 1980s, and are now some of the most highly profitable businesses in the U.S. economy. The railroads have high levels of capital investment and consistently produce strong results for their shareholders throughout the economic cycle. As Congress and the federal government look to the nation’s rail system to meet the United States’ future transportation needs, they also need to evaluate whether our country’s current rail policy needs to be changed to reflect this new
reality."
_______________________________________
..for pure unadulterated slow heavy freight going many hundreds of miles steel wheels on steel tracks already laid are cheap cheap cheap."
***************
But who really benefits from this? The American consumer? The farm-worker? Or some member of that 'top 1%'? When rising fuel costs make trucking prohibitively expensive, redirecting even more shipping onto those efficient trains, the improvement in railroad capacity utilization means the average cost per ton of shipping is actually reduced (despite their own rising fuel costs). Add more cars and fill them to capacity. Yet do rates go down? No! If anything, they go up. They go up as far as the monopoly railroad owners can get away with pushing them.
Who pays that inflated rate? Who pays for those windfall profits? They're paid for by struggling families just trying to feed their children nutritious meals. Single working mothers agonizing over how to make ends meet. The middleman's actual cost per unit has dropped, yet the costs to decent Americans everywhere goes up. Why? Who benefits? Once again, just as with all profits these days, it all goes to that nefarious 'one percent' (and in our case, his fat cat shareholder/partners). Profits to the middleman jump. Shareholders who haven't lifted a finger, or missed a meal, or even work on Wall Street, cheer. To our mogul, owning an American railroad is a right, not a privilege, which he will exploit every bit as much as he can. If he's allowed. He really is that greedy.
Consider this. This one mogul's railroad earns more in profit each year - profit to just him (and his shareholder cronies) - that's profit after paying all the costs to run the railroad - more profit - than all of the entire year's wages of all the farmhands on all of the farms in the entire states of Nebraska, Kansas, Iowa, and Missouri. Combined. That single 'one-percent' mogul sitting in an office in Omaha. Alone making more than all those farm-workers working all year on all those farms in all those states, actually out doing the work. And we wonder why the wealth gap is widening so far and so fast.
Now fair is fair. But in good times, instead of all the additional profits going to one person, shouldn't they be shared? If this were years ago, with dozens of railroads operating hither and yon, tracks being built, real risks being taken, letting some capitalists get away with predatory pricing might have been rationalized. But in these modern times the is competition long gone and the railroad is living large because of the government's generosity in giving them the very land their track is on. Given to them for what at the time was thought to be the 'public good'. Why? So for generations they could then exploit both their customers - decent farmers trying to get a crop to market - and just as bad, the American Consumer?
That railroad mogul is far, far wealthier, and increasing his wealth far faster than any of the hardworking Americans he serves. Government gave the fat cat and his railroad that license to steal - or at least price gouge. Can't they take it away?
_______________________________
Why would the government want to interfere? There's a powerful and beleaguered constituency that desperately needs help..that's why. Our most American of entrepreneurs, the American farmer, is getting shafted by that huge railroad monopoly yet again. These aren't our fathers' railroads, on the brink of failure and as likely as not to be operating in receivership. These are monopolies that are so profitable that they are being snapped up by the very wealthiest of our modern day moguls. They're the latest manifestation of the concentration of American wealth - unavoidable middlemen who using that privileged position to rob both the ever-struggling farmer and the strapped American consumer, taking their middleman's toll on a wide range of crops and consumer products. Politicians on both sides of the aisle can get behind this, but for different reasons of course.
Besides the farmer and consumer, who are the other victims (excuse me, 'constituents') in this exploitation? The monopoly's employees. More accurately, it's union employees. Who should be running this railroad, anyway? (Deja vu, anyone?) After all, government now has a proven track record as a successful investor for the benefit of the real 'stake-holders' vs those short-sighted fat cats who had merely economic claims on assets.
And as to those assets....used for freight right now, but coveted for their high speed passenger potential. Who would want them? We would, of course. As in the public (and union) 'we'. Just because private capital can't see its way clear to invest in a passenger rail system that nobody will use beyond a novelty ride doesn't mean its not the right thing for this country's future. And freight? If that's so good, let it help shoulder the costs of the passenger boondoggle with whatever scraps the price-control folks throw its way. Better that than to let railroads contribute even further to this country's growing 'wealth gap'. In any event, the assets won't go to waste. This has almost unlimited potential for infrastructure investment ramp-up. Besides, if things don't work out from a going-concern standpoint, we can always look to Amtrack to get us back on somebody's track.
Far-fetched, of course. But stranger things have happened.
