Top of the News: President Obama’s plans to spend $13 billion as an initial step toward building high-speed rail in America is a welcome change after years of anti-rail politics and myths. America is far behind most developed nations in using rail as an essential component of its transportation system. In Europe, high-speed rail between certain city pairs has essentially put the airlines out of those routes — allowing them to focus on travel that plays more to their strengths. China is building high-speed rail, and Spain’s system is so popular it can’t expand fast enough. That’s a 21st century transportation system. America has been stuck with a 1965 system, only with more congestion and fewer trains.
Improving this has economic ramifications, from increasing productivity to helping deal with higher energy costs and easing the effects — including high economic costs — of climate change. The funding is too small, and the process risks spreading it too thinly. A better process would be to pick one or two city pairs — San Francisco to LA, or Seattle to Portland — and build the thing. Show Americans who don’t get out much how it works — and works better than air travel in certain situations.
Also, we don’t need futuristic stuff (although high-speed rail is hardly even that, given its proven record worldwide). The economy would benefit from upgrading capacity on freight railroads. This would not only allow for enhanced Amtrak service that is convenient, frequent and reliable — the Cascades and California’s Amtrak service show how this can work — but it would improve freight service. A better freight rail infrastructure will also be an essential if the U.S. is to say competitive and deal with higher oil prices in the future. All of this is sustainable, creates American jobs and has the potential to create American companies doing some of the work.
End of Week Bits: In the Ooops Dept., Federal Reserve board member Janet Yellen looks back with regret on the government’s decision to let Lehman Brothers fail, a decision that severely worsened the financial crisis. The president of the San Francisco Fed told a Bloomberg reporter Thursday, “I am told that Lehman had insufficient collateral” for the Fed to provide loans. The story goes on: She noted that she was “sitting in California” at the time of the Fed deliberations and “wasn’t involved in anything having to do with it.”
–In the Ouch Dept.: Slate has a fascinating, and frightening, interactive map on the worsening unemployment situation in the United States. Check out the progression from job gains to losses in Washington from January 2007 on — things get really nasty starting last October.
–Sung Won Sohn, the longtime chief economist for Norwest and Wells Fargo, now a professor, offers a powerful argument why — China’s trial balloon to the contrary — it would be a really bad idea to replace the dollar as reserve currency.
Today’s Econ Haiku:
Mickey D’s grinds up
Starbucks for the analysts
Want to super-size?
NEW FEATURE: Later today, look for the new Econ Haiku poll. Vote on your favorite of the week and write your own. Hey, the dismal science shouldn’t be so dismal.