California high-speed rail: Only 49 Little Hoovers left

by Russell's Rants

Originally published December 4, 2010

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Back in late 2008, Paul Krugman, the Nobel Prize-winning economic columnist for the New York Times, famously coined the phrase “50 Herbert Hoovers” to refer to “state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic.” (http://www.nytimes.com/2008/12/29/opinion/29krugman.html) His point was that the state governments would be counter-acting the efforts of the federal government’s stimulus programs by deceasing spending, slashing state programs and dampening demand. A prime example became New Jersey Governor Chris Christie’s decision to cancel the Hudson River tunnel and rail program, which was the largest public rail program in the nation at the time. (http://www.nytimes.com/2010/10/08/nyregion/08tunnel.html ).

This week, however, California’s two Democratic senators, Diane Feinstein and Barbara Boxer, wrote to the U.S. Secretary of Transportation, Ray LaHood, noting since “several states plan to cancel their high-speed rail projects,” the funds otherwise slated for those projects should be reallocated to “states that have made a strong financial commitment to these very important infrastructure projects,” including, of course, California. (http://boxer.senate.gov/en/press/120110.cfm) The California Senators pointed out that voters in this state approved over $9 billion in bonds for high-speed rail. And, in fact, last year California won an award of $2.25 billion under the American Recovery and Reinvestment Act (i.e., the stimulus program) for the California High-Speed Rail Authority, with another $901 million announced in October 2010.

In November 2008, Proposition 1A, which won with over 52% of the vote, allocated $9.95 billion, to the California High-Speed Rail Authority, subject to receipt of federal matching-funds. Nine billion of that amount was slated for construction of core segments of the rail line from San Francisco to Los Angeles, with the rest for improvements to local railroad systems and connecting localities to the mainline.

The California Senators were able to point to this state’s commitment to high-speed rail as a basis for redirecting westward unused stimulus dollars from cancelled programs in other states. Why let the funds go to waste?

In the 1930’s, Franklin Delano Roosevelt constantly battled those who advocated the classical economic response of Herbert Hoover to recession, which had been to cut spending and balance budgets in a time of deep recession and unemployment, the result being the Great Depression. Reallocation of federal stimulus dollars toward states actually interesting in spending on critical infrastructure projects is a good step toward reversing the Hooverite impulses of some states and governors.

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