Before providing a detailed response to Conrad deFiebre and Minnesota 2020’s critique of a column I wrote for the Pioneer Press differentiating the economic concept of “public good” versus “private benefit,” a general observation.

When you read Mr. deFiebre’s commentary, which I fisk below, notice the deep anti-intellectual tone of his argument. He laments my “philosophical fantasy,” sarcastically dismisses “Deep Thoughts” and derides “cogitation.” Doing so, deFiebre makes my point from the column. He isn’t saying I misinterpreted the difference between public good and private benefit – a centuries old economic concept familiar to anyone who’s ever taken freshman economics. No, without any economic justification, he’s dismissing the concept as non-existent or irrelevant and certainly not worthy of consideration by policymakers when spending billions of tax dollars.

Apparently, I am suffering from a delusion that “think tanks” like Minnesota 2020 and The Minnesota Free Market Institute are suppose to think, to apply accepted economic thought to current policy and provide insight in to how policymakers might approach issues. I erroneously assume that a think tank should think, not simply opine. Mr. deFiebre’s piece would open whole new vistas of discourse by freeing debate from the constraints reality.

Let the fisking begin.

Over at the Minnesota Free Market Institute, nee Fact Slayers League, they’ve finally come up with a semi-plausible defense of the $1.6 billion in property taxes Minnesotans shell out each year to build and maintain local roads and bridges.

If one is going to lead with an insult, one should at least try to do so with a little panache. As my hero Cyrano might say, “nee Fact Salyers Leagure? Is that all?” Had Mr. deFiebre but a little wit or letters he might have said, “Westover’s Buridan’s Ass argument starves between economic theory and partisan politics.” Instead he calls it “semi-plausible,” which like the phrase “somewhat unique” forgets that some English words represent binary concepts and cannot be modified. Better had he taken a cue from G.K. Chesterton when he described an inadequate argument by Oscar Wilde as “like the Venus deMilo; what there is of it is magnificent.”

Unfortunately, like economic theory, such literary flourish is hidden in books. It is difficult to absorb by Googling, especially when one lacks the understanding to select appropriate search terms. And in this piece Mr. deFiebre demonstrates the understanding, literary flourish and wit of one who might aspire to author verification codes for Internet comment submissions.

That not-inconsiderable sum is equal to all the state and federal road user fees we pay through gasoline and vehicle taxes. Property taxes, of course, are not based on the extent to which property owners use the roads. But Craig Westover of the MFMI assures us that this is one government subsidy that is all well and good.

A point of clarification, which Mr. deFiebre missed in my column – there is a distinction between taxes and the legitimate government functions they finance and the concept of “subsidy.” Taxes are legitimately levied to finance necessary roads and bridges. A “subsidy”  occurs when taxes levied on all are used to build unnecessary infrastructure that benefits only a few. A road “subsidy” is the exception not the rule. An example of a road subsidy is any of myriad federally earmarked road projects in the Eighth District secured by Rep. Jim Oberstar that are not on the state priority list but require shifting funds to non-essential projects in order to capture the federal earmark.

Mr. deFiebre goes on to quote my argument that –

“roads provide benefit even to those who do not drive: Roads are the means by which emergency vehicles (police, fire and medical) get to any person’s home. Every item in any person’s home from material possessions to basic needs like food and clothing has at one time traveled some distance via a truck over a road. By contrast, light rail and bus service benefits only those who ride them. LRT and bus riders receive a private benefit from ridership; non-riders receive no benefits.”

I quote Mr. Westover at length so we can examine his argument in detail. Also, to document for posterity a rare right-wing acknowledgement that there really are public interests worthy of support with our taxes.

Another plea for precision – not public “interests” but public “goods.” There are lots of public interests, but not all of which require a government response. Government response is constitutionally limited; rule of law requires a consistency to government actions and interventions. Government intervention ought to be based on specific criteria, not simple an “interest” put forth by Mr. deFiebre as representing the public. But there I go again philosophizing, thinking and cogitating. I forgot for a moment that a debate with Mr. deFiebre is not constrained by reality. He goes on –

Let’s start with a look at the public-private dichotomy Westover posits — but which he also notes in a St. Paul Pioneer Press column is “admittedly not always a simple distinction.” He’s right that streets and roads provide a public benefit in access to emergency services and consumer goods. But the vast majority of driving – car trips to work or play or shopping that inflict most of the wear and tear on pavement and create the most congestion – is as strictly private as the way he characterizes transit rides.

On the other hand, is there really no public benefit from transit? If the movement of a frozen hamburger patty by over-the-road truck to the local McDonald’s constitutes a public good, why isn’t the bus commute of the worker who flips the patty the same thing? Does only inanimate merchandise being transported for someone’s private profit and someone else’s private enjoyment serve the public interest? And what about the light-rail ride to work of the 911 dispatcher who sends the cops, firefighters or paramedics to your house in an emergency?

Here Mr. deFiebre confuses the public good, the highway infrastructure, with the outcome of some specific economic activity. The public good is the road, not someone’s choice to transport a specific hamburger patty across it. That patty is a private benefit, which I pay for when I consume the hamburger. I pay all the costs of the private transportation of that hamburger, and I pay the salary of the worker who flips the burger, in the price of the burger. A person choosing not to eat a burger bears none of those private benefit costs. How the burger flipper chooses to get to work is his or her personal decision – a private benefit.

The same logic applies to the 911 dispatcher. I pay legitimate taxes to pay the dispatcher’s salary for which I receive a benefit; the dispatcher chooses the private benefits on which he or she spends money, including choice of transportation (as do hookers and bank robbers, which, if Mr. deFiebre were into thinking might raise interesting questions about a moral justification of either roads or rail). Mr. deFiebre goes on –

In reality, as opposed to Westover’s philosophical fantasy, transit provides these and many other public benefits, spurring sustainable compact land development and reducing arterial congestion (by 9 percent in the Twin Cities, according to the Texas Transportation Institute), tailpipe pollution and the need for land-gobbling parking. And it does it with less than one-fifth of the subsidy from non-direct users that Minnesota provides to motorways.

A point to note is the term “benefit” as Mr. deFiebre uses it. Public “benefit” can only be measured in terms of public “cost.” To put the issue in personal terms, there are certainly benefits to driving a Lexus I don’t enjoy driving my Chevy Cavalier; however in aggregate, whatever benefits I might derive by driving a Lexus are overshadowed by costs that would diminish greatly other parts of my life. The net “benefit” of my driving a Lexus is negative (unless of course someone else were paying for it).

Opining, Mr. deFiebre looks only at the seen benefits of LRT; critically thinking about LRT requires understanding the unseen ramifications and calculating the total costs to society of LRT. A net aggregate economic loss to society is not a benefit to society even when one segment of that society derives visible benefit at the unseen expense of others.

Also note that Mr. deFiebre cites as benefits outcomes that he regards as favorable, not necessarily those that people would freely choose if transportation policy were based not on social engineering but enhancing mobility – the ability of individuals to get from where they are to where they want to go, to do what they want to do, when they want to do it. Rather than deal with the questions of congestion relief (no, LRT doesn’t provide it) and environmental issues (no, LRT doesn’t reduce pollution, it actually increases it) I’ll link to a Policy Memo by MnFMI president David Strom on congestion and another by the Cato Institute’s Randal O’Toole on the impact of LRT of energy use and greenhouse gas emissions.

Mr. deFiebre then quotes a lengthy section of my column, which he might have summarized as “accepted public good theory.” I will so summarize and skip right to the last graph Mr. deFiebre quotes and then to his comments.

“The policy distinction boils down to this: If a taxi ride from point A to point B is a private benefit for which an individual pays a market fare, why is a bus or light-rail ride from point A to point B a ‘public good’ subsidized with tax dollars?”
There are a few problems with all this cogitation. For one thing, taxi fares are set by local governments, not pure market forces, and cabs wouldn’t get you very far, very comfortably without subsidized streets to drive on. And if motorways are a classic public benefit, why do they exclude people who lack the steep prices of buying, fueling, maintaining and insuring a car?

Rather than denigrate cogitation, Mr. deFiebre out to spend a little time engaging in it. I promise; he won’t go blind by such self-abuse. Mr. deFiebre is so accustomed to the policies of the People’s Republic of Minneapolis that he doesn’t realize there is no a priori reason (nor legitimate authority) for government to regulate taxi fees. In Denver, host city to the Democratic National Convention, taxi fees are set by individual companies and delegates could grab a cab for as low as a $1.80 entry fee and $1.80 a mile compared to a government regulated $2.50 entry fee in Minneapolis and $2.50 a mile fare, according to the Hill. On top of that, the Minneapolis City Council proposed a $1 surcharge during the GOP convention (price gouging?).

The benefit of roads (again Mr. deFiebre confuses public “benefit” with the economic concept “public good”) doesn’t exclude people simply because they cannot afford cars. They still benefit from access to emergency service. They still benefit from delivery of products. They can access the roads through ride-sharing, taxis (when absolutely necessary), bikes and even bus service, which requires roads to operate. Important to note is that when they need it, people can use the road system to get from where they are to where they want to go, to do what they want to do when they want to do it.

Flipping the question, if LRT is a public good, why does it exclude the weekend warrior who wants to pick up a sheet of 4 x 8 plywood at Menards and the single mom who in the morning has to get one kid to daycare, one kid to elementary school and get to work when none of those locations lie along a light rail line? Neither the homeowner trying to save big money nor the single mom can do what he or she needs to do when it needs to done.

If the transportation policy objective is providing mobility to low-income people, there are better ways to achieve that than a public subsidy for suburban workers to get downtown and Viking and Twins fans to get to the Metrodome. Again, it’s beyond the scope of this response, but even a welfare program like transportation vouchers for low-income families, which would let them decide what methods of transportation best met their needs, would be more cost-effective than spending billions to build a rail-based mass transportation system that will forever run at an operating deficit.

Here’s the real story: Virtually all modes of transportation, from the Erie Canal to transcontinental railroads to streets and highways to air travel to modern transit, have been heavily subsidized by government, for the eminently valid reason that they promote economic prosperity.
One exception to this rule was the original urban rail transit, streetcar and interurban lines operated as regulated private enterprises for profit. Not only did they receive no subsidies, they often subsidized street paving, either directly or by being forced to dig up and reset rails at their own expense as part of city paving projects. Finally, these free-market stalwarts were driven out of business by competition from private cars on government-subsidized streets and highways.

Again, Mr. deFiebre is very sloppy in confusing legitimate tax expenditures on infrastructure with subsidies for private benefit. The simple fact is, current LRT policy not only pays for building the systems (which Mr. deFiebre would equate to a “subsidy” roads), but current LRT policy also subsidizes operational costs for the private benefit of a ride. That is the equivalent of the state paying  the operational costs of your car every time you enjoyed the private benefit of driving it.

Mr. deFiebre seems astonished that a “right-winger” could acknowledge a legitimate need for taxes; I am positively astonished that Mr. deFiebre would admiringly refer to Carl Pohlad as a “free-market stalwart” or admit (however erroneous his example) that government drives private business out of existence. He concludes  –

Public largesse to the private car won’t be reversed anytime soon, and I’m not advocating that it should be. But let’s not let auto-centric blinders and silly philosophical arguments delegitimize government’s important duty to offer basic mobility to everyone at an affordable price.

Couple of closing points: First, government cannot offer anything to anyone until it takes wealth from someone else. That action involves trade-offs. Wealth expended on LRT is wealth that the individual who created it can’t allocate elsewhere in the economy; taxes collected and spent on LRT is money the state and cities cannot spend providing other services. The question is – are the trade-offs caused by LRT worth it?

Second, economic realities are not “silly philosophical arguments.” Argument by intimidation is not argument at all, and Mr. deFiebre’s piece is not intended to further discussion but to end it. His position is that only a silly person would question light rail, and to question light rail is to be against the poor.

In fact, to question the obvious economics of perpetually building and operating mass transit at a loss is the only rationale thing to do. That kind of drain on the economy can only hurt those that Mr. deFiebre says he wants to help. There are much better ways to increase mobility for well-to-do and low-income alike than the thoughtless policies advocated by Mr. deFiebre.

In short, one cannot accuse Mr. deFiebre of “slaying the truth”; for Mr. deFiebre the truth is an irrelevant concept.