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Detroit’s woes (woe unto itself)

By November 20, 2008current affairs

Had lunch yesterday with my friend Brian Oberkirch, and we talked about the shifting economic sands. Today he passed along this great article by Umair Haque called Detroit’s 6 Mistakes and How Not to Make Them. What’s the first big mistake?

“Shifting costs onto others, while striving to internalize benefits. Detroit chose lobbying, marketing wars, and low-cost hardball – to always and everywhere try to socialize costs and privatize benefits. Never was this truer than Detroit’s lobbying against public transport throughout the 20th century. Why does public transport in the States suck? Because Detroit’s lobbying machine doesn’t.”

I never looked at it that way. Did Detroit really lobby against public transportation? I guess I wouldn’t be surprised. Markets are supposed to be efficient, but what that economic bromide really means is that markets are more efficient if you hire lobbyists.


P.S. If you appreciate my observations, you might want to join my inner circle.

6 Comments

  • Jean Haddad says:

    Street Cars will be always a profitable busines and less expensive for individuals than to buy, drive and maintain a car. When we try to do this comparison, are we taking account the investments in streets, streets widening (relocating services), roads, mayor roads, express ways, etc. in one hand and individual parking spots, home garages, commercial parking lots, public parking lots, etc. in the other ?

    The reality is that in no case we have heard about increasing Public Transportation Services as a way for American Families to reduce expenses, risk, stress, carbon emisions, savings on gas, live a more human life, etc. or a mayor investment (how much was given to rescue GM and Chrysler so far ?) develop more efficient and reliable buses, trolies, metro, trains, etc.

  • Owen Courreges says:

    The National City Lines conspiracy was not responsible for the death of streetcars. In many cases, it may have accellerated the process to the benefit of GM and Firestone, but that’s about all it accomplished.

    To begin with, streetcars were in decline long before National City Lines began buying up local transit companies. In most cities, public transit had become unprofitable around WWI. It was so bad that jitney cars — essentially cheap cars running set routes — were beating streetcars financially in many cities (as a consequence, most cities banned jitneys to protect their transit companies). Buses were a more cost-effective way of transporting people; they also lowered road repair costs and allowed for more flexibility vis-a-vis route changes.

    National City Lines also didn’t buy up transit companies in many cities, including New Orleans. Accordingly, New Orleans streetcars dwindled without the benefit of GM’s meddling. Even in cities with municipally-owned transit companies in remote locations, like Honolulou, eliminated streetcar service during the same time period.

    The old chestnut about how the National City Lines conspiracy killed streetcars is a clever yarn, but it isn’t true. What killed streetcars was the high cost of service versus buses.

  • Ernie –

    There’s a parallel story of the demise of railroad rights of way, where companies were set up to acquire abandoned trackage and then to resell them to a hodgepodge of local owners, making it impossible to reacquire contiguous rail corridors.

    I don’t have the citation for this (and finding the right search terms is hard).

  • A.J. Levy says:

    Ernie,

    The story is that it was GM trying to sell busses and Firestone (I believe) trying to sell tires that causes the demise of so many streetcar lines here in New Orleans. (Both busses and tires wear out. Streetcars last longer and don’t use tires.)

    Here are the first couple of paragraphs of an article this month in the National Catholic Reporter NCRCafe.org (https://ncrcafe.org/node/1821):

    “Our automobile dominant society did not become that way by open market forces. The General Motors Corporation led a conspiracy to make this happen. GM set up a shell company, the National City Lines that endeavored to convert cities’ transit systems from electricity driven street cars to petroleum driven vehicles and give the conspiring companies an exclusive market over their competition in the gasoline, tire and bus business.

    “An excerpt from an October 2, 1946 letter of the Department of Justice to J. Edgar Hoover, director of the Federal Bureau of Investigations, describes the illegal activity:…”

    A google searach on ___ gm busses tires trolleys ____ turned up this and additional articles.

    A.J.

  • Rebunga says:

    Yes, Indeed. And when the “kindler, gentler and more community and environmentally focused focused” US automakers are finally destroyed by the profit driven and foreign-owned automakers who still employ non-union labor in the S.E. United States, then, it is prophesized that a single Terrakian named “Taarna” shall appear on a strange winged creature to exact a modicum of vengenace.

    https://www.youtube.com/watch?v=6pIW5gz8WUU

  • baltassoc says:

    In the first half of the 20th Century, Baltimore had a huge network of cable cars and trolleys — the largest network on the east coast. You could get anywhere in the city cheeply and efficiently. Then GM convinced the city/state to rip them all out and replace them with … busses. Baltimore now has a pathetic public transport system.

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