Stidmatt

People often say anything increasing in price is a bubble, be it housing, education, anything really.

I was just watching a video talking about how so many South Koreans go to university, creating a bubble. South Korea is not even the highest level in the world, even though it is one of the highest, with 45% of their population holding a tertiary degree as of 2014. Only 3% higher than the United States. But we don’t see the reduction in population in other countries which are well educated.

I don’t education can be a bubble, because education generally increases the productivity of workers while also providing societal benefits. The problems in South Korea are due not to the existence of wealth, neither are they due to economic inequality, which ranks as one of the most equal countries in the world on this metric.

One metric where South Korea really struggles in in housing prices where the housing price to income ratio in 2024 was 20.7, ranking South Korea as one of the most expensive countries in the world, among other countries like Iran, Vietnam, Taiwan, and Argentina.

The other issue is that people in South Korea work significantly more hours per year than in other developed countries, over 300 hours more per year than the average American. Despite this, South Korea has a lower GDP per capita than many countries which work significantly fewer hours. Hence, their labor productivity is fairly low for an OECD member country. By dividing GDP per capita by average hours of per labor we get the following hourly productivity metrics:

• United States: $32
• Germany: $31
• Japan: $24
• South Korea: $17

The problem of an extremely high cost of living driven by housing costs being out of reach for most people leading to people delaying marriage and having a family. On top of this, South Koreans work far more hours than people in most other developed countries, so they aren’t seeing the fruits of their labor. Their labor productivity is also significantly lower than their OECD peers, which just goes to show that working more hours is not itself enough to make a better life. Productivity in South Korea is very low, probably as a result of an economy dominated by the Chaebols.

When the cost of housing is high and labor productivity is low, no wonder South Koreans are struggling.

If Palestinians had citizenship in a UN member state, Bobby would never have been assassinated.

If Bobby had lived, he would have won the primary and the presidency.

If Bobby had lived, South Vietnam might have lasted, which would have prevented the Invasion of Afghanistan.

If the Invasion of Afghanistan had not occurred, the Taliban would have never rose to power.

If the Taliban had never rose to power, the World Trade Center would still stand.

If Bobby had lived, George H.W. Bush would have not have become CIA director.

If George H.W. Bush had not become CIA director, he would not have become Vice President.

If George H.W. Bush had not become Vice President, he would have never become President.

If George H.W. Bush had not become President, George W. Bush would not have become the Governor of Texas.

If George W. Bush had not become the Governor of Texas, he would not have become President.

If George W. Bush had not become President, we would still live in a world of visa-free travel, the PATRIOT ACT would never have been passed, and a lot of things would be better.

If George W. Bush had not become President, the Overton Window would not have shifted to the point where the brute Donald Trump could have become President.

If Bobby had lived… the world would be a better place.

Visa reciprocity is practiced by many countries, but is it a desirable policy?

Let’s examine three scenarios:

1. Travel between democracies
2. Travel between a democracy and an authoritarian regime
3. Free trade vs tariffs

Travel between democracies

Here are our rules to generate our table:

• Implementing a visa on another democracy will reduce your utility, but also the utility of the nationality being taxed.
• If a visa is implemented on my nationality, my country is harmed. Lose one point.
• If my country implements a visa on a nationality from another democracy, my country is harmed. Lose one point.

	Open border	Visa-free	eVisa, no appointment	Visa with appointment	Travel ban
Open border	10,10	9,9	8,8	7,7	6,6
Visa-free	9,9	8,8	7,7	6,6	5,5
eVisa, no appointment	8,8	7,7	6,6	5,5	4,4
Visa with appointment	7,7	6,6	5,5	4,4	3,3
Travel ban	6,6	5,5	4,4	3,3	2,2

This table shows that for maximizing quality of government and economic well-being the mutual open border is the ideal situation for two democracies.

We also find that seeking out visa reciprocity by increasing travel restrictions will always harm your country. Visa reciprocity is not a desirable policy.

Our only equilibrium is open borders. So its not a surprise this has become the default.

Diplomacy is an effective tool at maximizing the well-being of your country.

Travel between a democracy and an authoritarian regime

There are two possible scenarios, depending on what the authoritarian regime values. This is going to assume the authoritarian regime wants more travel freedom for their spies in our first scenario.

Rules:

• The authoritarian regime will send spies and terrorists into the democracy. The democracy is harmed if nefarious actors from the authoritarian state travel to the democracy without a visa. Democracy gains one point and authoritarian loses one point with each more restrictive visa short of a travel ban on the authoritarian subjects.
• The authoritarian state benefits from restricting travel freedom on the democracy to prevent the spreading of ideas counter to their ideology. But a full travel ban prevents the flow of money so it is worse than an open border. The authoritarian state gains one point with higher visa restriction on democratic citizens while the democracy loses one point because democracies always benefit from more travel freedom for their citizens.
• Increase visas on democracy
  • Democracy is harmed because it reduces diplomatic influence and harms citizens
  • Authoritarian regime benefits because it reduces the infiltration of liberal ideas to their citizens
• Increase visas on dictatorship
  • Democracy benefits because it slows the flow of spies, terrorists, and assassins
  • Authoritarian regime is harmed because it slows the flows of spies, terrorists, and assassins

	Open border on democracy	Visa-free	eVisa, no appointment	Visa with appointment	Travel ban on democracy
Open border on dictatorship	0,5	-1,6	-2,7	-3,8	-4,0
Visa-free	1,4	0,5	-1,6	-2,7	-3,-1
eVisa, no appointment	2,3	1,4	0,5	-1,6	-2,-2
Visa with appointment	3,2	2,3	1,4	0,5	-1,-3
Travel ban on dictatorship	-1,-1	-2,-3	-3,-4	-4,-5	-5,-6

Democracy (row), authoritarian (column)

The equilibrium is for both countries to impose visas on each other.

In this scenario, visa reciprocity is again not a desirable policy for either party. The democracy wants more restrictions short of a travel ban on the authoritarian regime for safety reasons, while the authoritarian regime wants more restrictions short of a travel ban on the democracy for propaganda reasons. However, these two are at odds with each other. But both are going to move towards the visa policy for the other, leading to the most desirable possible outcome for themselves at the expense of the other.

So if the democracy chose to lighten visas on the authoritarian regime in order to attempt to indoctrinate the subjects of the dictatorship with the false illusion of capitalism (jk) then they are not going to see reciprocity in return. But the threat of spies is so great that the democracy will not do this.

However, what if the authoritarian regime makes a different calculation and wants less travel freedom for themselves in order to prevent their citizens from being indoctrinated with liberalism? This makes a revised rule set:

• Increased restrictions on democratic citizens
  • Democracy loses a point because the citizens are harmed.
  • Authoritarian regime gains a point to prevent infiltration of liberal ideology. They don’t want a full travel ban.
• Increased restrictions on authoritarian subjects
  • Democracy gains a point, but they don’t want a full travel ban.
  • Authoritarian regime gains a point to prevent their subjects from fleeing.

	Open border on democracy	Visa-free	eVisa, no appointment	Visa with appointment	Travel ban on democracy
Open border on dictatorship	0,0	-1,1	-2,2	-3,3	-4,-1
Visa-free	1,1	0,2	-1,3	-2,4	-3,-2
eVisa, no appointment	2,2	1,3	0,4	-1,5	-2,-3
Visa with appointment	3,3	2,4	1,5	0,6	-1,-4
Travel ban on dictatorship	-1,4	-2,5	-3,6	-4,7	-5,-5

Democracy (row), authoritarian (column)

The outcome does not change, the mutual visa is still where we end up, since both countries want to restrict travel from the other country, albeit for different reasons.

This demonstrates that mutual visa policy between a democracy and a dictatorship can occur for two distinct justifications from the perspective of the dictatorship, leading to the same outcome.

Free trade vs Tariffs

Rules:

• I benefit if my exports are tariff free
• I also benefit if my imports are tariff free

	Free trade on row	Tariff on row
Free trade on column	1,1	0,0
Tariff on column	0,0	-1,-1

This is in terms of pure economic maximization. Reciprocity does not make sense. So even if another country starts hitting you with tariffs, do not hit back.

Tariffs should only be used in cases like the Russian invasion of Ukraine.

Diplomacy is a more effective tool than slamming tariffs on each other.

Politics is about keys to power and interest groups. The more keys to power you hold, the more likely you will win. Your positions win or lose you constituencies, leading to whether you win or lose office.

This is how politics works in every country. It is such a powerful concept that Keys to the White House is based solely on this concept from political science, and that is the best prediction system for who will win the presidential election ever designed.

But calling it a prediction system, while true, undermines the true understanding of what the system does. It’s a manual on how to win the presidency.

When looking at the country as a whole, there are thousands of interest groups, but when you distill it down to individuals, every individual will belong to multiple interest groups. I am a tech worker, renter, college graduate, and an investor, among others. Every individual is complicated. Since focusing on thousands of interest groups is impossible, politicians focus on the key issues for each interest groups and find the common threads which will win you the most interest groups in order to win the presidency.

The largest interest groups then distill down to several major issues which make up the Keys to the White House.

The second part is that when trying to find a position which the majority of people will agree with, you don’t necessarily need to go to the center on an issue. What ends up happening is you get policies which have very few supporters overall.

Let’s take the issue of abortion for instance, and go through a political strategy which works, and one which does not. While around 50% of Americans considered themselves pro-life before Roe v Wade was overturned, only around 20% of Americans believed abortion should be restricted in all cases. Source

The issue is that the Republican party position is pretty clearly pushing for the most unpopular position of abortion being banned in all circumstances. Around 50% of Americans support abortion only under certain circumstances, and this is where abortion law is ending up in most states. The question then becomes, what circumstance? 93% of abortions occur during the first trimester, which is still legal in 35 states. The 7% of abortions performed after the first trimester are almost always done for health reasons, not because the parents do not want to keep the child. So allowing abortions in the first trimester and then only allowing for health reasons after that point will make almost no difference in the amount of abortions done. It’s most politically convenient to just let abortion always be legal under all circumstances.

This brings us to the issue of whether people actually understand the issue being discussed. Media has amplified extreme voices who might not be the most qualified in the room to fully understand the issue. This leaves experts and people who actually understand the topic frustrated as ideas which have been debunked get spread around. A big role for politicians and the news media is to center and raise up voices who actually know what they are talking about. Challenge people in their positions and ensure that people actually understand what is going on. I think if more people understood these basic facts about abortion it would not be the major political issue that it is.

Abortion is one of the simplest major issues there is once you bring in these basic facts.

When it comes to even more complex issues regarding economics and foreign policy, the understanding of the average voter drops even further than the fairly straight forward facts about abortion. How much does your average voter in Toledo, Ohio know about the history of Ukraine? Does your average voter in Macon, Georgia understand the mechanisms behind how the European Union and Schengen Area work? I don’t think so. When news media does not educate voters about the complexities of such issues, it becomes easy to understand why people can start to think closed borders are good and that Ukraine is just a rogue oblast of Russia.

These foreign policy decisions, while more complicated than abortion, are still simpler than understanding the complexities of managing monetary policy, or designing health care systems. Monetary policy only has a couple tools, but understanding how those decisions impact the rest of the economy takes an entire college degree to fully understand and derive yourself. That is fairly simple compared to the design of a national health care system where there are many procedures and tradeoffs to consider.

Then once we surrender to the ignorant on these issues we end up with policies which end up being unpopular. Americans wanted peace in Afghanistan, but are dissatisfied with the outcome. The victory of the terrorists was so severe that American approval ratings dropped globally. This is the fallacy of populism. If you try to seek what people think they want, that can often bring you bad and unpopular outcomes.

If only politics was as simple as always following opinion polls with no thought as to the consequences of one’s actions!

Sometimes there are issues which are popular and obviously won’t have major backlash, generally among social issues when expanding freedom. Support for gay marriage only increased after Obama announced his support, with no negative side effects. Expanding freedom like this is usually very straight forward. People get more equal access, and life improves. No one is harmed.

But foreign policy and economics are different. They can often feel far away or abstract to many voters, and it is much easier to misinform people about issues that they never directly interact with. Society usually has to deal with feedback loops from these policies.

Popular misunderstandings of complex issues often lead to poor outcomes, but it also gets further compounded by our election system. Most places in the United States use a partisan two round first past the post election system at the state level, with those state votes aggregated into the electoral college for the presidency using a complex formula. Neither the primaries nor the general election for president are direct or ranked. So when people are voting for their ballot and they are choosing their candidate they are not just thinking “who is my favorite” but are predicting “who do I think will win the election.” If people are rational, and understand the perspectives of most voters this is less of an issue but the problem gets massively amplified by pluralistic ignorance. Instead of voting for their favorite they are voting for the candidate they believe will most likely get the most swing voters, leading to an undesirable outcome.

If that wasn’t bad enough, many politicians fall prey to pluralistic ignorance as well, taking positions which are overall unpopular with most voters, thinking it will convince the mythical swing voter to vote for them. This is how we end up with policies which are not just undesirable, but also unpopular. 45% of Americans believe we should support Ukraine, while 30% of Americans oppose supporting Ukraine, 24% have no opinion. Only 47% of Republicans think we support Ukraine too much. With a 15 point lead, you would think that sending Ukraine weapons to ensure they win the war would be a slam dunk. But given a combination of pluralistic ignorance combined by a fetishization of median voter fallacy we end up with restricting use of weapons, slow deployments, and other critical problems which threaten the security of the entire world. A destabilized world is obviously an undesirable outcome.

The media then amplifies the minority viewpoint which supports Russia in the war, making them seem like a bigger stance then they do. Politicians hear this and then try to court an illusion of a median voter who does not exist.

This combination of politicians drifting away from voters and voters voting against their interest has led to only 21% of Americans approving of Democrats in Congress. Chuck Schumer is being called to resign, even moderate Democrats are pushing for AOC to primary him in 2028, if he doesn’t resign sooner. Biden dropped out of the election, Harris lost, and Trump won with very low approval ratings. The system is clearly broken.

Conclusion

I have outlined three main problems here leading to undesirable outcomes for our country.

• Pluralistic ignorance
• Median voter mythology
• First past the post

These three issues coalesce, leading us to most Americans thinking the country is doing poorly, but understanding they are doing well individually. We get undesirable policy outcomes under all governments as a result. This has concluded to Donald Trump winning a second term as president.

All of this stems from first past the post. Even if we kept the electoral college, which we should obviously abolish, implementing ranked voting and eliminating primaries in legislative, congressional, and gubernatorial elections would improve the quality of politicians we get overall. We will finally be able to vote our conscience without worrying how others will vote. Aiming for the median voter will eventually become a losing strategy as voters will vote instead for candidates who offer real solutions.

Pluralistic ignorance won’t need to be such a major issue in voting anymore. It will no longer matter how you think other people will vote, vote your conscience and fill out your ballot all the way. I cannot guarantee it will work all the time, but eventually voters will realize that strategic voting is no longer mandatory. I can guarantee it will work more frequently than the system we have today, which is clearly broken.

To be clear, the system is not clearly broken because my preferred candidate lost. The system is broken because even within months after an election a majority of Americans disapprove of both parties and the new president had no honeymoon phase.

Ranked voting will ensure that the two party system will break and voting for unpopular policies will guarantee you will bleed votes in the next election. This will force politicians to think through the consequences of their actions, aiming not just for popular policies but also popular outcomes, or they will lose their seat which right now given how far the Republican has drifted to the right is often not a consideration.

Even removing money from politics won’t solve this issue as long as politicians and voters continue to misperceive what people think. People will continue to vote for the candidates they like less in order to prevent the worst candidate from getting into office.

Ranked voting fixes all of these problems.

And now we have shown that once and for all that invasion is a legitimate path for territorial gain. Taiwan should prepare to be invaded, the arms race in China is now on.

Yes, it looks like Europe has failed to properly respond to Trump’s call for a ceasefire between Ukraine and Russia. Ukraine withdrew from the Kursk Oblast and it looks like Russia is going to de facto annex 20% of Ukraine in a ceasefire.

This is the wrong move. Russia has been weakened significantly through their isolation and if Ukraine had the support they needed to be able to strike Russian military assets in Russia, Ukraine will win. Russia’s economy is on the brink of collapse, and when it does collapse it will be unable to continue to rape women, murder children, and terrorize Ukrainians in every imaginable way. This cannot be met through meekness, it will only empower authoritarians around the world.

Russia was just on the brink of losing the war if Ukraine had the tools necessary to do it. Russia lost its war in Syria after 11 years and the rebels having limited foreign support. The fact that Russia could no longer support Assad with weapons clearly demonstrated that their ability to arm themselves is failing.

Ukraine has instead withdrawn from Kursk Oblast, and are seriously considering accepting Trump’s ceasefire proposal. Just like in 2014.
This decision tree I made last year clearly shows the consequences of the peace of each proposal to end the war. This is the path we took in 2014. It did not lead to peace.

Ukraine is not going to get NATO membership as long as Trump is president, and Russia is going to regroup and invade again after the sanctions have been lifted.

They will either do a full military invasion again or use election fraud like they have in Georgia to take over the Ukrainian government if we don’t support Ukraine to victory.

Every time Russia has started a war since the fall of the Soviet Union they have gained something. They gained Abkhazia and South Ossetia in 2008. They gained Crimea, Luhansk, and Donbas in 2014. If this ceasefire goes through this will be the largest acquisition of territory via military conquest since World War II.

Donald Trump is acting just like Chamberlain, just like Obama did in 2014. It does not bring peace, it only brings more war. It does not bring justice, only more tyranny.

If this goes through, the European Union and NATO will appear weak. Faith in our institutions will falter, and this will empower more politicians like Donald Trump and Vladimir Putin. It will empower the continued fighting in Israel by keeping radicals in power at the expense of not just everyone in the region but Jews and Muslims around the world.

This is not a solution to the problem of Russian authoritarianism. This does not solve anything, it just sets a dangerous precedent.

More importantly, with lackluster support from NATO, Ukraine has built its own military industrial complex which the United States has no control over. They are now successfully blowing up Russian military infrastructure inside of Russia which significantly weakens Russia’s ability to conquer Ukraine.

I think this will happen in a very similar manner to the Syrian civil war, slow then fast. Ukraine is positioned in a much better position post-war than Syria. Ukraine has a modern democratic constitution. They will not fall into a civil war after the war is won. Ukraine is right now destroying the infrastructure in Russia which supports Russians in their genocide in Ukraine. Once they reach the tipping point where Russia cannot support their troops with fresh ammo and food they will be able to push Russians out of Ukraine.

Ukraine surrendering in Kursk is the wrong move. They have the upper hand right now. Russia’s economy is weak and they are incapable of defending their airspace. Ukraine just needs more weapons and to be given sufficient support by NATO until they reclaim every square centimeter of their territory and then completely close the border with Russia.

Russia is on its back foot and looking for a way out. They are hoping Trump will give them that. European officials need to recognize Trump is acting under orders from Moscow, he does not have America’s best interest at heart, and is destroying our economy.

I do not wish for war in Ukraine and Russia, and as I demonstrate in my decision tree, the only realistic path to peace is for Ukraine to regain their territory and join NATO. This ceasefire does not do that.

This is the history of basically all of our anti-urbanist regulation in the US and Canada which makes it exorbitantly expensive to build, while funding the building of highways but making transit building regulations unfunded mandates. As soon as ordinary people realized the promise of cars were fake in San Francisco they built BART, and within a few years NEPA was formed to prevent future BART systems in the rest of the United States. Doug Ford’s fake populism is very normal for Anglo conservatives. If the people want to do anything except commute in their cars to work on a highway, literally make it illegal for them to do anything else. This is why turning to urbanist solutions which are not made de facto illegal is a losing battle, we need to actively fight anti-urbanist central planning head on to make it legal and affordable to build transit and bike lanes across the US and Canada. Doug Ford has proven every other path is a fantasy.

Written in response to https://www.youtube.com/watch?v=_FZDEehlaC4

I calculated great power status based on GDP per capita, population, military expenditure, GDP, and surface area. I calculated the percentile of those 5 variables and averaged them out to get a great power score of each country.

The top 10 countries are, along with marking the indicators they fall short of 90% on:

• The United States, 0.98
• Canada, 0.91, population
• China, 0.895, GDP per capita
• Australia, 0.89, population
• Brazil, 0.881, GDP per capita, military expenditure
• Russia, 0.88, GDP per capita
• Japan, 0.870, GDP per capita, surface area
• France, 0.866, Population, GDP per capita, surface area
• Germany, 0.866, surface area
• Mexico, 0.851, GDP per capita, military expenditure

7 of these countries have mutual protection pacts with the United States.

What gets more interesting is if we then filter out these countries which have left-wing leaders and we clearly get our answer that Macron is currently the standard bearer for NATO.

The US is led by Trump, Canada just got a new Prime Minister, Germany just elected a new right-wing chancellor, leaving France as the most powerful NATO country with a left-of-center prime minister who can speak for the alliance with credibility.

We cannot give up. We will win. Trump will not succeed in dividing us. We stand with our democratic allies around the world.

BRICS is basically two things:

1. An investment bank
2. A payment system which is an alternative to SWIFT

BRICS was founded in 2009 just after Russia invaded Georgia. The entire purpose of BRICS is to give Russia a way to move around European and American sanctions because of their military endeavors in Europe.

BRICS comprises 10 countries in the world along with 9 partners. But this is already misleading. Thailand and Brazil have mutual protection pacts with the United States, and Brazil trades more with the US and Europe then with China. So it’s an odd pairing.

India is an odd addition given their tumultuous relationship with China.

Malaysia is also an odd member given how they trade more with the US, Japan, and Taiwan than they do with China.

Most of these countries are fully in the global economy already, so BRICS gives them little to no economic benefit.

Comprising only 23% of the global economy and having a GDP per capita of only around $5100, BRICS is not a major world power if the free world were to flex our muscles.

One interesting argument is that India argued a reason they joined BRICS is because they were upset they were not invited to join the G7. Let’s analyze this.

Every country in the G7 is a rich democratic country with excellent scores on corruption from Transparency International, and top marks from the World Wide Governance Indicators.

When we filter out all countries in the world to find potential additions to the G7, we would want added members to also be trillion dollar economies, and have better democracy and corruption scores than our worst member, in order to keep the group as a serious forum for discussing issues with countries with the weight to have input in such a meeting. The only country with a trillion dollar economy and a larger GDP per capita than the poorest member of the G7 is Australia. If Australia joined, they would be the smallest economy in the group.

Every country with a larger population than the G7’s smallest member and a larger GDP per capita than our poorest member is already a member. There are no good candidates to add in to the G7.

So instead of forming a group which seems to be for helping Russia get around sanctions which are in place because of their invasions, India should work on cracking down on corruption, improving their economy, and then they will almost certainly be invited to join the G7.

All in all, BRICS is a money laundering front meant to counteract US sanctions on Russia all wrapped up in paper saying its anti-colonialism.

If Russia were to stop invading other countries so their economy did not need to be sanctioned BRICS would likely cease to exist.

When armchair urbanists talk about why expanding highways will never work to solve transit, which is true, they claim the reason is due to “Induced demand” and that the highway will simply fill up with more cars, making the point moot.

But they then claim that the solution to housing prices is to build more housing, which is true.

The problem is that in both of these cases, induced demand is at play, and at the same level.

Either induced demand is the reason why highway construction does not work and densifying cities is pointless in terms of affordability, or there is something else going on.

Now it is true that at the scale of transportation demand and the necessity to commute by car in most of the United States, the amount of people who want to travel between points A and B are larger than the total capacity of basically any highway, even the Katy freeway in Houston, Texas which still gets congested despite its ridiculous size.

Leaving armchair urbanism and entering the realm of peer-reviewed research, it becomes clear that a main reason for traffic is not “induced demand” but in fact lane changes. https://www.sciencedirect.com/science/article/abs/pii/S0378437123006155#:~:text=Such%20decisions%20can%20reduce%20the,to%20traffic%20congestion%20and%20accidents

This presents the real reason why two lane highways are often faster than wide interstate highways. As lane changes increase, people slow down to merge, making the people behind them slow down, leading to more and more congestion until the highway is turned to gridlock. It’s a combination of people driving below the speed limit and changing lanes which leads to congestion in actual scientific research. More lanes means more merging. More merging means slower speeds.

Not induced demand.

It is true that if every person in every car kept going at the same speed, there would be no traffic. But in reality, that is impossible.

Now, there are ways to reduce traffic. Fewer cars on the roads means fewer opportunities for people to change lanes. Fewer lane changes means less traffic.

So how do we end up with fewer cars on the road? There are several options, divided into supply side and demand side solutions.

Demand side solutions:

• Congestion charge. This will lead to fewer people choosing to drive. However, its impact on traffic is proportional to the availability of substitutes.
• Car tax. Fewer people driving means fewer cars on the road. However, like a congestion charge, its impact on traffic is proportional to the availability of substitutes.
• Substitution effect. Offer people substitutes to reduce the demand for the road which can include:
  • Living close to the office. As long as everyone in the house works in the same neighborhood and never changes jobs this can work great!
  • Bike trails. As long as everyone lives close enough to their offices that everyone can bike to work every day of the year this can work great!
  • Mass transit. It actually works.

Supply side solutions:

• Narrow the road. Fewer lanes, fewer merges, fewer problems.

Substitutes will be most functional as long as the substitute for driving is faster than driving. Once they reach equity they will stop making any significant impact on congestion. This means that if you invest in a substitute you should make sure it is better than the available alternatives. The better the substitute, the more demand it will attract.

The stronger argument

There is a much stronger argument against widening highways than misapplied basic economic theory.

Mixed traffic, highways or surface streets, carry far fewer people than any other mode of transportation.

https://transformative-mobility.org/wp-content/uploads/2021/09/Passenger-Capacity-of-different-Transport-Modes_light-bg.pdf

Induced demand is a weak argument. The better argument is a simple cost/benefit ratio.

According to Transformative Mobility and other sources, highways carry 10% of the capacity of light rail, and 3% of the capacity of heavy rail.

To estimate the cost of building a highway, let’s use a real life example. The Washington State Department of Transportation is adding lanes to I-405 south of Bellevue. This is a 40 mile long project and it is going to cost $705 million, or over $17 million per mile. This is on par with the costs found on this website, which estimates $20 million per mile, or $32 million per kilometer, for a new highway.

The West Seattle Link which is a 4 mile long project is estimated to cost around $1.5 billion or $275 million per mile. Transit Costs Project puts it even higher at $649.50 million per kilometer. New York is even worse with the subway East Side Access expected to cost almost $4 billion per kilometer.

The San Francisco Central Subway is expected to cost $708 million per kilometer.

This is insane.

Eric Goldwyn is the expert on this topic. Explore the Transit Costs Project for details.

Now when we keep capacity in perspective, the appropriate costs for the following modes would be the following, if we make the inane assumption that $20 million per mile for a new highway is reasonable.

At $20 million per mile for a new highway the cost for a new highway is $10,000 per mile per passenger per hour. If we keep that cost constant we get the following table for each of these modes.

Mode	Passengers per hour	Cost per kilometer	Cost per mile
Highway	2000	$32,000,000.00	$20,000,000.00
Regular bus	5000	$80,000,000.00	$50,000,000.00
BRT single lane	9000	$144,000,000.00	$90,000,000.00
Cyclists	12000	$192,000,000.00	$120,000,000.00
Pedestrians	15000	$240,000,000.00	$150,000,000.00
Light rail	20000	$320,000,000.00	$200,000,000.00
BRT double lane	43000	$688,000,000.00	$430,000,000.00
Heavy rail	60000	$960,000,000.00	$600,000,000.00
Suburban rail	90000	$1,440,000,000.00	$900,000,000.00

These are the costs per mile which keep the cost on par compared to the already inflated cost of building a highway. A simple rule of thumb (whether it is good or not) is if the cost is higher than this, its a bad deal, but if it is lower than this, it is a good deal.

But no matter how you look at it, American costs for some transit projects are too high to justify the costs from a homo economicus perspective.

This is the insane thing.

I don’t care about the money as an end to itself. But if we were able to cut the cost of building transit in half, we could then theoretically double the amount of transit we are building. It also makes the case of building transit much weaker as opposed to highway expansion. At prices like these, highway expansion is sometimes the more economical option for increasing transit modal share!

It is absolutely insane that even though light rail is capable of carrying ten times the number of people as a highway, it can cost 20 times the cost of building a new highway in our current regulatory environment.

Heavy rail like the subway carries 30x the capacity of a highway yet costs 125x the cost of building a new highway.

Transportation costs are too damn high and just shoveling more money into the system will not fix it.

We need to bring costs down by making construction more efficient.

The argument I wanted to make was to say that expanding highways is not economical because they are low capacity and that it would be more cost-effective to just build rail rather than a new highway.

This is true in many cases, even in the United States. There are good projects in the United States which fit in the benchmarks in the table above. Basically every heavy rail project outside of New York city fits under this benchmark. These include:

• The San Francisco Central Subway: $708 million per km
• Los Angeles Purple Phase 3: $857 million
• Los Angeles Regional Connector: $611 million
• Los Angeles Purple Phase 1: $479 million
• Vancouver Broadway: $450 million
• Boston Green Line extension: $315.3 million
• Washington Silver Line Phase 2: $151
• Miami Metrorail extension to MIA: $129 million

But there are also projects which do not meet the benchmark:

• Seattle projects
• New York City subway projects
• Honolulu HART

It’s really just these three cities which are blowing their budgets above the baseline for matching the cost of building a highway in terms of capacity, at least from projects on the Transit Costs Project Database.

One issue I keep thinking is if we changed how bidding worked. Open bidding to foreign contractors. Each contractor sets a bid and proposal which is then accepted by the transit agency and/or city based on its costs and benefits. The contractor then must deliver the project as proposed at the costs laid out. If they underestimate the costs, they cover the difference. If they overestimate the costs, they are unlikely to get the bid. This bidding process in a free market will drive prices down, encourage innovation, and force contractors to stick to their word. If they don’t survey properly, don’t get things done on time, or other issues, they need full liability for that. Private contractors need to take the liability or the construction needs to be done in house.

I think that will be very effective in driving costs down.

But the funny thing is that even with outrageous spending costs, the cost of building transit is still cheaper than widening a highway outside of Seattle, Honolulu, and New York.

This is a factual argument based on real-life data which should be able to convince basically any politician regardless of their political affiliation.

It’s very simple. We should stop building highways because they are just not worth the money. It is usually cheaper to build rail, even in the United States.

In 1968, after a hundred years of operation, Pennsylvania Railroad merged with New York Central and the New York, New Haven and Hartford railroads to form a monopoly of train service in the northeast and Midwest.

8 years later it was bankrupt, and Conrail was formed. Conrail had a near monopoly on train service in the Midwest east of Chicago and the northeast. It was massive. It started to turn a profit within ten years and remained a for-profit government corporation until it was privatized in 1997. As Conrail was public it continued to make money, reinvest the money in the railroad, and service continued to improve.

But then it was privatized and progress has basically stopped since then.

I do not believe the rate setting was the primary factor in how railroads went bankrupt. That’s nonsense. Neither do I believe the Nazis building the Autobahn caused Deutsche Bahn to fail. I think a large part of it is due to incentive structure. The incentive of every private company is to maximize profit for shareholders. This usually works fine because of competition. If Microsoft were to stop investing in Azure, their customers would move to Amazon and Google, and Microsoft would lose a tremendous amount of money. But the issue for railroads is that competition is inevitably limited. If I want to send a shipment between Chicago and Fort Wayne I have only one option. I don’t care who owns the track between Stockton and Reno, it’s irrelevant. Even though there are highways between these cities, roads are more expensive when both trains and roads are run at their optimal level, leading trains to overcharge compared to their actual cost of doing business. Another negative side effect is that if a private corporation has the choice between non-urgent maintenance or sending a dividend to a shareholder, the private corporation is always going to spend money on the dividend, leaving maintenance for a later date. We saw this across the country in the first century of American railroading. Americans also correctly see sending taxpayer money to subsidize profitable corporations as distasteful and inefficient. Railroads should be able to pay their standard maintenance from their profits, just like any other company.

This led to a gradual decline in railroads as the quality of the track declined, leading to the bankruptcy of railroads in the 1970s. We had a choice, nationalize, or lose railroads in the Northeast and Midwest. We chose to nationalize.

Conrail was a success story. It turned unprofitable companies which would not invest enough into maintenance into a successful and profitable corporation. Then the federal government sold it off. There has been no expansion of passenger rail in the Midwest on former Conrail tracks since then. https://en.wikipedia.org/wiki/List_of_Amtrak_routes#Midwest

Neither has privatization been a boon for railroading. In 2002 around 2.3 trillion tonne-kilometers of freight were transported across the United States, and 2.1 trillion tonne-kilometers were transported in 2023. Basically unchanged.

If that’s not enough, America doesn’t even lead the world in terms of freight tons carried once we control for area. https://docs.google.com/spreadsheets/d/1UjzVlCG2pOCNeuvcT0xEUIjKktV3bt_h7TC6IHKSXMc/edit?usp=sharing

But we do seriously lag behind our peers when it comes to passenger rail.

That’s the reality of the privatization of public utilities.

What if

Now let’s imagine if instead of privatizing Conrail we had instead kept it in public ownership and used the profits to reinvest into itself to the present day.

Images are from Wikipedia

Here is an incomplete list of routes we could have added on just from the tracks controlled by Conrail:

• Cincinnati – Dayton – Columbus – Cleveland
• Chicago – Fort Wayne
• St. Louis – Indianapolis – Dayton – Columbus – Pittsburgh – Philadelphia
• Rochester – Montreal
• Buffalo – Binghampton – New York/Philadelphia
• Detroit – Toledo – Dayton – Cincinnati
• New York – Chicago via northern Pennsylvania, cutting out hours from Lake Shore Limited.

And many many more.

When I took the train to the west coast in November I noticed the track which was former Conrail track was better maintained than the track leading west out of Chicago. The train was faster, and it was clearly in better shape than the track which had never been public.

Not only that, but if we had worked on electrifying the track, straightening, and generally improving the track further it would have benefited not just passenger rail but also freight, as opposed to the stagnation of American freight we have seen for the last 25 years. Increasing capacity while better safety standards for railroads in this most populous region of the country would be significantly beneficial.

It would reduce federal subsidies to private railroads, giving them the option of either being profitable and paying their own maintenance, or being bought out by Conrail.

This would have improved railroading for the entire country and Conrail should never have been sold off.