Obama’s Favorite Hobbies: Cronyism and Wasting Taxpayer Money
Suppose you’ve got a project for which commercial banks just won’t give you a loan because they realize that you have a poor business model and your concept isn’t likely to work. Suppose you have some political connections. Suppose the federal government is foolish enough to get your back instead. Now suppose you connect the dots.
Unfortunately, this is not a hypothetical. It’s already in the works. And the temptation for people to ask their cronies in Washington for cash is rather abounding in this country. Of course, that means taxpayers will likely be held accountable for the federal government’s follies (think Solyndra and the long list of other green energy companies that have failed — yeah, we had all their backs.)
The project in question is a high-speed train called the Xpress West. One of the project’s developers, Anthony Marnell III, has made political contributions to Sen. Harry Reid (D-NV). He’s not alone in that:
Federal records show the elder Marnell has donated at least $15,000 to political committees connected to Reid since 2010, including a $5,000 donation in May to the senator’s Searchlight Leadership Fund.
According to federal records, the company has spent at least $270,000 since 2006 lobbying at the House, Senate and federal offices.
Other investors include North Dakota businessman Gary Tharaldson, who donated $10,000 to a Reid committee in March, and transportation expert Tom Stone, who organized DesertXpress with partner Mack in 2005.
There are several problems with this train. First it’s kind of unnecessary in general:
[It would] take tourists two-thirds of the way from Southern California to Las Vegas. Yes, “two-thirds of the way.” The train would operate from Victorville, requiring people to drive more than 75 miles from Anaheim or Los Angeles to more than 100 miles from southern Orange County or the San Fernando Valley to get to the train. This would make the train unique. None other in the world requires driving such a long distance to complete such a short train trip.
It won’t solve the problem it’s intended to fix (nightmarish traffic delays), because the problem doesn’t exist in the first place — even on Labor Day weekend the maximum delay was only 60 minutes, less time than traveling to the train station.
On top of that, the ridership has been vastly overestimated, a common occurrence that appears “consistent with international research showing that projects tend to wildly inflate ridership and revenue figures to obtain project approval.”
The most glaring of problems with this train is that it’s going to be financed by we the taxpayers, and the prospects of our reimbursement are rather grim:
The train would also be unique in requiring nearly all its financing from taxpayers. The project requires a loan from federal taxpayers of more than $5 billion, which is to be repaid out of passenger fares. The project is not sufficiently creditworthy to justify conventional, commercial finance.
According to a Reason Foundation report, there is a “strong probability that the train will not earn enough money to repay taxpayers.”
So the ball is in your court, federal government. Are you going to gamble again with our money? Rest assured, we won’t be turning a blind eye.