Democratic Party presidential candidate Joseph Biden’s infrastructure plan will require high levels of subsidization and result in few sustained industries. Biden is calling for a transformational investment in our country’s infrastructure costing $1.3 trillion over ten years. According to Biden’s website,
“Biden will invest in expanded public transit systems, giving more Americans an affordable, efficient way to get around without their cars. He will help state and local governments plan for the widespread adoption of electric cars, and will coordinate and invest in the construction of a national electric-vehicle charging network to power them. Biden will also push to build a national high-speed rail network; to accelerate the development of low-carbon aviation and shipping technology;”
From the above, it is unclear that Candidate Biden has heard of the coronavirus. People are afraid to use public transit and are driving cars instead. Purchases of electric vehicles are down as low oil prices spur purchases of gasoline and diesel vehicles. And high-speed rail networks are expensive and highly subsidized because their costs are not supported by their ridership. One needs only to ask California about its high-speed rail project.
Public Transit
Public transportation has been in a state of crisis since the coronavirus pandemic began. Ridership in major cities in the United States, Europe, and China is down by 50 to 90 percent from pre-crisis levels. The preference for cars over public transit can be seen in Wuhan, China, in dramatic fashion where the pandemic began—car traffic doubled after its 76-day lockdown.
Revenues from local taxes used to subsidize transit systems in the United States, such as sales taxes, are down and transit systems are running out of money. Despite the $25 billion in emergency aid that the federal government allocated to help cover operational losses, getting riders back onto buses and subways will continue to be an uphill battle. Historically, it has been during times of crisis that transit agencies have deferred maintenance, cut service, and canceled expansion projects.
The WMATA system in the Washington DC area closed 19 stations in the wake of the coronavirus, and drastically reduced service to limit worker exposure. Only about 130,000 to 150,000 trips are occurring a day on Metrorail and bus combined, as opposed to about 980,000 trips taken on an average weekday in February. Most riders now are hospital staff, essential government workers, and grocery and pharmacy employees.
The Centers for Disease Control and Prevention recommended riders use every other row of seats to maintain social distancing, board buses from the rear, and pay attention to markers on the floor to try to space outriders. These recommendations will lower ridership, which will continue in the potential wake of a second wave of the coronavirus.
On top of the coronavirus safety issues, gasoline prices are at a five-year low, which encourages more driving of gasoline vehicles and travelers are indicating that they have or will buy cars because of the pandemic.
Electric Vehicles vs. Gasoline Vehicles
In 2019, electric vehicle sales made up only about 2 percent of global sales. In 2018, fewer than 400,000 electric vehicles were sold in the United States despite the market supporting a 17-million-plus sales level for about five years—almost all of it gasoline-powered.
Electric vehicles have been around for more than a decade, which is enough time for a market to develop for a new type of vehicle. That electric vehicle sales growth has been weak relative to expectations indicates that people fundamentally do not want to purchase them. In the United States, people want SUVs and pickups. According to IHS Markit, SUVs made up 47.4 percent of U.S. vehicle sales in 2019, while sedans made up 22.1 percent. By 2025, the company expects light trucks and SUVs combined with vans to make up 78 percent of sales—up from 72 percent now.
Electric vehicles have been and continue to be supported by federal and state incentives, which is why the market exists. But that market is mainly for elites who can buy Teslas, BMWs, and other high-priced electric vehicles, and most are in urban areas. The federal tax credits consist of $7,500 per vehicle and 30 percent for refueling stations. And state rebates include New Jersey’s rebate of up to $5,000 per car, California’s rebate of up to $7,000 per car, and Oregon’s rebate of $2,500 per car. Even so, consumers are wary of the poor range of electric vehicles, the lack of refueling stations, the long time to refuel, and the high cost and loss of truck space for batteries. In California, which provides the strongest incentives for purchasing electric vehicles, electric vehicle sales declined in 2019, coinciding with the reduction in tax credits available to high-income individuals.
High-Speed Rail
During the Obama Administration, Congress appropriated $10.5 billion for high-speed rail at President Obama’s urging. Florida and California were to kick-off projects for bullet trains with federal help. Thankfully, Rick Scott, then Governor of Florida killed the Tampa-to-Orlando-to-Miami train and sent the seed money—$2.4 billion—back to Washington, which left the San Francisco-to-Los Angeles line as the only new bullet-train project.
California’s high-speed rail system has barely begun construction and only a small portion is expected to become operational in the future. The initial project was slated to cost $80.3 billion. It is expected that the train will only run in California’s Central Valley, from Merced in the north, 171 miles to Bakersfield in the south and then bus service will complete the connection to San Francisco and Los Angeles, making the 800-mile trip slower than flying or driving the I-5.
California Governor Gavin Newsom in his first state-of-the-state address in February 2019 said, “The project, as currently planned, would cost too much and take too long. There’s been too little oversight and not enough transparency. Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to LA.”
Over the span of 25 years, California’s $80 billion high-speed rail project has devolved from a pork barrel bonanza to a monument to an old politician’s ego—and it still has yet to carry a single passenger. Rail is simply not economic in the United States, but Biden is apparently not looking at reality.
Conclusion
Biden’s infrastructure plan is a failure, even before it begins, and it would just waste taxpayers’ dollars if undertaken, just as Solyndra and other failed “green investments” did for President Obama.
