John Stossel writes that “Our Government Doesn’t Create Jobs, It Kills Them.” In this column he objects to something the President said recently:
“We’re the country that built the intercontinental railroad,” Obama says. “So how can we now sit back and let China build the best railroads?”
The President meant the transcontinental railroad, but he’s not the first person to call it the “intercontinental railroad.”
Stossel then launches into a history of the transcontinental railroad that makes it into the biggest money-wasting boondoggle in history — “a Solyndra-like Big Government scandal,” he says. And he brings up all the corruption and bribery that went along with the project, and tosses in the fact that the two railroad companies that built the transcontinental railroad both went bankrupt a few years later. The project inflicted terrible cruelty on the workers, particularly the Chinese hired by the Central Pacific. It also was another blow to the cultures of the plains Indians.
On the other hand, any history book will tell you that the transcontinental railroad had a huge impact on the nation’s culture and economy. Goods could be shipped across the country at a fraction of the time and cost as before. Towns, and new businesses, sprang up all along the route. Interstate trade boomed. For all the graft and waste and cruelty that went with it, it created real wealth for the entire country.
There was only one 19th-century railroad company, Great Northern, that didn’t receive government subsidies, and which didn’t go bankrupt in the Panic of 1893, as many other railroads did (for reasons not entirely of their making). But Great Northern wasn’t operational until 1890, and it didn’t build the transcontinental railroad.
Then Stossel says,
We need infrastructure, but the beauty of leaving most of these things to the private sector — without subsidies, bailouts and other privileges — is that they would have to be justified by the profit-and-loss test. In a truly free market, when private companies make bad choices, investors lose their own money. This tends to make them careful.
But the only way private companies build infrastructure is infrastructure for their own personal use. Why would any company build a road or a bridge if anyone’s trucks can use them? There’s no profit in it, unless the company can charge for using it somehow.
No private company ever would have built the interstate highway system, or the Golden Gate Bridge, or the Hoover Dam. Or the transcontinental railroad, for that matter. Would not have happened. Yet building those things eventually made a whole lot of business enterprise possible that would not have been possible otherwise.
Stossel’s complaint about the railroad could be said about the voyages of Columbus, you know. I’m pretty sure those voyages were a financial loss to Ferdinand and Isabella, and Columbus turned out to be, um, a problematic individual.
And has the space program made a profit yet? I doubt it.
Righties are sooooo stupid.