Elephants in tubes & crises opportunists

Elephants in tubes & crises opportunists

A new study about the cost-effectiveness of building a high-speed hyperloop system that would carry passengers between Pittsburgh and Columbus raises a whole host of public policy questions.

The first one should be how government officials reached their conclusion in an equation in which they admit the major variable – what it will cost to build the system — cannot yet be defined.

There’s a trick, eh?

As the Post-Gazette reports it, the Mid-Ohio Regional Planning Commission has concluded that what essentially would be a huge vacuum tube trip of 20 minutes would cost $33 per passenger between the ‘Burg and Ohio’s capital city and $93 for the 56-minute trip between Pittsburgh and Chicago.

The travel speed in the low-pressure tubes in which pods are propelled on a magnetic field (and also touted as a way to transport cargo) would be 500 miles per hour. A second study, by the Northeast Ohio Areawide Coordinating Agency, bestowed the “feasibility” label on route between Pittsburgh and Cleveland.

But there’s quite the elephant in the tube, so to speak:

While the one feasibility study has projected the passenger fare, an official tells the P-G that folks “still are trying to nail down” the cost of construction.

Well, there is that.

Of course, both the Columbus and Cleveland groups says the projects – which, by various general estimates, would run in the tens of billions of dollars – would have to be a combination of public and private dollars.

Well, of course. That “public” financing component always presents itself as a bottomless money pit for the developers of such projects.

Does the “ability” to set ticket costs for a project that no one really knows how much it would cost to build suggest a nod-nod, wink-wink system in which “government dollars” – tax dollars, i.e. public money – will make up any funding deficiencies?

That should be considered a rhetorical question.

No doubt many meat consumers in Greater Pittsburgh have been experiencing sticker shock with rising prices during the coronavirus pandemic.

As Politico reports it, “Supermarket customers are paying more for beef than they have in decades … but at the same time, the companies that process the meat for sale are paying farmers and ranchers staggeringly low prices for cattle.

“Now, the Agriculture Department and prosecutors are investigating whether the meatpacking industry is fixing or manipulating prices.”

Whether they are or not will be determined, we suppose. And, yes, there has been a long history in this industry of questionable market practices. But it’s a difficult scenario to prove – especially when those closely aligned with the supposedly shorted cattle farmers point to the current marketplace.

As Ed Greiman, general manager of Upper Iowa Beef (and a former head of the Iowa Cattlemen’s Association), told Politico, the price increases in meat coolers are attributable to two hardly nefarious things:

First, meat plants hit particularly hard by the coronavirus, have been running at lower capacity.

Second, “farmers and ranchers desperate to offload their cattle as they reach optimal weight for slaughter are cutting prices so they won’t have to kill the animals without selling them.”

But, continued Greiman:

“Cattle are backing up because we can’t run our plants fast enough. Nothing is functioning properly. We need to be careful not to put blame on any one thing or part of the industry because we can’t get these plants going.”

And there are additional market complexities that grocery shoppers in Western Pennsylvania and elsewhere might not know or, if they do, fully appreciate.

As Ted Schroeder, an agricultural economist at Kansas State University, noted, rising consumer prices and falling cattle prices are consistent with normal supply and demand.

“It’s Economics 101,” he told the web news outlet. “There’s less meat around, but demand is still pretty strong.

“We’ve got plenty of cattle but can’t get it through the system. We are pretty close to what I would expect to happen to wholesale and farm prices given the bottleneck.”

If that’s “price-fixing” and/or “price manipulation,” then the concept of supply and demand has been rendered moot.

Then again, when those who can’t restrain themselves from never letting crises go to waste, market activity that is consistent with normal supply and demand cannot, and must not, be tolerated.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).