Vincent J. Curtis
20 May 2015
My hometown newspaper has been a true believer in an LRT, a
Light Rail Transit line. This line is
planned to run from Eastgate Square to McMaster University, along one of the
city’s prime east-west traffic corridors for automobile traffic.
One of the unspoken objects of running the LRT line along
King Street was for the line to create congestion, sufficient, perhaps, for some
people to give up driving cars and take the LRT line instead. In any case, congestion would make driving
cars more obnoxious, a penalty deserving on those who fail to choose the green
way of transporting themselves around the city.
The LRT is a ‘green’ project, and therein lies its special merit.
In a noteworthy admission, the paper has dropped the
pretense that the LRT was intended to solve a current or prospective
transportation problem. The driving idea
behind the LRT now is reduced to economic stimulation. For the moment, the fact that it is ‘green’
stimulus has been dropped.
A billion dollars’ worth of construction is supposed to lift
the city out of its economic doldrums, caused in part by the closure of the
United States Steel plant (formerly Stelco). It has also been admitted by its advocates
that the LRT itself is not expected to be profitable. The financial losses of the LRT are supposed
to be recouped by the additional tax revenue raised by the businesses that are
supposed to spring up like weeds along the rail line.
Ten years ago, a case could be made that Hamilton was an
economic basket case, and that desperate measures were required to revive the
city. So desperate, in fact, that it was
worth gambling the rent money on this throw of the dice.
Thus the plan was for the city to acquire a white elephant
and put it out as a circus act. The
circus act was unlikely to make money, but a profit would be make on the side
shows of the circus act.
Now, Hamilton is enjoying an economic revival without the
stimulus of an LRT. Nevertheless, the
newspaper and its other supporters insist that the city should still acquire an
LRT – on the grounds that the money being gambled on it is no longer the rent
money!
The purpose, now, of acquiring the LRT is to keep the white
elephant - as a useless pet! (It is
useless because it doesn’t solve a transportation problem, but may create one.)
Oh, the LRT supporters still argue the case for “extending”
the economic revival of Hamilton, meaning the circus side shows are still
supposed to spring up. And the beauty
is, that, even if the whole circus doesn’t appear, the city won’t get killed. (Forget for the moment the unpaved roads and
neglected infrastructure of the city that could be improved with the money
spent supporting the LRT.)
What these economic geniuses don’t seem to understand is the
concept of inflation. They want to
stimulate an already buoyant economy. If
some is good, more should be better, they think. Yeah, right.
Too many dollars chasing too few goods leads to inflation. The city is already experiencing a rise in
property values. When, thanks to market
value assessment, that rising in value results in higher property taxes, those
folks on fixed income are going to get squeezed. Drive up property values even higher, and the
squeeze gets tighter. People could be
forced out of their homes and into lower standard housing that costs just as
much as their former, and better, place.
Those who can afford the higher price for the old house are going to
become house poorer, because the higher capital cost of the house demands a
heavier mortgage, and less money is available to be spent on other things.
Hence, if the LRT supporters are right, and the LRT is
stimulatory, the consequences are not necessarily good. And if they are wrong, the city is hobbled
again by having to carry another unnecessary burden. Roads don’t get paved, and other
infrastructure is neglected because the money that could be spent on them is
being used to feed the useless pet white elephant.
The object of an LRT should be to solve a transportation
problem. Building one because it is ‘green’
is plain stupid. Hoping that economic
stimulus will result as a result of one is to misunderstand what economics –
the rational allocation of money – means.
If the province wants to spend a billion dollars to
stimulate the economy and create jobs, there are other ways could it do
so. The city and the province don’t have
to place their bets all on one thing: a pet white elephant.
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