by George Leef
Obama recently stated that the building of the transcontinental railroads is a good model for what he has in mind with his latest “jobs” plan. As professor Don Boudreaux observes below, those railroads (with one exception) were monuments to wasteful crony capitalism, with cagey, politically connected businessmen raking in huge amounts of taxpayer money. Expect more of that if any of Obama’s transportation fantasies should become law.
Editor, Washington Post 1150 15th St., NW Washington, DC 20071 Dear Editor: Michael Gerson misses the most germane problem with Pres. Obama's praise of the transcontinental railroad as a shining example of the wonders of "mobilized government" ("Obama fails the Lincoln test," Sept. 13). Save for the one transcontinental line that received virtually no subsidies (J.J. Hill's Great Northern), the building and operation of the other three lines were contaminated with graft, fraud, and corruption - of which the Credit Mobilier scandal is only the most famous instance. And on top of these shenanigans that predictably happen when government doles out subsidies were other, equally predictable results: shoddy construction, bloated costs, and inefficient and unsafe operation of the lines. On further reflection, Mr. Obama is spot-on to cite the transcontinental railroad as an example of his hope for America: it is a great monument to crony capitalism, under which government officials - constantly cackling about their 'grand visions' and 'commitment' to America's future - launch boondoggles that succeed only in transferring massive amounts of wealth from the general population to the politically connected. Sincerely, Donald J. Boudreaux Professor of Economics George Mason University