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
