This cancer

For once not the banks. Rather I am picking up an interesting article via Infectious Greed on properties of the Honda Accord through time. Who would have guessed that it was most economical in 1985? Or that it has increased in weight by nearly 50% since 1980?There are too many cars, they use too many resources, and there are too few credible alternatives to them. The Accord's trajectory is just a minor illustration of quite how screwed up we have allowed transport to become.

Just privatise them?

Ken's right. Can we now, please, at least five years too late, renationalise the railways. After the National Express disaster, it is time to acknowledge that PFI is bollocks and that private franchisees for public infrastructure amounts to nothing more than a grant from the state to shareholders in the good times and socialised loss in the bad ones. Sorry to the crude language and bald assertions, but this waste of money by the ideologically challenged really annoys me.

Update. Felix Salmon has a fascinating piece on the costs of driving in cities here, and how sensible congestion charging combined with fare revisions can make everyone's travel more efficient. While I am not convinced that fixed pricing is the right approach - letting investment bankers who can afford it drive while less highly waged workers are forced onto the subway - there are clearly some very interesting results in the work Felix describes. The right approach would be a variable tarif based on income, so that the congestion charge depends on how much grief you cause other people, how much carbon you emit, and how much you earn, but that is politically impossible.

Road deaths and other acceptable casualties

An article by David Mitchell from Sunday's Observer is so full of sense, and so nicely written that I want to quote quite of lot of it. It concerns the pathetic whingeing of the car lobby that they are sometimes caught breaking the law and even *gasp* punished for it (although not very much).

Apparently, the criminals who break the speed limit don't like the punishments they receive. Then again, the criminals who break the murder laws don't particularly like the punishments they receive either, but they don't form quite such a strident lobby...

The fact that many more people speed than murder does not make it any less a crime, even though it is a lesser crime. And the difference in the magnitude of the offences is reflected by the huge difference in their punishments. So that doesn't excuse the grumbling letters to Top Gear magazine either...

Almost everyone knows when they're speeding and almost everyone speeds. Maybe this massed recalcitrance means we should change the law, allow people to drive as fast as they like and accept a few thousand more road deaths? ...

Some drivers seem to have a gut feeling that racing around attached to a big internal combustion engine, going wherever they want, as quickly as they deem convenient, is some of sort of natural right or ancient British liberty. Well it's not. It may feel natural but so does smoking or an expensive boob job. It's recent, unnatural and unhealthy and the world would probably be a better place if no one had ever done it. Soon they may have to stop.

Then in today's paper, in a nice segue, we find:

Thousands of taxis, buses and council vehicles could be fitted with devices that prevent them from exceeding the speed limit.

Given that a driver's willingness to obey the law seems in inverse proportion to the cost of their car, I would suggest phasing in speed limiters immediately on all cars selling for more than £20,000. Sports cars, the worst offenders, would have to have speed limiters fitted at their MOTs. I am sure that this would do more to reduce road deaths than any amount of traffic calming or improvements in crumple zones. Add in genuine enforcement of the Highway Code by real policeman on the road, and we would have a revolution in road safety.

The triumph of the system

Over the last few days I have cycled over sixty miles (for pleasure - business is not going that badly). Somewhere around mile 50, it occurred to me just how amazing public transport is. I can get further in an hour by train than I can cycle comfortably in a day under my own steam, and it costs me much less than I can earn in an hour. Imagine what getting around would be like without the kind of multiplication of effort that railways provide - if we all had to provide our own private infrastructure. The state really did do some things well, and even now, in these denuded times, those advantages have not entirely disappeared.

Political Futures

I don't always agree with Michael Meacher, but this letter in the Guardian is so good, and hits the tone which is lacking in both the government and the official opposition so well, that I am going to quote it nearly in full:

We urgently need ... an alternative to the prevailing Tory-New Labour orthodoxy. I would propose three central strands. It should seek to restore a social democracy which has been ripped apart by greed and an out-of-control inequality epitomised by the banks' bonus culture. We need a solidarity tax levied on the top 5% of incomes and on the so-called non-domiciled super-rich - who use Britain but don't pay into it - with the proceeds hypothecated to end child and pensioner poverty.

We need to redraw the boundaries between the state and the market. The market fundamentalism of the last 30 years is well and truly busted. But ending privatisation, deregulation and PFI is not enough. We need a new perspective for the state, not - as now - passive facilitator and rescuer of last resort, but actively interventionist where the public interest requires it, and strong promoter of the key social values of accountability, equity and real equality of opportunity. A robust market has an essential role, but so does the state, not only in health and education (where private markets do not belong), but in energy (a key to national security), housing (neglect of which is the biggest repository of social misery), transport (for a fully co-ordinated system), and banking (to prevent another collapse and provide reliable housing for low-income households).

We need a state which is less an intrusive snooper and more the guardian of our civil liberties. And we need a major redistribution of power: away from a top-down state to disenfranchised citizens; away from top-down industrial relations to a fair and constructive role for trade unions: and away from a top-down politics to a much more genuinely participative system of governing.

Thank you, competition commission

From the FT:

BAA, the airports operator, should be broken up and forced to sell three of its seven UK airports, Gatwick, Stansted and Edinburgh, the competition watchdog said on Wednesday.

God knows the lot of the blase international traveller is a hard one these days, so any smidgeon of comfort is welcome.

Why I support the BA/Iberia merger

Because then I will have one fewer dreadful, customer-unfriendly, delay-ridden airline to ignore when booking travel. The rational for loathing British Iberian is easy: it saves time.

Civilisation Crushed - A Tale of Two Buildings

When the new Eurostar terminal at St. Pancras opened, it was to almost universal praise. See for instance here for the Guardian's take or here for the BBC. As the latter puts it:

The brick and stonework was near-perfect. The soaring roof was "detailed delicately" ... [it is a] World-beating roof

And yes, it is a lovely building, and yes, the roof is incredible, a soaring arch of glass that lifts the spirit. There's only one problem. You can't actually see it most of the time because the passenger is sunk in a tunnel of shops. Rather than let people enjoy the extraordinary Victorian space, the architect has ensured that what you actually experience is just another retail environment. It is a fantastic building ruined by an excrudescence of high street squalor.

Stansted is exactly the same. The building is one of Norman Foster's finest. It could be a nice place to use, with clear views all the way from check in to the runways, again with a high roof that lets lots of light in. Instead it is a hell of closely packed shops and restaurants, Foster's vision having been completely subordinated to the need to get as many square feet of selling in as possible. BAA are not unique in their ability to ruin the traveller's day but they are one of the leading practitioners of this all-too-common art.

The Victorians realised something that seems to be lost today: that if you make grand public spaces that are a pleasure to use, then you add joy to peoples' days. If you respect the general populace and provide a context that is fundamentally civil, then many of them, at least, will be civilised. But if you treat them as consumers whose only duty is to spend, then they will behave however they want. Is it too much to hope that one day St. Pancras or Stansted will push the shops into the background and let the building do its job?

What Pleasure It Is To Be A Real Keynesian Now

Finally the tide seems to be turning. Bernanke is talking about the need for central bankers to be mindful of asset price bubbles. Darling is reprioritising spending to produce a classic Keynesian stimulus. But isn't it bizarre that we now have nationalised banks and privatised railways? If ever there was one industry that the state should control - must control - it is transport. (The revelation on Saturday that the reason Virgin trains are so crowded is nothing more than revenue optimisation only makes the case even more clear.) Now Alistair has (reluctantly and a little tardily) got the nationalisation bug, perhaps he could finally undo the evils of his predecessors and renationalise the tube and the railways. Let's hear no more about internal markets in the health service or in education. Now is the time for the state to spend for the sake of us all.

Market gaps

Classical economics, curse its worm-infested body, teaches us that the market will generate innovations which meet demand. Leaving aside for a moment the obvious problem with this - that there is no account of how fast such creativity will happen - my recent travels have convinced me that there is a massive opportunity at the moment for operating companies to make more money from transport. I, and I am sure many others, would pay more for a ticket in a guaranteed child free carriage on a train or cabin on a plane. After all, if I took a tuba with me on my journey, and attempted to learn how to play for the entire trip, I would quickly be silenced. But the same volume of noise can easily be created by one child. First class is no guaranteed of peace as I found out on one memorable trip to New York: the front of a 747 is not the best location for a creche. So, please Mr. Planeman, Mr. Trainman, can I please pay more for a child free trip? I rather suspect the answer will be no, not because the scheme wouldn't work, but because of the opprobrium some of the breeders would foist upon anyone who dared to suggest their dearest's screams were unwelcome: Adam Smith is no match for the pram wielding classes.

BAA to be rent asunder?

The FT reports that UK Competition Commission is considering forcing BAA to give up at least one of its London airports. Given that this government will never agree to the right step - nationalising BAA - I suppose that is a start.

Update. So the competition commission is demanding that BAA sell not one but two London airports. Excellent. The Daily Mash puts it best:

SATAN, the Prince of Darkness, is to launch an appeal after he was ordered to sell Heathrow.

The Competition Commission ruling is a major setback to Beelzebub's plan to expand his kingdom of the damned via the world's third busiest airport. He said last night... "Our latest customer survey showed more than 90% would rather be roasted on a spit and have the flesh ripped from their bones by a horde of fire-breathing, shit-covered demons than endure another minute in one of Heathrow's check-in queues.

Run rat run

Labour MPs are, of course, far more concerned for themselves than either the governance of the country or their party. Here's just some of the utter nonsense, the self-serving anti democratic idiocy they and their leaders have been up to recently.

• Spending £3bn on new nuclear warheads despite not providing British troops in a war zone with the right body armour and posturing about Iran's nuclear ambitions.
  
• Umming and ahing over vehicle excise duty despite it being clearly sensible to charge more for the most polluting vehicles. And while we are on carbon issues, why doesn't aircraft fuel attact any duty at all?
  
• Utterly failing to reform the tax system to make it fairer and to prevent the rampant abuses of both corporates and wealthy individuals.
  
• Continuing to pursue the disaster that is PFI despite overwhelming evidence that there is little risk transfer to the private sector and excessive cost. Follow the New Zealand example instead and renationalise.
  
• Creating massive uncertain long dated liabilities by allowing new nuclear power stations to be built. Oh, and letting the company concerned, with a guarantee on clean up costs of course, be sold to the French.
  
• Failing to stop the free markets are the best thing ever for everything brigade from further ruining our public services. Damn it I'm a derivatives specialist and I'm far less keen on the power of the markets than Alan Milburn is. Maybe that's because I actually know something about them. And as for Hazel 'sum of all fears' Blears - heaven defend us against her kind of 'reform'.
  
• Not dealing with the utter mess that is MP's expenses. Stop spending my money on Lembit Opik. Or a ridiculously grandiose and over budget Olympics.
  
• Enacted the biggest snooping law in British history.
  

Now, I admit it, I cheered for Tony in 1997. I drank a lot of wine and ate pasta and stayed up until Portillo was gone. But now, please, can I have a Labour party back that is actually socialist, or at least has some vague aspirations other than leaving the rich alone, lining their own pockets, and trying to find some tiny chink of public life that has not yet been infected by Thatcherite free market dogma.

Heathrowics

I had to travel via Heathrow today, so I went on the airport website to check the state of the public transport links to Terminal 5. It said `Service not available.' And you can't fault a short and wholly accurate summary like that. Please, Gordo, would you nationalise BAA -- or shall I just give up on flying?

Why I like $140 oil

A surprisingly not ill-informed and annoying article by George Monbiot (isn't it nice when someone who is usually foolish says something sensible?) considers the good things about $140 oil. One of them is that it is stopping a lot of unsustainable fishing:

No east Asian government was prepared to conserve the stocks of tuna; now one-third of the tuna boats in Japan, China, Taiwan and South Korea will stay in dock for the next few months because they can't afford to sail. The unsustainable quotas set on the US Pacific seaboard won't be met this year, because the price of oil is rising faster than the price of fish. The indefinite strike called by Spanish fishermen is the best news European fisheries have had for years. Beam trawlermen - who trash the seafloor and scoop up a massive bycatch of unwanted species - warn that their industry could collapse within a year. Hurray to that too.

Let me add to that. Hurray if the oil price ruins the road transport industry. We should be sending much more cargo by rail and river anyway. Hurray if it causes people to drive less and to buy smaller and less polluting cars. Not only should Gordon go ahead with higher vehicle duty on the most polluting cars, he should extend that idea to lorries, planes, and indeed every other source of pollution. The only way to realign the economy to the post carbon age is to get the incentives right. $140 oil helps, but $200 or $250 oil would be even better.

Update. The high oil price appears to be working in Washington. According to a Washington Metro press release:

Twenty of Metrorail’s top 25 highest weekday ridership days have occurred since April of this year.

Surviving Gatwick North

If you are ever stuck in the noisy, dirty hell that is Gatwick North and are faced with a queue of 50 people just to buy a cup of coffee, make your way towards Gates 101-114. You will ascend over a spectacular bridge, then find yourself in a quieter waiting area with a much less busy cafe. Of course you might well have to make your way back when it is time to go to your gate, but waiting in this satelite is a good deal less nasty than in shopping centre that is the main hall, at least until the government has the balls to renationalise BAA.

Tearing Your Hair Out

God knows there is enough to tear your hair out for and scream about at the moment. But this made me laugh. From our illustrious Foreign Secretary David Miliband's blog, via the PM programme:

One foreign minister I met at the informal meeting in Slovenia over the weekend has fallen victim to the Terminal 5 saga. He arrived merely to transit, but his bags are nowhere to be seen and it was whispered that it might take weeks. He asked me to pass on a message to BA/BAA: for goodness sake get your act together.

Richard Branson meanwhile must be laughing really quite hard.

Privatised Infrastructure and the sad case of Heathrow

Heathrow, like Gatwick and Stanstead, is operated by BAA. Despite the positive impression created by the new Terminal 5, most of Heathrow is in a terrible state. It's old. It has little or no natural light. It's cramped. And it is stuffed full of shops and nasty food outlets to keep the waiting masses spending. Compared with many large airports - Hong Kong springs immediately to mind - it's embarrassing. Worse, the squalor and massive misery generation of Heathrow was entirely avoidable.

Stock companies have one aim: generating shareholder value. They have a legal obligation to work to that one end. They explicitly shouldn't care about national pride, client unhappiness, or holding back the broader economy if it gets in the way of making more money for shareholders. Hence not only can you not blame BAA for Heathrow, you should expect Heathrow to be as it is given it is privately owned and lightly regulated. BAA are doing what they are supposed to do: making money for their owners, Ferrovial. (Or in BAA's case, losing rather less money than they otherwise would.) The fact that this does not serve the countries' best interests, nor passengers, nor airlines, is irrelevant.

This is why private ownership of public infrastructure is inherently problematic. And why we won't be getting an airport anywhere near as good as Hong Kong's any time soon. Now wish me well - I have to use Heathrow again on Friday.

Update. It seems BAA can't even manage to run a brand new terminal properly. The BBC reports:

Cancelled flights and baggage delays have blighted the opening day of Heathrow's new £4.3bn Terminal 5.

British Airways, which has sole use of the terminal, was forced to cancel 34 flights by 1400 GMT due to "teething problems" encountered in the morning.

And it carried on. On Sunday we heard from the Guardian:

British Airways warned last night that the disruption that has plagued Heathrow's Terminal Five could run through this week as it emerged that 15,000 bags have yet to be returned to their owners. This figure is three times higher than BA had originally admitted to. Following three days of cancellations which saw more than 150 flights grounded and thousands of passengers disrupted, the airline, which has exclusive use of T5, said that a further 37 flights would not take off today.

Behind the pack

One of the major motivations for this blog was to understand how the rules of a given game determine the results, and how participants can better prepare themselves for adverse outcomes by understanding the class of behaviours the rules encourage. Subprime for instance was fundamentally caused by mis-aligned incentive structures.

A good example of a total failure to understand the rules comes from Porsche. They are threatening a legal challenge to London mayor Ken Livingstone's plans to demand a £25 congestion charge from drivers of high powered sports cars and 4x4s entering the capital. The congestion charge has been a huge success. Global warming is a major political issue which is not going away. If there is one thing Porsche could do to appear regressive and the choice of the selfish bore, suing Ken could well top the list. It looks to me like a PR gaffe equivalent to Ratner's 'total crap'.

If you want a fast car which won't make you appear egotistical, self-serving and totally without regard for others, perhaps you could try a Ferrari.

Or a Jag, as in this gorgeous, pre-Ford period XJ220:

Or even (if you must, given how terrible the suspension is as well as how polluting they are) a vintage Corvette:

Just don't buy a Porsche.

Update. Strangely enough, Matthew Lynn who I always thought of as a triffle reactionary, agrees with me.

Mr. Bean as the Fat Controller

The key question with any private sector involvement in public projects is whether the extra return shareholders rightly demand is compensated by increases in efficiency. Often the answer to that is no, which is why PFI makes so little sense - especially when you remember that there is rather little risk transfer to the private sector in many PFI projects. The latest rail debacle over the west coast main line is certainly evidence that the current mess of operating companies, National Rail, and private infrastructure contractors makes no sense -- our rail policy is fatally flawed. Let's renationalise the lot before our railway turns into a historical relic.

Hutton on the Transport White Paper

Will Hutton might be less than 100% sound on the capital markets, but he is often excellent on public policy and infrastructure and he has an excellent article in yesterday's Guardian on the recent Transport White Paper:

There isn't an adult in Britain who does not believe that our transport system is overcrowded, unreliable and unfit for purpose...

Last week's white paper on the future of rail maintains the British tradition. There is to be tinkering at the margins ... but the Department of Transport has shrunk from any serious ambition to scale up British capacity.

The heart of the problem is the Treasury's attitude towards public debt and the way it calculates the payback from public infrastructure projects... its approach to infrastructure spending remains in the dark ages - an outlier of 19th-century thinking.

I might quibble with '19th century thinking' - in many ways the Victorians understood the importance of infrastructure spending better than we do now - but otherwise Hutton is spot on. By using a metric for assessing cost/benefit analysis that is hugely skewed (and probably a hang-over from Thatcherite thinking rather than the 19th century), the Treasury is failing the country, holding back economic development and producing more misery. The requirements of tackling climate change and supporting growth require congestion charging over all urban areas, massively increased spending on rail, and a widespread application of the polluter pays principle to transport (which means higher taxes for SUVs and air travel and subsidies to bicycles and buses).