A Tale of Two Railroads

There are two railroads.  They are both transcontinental.  The first railroad is built quickly.  But it fails just as quickly.  The railroad has massive inefficiencies.  It has high grades as it snakes through the mountains.  The tracks are built poorly, and quickly need replacement.  It has no tributaries to bring product to the main line.  Beyond these structural flaws, the company has major management problems.  The owners of the company have set up a shell corporation.  They are skimming from the investors—overcharging their own railroad company for basic supplies.  Ultimately, the line is unprofitable, the company goes bankrupt, and the system collapses.  Many jobs are lost, but a few—the owners—escape with a massive new fortune courtesy of their investors.

The second line grows more slowly.  Although its architect plans well into the future, the line only expands when the necessary capital has been accrued and a plan developed to cultivate business along the rail line.  The architect gives free grain, cattle, and land along the line to individuals who will uproot and move west to farm.  He even sets up experimental farms to test new techniques and provide training to farmers in the area.

This line is financially and structurally solid.  The architect hires his own team of explorers to rediscover Lewis and Clark's lost pass through the Rockies—many believe the pass is a myth; they are proven wrong.  This line takes direct routes and minimizes gradient saving vast amounts of fuel and increasing the shipping speed on each trip.  This is the only transcontinental line that won't go bankrupt.

In Obama's "jobs" speech, he called Lincoln "a leader who looked to the future—a Republican president who mobilized government to build the Transcontinental Railroad."   I can only assume Obama included this line because he thought it might coax Republicans to "invest" in more railroads.  After all, "Building a world-class transportation system is part of what made us an economic superpower. And now we're going to sit back and watch China build newer airports and faster railroads, at a time when millions of unemployed construction workers could build them right here in America?"

But what is the history of government's investment?  Which of the two railroads did Lincoln force taxpayers to "invest" in?  If you think it was the second, successful line, I'm sorry, but you have too much faith in government.  Now that you know it was the first, failed railroad; now that you know this "investment" failed to serve the people while handing a fortune to a small group of cronies, is this the kind of "investment" you would like government to repeat?

Read More in Liberalism, Obama, Spending & Entitlements.