Democrat Representative Peter DeFazio was quoted in the Wall Street Journal (“Amtrak Faces Scrutiny Despite Gains”, 1/2/20) saying, “I think part of the problem we’re dealing with is the original mandate from Congress which said that this is supposed to be run as a for-profit corporation.” He argues that Amtrak’s CEO’s focus on profit is more appropriate to the private sector than to a government-owned company. This is at the heart of why government run entities will always crowd out the private sector.
With no concern for the bottom line, government run entities can operate at a loss with the power to generate revenue through force (taxes) or printing more dollars. The private sector cannot compete when the rules of engagement are controlled by those who want to replace you.
We have strong laws against monopolization yet the very people who advocate for enforcement of those laws seek to create government run monopolies. I’m not sure how the Warren’s and Sander’s of the world reconcile having a single payer health care system with their wish to break up “big business”.
Certainly, there are places where the profit incentive is irrelevant. The nation’s security is the most obvious. There is no real alternative for our defense in the private sector in part because of laws but also, the magnitude of the effort. Still, underlying that effort are private companies that operate in a way that they can sustain themselves. That requires making more money than you spend. That additional amount drives future investments that keep the company viable. The government doesn’t need to worry about sustainability in this sense. There is always another way to generate the cash they need.
Regarding Amtrak, getting to profitability would likely mean ending routes that don’t pay for themselves and charging more for the ones that are used. Instead, politicians on those less used routes will call for subsidies and those on the “NY to DC corridor” will fight to keep prices low. After all, they control the printing press!
Current Day Publius 