Keith and stuff
08-14-2012, 01:00 PM
Amtrak’s $16 hamburger
http://articles.boston.com/2012-08-13/opinion/33166077_1_food-service-long-distance-routes-hamburger
JOHN E. SUNUNU
You might know of John E. Sununu. While he was a US Senator from NH, he was known as 1 of the least bad US Senators. Though, that was a time before Rand Paul when most of the US Senators were pretty awful.
Sununu used the Amtrak news to segway into how ObamaCare is horrible. Going back to the Amtrak food issue, though, I have a solution. Amtrak would make money off of food if it leased out the kitchen areas of the trains for money. If a company cannot make money with cooked food, it could simply buy fruits, drinks and junk food in bulk at Costco and sell it to riders. If that didn't work, just use vending machines with non-perishable food and drinks.
When is a hamburger not just a hamburger? When it costs Amtrak $16 to make. They sell it for $9.50, and taxpayers cover the difference — every time. Then it becomes a glaring symbol for spiraling costs, crippling deficits, and the inherent inefficiencies of big government.
Thirty years ago, the idea of Amtrak losing money on food sales was as outrageous as it is today. (Hungry customers on a moving train with nowhere else to go. How hard can it be?) In fact, it was so outrageous that Congress passed a law against it. The Amtrak Improvement Act of 1981 prohibits the government-owned company from selling food at a loss. Nice try. Today, Amtrak is selling more and losing more than ever before.
This month the Government Accountability Office reported that losses on food service exceeded $80 million last year and totaled $834 million during the past decade. Auditors blamed the staggering losses — most of which occur on Amtrak’s 15 long-distance routes — on waste, theft, and lack of oversight. That’s only a fraction of the total losses from long distance operations, but it’s real money nonetheless.
Equally important, the distressing consistency of these losses demonstrates once again that government can’t reform itself. Blame the eternal optimism of Congress here. Like the 1981 law that prohibited losses on food sales, another that passed in 1997 demanded a path to profitability — without actually legislating specific changes to routes, head count, wages, or prices. If you leave all the decisions to a government-owned bureaucracy, you’re going to get the kind of decisions that a government-owned bureaucracy tends to make: poor ones.
Despite three decades of operational failures and over $25 billion in government subsidies, true believers still defend the system. For these hardy souls, no amount of economic reality will change their opinion — not the absurdity of running routes that lose $400 per passenger, not the idea of losing $200 on every long-distance ticket sold, and not the notion of losing $6.50 on every hamburger made.
But if Amtrak can’t make money on a hamburger after 30 years, what makes anyone believe that the government can effectively manage health insurance exchanges, control healthcare costs, or improve the quality of the medical care you receive? Stay tuned.
http://articles.boston.com/2012-08-13/opinion/33166077_1_food-service-long-distance-routes-hamburger
JOHN E. SUNUNU
You might know of John E. Sununu. While he was a US Senator from NH, he was known as 1 of the least bad US Senators. Though, that was a time before Rand Paul when most of the US Senators were pretty awful.
Sununu used the Amtrak news to segway into how ObamaCare is horrible. Going back to the Amtrak food issue, though, I have a solution. Amtrak would make money off of food if it leased out the kitchen areas of the trains for money. If a company cannot make money with cooked food, it could simply buy fruits, drinks and junk food in bulk at Costco and sell it to riders. If that didn't work, just use vending machines with non-perishable food and drinks.
When is a hamburger not just a hamburger? When it costs Amtrak $16 to make. They sell it for $9.50, and taxpayers cover the difference — every time. Then it becomes a glaring symbol for spiraling costs, crippling deficits, and the inherent inefficiencies of big government.
Thirty years ago, the idea of Amtrak losing money on food sales was as outrageous as it is today. (Hungry customers on a moving train with nowhere else to go. How hard can it be?) In fact, it was so outrageous that Congress passed a law against it. The Amtrak Improvement Act of 1981 prohibits the government-owned company from selling food at a loss. Nice try. Today, Amtrak is selling more and losing more than ever before.
This month the Government Accountability Office reported that losses on food service exceeded $80 million last year and totaled $834 million during the past decade. Auditors blamed the staggering losses — most of which occur on Amtrak’s 15 long-distance routes — on waste, theft, and lack of oversight. That’s only a fraction of the total losses from long distance operations, but it’s real money nonetheless.
Equally important, the distressing consistency of these losses demonstrates once again that government can’t reform itself. Blame the eternal optimism of Congress here. Like the 1981 law that prohibited losses on food sales, another that passed in 1997 demanded a path to profitability — without actually legislating specific changes to routes, head count, wages, or prices. If you leave all the decisions to a government-owned bureaucracy, you’re going to get the kind of decisions that a government-owned bureaucracy tends to make: poor ones.
Despite three decades of operational failures and over $25 billion in government subsidies, true believers still defend the system. For these hardy souls, no amount of economic reality will change their opinion — not the absurdity of running routes that lose $400 per passenger, not the idea of losing $200 on every long-distance ticket sold, and not the notion of losing $6.50 on every hamburger made.
But if Amtrak can’t make money on a hamburger after 30 years, what makes anyone believe that the government can effectively manage health insurance exchanges, control healthcare costs, or improve the quality of the medical care you receive? Stay tuned.