Introduction
Based on past Indianapolis Public Transportation Corporation (“IndyGo”) performance, our previous post demonstrated that even by a subsidized-transit consultant’s standard the expansion upon which IndyGo has embarked is hard to defend. That expansion nonetheless enjoys a great degree of support. This post will provide examples of the type of reasoning on which such support is often based. We will see that it tends to subordinate available facts to poor logic and wishful thinking.
Inconvenient Implication
The standard we applied had been set forth in a blog post by an IndyGo consultant named Jarrett Walker. In that post Mr. Walker stated that a transit route would be “hard to defend” if it didn’t provide more than ten trips per service hour. Showing that IndyGo’s current expansion will probably add fewer than four trips per additional service hour, our previous post concluded that by Mr. Walker’s standard the IndyGo expansion, too, would be hard to defend.
Moreover, our post confirmed by reference to past IndyGo performance that so low a ridership increase would indeed provide too little “bang for [the] buck,” as Mr. Walker put it. More specifically, we demonstrated that the expansion is costing more than the transportation it adds is worth even to the added riders themselves.
Our demonstration was based on the assumptions that decreases and increases in IndyGo ridership would respectively be greater and less percentagewise than the price and service increases that cause them. The magnitudes of IndyGo ridership’s price and service elasticities, that is, would respectively be greater and less than unity.
Since those assumptions dealt with future ridership, of course, we couldn’t be completely certain about them. But the service-elasticity assumption was based not only on an administration projection but also on the fact that IndyGo ridership’s response to service increases had been anemic even before the pandemic. And if the price-elasticity assumption weren’t correct then IndyGo fare prices could have been raised enough to cover IndyGo expenses. So real-world experience strongly supports the conclusion that the logic of Mr. Walker’s post seemed to imply: the IndyGo expansion is hard to defend.
But this conclusion implies that something else hard to defend is the transit tax that Indianapolis imposed to fund the expansion. This isn’t an implication that someone in Mr. Walker’s position is likely to find congenial. After all, he not only derives his livelihood from subsidy-funded transit agencies but also contributed significantly to the Marion County Transit Plan, which was something of a blueprint for IndyGo’s expansion. So, although our conclusion follows his post’s logic, he would probably reject it.
Or maybe he wouldn’t; the expansion’s dedicated lanes and electric buses may be too much to swallow even for him. Either way, another post of his is typical of the type of thinking that subsidy critics often encounter when they attempt as our previous post did to weigh transit’s benefits against those we must forgo to pay for it. So in what follows we’ll use that other post to illustrate subsidy-proponent thinking.
Specifically, we’ll focus on “How to Read the Best Anti-Transit Writing,” which was Mr. Walker’s response to a blog post that transit critic Randal O’Toole had based on a Los Angeles Times piece entitled “Billions Spent, but Fewer People Are Using Public Transportation in Southern California.” We’ll ignore that post’s Los Angeles-specific issues in favor of the views Mr. Walker expressed about transit critics in general and Mr. O’Toole in particular.
Wishful Thinking
In a rail-systems context Mr. O’Toole had described a type of wishful thinking that also seems to afflict advocacy for other transportation modes:
The transit agency offers all kinds of excuses for its problems. Just wait until it finishes a “complete buildout” of the rail system, says general manager Phil Washington, a process (the Times observes) that could take decades. In other words, don’t criticize us until we have spent many more billions of your dollars. Besides, agency officials say wistfully, just wait until traffic congestion worsens, gas prices rise, everyone is living in transit-oriented developments, and transit vehicles are hauled by sparkly unicorns.
Mr. Walker responded by accusing Mr. O’Toole of laboring under the misapprehension “that short term ridership is the proper metric for judging long term investments.” But the analogy he concocted in support of that criticism seems inapt:
Imagine if we had built the Interstate Highway System with this attitude. Oops, we just spent billions on a freeway to newly developing suburbs, but not many people are driving on it yet because the suburbs are still under construction. Surely the O’Toole of the day would have said that those highway planners are fools!
Rates of new-highway use vary, and existing highways’ volume has increased with population and car ownership. But those of us who made frequent trips in the mid ’60s between Indianapolis and Terre Haute know that Interstate 70 saw plenty of traffic almost as soon as it was completed. In contrast, although the Indianapolis transit network had already been extensive long before then, its occupancy thereafter fell in the next half-century to less than half a dozen riders per bus even before the pandemic.
By the middle of the last century the population density along streetcar routes was already great enough that the Indianapolis Transit System funded itself almost exclusively by fares: the transit system’s cost didn’t exceed its value to its riders. Being thus dependent on fares—and aided by a mid-century conversion from streetcars to city buses—its management had an incentive to run buses where they would attract the most ridership. Yet a quarter century later residents’ propensity to ride city buses had already declined so greatly that the system could no longer support itself.
Another forty years after that, moreover, less than one resident in twenty took the bus even one day a year, and taxpayers were bearing about 92% of the IndyGo funding burden. IndyGo subsidies have been increasing in fits and starts for half a century. Just how much longer does Mr. Walker think it will take for IndyGo to provide service that riders consider worth what taxpayers must pay to subsidize it?
In what he calls “the heart of the matter” Mr. Walker continues his criticism of Mr. O’Toole’s alleged “obsession with short-term outcomes”:
We’ve arrived at what’s really at stake here in this obsession with short-term outcomes. O’Toole begins from a deep hostility to the very notion of long-range planning, at least when done at the level of the city or community, and I hear this more and more from “conservative” voices in local conversations. (I put “conservative” in scare quotes because the more I hear the word, the less it seems to mean.) Sometimes I want to get some of these folks (especially older ones) into a room and just ask this: “Close your eyes and visualize your grandchildren, or whatever children are in your family. Are there any sacrifices you’d be willing to make so that they would have better lives, more opportunities, and generally a better world, even after you’re gone, even after you are no longer there to enjoy their gratitude?”
Most writers who self-describe as “conservative” these days, including O’Toole, seem to be starting from a clear no on this question, and presuming the same in their readers. If it doesn’t pay off now, it doesn’t matter. If you think about it, is the world view of the average thrill-seeking teenager, something most of us hope to grow out of as adults.
But Indianapolis’s half-century-long farebox-recovery decline from virtually 100% to only about 8% is hardly a “short-term outcome.” So Mr. O’Toole’s position may bespeak not a short-term view so much as an evidence-based assessment of what long-term prospects really are.
Basically, Mr. Walker is begging the question, which is whether the sacrifice he wants taxpayers to make will ever pay off. Just how beneficial to the grandchild he professes concern for will having a bus stop really be? How can Mr. Walker know it will be more beneficial than having passed Algebra II because of the tutoring his parents could have afforded if they hadn’t been required to pay the transit tax?
Transit-Oriented Development
Proponents’ seemingly unshakeable faith in long-term benefits often seems rooted in a belief that transit will over time attract more population density along its routes and thereby garner much more ridership than it currently can. And a torrent of grant money has created an environment in which proponents churn out studies that seem to support this view. Although transit routes in Indianapolis may have significantly affected development more than a century ago, however, any density they attracted later in the Twentieth Century wasn’t even enough to retain their previous ridership.
In light of that background a critical thinker should take into account the tendency of studies’ authors to infer causation erroneously from correlation. (Or to mistake the direction of any causation that actually does exist. It would be a mistake, for instance, to attribute the location of St. Vincent’s Hospital to the path taken by IndyGo’s St. Vincent route.) Mr. O’Toole has explained how even a subsidy-proponent darling like Portland, Oregon, gives us reason to question the density effects that subsidy proponents attribute to transit; in that city subsidies like tax-increment financing were needed to produce the development that planners thought light rail would attract. Even some urbanists recognize that transit projects often get credit for development that would have occurred anyway somewhere in the metropolitan area.
The Burden of Proof
In his summary Mr. Walker accuses Mr. O’Toole of living in an echo chamber and attributes the following attitude to him:
I, and the people choose to I listen to, all share the same tastes and experience and goals, so the fact that we’re right is just obvious! So, when government disagrees with us it must be stupid and incompetent.
If what Mr. Walker considers to be the government’s view is anything like his, though, there are plenty of reasons beyond mere disagreement with Mr. O’Toole for finding such views at least wrong if not “stupid and incompetent.” In addition to the wishful thinking we saw above, for example, there’s Mr. Walker’s poor logic:
There’s another contradiction here, which pervades all of O’Toole’s work I’ve read. O’Toole can’t decide if (a) transit is a bad idea or (b) transit is just badly planned and operated. If transit is run by idiots, as he often implies, then logically its performance says nothing about transit’s actual potential. On the other hand, if transit is a dumb idea, it would fail even if it were run by geniuses, which he advises it’s not. He can never seem to decide if he’s against transit or against the people making decisions in transit agencies. Logically, these two claims undermine each other.
A given transit initiative’s having been poorly planned and operated is hardly inconsistent with the proposition that it would still have been a bad idea even if it had been planned and operated as well as humanly possible. And in the case of IndyGo’s expansion we’ve seen no evidence that the resultant transportation would justify so great an expenditure rate even if IndyGo had been executing as well as anyone could.
This doesn’t mean that no transit project could ever be worthwhile; planners are not so universally astute as to have left no low-hanging fruit. But in light of experience transit projects should bear a heavy burden of proof.
A Caricature of Urban-Planning Critics
Mr. Walker seems to see conservative thought—or, since Mr. O’Toole posted on a Cato Institute blog, libertarian thought—as afflicted with an unreasoning antipathy toward government planning:
O’Toole would probably respond that he’s only opposed to government long-range planning, not private-sector or personal long-range planning, but the real horror for him is that as the world is becoming more interconnected, prosperity depends more and more on collective outcomes. Nowhere is this more obvious than in the rising economic importance of cities, the popularity of urban life as expressed in urban real estate values, and the impossibility of managing a prosperous and inclusive city without effective government.
As libertarian political economist Michael Munger explained in a recent interview, however, there’s plenty of room in libertarian thought for recognizing that market failures can necessitate government action. It’s just that in deciding how great a role the government should play we should take government failure into account, too.
In an argument that a “great libertarian city” is an oxymoron Mr. Walker further displays his comic-book impression of planning critics’ thinking:
The notion that a happy dense city can be generated solely from private profit-seeking has been tried, and I suggest you consult your favorite urban novel from the 1865-1929 period for reminders of what that was like. Almost anything by Dickens will do, and so will Upton Sinclair.
This argument strikes us as more than a little ideological. In Mr. Walker’s mind government regulation seems to eclipse the contributions that free-market-generated wealth made to easing the problems that old novels portray. Comparisons between North and South Korea, Cold War East and West Germany, and pre- and post-Deng China should make us a little more humble about how talented humans are at central planning.
Anyway, he seems to ignore the nuance in planning critics’ positions. Take those of urban economist Alain Bertaud. Despite criticizing much of the planning that Mr. Walker would presumably advocate, Mr. Bertaud’s Order without Design: How Markets Shape Cities shows that he has no trouble with using government regulation to address market failures. But experience has shown him the unfortunate results of doing so when it isn’t justified.
Why couldn’t what Mr. Walker apparently sees as a mindless hostility to government be viewed instead as a healthy appreciation of complexity’s implications? Yes, increasing urbanization results in more interactions that can require government intervention. But it also results in more levels of complexity that exceed humans’ ability to comprehend and that therefore make central planning problematic.
Moreover, increased urbanization’s relevance to transit may not be as self-evident as Mr. Walker seems to think; residents’ propensity to take the bus has declined even as greater Indianapolis’s population has grown. Mr. Walker seems oblivious to such realities when he reasons as follows:
It doesn’t matter how many people want to drive cars. In the city there’s a limit on how many people will be able to drive cars. So if you take a purely market approach that people should be able to drive as much as they want to drive, you are going to run into a physical limit. . . .
If transit were as effective a solution to such limits as he seems to believe, residents would be more willing than they have been to forsake their cars for transit.
High-School Debating
Occasionally Mr. Walker writes as though he’s in a high-school debate. Consider his response to Mr. O’Toole’s following passage:
“It’s not the dream of every bus rider to arrive in a bus that was on time, air conditioned and clean, where a seat was available,” said [USC engineering professor James E. Moore II]. “It’s the dream of every bus rider to own a car. And as soon as they can afford one, that’s the first purchase they’ll make.”
Rather than address that passage’s obvious point, which is that as the populace gets richer its propensity to take the bus declines, Mr. Walker seized upon Prof. Moore’s use of hyperbole to mischaracterize Mr. O’Toole’s meaning as follows:
Not the dream of most bus riders, but the dream of every single one. Again, if that doesn’t describe you, you aren’t just invisible or unimportant: You actually don’t exist. These are the moments, increasingly common in arguments in our polarized age, when O’Toole reveals that he has no desire to convince anyone who is not already in his cultural camp.
If Prof. Moore’s statement was hyperbole, so was Mr. Walker’s portrayal of Mr. O’Toole as denying that people who prefer public transit even exist. It’s at least as accurate to contend that Mr. Walker is denying the existence of those for whom transit-tax payments make it harder to afford things like baby formula, hearing-aid batteries, and home repairs.
Aid to the Urban Poor
We’ve focused on a particular Jarrett Walker post because it targets transit criticism and provides good examples of pro-subsidy thought. But we’d be remiss if we failed to acknowledge a factor that Mr. Walker’s post omits but that probably looms large in such discussions even when it isn’t mentioned explicitly. This is the view that since bus riders tend to be low earners it’s virtuous to support transit subsidies and vicious to oppose them.
Of course, evaluating the need for still further aid to low earners is beset with imponderables, of which the principal one may be how to weigh giveaways’ benefits against the resultant disincentives’ harm. As Gramm et al. explain in The Myth of American Inequality, moreover, government statistics relevant to the issue tend to be deceptive. On average, for example, an American family in the middle earnings quintile earns 13.5 times as much as one in the bottom quintile. But when Gramm et al. took taxes and transfer payments into account they found that actual disposable income per capita is no greater in the middle quintile than in the bottom one. Indeed, it’s slightly lower.
Let’s nonetheless assume that low earners should be given still more of what others have worked for. But let’s also take into account that most low-income Indianapolis residents don’t ride the bus. (Less than one resident in twenty takes the bus, but 15.7% of all residents live in poverty.) Wouldn’t it be more equitable to distribute the aid without making recipients ride the bus to receive it? Moreover, our previous post demonstrated that even to the riders themselves IndyGo bus rides aren’t worth what providing them costs. So wouldn’t even residents who currently ride the bus benefit more by receiving the aid directly in cash than through subsidized IndyGo bus rides?
Conclusion
Again, our previous post’s calculations employed estimates and projections of future ridership, so our conclusion that IndyGo’s expansion is costing more than it’s worth is not entirely free of uncertainty. But the historical data those estimates and projections were based on strongly support our conclusion. Guided by those whose livelihoods depend on transit subsidies, though, transit policy subordinates experience and data to poor logic and wishful thinking.
IndyGo should be downsized.