> Alternatively, we could imagine a firm that can't charge
> enough to cover its costs because its output is substantially
> non-market in nature, but whose output nevertheless is a
> great boon to humanity.
Like, say, SprintPCS?
:-)
> I suspect there would be benefits to rebalancing the nation's
> transportation more in the direction of rail, less for air and auto,
> but I don't have any cites on this.
They probably don't exist. Nonetheless, I think Amtrak's problem is that it's being asked to do two things at once: provide for "real" transportation in a few places (the "corridors"), and provide some partly symbolic, partly nostalgic "good old days" tourist train service, nominally so that many Senators can claim they support the rails.
They can't perform very well on the former because they aren't allowed to make large capital investments: the system that would work simply doesn't exist today, and would have to be purchased and built, at a not-insignificant cost. Higher speed tracking, removal of at-grade crossings, catenary instalation, probably close to $30M/mile. Once you have a system, making it bigger is easier, but you have to have an anchor.
They can't perform very well on the later because they are stuck with what are essentially cargo lines and are at the mercy of a (slowly!) dying industry. Yes: there are a few markets where rail can compete with trucks; I was just reading a fascinating discussion about how the twice-weekly Chicago->LA (but not, alas, the return trip) service is beating up even the highest skilled (and paid!) team drivers. Even with the extra drayage to get
They can leave Chicago slightly later, especially with "fresh" items, and arrive in LA early enough to get offloaded before the weekend (that's why it works in one way but not the return: time zones count!).
Incremental upgrades of "hot spots" on the tracks will push this even further, even though the overall speed of the 2,000+ mile run is about 49mph. 24 hour operation, slow but sure, beats even the teams who have one driver sleep while the other drives (and often it's a husband-wife team, so there's no split of the cash). Something like $1.10/mile as opposed to trucks at $1.30. Now there's a business with razor thin margins. Get stuck in traffic somewhere in Utah, and you're dead meat.
Split Amtrak up: get Herb Kelleher to run the Texas corridor (he's the most vocal opponant, becasue he has the most to lose), John Kelly from Alaska Airlines to run the west, keep the current management team running Washington->Boston, and get Disney to run the tourist trains.
/jordan