UPDATE: Wednesday, Mar 1, 2023 · 9:37:10 PM +00:00
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xaxnar
UPDATE: For everyone who didn’t get a chance to tune into the video chat mentioned at the bottom of this post, or couldn’t watch it in real time, a recording of the session will be made available. There were great speakers and a lot of interesting points brought up.
(If anyone from here watched, please let me know how it looked to you with a comment.)
By now you have probably heard quite a bit about the derailment in East Palestine, OH that involved a massive spill of toxic chemicals. There’s no question that what happened is still having an impact weeks later, both on the ground in the community and on national politics.
It has focused a lot of attention on how railroads have been cutting corners to increase profits at the expense of workers, shippers, safety, and the public interest. There’s been a lot of back and forth over who is to blame, whether new braking systems would have made a difference, etc., and is this an attack on white people in a red state?
Not getting as much attention is the widespread unhappiness among rail workers who were preparing to go on strike until Biden and Congress forced a contract on them that they had voted down. What happened in Ohio was an example of what they were willing to go on strike over — railroad cost-cutting measures that have decimated employee ranks and put safety at risk.
There are a lot of remedies being proposed, but there is one that is getting almost zero attention in the press.
Nationalization AKA Public Ownership
Unless you follow rail industry news sources, are tuned into labor efforts, or progressive news links, odds are you haven't heard that there is a growing sentiment that the best long-term answer for what ails the rail industry is for the government to step in, because the railroads are too important to leave to the mercy of hedge funds. (Recent example here.)
There is a lot of conventional wisdom that this is something we simply do not do in America. The government has never and does not have a role in operating railroads — except when it does. Numerous commuter lines come to mind for example — but there is more than a little precedent.
It was government action that resulted in the building of the Transcontinental Railroad. Western railroads would not have been built without government land grants. In 1894, Federal troops were one of the measures employed to end what was becoming a national rail strike after the Pullman Company cut worker wages during one of the periodic financial panics of the times.
[Update] It should also be remembered that railroads used to be heavily regulated because of egregious abuse of their customers because they used to be a transportation monopoly with no practical alternatives in the late 19th and early 20th century. Rail abuses helped fuel the rise of the Granger movement.
...The most significant of the Granger cases was Munn v. Illinois (q.v.), in which a Chicago grain-storage facility challenged the constitutionality of the 1871 Illinois law setting maximum rates. The court, with Chief Justice Morrison Remick Waite writing for the majority, upheld the state legislation on the grounds that a private enterprise that affects the public interest is subject to governmental regulation.
emphasis added
At the federal level, this resulted in the creation of the Interstate Commerce Commission.
The ICC was established by the Interstate Commerce Act of 1887, which was signed into law by President Grover Cleveland.[1] The creation of the commission was the result of widespread and longstanding anti-railroad agitation. Western farmers, specifically those of the Grange Movement, were the dominant force behind the unrest, but Westerners generally — especially those in rural areas — believed that the railroads possessed economic power that they systematically abused. A central issue was rate discrimination between similarly situated customers and communities.[2]: 42ff Other potent issues included alleged attempts by railroads to obtain influence over city and state governments and the widespread practice of granting free transportation in the form of yearly passes to opinion leaders (elected officials, newspaper editors, ministers, and so on) so as to dampen any opposition to railroad practices.
During the widespread disruption of the supply chain during the pandemic, it became apparent that the rail industry pursuit of PSR (Precision Scheduled Railroading) had crippled its ability to handle shifting demands, creating national security issues and hurting the national economy. A century earlier, the government responded to a comparable situation.
On December 26, 1917, President Woodrow Wilson took control of the nation’s railroads. Railroads were still having issues with labor, and were failing to provide the service needed to meet wartime demands. Under national control, critical investments were made, designs were standardized, and other reforms were instituted. Railroads remained nationalized until 1920. Although rail workers wanted the railroads to remain under Federal control, Congress handed them back.
In more recent history, decades of investment in highways and airways along with regulations that made rail uncompetitive with trucking were driving the industry into collapse. Amtrak was created in 1971 to take over the passenger service railroads were dropping as unsustainable. Although it was created with the expectation that it would eventually fail, Amtrak hung on and is the reason we have any kind of national passenger rail system at all.
In 1976 the Federal government created Conrail in response to multiple rail bankruptcies in the Northeast. The Staggers Act in 1980 lifted many controls from the industry, and rail began to be profitable again. Conrail was eventually turning a profit and was privatized between Norfolk Southern and CSX.
In light of this history, the government taking a role in managing railroads is not unprecedented. The situation today is that while the rail industry is highly profitable with record earnings, it is operating in a way that is counter to the public interest. It is putting the economy at risk, is creating serious safety hazards, is failing to fulfill its potential to address climate, is providing unacceptable levels of service, and is engaged in labor policies that exacerbate all the other problems. Nationalization is once more looking like the remedy the industry and the country need.
There’s Several Ways To Do Nationalization
In These Times has an article that looks at the subject in detail. If you read nothing else, read The Case for Nationalizing the Railroads. It discusses how rail workers are up in arms over the state of the rail industry and are calling for nationalization. It makes the case for greater public equity given the massive profits of the rail industry, how it is cannibalizing itself for Wall Street, the question of infrastructure investment, the unrealized climate potential, robber barons and regulations, global examples, and more.
To point up one of the key elements, should it be horizontal or vertical?
Ownership of the different components of the rail sector is often described along “vertical” or “horizontal” lines. “Vertical separation” means that one entity — perhaps the government — owns the tracks, and different railroad companies compete and pay to ship freight on them.
“Horizontal separation” means a single entity owns the tracks and runs trains on them. Nationalization could more easily happen in a vertical separation model, in which the government owned the tracks and infrastructure, while nationalization in a horizontal separation model would be more complicated, with the government presumably both owning the tracks and shipping freight. If the U.S. government did own rail infrastructure, either private freight railroad companies could either pay to use it or the government could offer concessions and contracts for privately run services. This form of nationalization would not require taking over or dissolving the railroad companies, since they would still be running the trains — just on publicly owned tracks subject to government planning and regulation.
There’s a suggestion that it might be more feasible to attempt to correct the shortcomings of the industry with a return to more regulation instead of public ownership. Given the predictable reaction to the idea of some kind of nationalization by the rail corporations, Wall Street, and the political establishment, this response points to an interesting parallel:
Ron Kaminkow is among the workers who prefer wholesale change — and now. “If the only choices are the status quo versus some form of regulation and restriction to rein the Class I carriers in, then I suppose I would support the latter,” Kaminkow says. “However, just like regulating the health insurance industry — providing Obamacare or what have you — these are not real solutions.
“We need a national healthcare system. I think the same thing holds true for the railroads.”
Want to learn more?
Theres going to be an online session with people intimately involved in these issues on MARCH 1, 2023.
Tomorrow (Wednesday at Noon Pacific/3pm Eastern), Solutionary Rail hosts an important virtual panel discussion with Carl Rosen, General President of the United Electrical, Radio and Machine Workers of America (UE), Scott Slawson, President of UE Local 506 that represents workers at Wabtec, in Erie, PA, and leading EJ organizers from around the country.
Expressions of Solidarity: UE's Call for Public Ownership of Railroads & Environmental Justice Perspectives
Read UE's resolution to put US railroads under public ownership. This resolution builds upon the Green Locomotive program they lobbied for at the beginning of the Biden Administration. Both address important impacts on and demands of EJ communities. Rosen and Slawson will speak about their work and engage with some of Solutionary Rail's Environmental Justice allies, including: mark! Lopez of East Yard Communities for Environmental Justice (EYCEJ), Ivette Torres of People's Collective for Environmental Justice (PC4EJ), and Yvette Arellano of Fenceline Watch.
There’s a form at the bottom of the page to RSVP to get access to the presentation. It’s also available as a Facebook Event.
The program will likely be recorded for viewing at a later time for those who can’t make it.
For other articles on nationalization of the rail industry:
• Amid Ohio Nightmare, Rail Worker Alliance Urges All of Labor to Back Railroad Nationalization
* This diary has been updated with additional material about the Granger Movement, the Interstate Commerce Commission, and corrected/’additional links about the Green Locomotive initiative, 12:20 east coast time 3/1/2023