This was originally posted on Live Oaks on September 7, 2010. Comments have not been migrated.
The Chronicle tells us that new Metro chairman George Greanias faces the challenge of selling a “sometimes skeptical public” on the alleged merits of light rail. The article makes it appear that Greanias is more concerned with the troubled agency’s public image than correcting its financial problems. And that isn’t surprising.
Unlike a private business, Metro has an endless source of funds–taxpayers–which it can tap into. Unlike a private business, Metro does not depend on the voluntary consent of its “investors.” Whether it gets its money from taxes or by begging Washington, the money is ultimately taken from taxpayers through coercive means. That is not the only difference between a private business and a government agency.
A private business must offer potential investors a reasonable return on their investment, with each investor free to decide what is reasonable and what risk he wishes to take. A private business must sell potential investors on the merits of its plan. Similarly, a private business must sell potential customers on the value it offers. Again, each consumer is free to decide for himself whether the value offered is worth the price asked. Everyone–the business, investors, and consumers–is free to act according to his own judgment. This is not the case with Metro.
Greanias does not need the unanimous consent of every participant in Metro’s boondoggles. In the case of bond elections, he need only obtain the consent of a majority of voters. In the case of handouts from Washington, he need only obtain the favor of the proper authorities. Unlike a private business, Greanias does not need to convince everyone of Metro’s alleged benefits–he is ultimately backed by the coercive power of government.
This is true of both the “investors” and the consumers. Taxpayers are forced to subsidize Metro’s operations, and thereby pay for the transportation expenses of other citizens. And the government’s monopoly on roads and highways leaves drivers no choice but to utilize these government “services”–no selling is necessary.
If Greanias really wants to do the public a service, he would try to sell it on the merits of getting government out of the transportation business. Until he does that, all he is selling is a glorified welfare scheme.