Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


California High Speed Rail Delayed Again

The controversial high-speed rail project; which inspired Elon Musk to think up the Hyperloop, has been delayed again. Politco reported that the first segment of California’s high speed rail line will not be completed until 2022 under the present schedule.

That means California could put the finishing touches on its project as Hyperloop opens somewhere else. It goes without saying that would be a major embarrassment for the Golden State. To make matters worse; the first segment will only connect Bakersfield and Fresno, and not reach any of California’s major cities.

The segment through California’s flat Central Valley was supposed to open in 2018, but now it will not be ready until 2022. That has critics demanding the plug be pulled and rail-hating Republicans ecstatic.


Part of the reason why people are so mad is that the project was supposed to be done in September 2017. Now all that’s going is the construction of some overpasses. To make matters worse the project is being built in an area of California where nobody wants it.

Currently the California High Speed Rail Authority (CHSRA) is rushing to spend $2.5 billion in federal stimulus Monday simply to spend it. The Authority also has $9 billion in state bonds to spend.

Should California turn High-Speed Rail Over to Hyperloop One?

Perhaps the state should scrap the whole high speed rail plan and turn the bonds over to Hyperloop One. After all that company successfully tested part of its technology in North Las Vegas on May 11, 2016. More importantly it has an aggressive CEO with a successful track record of building infrastructure in the form of Rob Lloyd.

Hyperloop One is also headed by a successful venture capitalist, Shervin Pishevar who has been able to raise a lot of money. Hyperloop One has quickly put together a team of successful engineers and other executives. The CHRSA has been criticized for not putting together a team.

More importantly; Hyperloop One is a California-based company headquartered in Los Angeles. It could form the basis of a major new industry for the Golden State, that could generate billions in revenue and thousands of new jobs. Since Hyperloop One is actively searching for a site for the first line it could be a good fit.

That could also spare California the embarrassment of spending billions to create a rail system that could be obsolete before it the first train runs. Since the high speed rail might not be built, why not take a risk on something new that could be a lot cheaper.

Some estimates indicate that the Hyperloop would cost $5 million a mile to build so it could be much cheaper. That means a Hyperloop system connecting all the state’s major cities might be possible with the $9 billion the CHRSA has access to. More importantly it might be possible to build it in a few short years.

Hyperloop might be the only thing that could save California’s dream of high speed rail from becoming a bureaucratic boondoggle and a national embarrassment. That could be the ultimate irony, because Musk originally proposed Hyperloop as an alternative to CHRSA. The billionaire was so disgusted by the slow speed and high cost of the original CHRSA rail proposals he devised an alternative.

Musk’s reaction to the rail project shows us why spending on infrastructure is so important. Investment in infrastructure spurs innovation and thinking that can lead to important progress. Therefore we need a lot more investment in America’s infrastructure and less talk of austerity for austerity’s sake.