The Secret Worldwide Transit Cabal

Informed but opinionated commentary and analysis on urban transportation topics from the Secret Worldwide Transit Cabal. Names have been omitted to protect the guilty.

Our Mission: Monkeywrench the Anti-Transit Forces

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Tuesday, October 08, 2002


From the Cabalmaster:

The latest ?wisdom? from Wendell Cox
If you prefer facts, verifiable references, and reasoned if opinionated commentary, then you’ve found the right website.
But if you prefer “sappy” fudge, stale sound bites and warmed-over baloney, you might want to check out Wendell Cox’s latest effort (“The Lexus Lines: Urban Rail in Minneapolis-St. Paul;” see:  This time, he’s “critiquing” (in his usual “Cox-amamy” manner) the Hiawatha Corridor LRT project and the proposed Northstar commuter rail line in Minneapolis.
(See:  For a map of the Hiawatha line, see:  For the “official” project website, see:  For the Northstar proposal, see:
Variations on this well-worn theme have been recycled ad nauseum for decades:
“Then there’s L.A.’s Metrorail subway, being built at the cost of at least $250 million per mile.  Even with heavy ridership -- which is unlikely, according to independent studies -- the construction costs would be enough to buy every patron a limo” (“The Week in the West,” “The Road to Nowhere,” National Review, November 16, 1992).
Most writers who use the “limo line” are wise enough not to elaborate.  But good ol’ Wendell actually provides numbers!  By doing so, he’s given your favorite opinionated transit pundits a golden opportunity to document the machinations of a master fudgemeister.
Not only that, but Wendell insists -- elsewhere -- that he’s not serious. He states -- explicitly -- that another variation, the so-called “Jaguar Argument,” is not a “policy proposal:”
“The Jaguar Argument is used to demonstrate the absurdity of spending so much money to attract a new commuter to light rail” (see:; “The Jaguar: Symbolizing Public Policy Absurdity”).
We remain unconvinced, Wendell, and we’re not the only ones.
But first: Wendell also states -- explicitly -- that he does not find it “necessary to respond in detail” to anyone who fails to provide “on-point refutation of any point raised by Wendell Cox or ‘The Public Purpose’” (see:
We therefore anticipate that Wendell will respond to each and every issue raised in this mini-series.  If not, then Wendell will have acknowledged, if tacitly, that his demonstration of “absurdity” is in itself absurd (e.g. arguing against the existence of Santa Claus by denying the reality of the Easter Bunny).
1.) By failing to equalize the capital recovery factors used to determine “rail” and “automobile” costs, Wendell Cox almost doubles rail costs with respect to auto costs.
Cox based annualized capital cost for the “auto” examples on the “capital recovery factor” charged by an online vendor (, about 5 percent.  He determined rail costs using the 7 percent discount rate specified by the Federal Transit Administration (FTA) for alternatives-analysis purposes.
In other words, Cox based auto costs on “financial” analysis, and rail costs on “economic” analysis.  This cannot be justified given the purpose at hand.
The 7 percent FTA discount rate is a “real” discount rate that does not include inflation.  In contrast, the 5 percent CRF associated with automobile leasing is a “composite” rate that does include inflation.  Inflation for the second quarter of 2002, seasonally adjusted, was estimated at about 2.2 percent ( This implies a real CRF of about 3 percent for leased autos, or 4 percent less than Cox charges against urban and commuter rail projects.
The discounted capital cost calculated by Cox is nearly 74 percent greater than if based on a 3 percent discount rate.  The total annualized cost would fall by about 30 percent if a 3 percent discount rate were used.  The facts justify a 30 percent downward adjustment in Cox’s “Hiawatha Light Rail” and “Northstar Commuter Rail” costs (rounded to one significant digit to avoid spurious precision):
“Cost per New Ride:” $20.00.
“Annual Commuter Cost:” $8,000 ($2,000 less than the annual lease expense for a 2002 Lexus 430).
“Career Commuter Cost:” $300,000.
“Cost per New Ride:” $8.00.
“Annual Commuter Cost:” $4,000 ($2,000 less than the annual lease expense for a 2002 Lexus IS 300).
“Career Commuter Cost:” $200,000.
To be continued…

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