This post originally appeared on Orphan Road.
How does a pro-roads organization come to favor rail? Well, they don’t. But they provide a great reason to push for infrastructure improvements immediately. The world is awash with global capital right now (article here). Sure, they want to use this cheap capital for building roads, but the argument is the same for building massive rail improvements quickly.
Here’s the situation. Remember the collapse of the mortgage industry, specifically the sub-prime mortgages? Well the bubble was caused by a glut of global capital looking for a safe place to rest, and the bubble popped when investors realized that sub-prime mortgages were not a safe bet. This capital hasn’t gone away – it’s still there looking for safe, long term investments (see: Dubai for one of the places it has landed). For a great primer on this, listen to a rare This American Life documentary on the subject (here).
What would be a safe, long-term investment for global capital? Discovery says infrastructure fits the bill. We may disagree on what that infrastructure should be, and I don’t think they realize the full financial potential out there, but we agree on the major financial points. This global capital is available now. We don’t know what the financial picture will look like in several years. Actually, this is a great reason to do more than just ST2.1 immediately – let’s build an in-city light rail system while we’re at it. We just may not ever get this good of an opportunity again.