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Source link: http://archive.mises.org/13572/seeing-is-believing-20-miles-of-empty-and-mothballed-lumber-hauling-rail-cars/

Seeing Is Believing — 20 Miles of Mothballed Lumber Hauling Rail Cars

August 16, 2010 by

[UPDATE: Welcome Instapundit readers. Check out the comments section below for additional eyewitness accounts of mile after mile after mile of mothballed rail transport cars in Eastern Colorado, outside of Bakersfield, south of Olympia, Washington, south of Corvallis, Oregon, and southwest of Phoenix, etc., rail cars used to transport lumber, cars, construction supplies and industrial equipment. Feel free to crowd source your own eyewitness account of malinvested resources from the artificial boom of the 2000s now left idle during the inevitable bust phase of the business cycle -- now tragically deepened by the pathological policies of Obama, George Bush, and the U.S. Congress. For a basic account of the Hayekian malinvestment boom and bust cycle see this article by Tom Woods, this YouTube Hayek vs. Keynes Rap Anthem produced by John Papola and Russ Roberts, or any one of these essays by Roger Garrison.]

Malinvestment. Picture it in your mind. Or take a look out the window. Below right is a photo taken of unused lumber hauling rail cars now parked on a closed railroad spur in Eastern Oregon, part of 20 miles* of empty rail cars dedicated to hauling lumber to market. Most of these lumber hauling rail cars have been in mothballs since 2008 ….

Empty Lumber Cars

Empty rail cars mothballed in Eastern Oregon

Like a maid who doesn’t do windows, most economists are “scientists” who don’t do field research. The situation is rather different in other sciences. They do field research in the sciences of Zoology, Botany, Geology, Entomology, Oceanography, and Astronomy (in fact, try getting an advanced degree without some field research). They even do it in “Nursing Science”, and “Agricultural Science”, and “Public Health Science”. But don’t ask a computer jockey “Economic Scientist” to leave his office and learn empirically — “test” his understanding — from anything other than his Internet stream of “Official Government Data”.

Twenty-five percent of unemployed workers in America are construction workers. (I personally counted over 100 day laborers seeking work outside of a Home Depot in Glendale, CA last year — before I stopped counting.) The artificial malinvestment and overconsumption boom played out in part through the housing market and associated industries (identified by F. A. Hayek as a classic long-period production good — see The Pure Theory of Capital).

If only 1/10th of 1 percent of the “economic scientists” employed by the taxpayer went to work doing field research on the housing / mortgage bubble we could know EVERY empirical detailed involved in EVERY housing loan and housing exchange across the course of the artificial malinvestment and overconsumption boom. They could do the same in any number of associated industries.

Don’t hold your breath.

Economists don’t do empirical research.

They don’t even use a camera.

Related:

Video of uncompleted homes being bull-dozed in San Bernardino County, Northeast of Los Angeles.

A photo of the mothballed Echelon casino project in Las Vegas.

The Wallowa County ChieftainUP stores 563 more cars.

*I marked 22 miles of steady empty rail cars on dad’s truck odometer as we drove along the rail line, and I subtracted 2 miles for short breaks here or there where the road crossed or farm houses were allowed a unobstructed view. The Wallowa County Chieftain reports however that up to 30 miles of rail line have been leased for the purpose of mothballed lumber car storage.

Below is a close up of the empty lumber transport cars now mothballed in Eastern Oregon:

Empty Lumber Transport Cars

Empty Lumber Transport Cars

{ 68 comments }

HL August 16, 2010 at 1:58 am

I drive past abandoned housing complexes, strip malls and office buildings every day. Indeed, the evidence is all around us.

Greg Ransom August 16, 2010 at 3:03 am

In 2003 I moved into the housing-bubble boom town of Ladera Ranch, CA.

High end and luxury retail also boomed here.

But a good chunk of the small businesses shut their doors in the last 2 years. I’ve often thought I should have taken pictures of all all the empty retail businesses and posted them here on the Mises blog.

A few new businesses have taken the place of some of the closed stores, but there’s still lots of empty retail space in commercial buildings built in the last 10 years.

And note well. Ladera Ranch is the #1 foreclosure zip code in all of Orange County, CA, the original home of the subprime mortgage.

I’ve seen the sale price of my exact duplicate tract house model double in price and then nearly fall in half in less a 7 year span.

And have you ever seen “The Real Housewives of Orange County” TV show on Bravo? A number of those women lived in this area, and what happened to some of them — buying too much house, spending too much money, and losing their artificial boom-times income — happened to all sorts of people in this town.

All in all it’s a picture worth a thousand words of a classic malinvestment and overconsumption boom and bust in one little zip code.

john August 16, 2010 at 5:37 am

Thank you.

michael August 16, 2010 at 8:00 am

You have to congratulate anyone who suggests that academics should do field work. How else are they going to find out where the rubber actually meets the road?

We should all take the time to go somewhere new and meet someone new. If you’re a bond trader, go out and meet a bar full of hardhats. And if you’re a plumber, show up at a faculty lounge. Carry a notebook, and have a list of intelligent questions to ask. No one will be offended– in fact everyone you meet will probably be very enthusiastic about your project.

A good list of questions might be every one of your automatic assumptions about the way things are. Ask them in the form of a question, as in “Many people think (etc.)… what do you think?” And see what people say.

Every day we spend learning things we didn’t know before is a day well spent.

Daniel August 16, 2010 at 10:30 am

Later you can just handwave what you don’t agree with, despite near-apodictic certainty due to rigorous fundamental epistemology and nearly flawless deductive reasoning, and rationalize it by claming you were successful in business, therefore you must know economics

Inquisitor August 16, 2010 at 11:59 am

Mind you this is field work interpreted via a particular economic lens. It isn’t “testing” as if such a concept applied to economics.

michael August 16, 2010 at 5:21 pm

Near-apodictic certainty. I like that.

No, I don’t know classroom economics the way you do. What I do know is how business works, in many areas. And my work has been graded over a span of many years, in the big classroom.

It is my opinion, not a certainty, that much of the theory people espouse around here is inapplicable to real life. And that if their version of austrian economics were ever to be seriously applied, it would be a disaster for the average person… and less so for the richest fraction among us.

It has also been my observation thus far, that F Hayek argues his points much better than most of you argue yours. Because I’m now taking the universal advice I’ve been given here, to actually read the ancient sacred texts. And I find Hayek telling us that the monetary explanation of the business cycle can really be very badly argued. To which sentiment I agree.

So let’s say I know very little so far about your brand of schismatic economics, other than that a majority of economists-without-prefix are openly skeptical of your school. (And that most of the comments I read in the forum here don’t make any intuitive sense.) The only thing I’ve studied across my career has been the actual flow of money, as it travels through a multitude of hands.

Russ the Apostate August 16, 2010 at 5:43 pm

“Near-apodictic certainty. I like that.”

I disagree with some of Austrian “epistemology” or “meta-economics”, also. But just because I do, that doesn’t mean that they’re wrong about everything.

“What I do know is how business works…”

So you say, which we have no way of verifying. As I said before, this is nothing but a very poor argument from authority. But if I assume that what you are saying is true, so what? If we were talking about the economy of one firm, that knowledge might apply. But we’re not, so it doesn’t. You don’t necessarily understand any more about economics than Ross Perot did, and I think it’s a safe bet that he understood more about running a business than you do.

“It is my opinion, not a certainty, that much of the theory people espouse around here is inapplicable to real life.”

It is my opinion that your pragmatic attitude leads you to believe that you already know everything that needs to be known, whereas in reality economies are much more complicated than you are willing to accept. It’s as if I were a purely pragmatic engineer trying to design a DVD player from scratch, but didn’t think that all that quantum theory stuff (i.e. as it applies to lasers) was applicable in the real world.

“…most of the comments I read in the forum here don’t make any intuitive sense.”

So what? Much of economics, even of more mainstream schools, is counter-intuitive at first blush.

michael August 17, 2010 at 2:25 am

Maybe I should say it more plainly. When I read standard economics, most opinion there can be supported by evidence, and appears solid. Individuals may diverge, but not by all that much. They don’t begin with the premise that all competing approaches must be totally trashed, and that nothing said by any opposing school can be of any worth.

And now that I’m reading Hayek and bits of Mises (so far) I find quite a lot of what they have to say to be solidly grounded. It’s just that when I read the body of opinion on offer in this forum, it’s mostly wack-job economics, half-understood, not dependent on observation, and asserted so forcefully you can feel the spray on your face. Keynes is full of crap. Krugman is a stooge. And so forth. Admit the least validity in anything either has written, and the whole edifice of absolutist austrianism (more accurately described as a belief system) crumbles.

This is not the science of economics. I describe the practical economics of cash flow in American society as I have observed it over a lifetime of working inside it… and I’m ready to be shown as mistaken on the underlying theory by superior evidence. But I am not blown away by mere dogma, no matter how bitterly it is argued.

Hayek himself is so much more intelligent than most of you fellows here.

Jon Leckie August 17, 2010 at 3:49 am

What is this nonsense, michael? Serious question. What are you saying here? That you’re holding members of the public who read the articles on this site and comment on the blog are to be measured against full time professional thinkers who are widely acknowledged to have been among the most brilliant of their era? I have a full time job – probably like many visitors to these pages – but I also have an interest in history, economics and politics. I come to this site to learn more about a school of thought I find very powerful. And for the last month, a site that is completely dominated by your peculiarly offensive brand of arrogance and condescension. You assert that you’re open to evidence. You’re not. You’re a close minded bigot.

It’s great to see that you’ve finally started to read Mises and Hayek, but it remains disappointing and frustrating that you’ve so arrogantly and unproductively drowned this website in your repetitive twaddle. You communicate this sense of entitlement which is really quite bizarre. I do not come here to compose elegant, comprehensive verses on the Austrian perspective to allow a close minded bigot like yourself easier access to the principles behind it.

Fredrick Hayek is so much more intelligent than Jon Leckie. Wow. Great contribution.

michael August 17, 2010 at 9:02 am

I am certainly open minded toward evidence. That is my orientation. But I am not very open to unsupported doctrine that doesn’t make intuitive sense. So I grate on the nerves of the gallery here. I’m prodding people, trying to urge them to support their theses the way any decent college professor would do.

And along the way, more than once, people suggested that I’d learn more by reading the GMs (Great Masters). And I’m finding that to be true. Hayek in particular doesn’t seem to suffer from the common faults on display here in the forum. He’s got a pretty good head on his shoulders.

I do understand your central comment, that you work full time and just don’t have the spare time to study anything in great depth. All the time I was working I had the same problem. I never even had time to get a haircut; the phone would be ringing off the hook for me. Even at midnight, they’d be calling in from Djakarta or Hong Kong. Sleep itself was restless and agitated.

Any natural advantage I’ve had is that I devoted all my spare energies to learning more about the world we live in (on the theory that we only go around once, and should make the most of it) instead of just doggedly pursuing a personal fortune with the rest of the herd. So while the mass of Americans were watching television and following sporting events, I either had my nose in a book or was traveling outside the bubble, in the less fortunate parts of the planet, where I could see for myself the consequences of history gone wrong.

This unshared body of experience makes me sound impossibly arrogant and preachy. A terrible flaw. But what I want to do is try to impart some of the sense of what I’ve learned by entering into every level of humanity and studying people’s lives– not just paying the note on some overpriced condo in midtown by composing briefs no one will ever read more than once.

The condescension I plead guilty to. It’s a fault, to be corrected by adding a dash more humility. Bigotry? No, I don’t think so. And a sense of entitlement? I’ll cop to that, in spades.

Every man is a king; most are unaware of it. The mass of men comfort themselves with the thought that they enjoy free will; yet every day they tread the same track they did the day before. Should I try to signal to them that they stand at the crossroad of a hundred paths? Or just give up and walk away when the crowd yells at me to leave them alone?

I would suggest to Jon Leckie that if F von Hayek became a truly intelligent man, then anyone can. And when JL retires and has a few spare moments, he should study how that was done… and become a great man himself. We all have it in ourselves, providing we’re not just too damn busy. We are each kings in a marvelous land.

Jon Leckie August 17, 2010 at 9:36 am

michael, I’ll give you one thing, well two: 1. you never rise to my insults. Kudos. 2. you are one stubborn bastard. Bravo.

In the same vein: You rely on this wide ranging experience of yours to disregard the responses made to your specific points. You then criticise the lack of an overall coherence in the posts responding to you. But you have refused – up until now perhaps? – to explore the sources that support the viewpoint of those respondents. So you rely on your own authority as a man of the world to disregard any counterfactuals, while refusing to engage with the theory that would tie those counterfactuals together. And you repeat this exercise day in, day out. Surely you’ll concede that this is rather frustrating to watch?

A second point. You seem to take at face-value everything you have been told about how the economy works thus far, and your interpretation of your life experience is unquestonably informed by this uncritical acceptance of standard economics. Yet you refuse – just refuse! – to consider 99% of the points and arguments made to you on this site, on the basis that they’re contrary to your experience. Michael, your interpretation of your experience is necessarily and unavoidably conditioned by the theoretical framework that – whether you’re aware of it or not – you carry around in your head. I must question why you are so ready and willing to accept the dominant point of view and why you do not question your broader assumptions more closely. You would surely benefit from being more open-minded. And no poster here can substitute for reading the Masters – they’re giants of political economy and it’s rather silly to expect that standard on an open forum like this.

So bravo on breaking into Hayek and Mises. I would also suggest getting an audiobook version of Hazlitt, I often have it on while I’m working, in lieu of the radio. If you did not look at the Hayek v Keynes rap battle link on youtube, you should check it out: I think it’s extremely well done and if you don’t agree, you should at least be entertained: http://www.youtube.com/watch?v=d0nERTFo-Sk

Jon Leckie August 17, 2010 at 9:38 am

Sorry I replied to the wrong thread.

michael August 17, 2010 at 9:52 am

Counterfactuals? Oh please, bring them on! A philosophy is worthless until it holds up well under serious challenge.

Let’s say the first round is over, and nobly fought to a draw. Let the second round begin! And this time, to be played with more light than heat.

I’ll give you a hint as to my method. You say “A second point. You seem to take at face-value everything you have been told about how the economy works thus far, and your interpretation of your life experience is unquestonably informed by this uncritical acceptance of standard economics.”

Wrong way to. I did a lot of thinking about what I saw in the economy, while I was working in it. Later I found the time to delve into some economics texts to see how others saw it. And oddly, those who I felt had the best take on it turned out to be people like JM Keynes, and JK Galbraith. And more recently people like Bob Reich, Kevin Phillips, Joseph Stiglitz.

Now that I’m reading Hayek, I like him because he’s first describing all the errors inherent in poorly stated monetary theses. In a word, he’s laying a solid groundwork for whatever is to follow, like the first passage of a well formed symphony.

“Yet you refuse – just refuse! – to consider 99% of the points and arguments made to you on this site, on the basis that they’re contrary to your experience.”

During our second round I will expect you to not just come up with the arguments (which I’ve now heard) but with supporting evidence taken from the real world. Because I’m convinced by the real world. It alone is true, while all our suppositions about it are in some degree mistaken.

I will discard all those that are irrelevant not just to my own experience but to any body of experience that can be found. In any other case, where there is no verdict of failure to adequately demonstrate, you may be crowned the winner.

Jon Leckie August 17, 2010 at 9:54 am

Sorry dude, you’re on your own. That’s good advice you’ve been given there. All the best with it.

michael August 18, 2010 at 8:28 am

That’s a disappointment, JL. I did give you every opportunity to carry the flag.

There are more things on heaven and earth than are dreamed of in your philosophy… or in mine. But likewise there’s some wisdom to be gleaned from any orientation, and I would have enjoyed debating you.

Jon Leckie August 18, 2010 at 8:46 am

I would’ve liked to as well michael, it’s a time thing, that’s all. But I couldn’t do a better job than a careful reading of Hayek – he sets out the arguments so clearly. And you know, one can be a libertarian without setting up a blind choice between no government and (eg) a state the size of the US Federal machine. It’s a continuum, and one has to live in the world in which one finds oneself (errgh what a clumsy sentence). I just think that state intervention damages a community’s ability to make the most of the scarce resources available to it, and so am opposed to any increase of state power and reach. The counter-argument that the free market will inevitably entrench inequality is a furphy. For the reasons why, see Hayek. (I would also refer to my own experience of the world around me, but I would expect no more recognition of the authority of that experience than that which I accord yours!) Good luck, try to keep an open mind!

michael August 18, 2010 at 9:02 am

Well, we’ll have to close this one in agreement. I’m not an extremist, preferring the comfortable middle. And I like living about halfway between the Darwinist jungle of no government control and the totalitarian hell of absolute control. What I find so fascinating here is the number of committed absolutists, who are utterly convinced there’s nothing in any view but their own. And who never wonder why they are such a miniscule proportion of the whole body politic.

If we try to rate the efficacy of state control in terms of mere quantity, rather than quality, we’ll probably come away with the idea that there’s “too much” state control. But that’s a really bad yardstick. Instead we should probably rate them on (a) the degree to which regulation and enforcement fulfills the intention of the people who support the state, and (b) the degree to which these rules constitute a hindrance to those who find themselves living in, but unsupportive of, the state. That is, how good those rules & regs are, and how faithful to our intentions in adopting them are the courts and police.

So then. We don’t have rules that make this an entirely useful and productive place in which to live and do business (there’s way too much squabbling over them)… but we do have such that it’s an okay place to do business. And most people prefer it to the alternatives. If someone were to stand up and call for revolution, I think very few Americans would support them. But if a discontented soul wanted to move to Hong Kong, which probably does things more to their liking, I’m sure none would object.

It’s live and let live, when things are going well. Revolution has never been popular in this country, not since we won our own.

mpolzkill August 18, 2010 at 9:26 am

Michael’s revolution in 1933 that has made him so very fat, happy and insufferable:

http://mises.org/books/pottage.pdf

michael August 18, 2010 at 9:29 am

“I just think that state intervention damages a community’s ability to make the most of the scarce resources available to it, and so am opposed to any increase of state power and reach. The counter-argument that the free market will inevitably entrench inequality is a furphy.”

I hope my argument didn’t come across as being quite so absolutist. I tend to categorically reject any argument that relies on the word “inevitably”. I think the world’s much more raggedy than that, and that outcomes are always in flux.

Will the mere presence of state control *invariably* lead to a misallocation of resources? Well, who’s to say? Some resources will be allocated by a state that ideally represents the wishes of all its people, in what we would hope would be a responsible manner. Whereas the absence of any state management of resources will lead to their being passed around only among those who are fortunate enough to lay claim to those resources. That would seem both an obvious and a neutral way of stating it.

This might not “entrench” inequality. But it would very likely set inequality into place, as those without access to needed resources would be at a disadvantage in the matter of ever gaining access to them. Once you’re down, you’re more likely to perpetually remain down.

However I would join you in opposing “any increase in state power and reach”. We have quite enough for the moment, thank you. The problem with our state (I don’t know about Australia) is that the state is in disarray. It’s split in two, with no common ground. Giving “it” more or less power won’t change the basic dynamic, which is toward terminal gridlock.

So in the dynamic between more or less state power, I hold a third view.

A second thing is this: why would I even think that imposition of an austrian solution would lead to an increasing gap between rich and poor, when our current, allegedly statist, policies lead to the widening of that gap?

The forces of concentrated money tend to accrue more money to themselves. In our system they are largely successful in co-opting the state’s power to their purposes. And if there were a sudden vacuum those forces would be even more successful, as they would be then unopposed by any competing strong estate.

If you spend any period of time accumulating information about macroeconomic trends I think you’ll find that rising real interest rates and tight money (the immediate effect of any austrian-style program) tend to induce a recession… and to make an already existing recession worse. And in the resulting credit freeze, history tells us that people with enough money to take advantage of the situation continue to do very well. Their money is both a cushion against adversity and a useful tool for taking advantage of distressed times. They are able to “buy low” at a time when everyone else is encountering serious cash flow problems. To buy and mark up scarce items, for example. In a zero-sum game they are the winners.

People without deep cash reserves take it on the chin. Hence I posed the general rule that a free market will tend to increase inequality, and reward the more fortunate at the disadvantage of the less fortunate.

mpolzkill August 18, 2010 at 9:37 am

“why would I even think that imposition of an austrian solution would lead to an increasing gap between rich and poor, when our current, allegedly statist, policies lead to the widening of that gap?

The forces of concentrated money tend to accrue more money to themselves. In our system they are largely successful in co-opting the state’s power to their purposes. And if there were a sudden vacuum those forces would be even more successful, as they would be then unopposed by any competing strong estate.”

Which well explains the massive support of Ron Paul by the nation’s rich and powerful.

michael August 18, 2010 at 10:02 am

Thank you for your civil comment.

The nation’s rich and powerful tend to be very conservative. They’re not the kind to ever rock the boat. Rather they vastly prefer the jungle they know to an experimental foray into the great Unknown.

If they went with a flake like Ron Paul they’d have to go to the trouble of learning a whole new ball game. Plus, I’m thinking their first take on his monetary ideas would be that he would just hasten the destruction of the dollar.

mpolzkill August 18, 2010 at 10:08 am

“Thank you for your civil comment.”

Go f*** yourself, scumbag.

“Rather they vastly prefer the jungle they know to an experimental foray into the great Unknown.”

Many of the rich and powerful supported your Hawaiian flake/war criminal, scumbag. And many of them truly are rueing that leap into the unknown.

Tim L August 17, 2010 at 4:11 am

‘You have to congratulate anyone who suggests that academics should do field work. How else are they going to find out where the rubber actually meets the road?

We should all take the time to go somewhere new and meet someone new. If you’re a bond trader, go out and meet a bar full of hardhats. And if you’re a plumber, show up at a faculty lounge. Carry a notebook, and have a list of intelligent questions to ask. No one will be offended– in fact everyone you meet will probably be very enthusiastic about your project.

A good list of questions might be every one of your automatic assumptions about the way things are. Ask them in the form of a question, as in “Many people think (etc.)… what do you think?” And see what people say.

Every day we spend learning things we didn’t know before is a day well spent.’

Michael you’re a deluded hypocrite. Bore off.

Matthew August 16, 2010 at 10:34 am

This post is fantastic. It is just the kind of thing I want to see more of.

Tim L August 17, 2010 at 4:15 am

Mathew I always found this to be useful, if you want to look at the weekly rail data for the US. As far as i know its independent from the Bureau of Lies and Snake Oil.

http://www.aar.org/newsandevents/newsandevents.aspx – new data out every thursday US time if i remember correctly.

Fephisto August 16, 2010 at 2:05 pm

I remember a while back I was all into Patton.

There’s this point in the movie Patton, where a portion of his army hasn’t crossed this single river. He storms into the HQ and asks what the hell is up. They respond that they’ve been searching maps trying to find a place where they can ford the river, since all the bridges are out.

Patton storms out, and soon enough they see him on the other side of the river.

Ren August 16, 2010 at 6:52 pm

And 30 miles of surplus rail spur gets new life.

gus3 August 16, 2010 at 10:05 pm

The classic Broken Window Fallacy.

Doug August 16, 2010 at 10:05 pm

They are center beam flat cars, they are used primarily for hauling finished lumber products and empties can be found parked all over the country, not just Oregon. They are one of my personal economic indicators and I too have been tracking some that have been unused since late 2007. I know of several stretches of rail where they occupy just about every unused rail siding and have for over two years.

apetra August 16, 2010 at 10:16 pm

Don’t assume economics as a profession is profoundly liberal.

The field may hold more conservatives, skeptical of government, in the academy than any of the fields you mention that do lots of on-the-ground research.

Going out an ‘collecting data’ doesn’t always lead to more practical, pragmatic economic views. I offer for your consideration: Marx’s buddy Engels and his “Manchester and the Working Class” http://www.amazon.com/Engels-Manchester-Working-Steven-Marcus/dp/0393302377

michael August 18, 2010 at 8:35 am

Are you assuming every researcher must be politically biased? When I was in school that was seen as a serious flaw. THE most serious flaw.

We’re supposed to go out into the field free from preconception, and report on what we find from the POV of the people we interview. Later on we can submit our data to analysis. The worst mistake we can make is to begin with our conclusion, and then discard any data that doesn’t lead us there.

I clicked on your link. And unfortunately the page doesn’t have a “look inside” feature for this book. Nor does it even give any book reviews. So, if you want to offer the book’s content for our consideration why don’t you give us something from it, or a synopsis?

Shane August 16, 2010 at 10:32 pm

Born and Raised in Wallowa County, been watching the number of cars growing each visit home. I’ll start investing in lumber companies and builders when I see the line get smaller.

Mike August 16, 2010 at 10:38 pm

There are several stretches of the Portland and Western south from Corvallis toward Monroe, Oregon, also storing these center-beam flatcars.

During the recession of the early 1980s the Southern Pacific yard in Eugene, Oregon, stored what must have been at least a hundred locomotives, all strung together. It was quite the sight, and for those of us in western Oregon, that recession and the accompanying tree-hugging (see, e.g., the Spotted Owl controversy) that was heralded the decline of the timber industry in these parts.

Our former loggers either have fled or are cooking meth.

Doug August 16, 2010 at 10:44 pm

There are thousands of locomotives in storage now too, Mike, and large cuts of them can be seen in just about every rail yard of any consequence. Mostly older stuff, but some newer locomotives as well. The cars pictured above appear to part of a leasing pool and those leasing companies are taking a beating.

Justin August 16, 2010 at 10:49 pm

Autorack railcars are another good indicator. WSJ stories last year of towns divided by idle railcars. Over 12,000 were idle 18 months ago out of the national fleet of 40,000. They are going back to work now, the trilevels (for small cars) in most demand. But autorack use is forecasting a new dip in demand next 2 quarters, which will be painful.

J. B. August 16, 2010 at 10:51 pm

It might well be that the U. S. timber industry is in doldrums because of government policies that discourage logging on “environmental” grounds, as well as the costs associated with government tolerated ecoterrorism. It would be interesting to know the amount of lumber imported from
Canada each year, what percentage of U. S. lumber sales those imports involve, and how much financial support “environmental” groups receive from the Canadian timber industry.

Bill Lever August 16, 2010 at 10:52 pm

Thanks, I too have been watching over 200 similar cars idle here in Bakersfield for more than a year. That should be about 3 miles of them.

I want the federal government to stop the policies that led to this.

Thousands of idle train cars, tens of thousands of empty houses, millions of idle square feet of commercial buildings ought to prove that the “best and the brightest” are the problem, not the solution.

Doug August 16, 2010 at 10:56 pm

Yep on the autoracks, although I agree it has gotten better. I see quite a few spine cars, 50′ box cars, old hoppers and older covered hoppers parked, too. I have noticed no increase or maybe even a decline in manifest trains. Almost everything I see being hauled on the mainlines are unit grain, ethanol, coal or container trains. In other words, no sign of a recovery yet, IMO.

ObjectionSustained August 16, 2010 at 10:57 pm

Same kind of thing happening in Eastern Colorado. About 20 miles of parked automobile transport cars parked between Eads and Ordway, Colorado. All Union Pacific. I recall seeing them there since late 2008. As an aside, I have always been told if you want to know how the economy is doing, just monitor the activity in the North Platte, Nebraska rail yard — a junction point for several major rail lines.

Narniaman August 16, 2010 at 11:08 pm

About two months ago there was least five miles of empty piggy-back trailers on a railroad siding along the interstate heading south from Olympia, Washington. There may have been more — but the railroad veered away from the interstate and disappeared into the woods, so I couldn’t say how much more than five miles of cars there were.

Narby August 16, 2010 at 11:16 pm

I’m a private pilot, and I can attest that there is a similar stretch of automobile carrying rail cars on a line southwest of Phoenix Arizona. I didn’t measure their length, but from my view from a couple thousand feet, they went as far as I could see in both directions.

1389AD August 17, 2010 at 12:53 am

This is truly tragic.Even more tragic is the unemployment and UNDERemployment that has afflicted the American worker as a result of onerous taxation and overregulation and uncertainty that has driven so many of the good jobs overseas.

egoist August 17, 2010 at 4:59 am

I suspect similar views are to be had throughout the country. South of Chicago, there are piles of containers on the side of HWY55. This reminds me of my brother’s [dark] advice about the statism current that’s sweeping the nation: “whatever you do, don’t get on the train”.

RailRoader August 17, 2010 at 5:41 am

oookay. Let’s look at this from a different perspective.

I am a director at a mainline railroad. I have shippers and client’s screaming at me to get lumber moved from here to there. My competition is moving and putting money into getting that lumber from here to there.

From what I am seeing in the comments, it is bad business for me to invest in the buying and leasing of railcars to do what I do best, move large quantities of material from here to there.

The problem with economists is the same as politians, they haven’t a clue other than esoteric numbers on a spreadsheet on what it takes to run a business.

RailRoader

The Kid Salami August 17, 2010 at 7:03 am

When you say

“I have shippers and client’s screaming at me to get lumber moved from here to there. My competition is moving and putting money into getting that lumber from here to there.”

I presume you are talking about during the boom times? And you are saying that commenters here think “it is bad business for me to invest in the buying and leasing of railcars to do what I do best”.

No, no’one is saying it is “bad business” at all, it makes perfect sense for you to act like you say. Did you read the article by Tom Woods linked to above? Please don’t be one of the innumerable who dismiss the Austrian theory of the business cycle without understanding it properly.

Some quotes from said article:

“One more point is important to remember: all firms are affected by the artificial boom, not just those that embarked on new projects or came into existence thanks to artificially cheap credit. Mises observed, “in order to continue production on the enlarged scale brought about by the expansion of credit, all entrepreneurs, those who did expand their activities no less than those who produce only within the limits in which they produced previously, need additional funds as the costs of production are now higher.” ”

“But why can’t businessmen simply learn to distinguish between low interest rates that reflect an increase in genuine savings and low interest rates that reflect nothing more than Fed manipulation? Why do they not avoid expanding when the Fed ignites an artificial boom?

It is not so easy. Even businessmen who know that the Fed is keeping interest rates artificially low may still find it in their interest to borrow and launch new projects, hoping they can get out before the bust hits. If they do not react to the lower rates, their competitors surely will and might be able to gain market share at their expense. Someone will take the bait.”

Carolynn August 17, 2010 at 8:10 am

Hi RailRoader!

Well…I believe you.There was an article on railroads in the Economist a few months back. Apparently, rail freight in the U.S. is among the most efficient in the world…and picking up steam again (*ahem*). It wouldn’t be surprising that lumber cars are idle, the construction market it flat and falling, but that doesn’t speak for other goods.

Still, according to the Economist article our rail roads are in trouble because Bush era regulations coming on line soon, and apparently some of our large industries that depend on rail (coal) think that rail freight prices are too high and are pushing for price controls — even though we have the cheapest rail prices in the developed world! This Congress is willing to lend a sympathetic ear. That scares me more than these pictures.

Doug August 17, 2010 at 9:33 am

I think the point is simply that malinvestment in housing led to additional malinvestment elsewhere. As the shipper you can’t know the end use of the product you are shipping and can only respond to the market. You did, and parked rail cars are the result.

RailRoader August 21, 2010 at 6:07 pm

I still don’t understand. I’m not going to argue that it was interference from the top trying to buy votes that fueled the last bubble with the RR and lease companies now left with surplus center flats. What would have been the proper thing for the RR’s to do? I am trying to learn something here that I didn’t know before, and I am trying to understand something way outside my sphere of knowledge.

The Kid Salami August 21, 2010 at 6:58 pm

“What would have been the proper thing for the RR’s to do?”

Again, no’one is saying that you should have acted any differently. As doug said, you responded to the market – it’s not your fault that the market was giving faulty signals, that the interest rate distortion gave the impression that there was much more “stuff” and future purchasing power than there actually was. This article really is very good.

http://www.amconmag.com/article/2009/mar/09/00012/

P. Aaron August 17, 2010 at 6:16 am

Try driving through Detroit. It’s largely abandoned.

Beefcake the Mighty August 17, 2010 at 6:19 am

Yes, but this is due to changing demographics, not credit-induced malinvestment.

Rick Caird August 17, 2010 at 7:01 am

I was on a tour in Ireland earlier this year. At one point the tour guide said “We don’t want to hear anything about the ‘Celtic Tiger’. Do you see that long row of houses over there? At night, they are dark because no one lives there”.

My theory of recessions is “If it is worth doing, it is worth over doing”. There is no Keynesian solution to having “overdone”.

z August 17, 2010 at 8:59 am

The federal reserve was created in 1913. What role did the federal reserve have in the boom and busts that preceded its existence, such as the tulip craze of the 1600′s, the Gold boom and bust of the 1840′s, the railroad bust of the 1870′s, or even the financial panics of the 1900′s which were the catalyst for creating the fed?

J. Murray August 17, 2010 at 9:03 am

The Tulip Craze was perpetuated by the Central Bank of Amsterdam that subsidized coinage of foreign gold into local currency.

The 1840s was a localized bust, not a national failure.

The railroad bust of the 1870s was driven by excessive government intervention as well as the post-Civil War era rejection of Union fiat currency. Another factor was the US Government banning use of silver for money, overnight making large amounts of bank deposits worthless. Further, there wasn’t a real bust as the rest of the nation went through the world’s largest economic and prosperity expansion in history.

The 1900s were a result of farming interference by Washington under the Interstate Commerce Commission.

J. Murray August 17, 2010 at 9:08 am

Since it isn’t letting me edit:

The argument isn’t that the Fed is responsible for ALL failures, as you pointed out, they didn’t exist until 1913. The argument is that it’s monetary and credit growth as well as central government manipulation that leads to failures. All of the busts you mentioned have significant factors of either monetary growth and/or significant central planning elements. You’ll be hard pressed to find a truly free market failure.

It just so happens that, today, the Federal Reserve is that central planning and monetary growth organization. If it went away and something else was created that did the same thing but held a different name, nothing would change. The entity doesn’t even have to be labeled as a central bank. It isn’t what we name something that is important, it’s what it does. The Federal Reserve is just another in the long line of central authority money creating organizations that hold significant respoinsibility for the bubbles and busts throughout history.

z August 17, 2010 at 9:39 am

Thanks for your response. I guess as far as I know, any group of people who have ever had an advanced economy have also had a government and therefore there has never been a true free market economy. So you can always point to some aspect of government as the cause of this or that failure but in the end those are just tenuous hypotheses which cannot be proved one way or the other. Maybe people are just idiots.

Ryan August 17, 2010 at 2:36 pm

If people are idiots, should we be selecting from among those idiots a few who will enjoy the exclusive privilege of creating money and credit, or to choose where to intervene or not to intervene in other forms of economic activity as well?

Rick Caird August 18, 2010 at 9:32 pm

You are a silly z. A free market system requires a system of property rights and contract enforcement. That does not imply that government is interfering with a free market when it enforces those two values.

Edward August 17, 2010 at 10:46 am

In recent months I have also seen long lines of empty rail cars parked near Coulee City, WA (rural area), and last fall, along sidings in rural Montana, and just south of I-84 along the Columbia Gorge in Oregon. I read that 20% of all freight cars were sidelined due to over capacity.

Some good news – I returned, via road, from western Canada last week and there was plenty of rail traffic again. Raw materials and multi-modal carriers were rolling on many long and frequent trains. This would be good.

Forrest August 17, 2010 at 12:09 pm

About a year ago I was driving South along I-5 between Olympia, WA and Vancouver, WA where I also witnessed what seemed to be endless miles of empty rail cars. it looked to me like they must have shut down a whole through line/track paralleling I-5 just to park them all. It’s a bad sign.

ProfitOverLife August 17, 2010 at 3:10 pm

My favorite little independent store just closed. Also several favorite restaurants and a couple of favorite eateries at my local near-to-work food court also closed. One will be replaced by, apparently a chain eatery.

You are seeing the hollowing out of the country–a hollowing out of the middle class and the small businesses the middle class spend money at.

This is the logical, expected, predicted, inevitable end result of years of regressive Republican power and policies that say that the rich and corporations come first, that giving the rich all the money will somehow help the economy, and that letting the corporations run wild away from regulation and letting them get used to the idea that “no amount of profits is ever enough”, are somehow good ideas.

Vote Republican this fall, so we can have even MORE of this! Of course, they are on record as WANTING THE COUNTRY TO FAIL, so if they take the house/senate majority, they’ll be in a real conflict, won’t they?

Richie August 17, 2010 at 5:43 pm

You picked the wrong site troll.

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Cars September 23, 2010 at 2:13 am

This project is one of the failed actions of the government in requiring field researches to polish the proposed projects. It must be remembered that every theoretical advancement must be dealt with tactical safety nets that could secure the efficiency of the actions. This 20 Miles of Mothballed Lumber Hauling Rail Cars simply displays the incompetencies of some officials in approving and executing the said project. The wasted budget is just the symbol of unattended precautions in the proposition.

VehicleRecycleMarkham September 30, 2010 at 11:23 pm

The naive project by the state is a waste of budget and time. It is also not just a waste but a profound source for danger because of incomprehensible approval even the actual site doesn’t seem fitting. The control over this situation can not be acceptable and the urgency seems inappropriate. The project undermines is purpose because it never achieved its real end goal. At the end of the day, the state will the stakeholder and will answer this mess. Even today, many people are witnessing how incompetent the project is and its like just an obliged action done just to showcase that a project has been done for the society.

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