Making sausage

A famous quotation attributed to "Iron Chancellor" Otto von Bismarck, who unified Germany in the nineteenth century, says that you should not watch either laws or sausages being made. Add to laws and sausages the current cost allocation system used by Amtrak to justify its reports of money-losing trains. At least that's what it would appear is Amtrak's intent, according to an excellent article by Bob Johnston in the January 2019 issue of Trains.

(See Amtrak sausage on California Zephyr at left.)

When you or I wish to determine whether a certain business, say making sausage, will result in a profit or loss--and consequently whether that business is a good investment of our time or money--we do two things. The first is to find out how much money we can sell our sausages for--and maybe selling the service of making sausages. The second is to find out what it costs to make the sausages or provide the service of making them. Simply stated, if we subtract the second from the first and get a positive number, the business of sausages will make money.

This simple method appears to be too simple for Congress and the congressional agency that has developed the cost allocation system for Amtrak. According to Bob Johnston, Amtrak either does not know what the true cost of running a train is, or doesn't want us--the tax-paying, train-riding public--to know.

If I am reading the facts correctly, much of what remains a mystery is the allocation of executive and bonus compensation that, theoretically, benefits all of long-distance, corridor, and Northeast trains. Managers of state-sponsored programs run by Amtrak have noticed disproportionate allocation of management compensation that does not benefit their trains because those management positions are already filled at the state level. In similar fashion, some have caught allocation of expenses that simply cannot belong to their trains. An example of this would be costs for snow removal at stations where it doesn't snow.

Johnston also reports that Amtrak does not respond to specific questions, but, instead, issued generalized statements about its duty and commitments to the traveling public. My opinion is this: If you knew how Amtrak made its sausage, you might neither buy the sausage nor recommend the sausage to anyone else.

So write your "sausage makers" in Congress and tell them Amtrak should provide a logical cost accounting for its operations before they are given any more taxpayer sausage-making dollars.