Bait-and-switch and Sunk Cost Fallacy: Newsom tricking taxpayers out of more money for high-speed rail
California Governor Newsome made statements Tuesday indicating that the full high-speed train line between Sacramento and San Diego “would cost too much”, but after his office made some clarifications Wednesday, it looks like California and U.S. taxpayers are being taken in a classic con: the bait-and-switch.
“Let’s level about the high-speed rail,” Newsome said during Tuesday’s State of the State Address. “Let’s be real, the current project as planned would cost too much and, respectfully, take too long. Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A. I wish there were.”
Newsome made a counter-proposal to re-scope the project for a small subsection of the whole, the segment between Merced and Bakersfield which is unlikely to attract enough riders at a profitable price point to make the line viable. Then again, it doesn’t appear that Newsome expects, nor wants, the Merced-Bakersfield experiment to pay off.
The concept is a combination of a classic con game and using the sunk cost fallacy against them.
“Newsom wants to spend tens of billions on a rail line between Merced and Bakersfield — a complete waste,” Carl DeMaio, chairman of Reform California said in a statement Tuesday.
“Once this segment is done, politicians will argue that no one is riding this route because it doesn’t travel far enough and voila: the entire project will continue.”
The concept is a combination of a classic con and using the sunk cost fallacy against them:
- First, a bait-and-switch
- Then, give the suckers the impression they can win so they keep betting – and losing
- Rinse and repeat until project completes or taxpayers revolt, either way, taxpayers lose
The Bait and Switch
The entire project was supposed to cost just $33 billion. Now it’s projected at between $77 and $100 billion and it won’t likely complete until at least 2033. The optics could put Democrats at-risk for losing a progressive legacy project and the money to go with it.
Sooo … Newsome offers a small section of the line so that something gets built with the money allocated to the project, which includes $3.5 billion in U.S. taxpayer funds. It is likely that all $33 billion, and more, would be used to fund the route from Merced to Bakersfield – about 160 miles.
“We’re going to make high-speed rail a reality for CA. We have the capacity to complete the rail between Merced and Bakersfield,” Newsome said in a tweet. “We will continue our regional projects north and south. Finish Phase 1 enviro work. Connect the Central Valley to other parts of the state.”
The Suckerpunch
The Merced to Bakersfield route has zero chance of being profitable and the costs will likely continue to rise while the completion date keeps slipping, but that’s part of the plan.
As DeMaio said earlier: “politicians will argue that no one is riding this route because it doesn’t travel far enough and voila: the entire project will continue.”
Newsome will then give the gambling taxpayers hope that they will come out on the winning side of a losing proposition by offering them the chance to vote for another massive bond to fund the remainder of the project. A project they had already paid for. If all else fails, he’ll use the bad-money-after-good argument gamblers and investors use to tell themselves to keep on playing despite losses.
“Abandoning high speed rail means we will have wasted billions of dollars with nothing but broken promises and lawsuits to show for it,” Newsome tweeted. “I’m not interested in sending $3.5B in federal funding–exclusively allocated for HSR–back to the White House.”
And he has no interest in losing the money Californian’s have already loaned, and the additional money they will likely loan to this progressive con game.
Rinse and Repeat
The second round of public funding also will fall short of completing the project. Tens of billions of additional money will then be redirected to only complete the spurs to San Francisco and Los Angeles – or pehaps one of them.
Then the taxpayers will be given the gamblers’ choice, once again, in order to complete the project: “Do you want to just throw away the money you’ve already invested? Of course not, so support Prop XXX to give us another $100 billion.”
Finally, the Merced to Sacramento section will be complete… but we’ll need more if you want to get to San Diego.
It will never end. It will never turn a profit. It will never have been worth it.
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