Staging a comeback?

A Streetcar Named Progress

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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One of my favorite former colleagues, Emily Bobrow of the Economist, explains why streetcars are a bad idea. The short version: They don't move faster than buses, at least not in the U.S., where they're rarely given dedicated lanes. And because they require a big fixed investment, they're very expensive, and inflexible, compared to buses.

So why are cities suddenly going streetcar-mad? Oh, you can cite the small advantages of streetcars -- they're less likely to give people motion sickness, for example -- but these advantages don't really seem to outweigh the huge costs. Yet American cities are laying streetcar track as fast as they can get financing.

My theory is that for cities, the high investment, as well as the inflexibility of the routes, may often be a feature rather than a bug. Building a streetcar is a way to attract investment to an area where you would like to encourage rapid development. And the reason that it's attractive to investment is that once they've been built, the streetcars can't be moved.

Putting in a new bus route may enhance the transportation options in an underdeveloped area. But a developer thinking about building on that route can't rely on your new bus line; you could always cancel it or change the route so that it no longer goes past his shiny new building. Streetcar tracks, on the other hand, send a nice, strong signal: We've spent a boatload of money on this area, and it will be hideously, humiliatingly expensive to rip out all this infrastructure and move the streetcar somewhere else.

Moreover, a streetcar sends a signal about transportation options to people who are considering moving. Very few people know exactly which bus lines go past a given address. But you can see whether there's a streetcar line just by looking down.

So, ironically, the very fact that it is a big, risky investment may help everyone agree to rapidly develop a streetcar route, generating tax revenue for a city, cash for developers, and votes and campaign contributions for the politicians who install the thing. It's hideously inefficient, of course ... but that's politics for you.

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Megan McArdle at

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Brooke Sample at