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Recently, two major railroad operators, CSX and Union Pacific, reported a significant drop in earnings, in part due to declining rail shipments. This was partially due to the impact of ongoing trade disputes. While we generally support a better trade relationship with China (hopefully with fewer tariffs and nontariff barriers), we need to see strong freight rail traffic if the economic expansion is going to roll on.
Legendary investor Warren Buffet once said that if he were stuck on a desert island and could only be given one number to know how the economy was doing, he would pick rail car traffic.
Manufacturing - Mining - Merchandising - Energy - Industries
Our manufacturing, mining, merchandising and energy industries are dependent on freight rail and trucking. This is why we can't think of a worse time for Washington to be imposing new onerous regulations on the rail industry. One policy that could very negatively affect freight rail is the effort among some regulators inside the Trump administration and some in Congress to reregulate the rail industry during the time when it least needs additional red tape.
This is especially important because this is a president who prides himself on rolling back the regulatory surge under President Barack Obama. Remember: Two regulations repealed for every new rule passed.
Habit - Jimmy - Carter - Economy - Staggers
We do not make a habit of praising Jimmy Carter on the economy, but signing the Staggers Rail Act into law was one of the most positive economic reforms of that era. The Committee to Unleash Prosperity co-founder Steve Forbes has referred to the deregulation of the railroads in the 1980s as an "economic miracle" we ought to learn from.
The Staggers Rail Act gave rail carriers greater flexibility to negotiate their own prices and contracts, and as a result, a recent study by the American Action Forum found that rail shipping costs in 2016 were "45 percent...
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