The Wrong Lessons From the Metro-North Train Crash

The many costs of bad regulation.


In the aftermath of the deadly Metro-North train wreck in New York, there was ample fuel for outrage. The anger was directed at the driver for apparently taking a turn way too fast—and at the federal government for not making that impossible.

Back in 2008, after another fatal accident, Congress ordered passenger and freight railroads to adopt a system called Positive Train Control that would stop trains before they crash. But the deadline for implementation is not until 2015, and the industry wants to delay it further.

Sen. Dianne Feinstein, D-Calif., said the new system "will save lives when it is deployed, and every day of delay leaves in place a 19th century signaling system dependent entirely on the attention of each train's lone engineer." The National Transportation Safety Board agreed that it probably would have averted the Metro-North crash.

It may seem criminal that the nation's railroads haven't already adopted the technology. In fact, the case for this option is surprisingly weak. The real question is not why the requirement was not implemented sooner, but whether it should be implemented at all.

The main reason for doubt is the cost. The Federal Railroad Administration (FRA) estimates that the price tag, including installation, will exceed $10 billion—nearly as much as all the railroads in America spend on capital investment in a given year.

The mandate from Congress, like many mandates from Congress, came notably short on the money needed to pay for it. It's a demand that local railroads and communities spend their own revenues in a way that may not match their needs.

Here in northern Illinois, the commuter rail agency Metra has asked for an extension of the deadline. Spokesman Michael Gillis says an official study found that it needs nearly $10 billion over the next decade "to keep the system in a state of good repair." Established state and federal programs will provide only $2 billion. The $235 million needed for anti-crash devices is among the funds that won't fall out of the sky.

Nor is Positive Train Control a simple fix. The system is complex, multifaceted and a long way from being perfected. An August report by the federal Government Accountability Office warned, "By attempting to implement PTC by the 2015 deadline while key components are still in development, railroads could be introducing financial and operational risks."

What would the change accomplish, if it worked as intended? The Congressional Research Service noted that it "is expected to prevent less than two percent of the approximately 2,000 railroad collisions and derailments that occur annually." The FRA says that between 1987 and 1997, it would have saved about seven lives a year. For comparison's sake, more than 33,000 people die every year in U.S. auto accidents.

Even when it comes to saving lives, some investments have too low a payoff to justify the money they require, and this is one of those. The FRA estimated that the costs of imposing it would exceed the benefits by 20-fold.

Cass Sunstein, who was in charge of assessing regulations for President Barack Obama, was asked during a 2011 House hearing whether he knew of any federal rules that clearly failed the cost-benefit test. "There is only one big one that comes to mind," he replied. "It is called Positive Train Control."

No one doubts the system would prevent injuries and fatalities. But if that were the sole consideration, we'd all be driving armored vehicles to the grocery and wearing bulletproof vests to walk the dog.

Money spent on this remedy is also money that can't be spent on others that may be more critical. Earlier this year an executive of the Southeastern Pennsylvania Transportation Authority told The Wall Street Journal the federal rule would consume funds needed to repair a major bridge, forcing its closure. "We could have great signals," he said. "But we might not have safe bridges to run those trains over."

Or, come to think of it, safe crossings. Most rail accidents involve cars that roll onto the tracks in front of speeding trains. But efforts to prevent these collisions may go begging for money because Washington has a different priority. The end result may be more lives lost than saved.

At work here is the familiar government impulse to come up with a solution for every problem. In this case, it has run dangerously out of control, and there is no device to stop it.