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Nov 16, 201012:00 AMMad @ Mgmt

with Walter Simson

Southeast Express

Southeast Express

Mad @ Mgmt addresses the concerns of middle market companies, including banking, family & succession issues, turnarounds & performance improvement and economic life in general. Walter Simson is founder and Principal of Ventor Consulting a firm dedicated to middle market companies.

The cost of a gallon of gas averages $3 nationwide. This is a fact that I thought would have all the concerned commuters brushing off their pitchforks, getting ready for a little torchlight 10K. But no. Here in Wisconsin, we are doing the opposite: fighting a regional innovation that might save energy and jobs as gasoline starts on a new leg upwards.

First, let's talk gas. It was $1.50 a gallon eight years ago. It is the financial lifeblood of terrorist groups against whom we are sending our magnificent warriors in Iraq and Afghanistan. Do we forget the mission of Wahabism, the evangelical ultra-orthodox sect financed by the Saudis, every time we fill up the Tahoe?

Now at $3, gas will go to $4 soon, either due to the inevitable increase in demand from the developing world, or due to the deliberate debasing of our currency by the politically independent Federal Reserve.

Is a regional rail system right for Wisconsin? I do not know the answer, but I know the questions.

Question One: how many travelers between Milwaukee and Madison would use a train today?

(Don't confuse the issue with the question of how they would get from the train terminus to their final destination. That is traffic engineering. What we are talking here is inspiration.)

To answer my own question, just about every mid-size company I visit in Madison has a Milwaukee commuter. They are identified by the huge coffee cups they carry around, and by the bags under their eyes. There are plenty of 'em. And, by the way, my non-scientific survey of them shows that they are all against using rail to get to work.

Question Two: how many future riders could be attracted to a reliable train service? Students, older people, tourists, professionals?

My sense from other areas of the country is that regional rail is a pleasure. Try the Acela from New York to Boston, which whisks along the coastline. Folks literally stop mid-sentence as they pass breathtakingly picturesque natural harbors in Connecticut and Rhode Island. Or try the Amtrak between Princeton, one of the East Coast's most desired academic and business hubs, and New York. It is about 90 miles, and thousands commute for lifestyle reasons every day.

Question Three: Is rail a viable long-term investment?

Warren Buffett seems to think so. Only last year he literally made the largest single investment of his life by buying the parts of Burlington Northern Santa Fe he did not already have. At the time, he was quoted as saying that it was not only a good investment today, but one that would continue to pay for 100 years.

Which reminds me, as one who is trained in finance and practices it daily: investment is not a fashion business. We do not invest because the slogans tell us to, or not to. The right decision does not come off the cover of Cosmo. We make investment decisions based on what makes us better off. That is true for Buffett, and it is true for public investments also. Don't forget: you happen to reading these words on a public investment that has paid off handsomely: the Internet.

Question Three: Does point to point transport work? Or do we have to wait for a comprehensive national strategy in order to see the benefits?

I would literally call Herb Kelleher, the founder of Southwest Air. He seems to know short-hop transportation. I bet he's give an honest answer, too.

Last question. Would we be happy to ride in coal-fired trains (remotely) when gas is at $4 or $5?

That answer I know.

My sense is that the naysayers, including the governor-elect, have the upper hand now. But my questions remain. And I want to know because trains were such a big part of my upbringing. As a matter of fact, I did not own a car until 1987. Which was also the year I met the love of my life.

That, I'm pretty sure, is just a coincidence...

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