You're Probably Getting Screwed By Railroad Monopolies

Question: in the game of Monopoly, how many railroad properties are there? 

There are four.

Back in 1976, there were 63 Class I railroads. Today, there are 7 and the largest 4 (the number same as in the game of Monopoly) control 83% of the freight railroad market.

How did it get so concentrated? A thing called precision scheduled railroading (PSR). Wall Street took notice of railroads' wealth potential and implemented PSR.

To show an example of PSR, in 2000, Union Pacific employed 50,000 people and generated $11.8 billion. Today, Union Pacific, employs almost 18,000 less people, but manages to earn 85% more in revenue each year.

COURIER @CourierNewsroom

Instead of investing in workers or improving railway resilience, railroad companies prioritized kick-backs for their Wall Street investors. @JDScholten breaks down what’s going on with the railroads and how you’re probably getting screwed by corporate greed — again.

September 23rd 2022

Checkout this quote: 

“The problems we are experiencing today are not solely the result of the COVID-19 pandemic. Years of railroad decisions to cut staff, eliminate switch yards, and slash customer service resources have gutted network resilience, making service crises like this one entirely predictable, if not inevitable.”

That quote isn’t from a union leader. It’s from the President of the American Chemistry Council - a trade group for Exxon, Dupont, and Honeywell…

Basically, the railroad industry has a huge monopoly problem. That means two groups get screwed the most, workers and consumers.

Workers. You might have heard that there was almost a railroad strike involving 125,000 workers.

It’s estimated that if there is a railroad strike, it would cost the economy around $2 billion a day. 

So why would the workers strike? Maybe because the railroad industry made $20 billion in profits last year, but these monopolies are willing to derail our supply chain to deny workers paid sick leave.

Lastly, the 7 railroads collected a record $1.18 billion in fees for freight stuck in supply chain bottlenecks. 

And since 2010, the railroad industry spent $46 billion more on stock buybacks and dividends than on maintenance and equipment investments, which would have increased the rail system's resilience against supply chain shocks.

So instead of investing in their workers or industry resilience, the railroad paid their Wall Street investors and passed the buck onto you, the American consumer!

Share YOU'RE PROBABLY GETTING SCREWED

YOU’RE PROBABLY (ALSO) GETTING SCREWED BY:

MEMBERS OF CONGRESS

According to the NY Times, nearly 1 in 5 Members of Congress have traded stocks that involve a potential conflict of interest. That totals up to about $746 million. Worse yet, they’re not just getting rich, their portfolios often determine what is law!

LACK OF ANTITRUST ENFORCEMENT

U.S. incomes fail to grow for a 2nd straight year and research suggests corporate concentration costs incomes more than $10,000 a year…

CORPORATE GREED

"Profits appeared to be salvaged by pricing power that remained unusually strong for this point in the cycle." AKA corporations are using “inflation” to make consumers pay more.

THE “HAVES”

In yet another example of the “haves” taking from the “have nots” in this country, texts reveal Brett Favre and Phil Bryant former Mississippi governor's roles in alleged welfare scandal.

HEALTHCARE IN AMERICA

CVS Health announced recently that it was buying Signify Health for $8 billion. This means a patient could get a patient, as Jake Zuckerman posted, could get a prescription from a doctor, fill it at a pharmacy, and have the transaction administered by a PBM, and all the while be working with the same corporation. TLDR your medical costs aren’t going to shrink…

***If you have a healthcare story or see a healthcare story posted on social media that needs more attention, please comment below and we will reach out. 

BEFORE YOU GO

Before you go, I need two things from you: 1) if you like something, please share it on social media or the next time you have coffee with a friend. 2) Ideas, if you have any ideas for future newsletter content please comment below. Thank you.

Standing Tall for All,

J.D. Scholten