Bikes = Economic Catastrophe

Will the US DOT recent policy change giving equal weight for multiple transportation modes result in ‘economic catastrophe’?

US Transportation Secretary Ray Lahood’s March 15 policy announcement favoring bicycle transportation received a lot of favorable press from bike wonks like you and I. The National Association of Manufacturers fears the impact this policy could have on “the efficient movement of freight.” They responded on their Shopfloor blog:

Treating bicycles and other non-motorized transportation as equal to motorized transportation would cause an economic catastrophe. If put into effect, the policy would more than undermine any effort the Obama Administration has made toward jobs. You can’t have jobs without the efficient movement of freight.

League of American Bicyclists director Andy Clarke gave a response that’s solid gold. I hope he doesn’t mind that I copy so extensively here:

I’ve been called many things as I ride to and from work every day in our nation’s capital, but a harbinger of economic catastrophe…now that’s a first!

As I think back to major economic catastrophes of the last 40 years, I am having a hard time finding any tell-tale trace of bicycle tire tracks. On the contrary, my recollection of significant recent economic crises is that they are invariably caused by our predeliction for foreign oil – the 1973/74 oil embargo; 1988 oil crisis; 2008 gas price increases quickly followed by the mortgage and foreclosure crisis that piled unsustainable housing costs on top of budget-busting suburban commuting costs.

In terms of economic competitiveness, I would suggest that the crippling – and rapidly rising – health care costs associated with physical inactivity and obesity among the US workforce is a crisis worth worrying about. This adds significantly to the cost of everything produced here in the United States, making us less competitive abroad. Getting people moving through daily physical activity is a national priority – enabling people to bike and walk as part of everyday routines is a remarkably cost-effective way of achieving that goal, and surely something that manufacturers and employers would be behind 100 percent. The fact that it would also reduce congestion and increase discretionary spending on goods and services seems like a pretty good deal for the business community.

The president of the Rails to Trails Conservancy, Keith Laughlin, follows up by noting our business-as-usual transportation and development practices resulted in a “drive until you qualify” mindset that in turn led to unaffordable mortgages and the housing bubble.

The housing-transportation connection was made abundantly clear today with the release of the Center for Neighborhood Technology’s Housing-Transportation Index.

What this analysis reveals is that households in walkable/bikeable/transit-rich neighborhoods can devote as little as 12 percent of household income to transportation costs, providing more discretionary income to pay the mortgage.

In contrast, the study finds that households located in auto-centric places that require long driving trips between destinations are forced to pay as much as 32 percent of household income for transportation – which may even exceed the cost of their mortgage. Not only do such families have to pay a lot more for gasoline, but they often have to assume a variety of costs associated with owning a second car, when families in more “location efficient” communities can comfortably get by with one.
By combining housing and transportation costs into a single index, this ground-breaking analysis will change the way we determine if a house is truly affordable. It will make apparent not only the purchase price of the house, but the monthly transportation costs associated with living in a particular location.

My 2 cents worth: American Trucking Association President Bill Graves is correct in telling us “These [livable] communities will not be livable without an efficient highway system and trucks to deliver the food, medicine, clothing and other necessities that make walking and bicycling possible.” Transportation policies that encourage more dense development means money that previously was spent to serve sprawling outlying communities can now be spent on fixing the highways we already have. Policies that encourage “alternative” transportation for commuters means more room on the highways for trucks to deliver their goods.

I venture outside of the echo chamber often to ensure a balanced perspective. A common theme in the blog-o-sphere is that this policy change is about political control, which is especially ironic given that additional transportation choices means freedom for me to get to work and shopping without the state’s permission (i.e. a driving license). Other bloggers note that, in China, the people are “becoming more American” by dumping their bikes and buying cars.

Oil production has remained steady at about 85 million barrels per day since 2007. More people around the world are buying cars and driving them. The law of supply and demand has this cascading sequence of consequences:

  • more gasoline demand worldwide
  • higher prices worldwide for oil
  • higher transportation costs for goods, resulting in higher prices
  • sprawling drive-until-you-qualify development becomes unaffordable as families pay more for transportation
  • failing banks, 9.7% unemployment and persistent recession.

Oil production has remained steady in spite of frantic exploration, drilling and development because new discoveries just barely make up for the sharp production decline in almost every large oil field on the planet.

Read more of the discussion (including the AARP’s support for the new USDOT policy) at National Journal Expert Blogs. See also “Transportation Department Embraces Bikes, and Business Groups Cry Foul.”


  1. Excellent summary. The only point that I would add is that it's laughable to assume that an increased focus on cycling in federal transportation policy would have any appreciable impact on the movement of freight, let alone cause “economic catastrophe.” At present, walking and biking account for about 1 1/2 cents of every federal surface transportation dollar. If we were to realize our goal of doubling that, the amount would be huge from our perspective but negligible in terms of what is spent on highways. In addition, our other big ask is the full embrace of complete streets policies. Again, the costs to roads would be small potatoes because it wouldn't divert money away from roads, it would only ensure that the needs of cyclists and pedestrians were fully considered in the design of road projects. That's simple common sense.

    Finally, I like how you neatly wrapped up all the macroeconomic issues from the consequences of peak oil to sprawl to bank failures. Because the road gang so often engages in hyperbole — like wild claims of “economic catastrophe” — I'm hesitant to imply that bicycling can save the world. But with relatively small investments it can produce significant returns that will contribute to solving a wide variety of problems.



  2. He left out the multiple, huge, and ongoing car bailouts over the decades, famously starting (I think) with Chrysler. He also left out that the bicycle business is already creating jobs and will continue to do so — look at bikeportland's many bike-related job creation stories.

    the one critique i'd have of 'the bike people' here in the US is that all manufacturing is shifted overseas, which seems a bit of a travesty. i can't imagine that building bikes domestically is such a complicated and expensive process that it can't be done profitably here in the US.

  3. =v= You want to move freight efficiently, resurrect the country's rail system. Apparently it's good enough for Warren Buffett.

  4. Thank you so much for your comment, Keith. I agree with you that increasing bicycling for transportation will have modest benefits overall, but you're correct that we can get a lot of bang for the buck in investing in cycling.

  5. Is reverse conversion necessary to make our transportation choices more efficient and less dependent on imported oil? Will cyclists get upset if trails created by Rail-to-Trails is reversed and become full of trains once again?

    MoDOT wants to use federal dollars to build “Trucks-Only” lanes on highway 70… how crazy can we get in supporting unsustainable choices?

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