Elon Musk has eagerly positioned himself as a chainsaw-welding horror movie slasher with government agencies as his victims, instead of promiscuous high schoolers. The Tesla CEO set his sights on privatizing the USPS and Amtrak, but the federally-owned railroad released a response last week stating that it can’t understand why it needs private ownership. Amtrak has turned a lemon from the 1960s into a decent lemonade by the 21st century.
Musk spoke at a Morgan Stanley technology conference last week and advised travelers visiting the country to stay away from Amtrak. He said the railroad is “a sad situation.” According to Scripps News, he added, “I think we should privatize anything that can be privatized, just so you’ve got a feedback loop for improvement, which is what happens when something’s privatized.” Musk, of course, presented this without any evidence.
Amtrak’s response, simply titled “Proposals to Privatize Amtrak,” directly challenges Musk’s comments. The railroad stated, “It is not clear what problem Amtrak privatization proposals are intended to solve.” It added that it broke all-time records in ridership and revenue over the 2024 fiscal year. Also, the Northeast Corridor (NEC) route between Boston and DC operates a profit. However, Amtrak as a whole doesn’t operate at a profit and relies on the federal government to cover its losses.
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Privatization would make Amtrak’s existing issues even worse. Part of the reason why the NEC is profitable is that Amtrak owns the track on which it operates. Freight railroads own the vast majority of the national rail network. If Amtrak was privatized, freight companies would no longer be legally required to allow Amtrak to operate on its tracks. It would quickly become far more expensive to run passenger trains on freight tracks.
Despite Amtrak’s current legal obligation to operate as a for-profit business, the railroad uses the revenue from the NEC to subsidize train services to rural areas. The response to Musk noted that government spending on rail transportation didn’t decrease in Britain when it privatized its rail network in 1994. The service became so expensive and awful that the UK’s Conservative Party decided to reverse course and phase out privatization in 2020. Modern rail networks require a level of capital investment that only a government can provide consistently.
This isn’t the first time Musk has tried to derail a railroad company. He allegedly proposed building Hyperloop, a 700-mph vacuum tube gadgetbahn, in an effort to cancel California’s High-Speed Rail project. Hyperloop One, the venture tasked with bringing Musk’s pipedream to fruition, shut down in 2023. California High-Speed Rail is still slated to open in the early 2030s with a North American subsidiary of Deutsche Bahn, Germany’s state-owned railway, as its operator.
