One could also predict that as gas prices — especially diesel — soar, long-distance trucking will decrease. Railroads are already touting the ability to haul umpteen times as much freight as trucks for a fraction of the price. That is true. Thus, fewer truckers populating the highways will also reduce the accident rates. The auto insurance industry is thrilled about that prospect, right? Not necessarily.

Wall Street Speculators

Fewer accidents would mean that adjusters would have fewer claims to investigate, meaning that they could spend more time investigating those that do occur. The amount of loss the industry claims it loses to fraud could decrease as the accident rate decreased, and the premium needed to pay for it all would decrease, and so on. The percentage of profit the insurance companies would make will remain the same — that's generally a built-in factor in insurance rating — but the amount of profit would drop. The extent to which it would drop is unknown. Wouldn't those of us who pay premiums love to see a premium decrease? Sure, unless we own stock in the insurance company and watch our profits drop as a result. Wall Street won't pay insurance CEOs the big bucks to manage a company that will be bringing in fewer big bucks. Thus, one might predict that insurers will try to maintain the big profits by cutting costs elsewhere. Unfortunately, this “elsewhere” usually applies to the claim department.

Another prediction is that people will reconsider using local and long distance transit. Long-time readers of this column know I am a rail buff who has advocated high-speed rail and commuter service for decades. In the past eight years, this mode of transportation has been a flop. Even Acela, Amtrak's high-speed line between Boston and Washington, can only eke out a maximum of 150 miles per hour, a speed achieved only on limited stretches of straight track. The conventional Crescent manages more than 110 miles per hour on the same track.

Guns or Butter?

The old debate continues. Billions are allocated for defense, whereas just pennies are reserved for transit. There were no surprises in regard to Amtrak in President Bush's final budget. “The administration's proposal calls for $800 million for Amtrak, a figure that is 40 percent less than the current year's grant and is seen as a shutdown number that wouldn't allow continuation of the national network,” the Passenger Train Journal reported this summer. “Amtrak's own budget request came several days later, with the railroad asking for $1.671 billion, including $525 million for operations, $801 million for capital, and $345 million for debt service.” Just about every long-distance train departing from New York or Chicago is jammed these days. The seats are reserved, but each one is filled. There are not enough coaches to add to the trains and there is inadequate funding to fix those that are out of service.

Meanwhile, high-speed rail passenger service has advanced on every continent except North America. Spain just completed a line from Madrid to Barcelona — stretching 380 miles — for 200 mile-per-hour plus trains at a cost of $160 billion. France regularly runs trains at 200 miles per hour, and Switzerland just finished a passenger tunnel under the Alps for its high-speed line. Japan's bullet trains have been in operation for decades, and China has a 200-mile-per-hour Maglev monorail that runs from Shanghai to its airport. Argentina has updated a line between Buenos Aires to Mendoza, about the same distance as Chicago to New York, for 150 mile-per-hour travel. Morocco has also joined the high-speed club with a 260-mile line between Casablanca and Rabat, about the same distance as Chicago to St. Louis.

Critics of Amtrak complain that it loses money and can never pay its own way. But that is true in any country with rail passenger service. It is expensive to build, maintain, and operate. So do we think that the truck lines pay to race down the interstates solely with their gas taxes, or that our gas taxes fully pay for all of the road repairs and new construction? Do the airlines own the airports or pay for the FAA? Are they not subsidized to carry the mail, the way the railroads once were? These systems were developed back in President Eisenhower's era when our population was 200 million. There are more than 300 million of us now, and highway travel and airlines alone can't handle the load.

So what is the prediction? In two months, we'll be electing a new president. What either will do if elected is unknown. How each will deal with the problems of our economy, our national debt, our deteriorating infrastructure, and our clogged highways and high gas prices are unknowns. The contents of my coffee cup haven't provided an answer just yet.

Ken Brownlee, CPCU, is a former adjuster and risk manager based in Atlanta, Ga. He now authors and edits claim-adjusting textbooks.