Bad ideas in the railroad world seem to have a cycle of between 30 and 40 years. Why? Because the people that got burned by them in their previous incarnation have retired and the younger guys don't know what is about to happen.
It's not just the railroading world -- a lot of bad ideas come back in the Defense Industry, particularly the shipbuilding industry for warships. Everyone seems to get it into their head that a short, fat planing hull works; or that a multi-hull warship would be great!!! every 18-20 years.
I've seen some studies on there being a similar tendency within the stock market, too (the late 1920s, late 1960s, and late 1990s/mid 2000s all had a lot in common). On a similar note, I've seen much shorter cycles in student organizations at colleges...I was in the William and Mary College Republicans for nearly a decade (they let me in when I was in 8th grade, and I stayed at least marginally involved until I graduated), and I saw a boom-bust cycle run about 4-5 years. It's tied to institutional memory getting cycled out...something about not learning from history (and that coming about from lacking people on staff who were there).
To solve this problem, hire elves.
RCrierie,
The biggest problem I see with what you suggest is that a lot of those routes don't make money. You've got a couple of regional routes with higher CR numbers, but once you get outside the Northeast Regional/Acela routes (note that LYH-WAS and NPN-WAS fall in here) nothing turns a regular profit. This is not to say that a privatized entity might not be able to, in the present environment, push a couple of those routes into the black with higher fares...but without a reasonable guarantee, you'd be handing the private sector control of something they by and large don't want to have there. Now, if you gave the RR's tax incentives to run passenger operations (and/or subsidized losses up to a certain point), you might be able to make something work in some areas...but the big problem is that the passenger operations will get shoved aside the minute they need those tracks for freight shipping.
As to financing, outside of an economic boom I can't see banks putting money into something that hasn't turned a profit in the US in a long time. In your example, Eastern Airlines might have been in trouble, but you had a bunch of lines that were profitable as well...the industry wasn't all in the red. With passenger rail, you might be able to get some kind of loan at an awful rate without government backing...but I suspect that would involve going to people whose names end in vowels.


