A similar thing happened in Sydney, Australia, the city had one of the largest tram systems in the world, the director of the motor trade authority was elected into government and made sure that all the tracks were literally tared over, they are still under the roads. The excuse used was that the network was over congested / too popular, and cars would solve the problem, guess what? Sydney is in the middle of putting the tram network back in to solve the car problem :) Melbourne, Australia was spared because it built it's network in the 40's and 50's and it was difficult to persuade the working class that putting in such a newly built system was a good idea. People literally move to Melbourne because of the convenience they provide.
If you're interested Bikes vs Cars (http://www.bikes-vs-cars.com/) is an awesome documentary, it shows that LA even had things called "Bike Highways" at one stage. You will see how people were so negatively influenced by big business lobbying, and from memory outlines why New York was somewhat spared from the fate.
Sounds like you're being told the same stories again either way.
