Thursday, October 21, 2010

Why don't we build anything anymore?

From AP via Yahoo! News -
NEWARK, N.J. – New Jersey's governor wants to kill a $9 billion-plus train tunnel to New York City because of runaway costs. Six thousand miles away, Hawaii's outgoing governor is having second thoughts about a proposed $5.5 billion rail line in Honolulu.

In many of the 48 states in between, infrastructure projects are languishing on the drawing board, awaiting the right mix of creative financing, political arm-twisting and timing to move forward. And a struggling economy and a surge of political candidates opposed to big spending could make it a long wait.
Many public works projects are decried as "pork" or "the government interfering in the free market" by Republicans.

Yet those things, like the interstate highway system, transcontinental rail system, the Hoover Dam, Tennessee Valley Authority, and more all created the infrastructure necessary to encourage and sustain the American economy in ways that short-sighted "free market" theorists (who are usually nothing more than corporate lobbyists with an academic degree) will never admit to. 

Those lobbyists would rather not have roads to carry their products/services on than have to pay for those roads.

If the "free market" was left entirely to its own devices, there wouldn't be much electricity or water in Arizona, hence there wouldn't be much Arizona.

However, because of federal projects and spending on things like the Central Arizona Project, Arizona is home to millions of people, as opposed to the thousands (not hundreds of thousands, just thousands) that could or would live here without them.

The Party of No, whether the large-scale version in D.C., the smaller version at the AZ lege, or the street corner variety in places like Scottsdale ("no light rail for us!"), is all about protecting the short-term revenue streams of corporations and the already-wealthy.

Years ago (and now, for that matter), the Rs would rationalize their tax cuts for the wealthy and corporations by saying that "a rising tide lifts all boats."  The implication was that by helping the wealthy, the wealthy would help everyone else.

It was and is the era of "trickle down" economics.  Yes, I know that this is a very simple, even simplistic, explanation, but tinkle down economics isn't the focus of this post.

What the state and the country should understand is that is backward thinking.  The country's real need is long-term thinking, and a realization that the rising tide that lifts working fishing trawlers first also eventually lifts luxury passenger liners as the working class starts spending money.

By sacrificing America's future economic viability in order to bolster corporations' immediate bottom lines, the Party of No is crippling America for decades, possibly ever.


Thane Eichenauer said...

How is a person to know how much electricity or water there would be in Arizona if not for government engineering projects?

Water and electricity existed before government got into that business. Business (or co-ops) can provide both when government gets out of that business.

Perhaps the US would be better off if all the people who were economically hijacked to move to Arizona stayed in Iowa or Colorado? You seem to presume that any and all government projects are good ideas. Isn't it conceivable that at least 10% of them are bad ideas?

Government cannot now and always borrow and spend, spend and borrow. Eventually government will impound all the capital in society and all society will have is a big fat IOU made out in their name held by people you can't welsh on.

Government can't borrow and spend its way to prosperity.

cpmaz said...

Thane, I knew we would disagree on this one, and something tells me that we'll never see eye-to-eye on the subject.

Infrastructure items, like national defense, aren't the sort of thing that benefit a single business or a co-op enough for that business to invest in it.

When businesses built dams to provide water power for their industries (a common occurrence in the Northeast in the 1800s), they built just enough dam to serve their purposes, not something that would benefit the entire community.

Even when their dam would aggravate or cause flooding of other people's property during bad weather or spring thaws (not saying that this happened with *all* private dams, but it happened with enough).

Things didn't straighten out until government, with a longer and broader view, stepped in to mandate certain standards.

Of course, not all projects are good (see: Big Dig in Boston), but *no* projects are worse.

You are correct when you write that "government can't borrow and spend its way to prosperity" but unless an external force exists to protect society as a whole from the groups solely motivated by short-term profit, society in any meaningful sense will crumble(think Somalia).

Enlightened self interest is a wonderful motivator, in terms of both micro- and macro-economics, but it only works if the major players are actually "enlightened."

Thane Eichenauer said...
This comment has been removed by the author.
Thane Eichenauer said...

The problem with any given government project is the prime reason why government should not build anything anymore. There is no very little connection between the benefit and the cost resulting in very high cost for any given benefit.

National defense and (government) dams are two fine examples. Nobody directly pays for either and therefore nobody has an incentive to ask "Could this be done cheaper?" and certain very few ask "Is this a needful project?" (think Luke Air Force base)

Building one more government infrastructure project for the amorphous public benefits that cannot be measured is building and spending and taxing and borrowing without any rational actor acting as feedback.

You are right that we have different opinions. I believe that unless an external force exists to protect society as a whole that groups motivated only by short term benefit that society (or government) will crumble under the crushing burdens of debt and inflation (think Weimar Republic or Zimbabwe).

So long as there is a foundation fashioned by rule of law and private property along with a helping of limited government then self-interest can move mountains and built roads (and dams).

There are few if any "needs" that cannot be provided at lower cost by businesses, individuals and private groups (excluding so-called private prisons).

Somalia has problems that no government can solve. Like many areas of Africa the rule of plunder has impoverished a rich continent. I hope that Somaliland can do what Somilia hasn't.