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What the Atlanta Highway Collapse Signals about American Infrastructure – Article by Lili Carneglia

What the Atlanta Highway Collapse Signals about American Infrastructure – Article by Lili Carneglia

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The New Renaissance Hat
Lili Carneglia
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Atlanta is already known for having some of the worst traffic in the world, and the recent collapse along a major interstate will only make congestion worse. On March 30, in the middle of rush hour traffic, a fire began under the I-85 Northbound that quickly erupted into a massive blaze, eventually causing a section of the bridge to collapse.

Less than 24 hours later, with the rubble still smoldering, the US Department of Transportation announced a $10 million award to begin emergency repairs. Despite the quick response from the DOT, it will take millions more dollars before I-85 can resume carrying 400,000 vehicles daily.

With the nation’s Highway Trust Fund rapidly approaching insolvency, the I-85 collapse and the subsequent Atlanta traffic chaos exemplify the overwhelming cost and inefficiency of public infrastructure in America.

Why So Expensive?

In the United States, transit projects are chronically expensive and time-consuming. The country’s outdated method of allowing most highways to fall under federal care, and cumbersome regulatory obstacles, is part of the reason that we continue to lag behind when it comes to international standards. Regulatory burdens also contribute to other countries’ outranking the US when it comes to securing construction permits, making new projects and maintenance even more complicated.

Policy relics of the Obama administration weigh particularly heavy on this type of progress. Specifically, Executive Order 13502, which encourages labor agreements for federal construction projects. Because these agreements require union labor, this E.O. severely limits the number of firms that can accept a federal contract, since only 13.9 percent of the construction workforce is unionized. Additionally, many researchers have found that this practice is estimated to increase the costs of projects anywhere from 13-18 percent.

As the small fraction of construction firms that benefit from this order continue to lobby for similar policies that land them more federal projects at the expense of taxpayers and industry innovation, we can expect the cost of infrastructure projects to continuously rise.

This issue is nothing new, with politicians from both sides of the aisle eager to point fingers and  offer their own solutions. President Trump is no exception. He has made a repeated pledge to invest $1 trillion in the nation’s infrastructure. While the Trump administration has announced that those plans will be revealed later in the year, the details, including the amount of federal funding available for the project, remain a mystery. In part due to this opacity, most people remain skeptical of promises, released alongside a proposed budget, that would cut DOT spending by 13 percent.

However, even if the Trump administration were to pump $1 trillion of pure federal funds into infrastructure projects, it would do little to fix the country’s severely broken system. The best chance of improving America’s infrastructure lies in removing the red tape standing in the way of private firms when it comes to federal projects – or better yet, ending the government monopoly on transit altogether.

Corporate Welfare

One of the most promising international trends in infrastructure development involves moving away from public transportation and towards private transit systems. The Organisation for Economic Co-operation and Development (OECD) reports that in many countries, private investment in infrastructure is on the rise as government investment declines due to “constraints on public finance and recognized limitations on the public sector’s effectiveness in managing projects.” The US should take note of the global trend.

Transitioning to privatization is quickly becoming a necessity in the face of rapidly-expanding maintenance costs and Trump budget cuts. Even without the option of public funding, privatization offers massive benefits for taxpayers.

Some of the biggest users of public roads, like logistics companies, create billions more dollars in transportation expenses than the average car-owner. However, road costs are passed on to taxpayers en masse, subsidizing companies that use public roads the most. The current system effectively results in corporate welfare. Private toll roads help mitigate the unfair cost burden and appropriately account for maintenance.

American infrastructure is on the brink of complete disaster. While the I-85 collapse was an unpredictable event, prior to last month, the road was not even listed among the 56,000 structurally deficient bridges in the country. Infrastructure expenses will continue to drain federal and state budgets until public funds can no longer keep up. Sudden highway collapses are a disquieting reminder of what is at stake if we fail to change the way the US approaches transportation.

Lili Carneglia is a student at the University of Alabama where she is getting a joint bachelor’s and master’s degree in Economics. She is a Young Voices advocate.

This article was originally published on FEE.org. Read the original article.

The Need for a “Buy Human” Program – Article by Bradley Doucet

The Need for a “Buy Human” Program – Article by Bradley Doucet

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The New Renaissance HatBradley Doucet
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The Canadian government is apparently facing growing pressure to graft a Buy Canadian program onto its billions of dollars of planned infrastructure spending. That way, all those taxpayer dollars would help support employment and economic growth here at home instead of shipping it across the border and overseas. Who could object to such a well-meaning policy to prop up good, Canadian jobs?

Well, for starters, someone concerned with cost-effectiveness could raise an objection. Such a person might argue that our representatives in government have a responsibility to see that we taxpayers get our money’s worth when they, for example, decide from whom to buy the steel that will be used to build our bridges. Before raising our taxes even higher than they already are, or sinking us further into debt and saddling our kids with the bill, they should try to stretch each tax dollar as far as it’ll go. And if getting the best value for our money means buying steel from China, then that’s what they should do.

Someone who understands the general benefits of trade and specialization could also easily object to a Buy Canadian program. When we engage in voluntary exchange with other people, we do so because we expect to benefit—and the people we trade with do the same. By specializing in some form of production, we can get better at it, becoming more skilled and even finding better ways of doing things. Then, through trade, we benefit not only from our own skills and innovations, but from other people’s as well. Importantly, this dynamic holds whether our trading partners are across the street or on the other side of the planet.

On the flipside, someone who understands how harmful a trade war is to everyone concerned would have good reason to object to measures like a Buy Canadian program. All parties are losers in a trade war, as protectionist barriers beget more protectionist barriers. It’s like two imbeciles in a gunfight: one shoots himself in the foot, and his rival retaliates by shooting himself in his foot. As our economies limp along with these self-inflicted wounds, we are also in increased danger of seeing our strained relations deteriorate into actual wars, since instead of at least valuing foreigners for what we can get from them through trade, we find it easier to denigrate them as something less than human, the better to justify dropping bombs on them. If this seems farfetched, just think of how certain media outlets portray the people who are currently having bombs dropped on them.

And speaking of foreigners, someone whose concern for the well-being of his or her fellow humans doesn’t stop at an imaginary line on a map could also find a Buy Canadian program objectionable. It’s true that some people’s lives here at home are disrupted when businesses close, or when certain kinds of jobs disappear altogether from the local landscape. But the people we trade with in other countries? They’re people too, and trade benefits them just as it benefits someone in this country. Why their well-being should matter less to me because they live in a different country, I’ve never understood.

If we want to lend a hand to our neighbours who lose their jobs, we can help them transition to some other kind of work. But “we” shouldn’t keep making steel if “we” can’t make it at a competitive price anymore; instead, we should switch to doing something else, and buy our steel from people willing and able to produce it and sell it at a lower price. They in turn will buy from us the things that we are comparatively good at. And if other governments want to subsidize their steel industries—and therefore our purchases of steel—then our own governments shouldn’t compound the mistake by following suit.

Think about it: If it makes sense to Buy Canadian, then why not Buy Quebecois? Buy Montreal? Buy Mile-End? Buy Fairmount-between-St-Laurent-and-Clark? The simple fact is that global trade has made the globe richer, helping to bring us closer than we’ve ever been to eradicating extreme poverty, and allowing everyone not living under the boot heel of authoritarianism the opportunity to live a decent life. Parochialism will only make us poorer and less connected with other people around the world. Instead of Buy Canadian or Buy American programs, what we really need is a Buy Human policy, trading with whichever of our fellow human beings are offering us the best value for our money in their efforts to improve their own lives.

Bradley Doucet is a writer living in Montreal. He has studied philosophy and economics, and is currently completing a novel on the pursuit of happiness. He also is QL’s English Editor.
The Myth of Crumbling Highways – Article by David Hartgen

The Myth of Crumbling Highways – Article by David Hartgen

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The New Renaissance Hat
David Hartgen
April 2, 2013
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Crumbling infrastructure has a direct impact on our personal and economic health, and the nation’s infrastructure crisis is endangering our future prosperity.

—D. Wayne Klotz, former president of the Society of Civil Engineers

Ah, spring. The snow melts and orange barrels return to the nation’s roads. We hear the usual calls for repairs of “crumbling infrastructure.” Authors of several national studies cite overwhelming needs. President Obama calls for fixing structurally deficient bridges. There are tales of woe in nearly all of these plaintive accounts of America’s highways, and most are used to justify yet more government stimulus spending.

So we decided to look.

Far from crumbling highways, our new Reason Foundation report finds that America’s state-owned highways have actually improved on key measures of road performance. There’s no doubt state governments can do better. In many ways, they’re inefficient, and state transportation dollars are a trough for cronies. But the crumbling-infrastructure meme is just a myth.

The Reason study tracks seven measures: urban and rural interstate condition, deficient bridges, congestion, fatalities, rural primary road condition, and narrow rural roads. We compile data from the states’ reports to the federal government from 1989 through 2008 (the last year available). We also track spending and compare each state with national averages.

Perhaps surprisingly, the U.S. highway system actually improved on all seven measures over the last two decades:

  • The percentage of rural interstates rated “poor” declined by two-thirds, from 6.6 percent to 1.9 percent.
  • Urban interstates with poor pavement dropped from 6.6 percent to 5.4 percent.
  • Rural primary poor pavement improved from 2.8 percent to 0.5 percent.
  • Deficient bridges improved from 37.8 percent to 23.7 percent.
  • Fatality rates improved from 2.16 to 1.25 per 100 million miles driven.

Even urban interstate congestion declined, from 52.6 percent to 48.6 percent, although some of that may be recession-related. During the same period, expenditures for state-owned highways increased by more than 181 percent. Spending per mile increased 177 percent in nominal terms and 60 percent adjusted for inflation.

State-Owned Highways

Most states saw substantial improvements.

All 50 states lowered their highway fatality rates between 1989 and 2008, saving about 150,000 lives. New Mexico, Nevada, and Mississippi saw the biggest decreases in fatality rates. Even if you don’t like the idea of government funding road construction, this fact should be celebrated.

Overall, 40 states reduced their number of deficient bridges from 1989 to 2008. In 1989, over half of Mississippi’s bridges were deficient, but by 2008 only 24.7 percent were rated deficient. Nebraska went from 55.1 percent deficient to 23.6 percent deficient. The numbers rose in 10 states: Hawaii, Alaska, Massachusetts, Rhode Island, Idaho, Arizona, Utah, Ohio, South Carolina, and Oregon.

Thirty-seven states improved the condition of rural interstates, but that progress was made mostly in the 1990s and has slowed since then. Five states (Missouri, Rhode Island, Idaho, Nevada, and Wisconsin) reduced their percentage of poor rural interstates from over 20 percent to near zero. But two states, New York and California, reported rural interstate condition worsening by more than five percentage points.

Twenty-seven states improved the condition of urban interstates—indeed, Nevada and Missouri made remarkable turnarounds. In 1989, 47.8 percent of Nevada’s urban interstates were in poor condition, but by 2008, it was just 1.6 percent. Missouri’s urban interstate mileage in poor condition decreased from 46.7 percent in 1989 to 1.3 percent in 2008.

Seven states, however, reported more than 10 percent of their urban interstates in poor condition in 2008. A quarter of Hawaii’s interstates rated poor. In 1989, just 4.1 percent of California’s urban interstates were in poor condition, but by 2008 that number had ballooned to 24.7 percent. Vermont went from 2.9 percent of urban interstates in poor condition in 1989 to 17.5 percent in 2008. New Jersey, Oklahoma, New York, and Louisiana also reported more than 10 percent of urban interstates in poor condition in 2008.

Overall, twenty-nine states reduced urban interstate congestion between 1989 and 2008. Six states—Delaware, Massachusetts, Virginia, Alaska, Missouri, and South Carolina—reported improvements greater than 20 percentage points. But 18 states reported a worsening of urban interstate congestion. The greatest increase in congestion, 36.2 percentage points, was in Minnesota.

Overall, 11 states—North Dakota, Virginia, Missouri, Nebraska, Maine, Montana, Tennessee, Kansas, Wisconsin, Colorado, and Florida—improved on all seven performance measures. Eleven more improved on six measures and 15 improved on five measures. So, 37 states improved in at least five of the seven metrics.

Disbursements_per_mile

In another surprising finding, the study notes road spending seems to be only loosely related to performance.

Of the 22 states that improved on six or seven measures, only one (Florida) spent more than the U.S. average per mile, and several large states (notably Virginia, Missouri, Oregon, Minnesota, and Texas) spent less than half the national average. The study suggests a widening gap between most states making progress and a few spending much more but still performing poorly. It also suggests that the higher road systems, particularly the interstates, are performing better than lower-level systems that are locally owned.

So, if resources are not the problem, what is?

Some of the poor performers have older systems, lots of traffic, and hard winters, but so do some good performers. More likely, the cause is high unit costs—policies that push funds to low-priority projects and “ribbon cuts,” draw attention away from maintenance, and use available revenues inefficiently.

So there are still plenty of problems to fix, but our roads and bridges aren’t crumbling. The overall condition of most state-owned road systems is actually getting better, and you could make a case that they have never been in better shape. The key is to target spending where it will do the most good. If your state is not on our “Top 22” list or is spending more than the U.S. average, ask why.

David T. Hartgen is Emeritus Professor of Transportation at UNC Charlotte, president of The Hartgen Group, and adjunct scholar at the Reason Foundation. This study was sponsored by the Reason Foundation and is available at www.reason.org.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.