Nomi Prins: To Build or Not to Build? The Infrastructure Question

Yves here. While Prins is correct to highlight the magnitude of deferred infrastructure maintenance and the failure to invest in seemingly obvious high payoff upgrades like high speed broadband, what isn’t covered here is important.

Even before you get to infrastructure fund grifting, America’s infrastructure building process makes military pork look good. As Adam Tooze explained in a must-read piece from 2017:

Every aspect of US project construction is worse. “In China, a 30-story building can be completed in only 15 days. In Japan, giant sinkholes get fully repaired in one week. Even in the U.S. of a century ago, construction was pretty fast — the Empire State Building went up in 410 days. Yet today, it takes the U.S. many years to spend the money that Congress allocates for infrastructure. New buildings seem to linger half-built for months or years, with construction workers often nowhere to be found. Subways can take decades.”

What this suggests Smith argues, is that the key to higher US costs is “general inefficiency — inefficient project management, an inefficient government contracting process, and inefficient regulation. It suggests that construction, like health care or asset management or education, is an area where Americans have simply ponied up more and more cash over the years while ignoring the fact that they were getting less and less for their money.”

And labor unions most assuredly are not the culprit. France and Japan have very strong unions yet build more efficiently than the US.

In a comment some time back that I wish I could readily locate, PlutoniumKun explained why the French were so much more productive than Americans on big infrastructure projects. They chose to limit projects to a handful of firms, all of who were assured a minimum level of business. That meant they didn’t have to fire staff between gigs (workers engaged on only a project basis get paid a big premium), the staff could build skill, and they and their firms could get rolling much more quickly. The fact that the same agencies worked with the same construction firms also meant the contractors would already know the agency’s quirks and could submit more on-target project plans and devise more effective reporting/supervision routines.

A second, and potentially related problem, is that some and perhaps many projects are spec’d like F-35s: too many inconsistent things on the wish list so the end project is not terribly functional.

A pet peeve is airport construction. It seems that just about everyone has lost sight of the fact that one of pluses of a domestic airport versus an international one is relatively short distance from curb to gate. Another issue is whether the airport really needs to be razed and rebuilt or just needs a makeover plus selective upgrading. Billionaire real estate developer Steve Ross pioneered that approach in New York City with what became the Revlon Building, where Ross reskinned and improved some of the systems on a tired Class A office building on Madison at 59th. It took a fraction of the cost and was enormously less approval delay and hassle than the usual teardown and new construction, and was enormously profitable as a result.

The new Terminal B (American) at Laguardia is a horrorshow, and taxi drivers tell me everyone hates it. All it has going for it is looks. It’s as sprawling as an international terminal and takes at least ten minutes longer to get to and from the gates. A facelift was all that was needed. The new gates at D terminal are just as misguided. Not only are they insanely far from the TSA checkpoint, the distance between each gate is enormous. I understand a similarly terrible new airport is under way in St. Louis, which had one of the best designed terminals I had ever encountered. The redos of the Birmingham and Portland, Maine airports were net negatives, but not as extreme as Laguardia.

And finally, another pet peeve, the harping on the lack of high speed rail. Yes, it’s a shame but it’s not doable given present conditions. Too much in the way of existing buildings would need to be destroyed. It’s a “burn the village to save it” proposition.

By Nomi Prins. Originally published at TomDispatch

During the Trump years, the phrase “Infrastructure Week” rang out as a sort of Groundhog Day-style punchline. What began in June 2017 as a failed effort by The Donald’s White House and a Republican Senate to focus on the desperately needed rebuilding of American infrastructure morphed into a meme and a running joke in Washington.

Despite the focus in recent years on President Trump’s failure to do anything for the country’s crumbling infrastructure, here’s a sad reality: considered over a longer period of time, Washington’s political failure to fund the repairing, modernizing, or in some cases simply the building of that national infrastructure has proven a remarkably bipartisan “effort.” After all, the same grand unfulfilled ambitions for infrastructure were part and parcel of the Obama White House from 2009 on and could well typify the Biden years, if Congress doesn’t get its act together (or the filibuster doesn’t go down in flames). The disastrous electric grid power outages that occurred during the recent deep freeze in Texas are but the latest example of the pressing need for infrastructure upgrades and investments of every sort. If nothing is done, more people will suffer, more jobs will be lost, and the economy will face drastic consequences.

Since the mid-twentieth century, when most of this country’s modern infrastructure systems were first established, the population has doubled. Not only are American roads, airports, electric grids, waterways, railways and more distinctly outdated, but today’s crucial telecommunications sector hasn’t ever been subjected to a comprehensive broadband strategy.

Worse yet, what’s known as America’s “infrastructure gap” only continues to widen. The cost of what we need but haven’t done to modernize our infrastructure has expanded to $5.6 trillion over the last 20 years ($3 trillion in the last decade alone), according to a report by the American Society of Civil Engineers (ASCE). Some estimates now even run as high as $7 trillion.

In other words, as old infrastructure deteriorates and new infrastructure and technology are needed, the cost of addressing this ongoing problem only escalates. Currently, there is a $1-trillion backlog of (yet unapproved) deferred-maintenance funding floating around Capitol Hill. Without action in the reasonable future, certain kinds of American infrastructure could, like that Texas energy grid, soon be deemed unsafe.

Now, it’s true that the U.S. continues to battle Covid-19 with more than half a million lives already lost and significant parts of the economy struggling to make ends meet. Even before the pandemic, however, America’s failing infrastructure system was already costing the average household nearly $3,300 a year.

According to ASCE, “The nation’s economy could see the loss of $10 trillion in GDP [gross domestic product] and a decline of more than $23 trillion in business productivity cumulatively over the next two decades if current investment trends continue.” Whatever a post-pandemic economy looks like, our country is already starved for policies that offer safe, reliable, efficient, and sustainable future infrastructure systems. Such a down payment on our future is crucial not just for us, but for generations to come.

As early as 2016, ASCE researchers found that the overall number of dams with potential high-hazard status had already climbed to nearly 15,500. At the time, the organization also discovered that nearly four out of every 10 bridges in America were 50 years old or more and identified 56,007 of them as already structurally deficient. Those numbers would obviously be even higher today.

And yet, in 2021, what Americans face is hardly just a transportation crisis. The country’s energy system largely predates the twenty-first century. The majority of American electric transmission and distribution systems were established in the 1950s and 1960s with only a 50-year life cycle. ASCE reports that, “More than 640,000 miles of high-voltage transmission lines in the lower 48 states’ power grids are at full capacity.” That means our systems weren’t and aren’t equipped to handle excess needs — especially in emergencies.

The country is critically overdue for infrastructure development in which the government and the private sector would collaborate with intention and urgency. Infrastructure could be the great equalizer in our economy, if only the Biden administration and a now-dogmatically partisan Congress had the fortitude and foresight to make it happen.

American History Offers a Roadmap for Infrastructure Success

It wasn’t always like this. Over the course of American history, building infrastructure has not only had a powerful economic impact, but regularly garnered bipartisan political support for the public good.

In July 1862, President Abraham Lincoln signed the Pacific Railway Act. That landmark bill provided federal support to an already ongoing private effort to build the first transcontinental railroad. Though at the time all its ramifications weren’t positive — notably escalating conflicts between Native Americans and settlers pushing westward — the effort did connect the country’s coastal markets, provided jobs for thousands, and helped jumpstart commerce in the West. Believe it or not, most of that transcontinental railroad line is still in use today.

In December 1928, President Calvin Coolidge signed a bill authorizing the construction of a dam in the Black Canyon of the Colorado River in the American Southwest, a region that had faced unpredictable flooding and lacked reliable electricity. Despite the stock market crash of 1929 and the start of the Great Depression, by early 1931, the private sector, with government support, had begun constructing a structure of unprecedented magnitude, known today as the Hoover Dam. As an infrastructure project, it would eventually pay for itself through the sale of the electricity that it generated. Today, that dam still provides electricity and water to tens of millions of people.

Having grasped the power of the German system of autobahns while a general in World War II, President Dwight D. Eisenhower would, under the guise of “national security,” launch the Federal-Aid Highway Act of 1956, with bipartisan support, creating the interstate highway system. In its time, that system would be considered one of the “greatest public works projects in history.”

In the end, that act would lead to the creation of more than 47,000 miles of roads across all 50 states, the District of Columbia, and Puerto Rico. It would have a powerful effect on commercial business activity, national defense planning, and personal travel, helping to launch whole new sectors of the economy, ranging from roadside fast-food restaurants to theme parks. According to estimates, it would return more than six dollars in economic productivity for every dollar it cost to build and support, a result any investor would be happy with.

Equivalent efforts today would undoubtedly prove to be similar economic drivers.  Domestically, such investments in infrastructure have always proven beneficial. New efforts to create sustainable green energy businesses, reconfigure energy grids, and rebuild crippled transit systems for a new age would help guarantee U.S global economic competitiveness deep into the twenty-first century.

Infrastructure as an International Race for Influence

In an interview with CNBC in February 2021, after being confirmed as the first female treasury secretary, Janet Yellen stressed the crucial need not just for a Covid-19 stimulus relief but for a sustainable infrastructure one as well.

As part of what the Biden administration has labeled its “Build Back Better” agenda, she underscored the “long-term structural problems in the U.S. economy that have resulted in inequality [and] slow productivity growth.” She also highlighted how a major new focus on clean-energy investments could make the economy more competitive globally.

When it comes to infrastructure and sustainable development efforts, the U.S. is being left in the dust by its primary economic rivals. Following his first phone call with Chinese President Xi Jinping, President Biden noted to a group of senators on the Environment and Public Works Committee that, “if we don’t get moving, they are going to eat our lunch.” He went on to say, “They’re investing billions of dollars dealing with a whole range of issues that relate to transportation, the environment, and a whole range of other things. We just have to step up.”

As this country, deep in partisan gridlock, stalls on infrastructure measures of any sort, its global competitors are proceeding full speed ahead. Having helped to jumpstart its economy with projects like high-speed railways and massive new bridges, China is now accelerating its efforts to further develop its technological infrastructure. As Bloomberg reported, the Chinese are focused on supporting the build-up of “everything from wireless networks to artificial intelligence. In the master plan backed by President Jinping himself, China will invest an estimated $1.4 trillion over six years” in such projects.

And it’s not just that Asian giant leaving the U.S. behind. Major trading partners like Australia, India, and Japan are projected to significantly out-invest the United States. The World Economic Forum’s 2019 Global Competitiveness Report typically listed this country in 13th place among the world’s nations when it came to its infrastructure quality. (It had been ranked 5th in 2002.)  In 2020, that organization ranked the U.S. 32nd out of 115 countries on its Energy Transition Index.

Despite the multiple stimulus packages that Congress has passed in the Covid-19 era, no funding — not a cent — has been designated for capital-building projects. In contrast, China, Japan, and the European Union have all crafted stimulus programs in which infrastructure spending was a core component.

Infrastructure Development as a Political Equalizer

Infrastructure could be the engine for the most advantageous kinds of growth in this country.  An optimal combination of federal and private funds, strategic partnerships, targeted infrastructure bonds, and even the creation of an infrastructure bank could help jumpstart a range of sustainable and ultimately revenue-generating businesses.

Such investment is a matter of economics, of cost versus benefit. These days, however, such calculations are both obstructed and obfuscated by politics. In the end, however, political economics comes down to getting creative about sources of funding and how to allocate them. To launch a meaningful infrastructure program would mean deciding who will produce it, who will consume it, and what kinds of transfer of wealth would be involved in the short and long run. Though the private sector certainly would help drive such a new set of programs, government funding would, as in the past, be crucial, whether under the rubric of national security, competitive innovation, sustainable clean energy, or creating a carbon-neutral future America. Any effort, no matter the label, would undoubtedly generate sustainable public and private jobs for the future.

On both the domestic and international fronts, infrastructure is big business. Wall Street, as well as the energy and construction sectors, are all eager to learn more about Biden’s Build Back Better infrastructure plan, which he is expected to take up in his already delayed first joint address to Congress.  Actions, not just words, are needed.

Expectations are running high about what might prove to be a multitrillion-dollar infrastructure initiative. Such anticipation has already elevated the stock prices of construction companies, as well as shares in the sustainable energy sector.

There are concerns, to be sure. A big infrastructure package might never make it through an evenly split Senate, where partisanship is the name of the game. Some economists also fear that it could bring on inflation. There is, of course, debate over the role of the private sector in any such plan, as well as horse-trading about what kinds of projects should get priority. But the reality is that this country desperately needs infrastructure that, in turn, can secure a sustainable and green future. Someday this will have to be done, and the longer the delay, the more those costs are likely to rise. The future revenues and economic benefits from a solid infrastructure package should be key drivers in any post-pandemic economy.

The biggest asset managers in the country are already seeing more money flowing into their infrastructure and sustainable-energy funds. Financing for such deals in the private sector is also increasing. Any significant funding on the public side will only spur and augment that financing. Such projects could drive the economy for years to come. They would run the gamut from establishing smart grids and expanding broadband reach to building electric transmission systems that run off more sustainable energy sources, while manufacturing cleaner vehicles and ways to use them. Going big with futuristic transit projects like Virgin’s Hyperloop, a high-speed variant of a vacuum train, or Elon Musk’s initiative for the development of carbon-capture technology, could even be included in a joint drive to create the necessary clean-energy infrastructure and economy of the future.

Polling also shows that such infrastructure spending has broad public support, even if, in Congress, much-needed bipartisan backing for such a program remains distinctly in question. Still, in February, the ranking Republican senator on the environment and public works committee, West Virginia’s Shelley Moore Capito, said that “transportation infrastructure is the platform that can drive economic growth — all-American jobs, right there, right on the ground — now and in the future, and improve the quality of life for everyone on the safety aspects.” Meanwhile, the committee’s chairman, Democratic Senator Tom Carper of Delaware, stressed that “the burdens of poor road conditions are disproportionately shouldered by marginalized communities.” He pointed out that “low-income families and peoples of color are frequently left behind or left out by our investments in infrastructure, blocking their access to jobs and education opportunities.”

Sadly, given the way leadership in Washington wasted endless months dithering over the merits of supporting American workers during a pandemic, it may be too much to hope that a transformative bipartisan infrastructure deal will materialize.

Infrastructure as the Great Economic Equalizer

Here’s a simple reality: a strong American economy is dependent on infrastructure. That means more than just a “big umbrella” effort focused on transportation and electricity. Yes, airports, railroads, electrical grids, and roadways are all-important economic drivers, but in the twenty-first-century world, high-capacity communications systems are also essential to economic prosperity, as are distribution channels of various sorts. At the moment, there’s a water main break every two minutes in the U.S. Nearly six billion gallons of treated water are lost daily thanks to such breaks. Situations like the one in Flint, Michigan, in which economic pressure and bankruptcy eventually led a city to expose thousands of its children to poisonous drinking water, will become increasingly unavoidable in a country with an ever-deteriorating infrastructure. 

The great economic equalizer is this: the more efficient our infrastructure systems become, the less they cost, and the more they can be readily used by those across the income spectrum. What American history shows since the time of Abraham Lincoln is that, in periods of economic turmoil, major infrastructure building or rebuilding will not only pay for itself but support the economy for generations to come.

For the next generation, it’s already clear that clean and sustainable energy will be crucial to achieving a more equal, economically prosperous, and less climate-challenged future.  A renewables-based rebuilding of the economy and the creation of the jobs to go with it would be anything but some niche set of activities in the usual infrastructure spectrum. It would be the future. High-paying jobs within the sustainable energy sector are already booming. The Bureau of Labor Statistics reported that among the occupations projected to have the fastest employment growth from 2016 to 2026 will be those in “green” work.

Wall Street and big tech companies are also paying attention. Amazon, Google, and Facebook have become the world’s biggest corporate purchasers of clean energy and are now planning for some of the world’s most transformational climate targets. That will mean smaller companies will also be able to enter that workspace as innovation and infrastructure drive economic incentives.

The Next Generation

It may be ambitious to expect that we’ve left the Groundhog Day vortex of “infrastructure week” behind us, but the critical demand for a new Infrastructure Age confronts us now. From Main Street to Wall Street, the need and the growing market for a sustainable, efficient, and clean future couldn’t be more real. An abundance of avenues to finance such a future are available and it makes logical business sense to pursue them. 

It’s obvious enough what should be done.  The only question, given American politics in 2021, is: Can it be done?

The economy of tomorrow will be built upon the infrastructure measures of today. You can’t see the value of stocks from space, nor can you see the physical value of what you’ve left to the next generation from stat sheets. But from the International Space Station you can see the Hoover Dam and even San Francisco’s Golden Gate Bridge. What will future generations see that we’ve left behind?  If the answer is nothing, that will be a tragedy of our age.

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  1. PlutoniumKun

    Its a complex area, and I’m not aware of any detailed studies explaining why construction is so much more expensive in other countries, but the use of subcontracting and an emphasis on ‘one-off’ projects is certainly a major contributor. The expansion of the Madrid metro system in the 1990’s is frequently cited as an example of a system that was delivered at a comparatively low cost by way of careful management of contractors – essentially putting in place contracts that would operate over a guaranteed number of years, allowing them to invest with security in the necessary plant and expertise.

    An anecdote: I was working in a major construction project that was run by four major contractors in the UK – one was French, the other three were UK or US based. When a funding blip meant a 6 month pause, the UK and US companies, over the strong objections of the ‘on the ground ‘managers, made most of the design engineers redundant. The economy was on an upswing, so when the project was restarted, many of these engineers had to be rehired again on highly inflated contracts. There was enormous disruption as new engineers had to be re-skilled for the project. The cost of this was never calculated, as it would have reflected badly on the senior managers (I learned quickly that inflated costs were reported in a way favourable to señor managers and didn’t reflect the actual reasons). In the meanwhile, the French design company had maintained all its staff, and was soon many months ahead of the others in design. It simply hadn’t occurred to them to make their staff redundant, they assumed it was far cheaper to avoid disruption by losing experienced managers and engineers.

    I’m a bit pushed for time now, I could write many more similar anecdotes from back when I worked more directly in construction projects, but it is clear to me that the core way contracts were operated seemed designed to push costs upwards. Simple, proven systems to keep costs down and implement small projects rapidly (like annual tender lists for standardised works) were gradually pushed out in favour of compulsory tendering and subcontracting. I can only assume that this is because it opened more opportunities for people to take a slice of the overall pie.

    On the issue of HSR, while I’m a fan of railways, I agree that its something of a waste of time for the US. HSR generally only works well when you can minimise land purchase costs (as they do in China), and for urban areas within 4 hours travel distance (i.e. about 500 miles), and where there is sufficient urban density with metro systems to feed travellers into the rail stations. This only applies for a very limited number of areas in the US in contrast to much of Asia and Europe. HSR would be great, but it would prove extremely costly and there are probably far better ways to spend the money.

    1. bojackhorsemeat

      If the US does get serious about a green economy, it’s clear airlines should be on the chopping block – astounding levels of pollution vs. what is provided, and no clear way to improve emissions very much. At the very least, HSR in theory replaces short flights (mostly across the east coast?).

      Without flights or HSR… We’re painting ourselves into a corner where it’s just going to be “impossible” politically to do what’s needed. Use the fiat to buy whatever is needed to keep things flowing (or jack up property taxes first to crash valuations, ha).

      1. Susan the other

        Where there is metro and highway gridlock from commuters’ overuse of automobiles (because there is no adequate public transportation) there is massive air pollution. If we are serious about mitigating CO2 we need short-line RRs in specific areas of congestion. Lots of them. And for long-hauls maybe two big east-west HSRs – one along the northern states and one along the southern – across the entire country. Pretty much where the big interstate roads already are. So maybe alongside. And then… we need some north-south rails, as necessary. Which can be medium lines. And, since civilization follows rivers and railroads, it will be easier to acquire undeveloped north-south land. We need railroads. Not airlines. Not cars. Let’s always remember how the RRs vanished. All the little lines were bankrupted by the government subsidizing the automobile industry.

        1. drumlin woodchuckles

          And where in-city streetcar and trolley lines were concerned, the destruction was even more overt and planned than that.

          About high speed rail? I don’t think that is needed, as well as being un-doable anyway for the reason of too much to destroy first. What we could use someday eventually is fairly fast rail, able to run on current maybe upgradeable tracks. High speed rail itself becomes energy inefficient after it reaches and exceeds the speed at which it creates its own “foam rubber brick wall” of air by trying to punch through it to fast for it ( the air) to get out of the way.

          The amount of High Speed Rail to be called for under the Big Phuqn Green Deal or whatever it will be called, will be a measure of just how totalistic and pharaohonic the Establishment is, even with something as serious as upgrading transportation.

          I could envision strictly passenger rail running up and down the medians of all the Federal Interstate Highways. In places where the medians aren’t wide enough, sacrifice the “left lanes” of the Interestates to create room for railbed. Link them up with passenger spur lines to airports. Maybe wall-to-wall bus shuttle systems from wherever they are able to stop at stations near towns and cities, to get hordes of rail riders between city and station. Or if there is not too much to destroy along the way, spur lines into feasibly rail-able towns and cities themselves here and there. And have them go fairly fast but NOT high speed.

    2. Ook

      If you take into account time wasted at airports, and the fact that train stations can be located centrally, a 4 hour flight or a 6-hour train ride amounts to the same overall time. With the latest generation of maglev trains running at 600 km/h, that’s 3600 km, or about 2,200 miles. New York to San Francisco is 2,900 miles, so we’re already pretty close to having the technology to have high speed rail cross country. All we need is imagination and leadership. Should be easy in a country like America.

      1. Yves Smith Post author

        Did you read the intro??? HSR is a non-starter due to all the right-of-way problems with existing residential and commercial real estate that would need to be cleared. It would be catastrophically expensive as well as take forever because the buyout valuations would be contested.

        On top of that are too many secondary cities in the US and hence too many potential routes. That’s why airlines went from point to point to hub and spoke. No one is going to run HSR from Birmingham or even Atlanta to NYC. And no one is going to take HSR if they have to go to NYC and then change trains, particularly if the connector is a regular train.

        1. Peter Beattie

          No doubt the factors you mention comprise a huge impediment to HSR in the US. But what’s the alternative? Seems like it’s a choice between two bad options: status quo transportation system, which is simply unsustainable; or HSR replacing at least a significant fraction of the car-based system, and sub/urban planning to concentrate future development around the HSR hubs, with eminent domain paying under current property valuations and/or being paid late with proceeds from value-capture taxes on property appreciation near the new stations. There doesn’t seem to be an ideal option here, but the latter seems clearly less bad.

  2. Halcyon

    My main anecdotal experience of this is living very close to a woodland that is going to be, in part, destroyed to make way for HS2. I walk there every few days as it’s the only place accessible from my house. For years now, the place has been swarming with various builders, workpersons, engineers, and so forth. Occasionally some new swathe of territory will be fenced off, or some new great hole has been dug or filled with water. There’s almost never anyone actually working on the sites when I pass them. Once I came across six or seven HS2 workers just sat in the woods on camping chairs, apparently waiting or monitoring something? They remained camped out there for several days. At no stage have I had any idea what any of these folks are doing; there just seems to be endless disruption on this site. I understand initial consultations to build on this area began earlier than 2010. I may well not live to see the project’s completion [\s]

    1. larry

      I am familiar with a number of construction projects (UK) where workers seem to do a lot of standing around doing nothing or not showing up for days, sometimes weeks, on end. It may be that the company has a number of projects on the go simultaneously and is switching attention from one to the other. Funding disruption may be an issue for some projects. Delievery of materials may be being held up. I really do not know why so many projects seem to take forever to progress. And it doesn’t seem to matter how large the company is either.

  3. The Rev Kev

    So, looking at the benefits of a major infrastructure investment in America, you would have-

    -Making America more competitive with the rest of the world.
    -Employment for hundreds of thousands if not millions of workers.
    -A boost in the economy as those wages are spent into the economy.
    -A more stable and a higher standard of living for millions of workers.
    -Tens if not hundreds of millions of people experiencing a superior infrastructure.
    -The removal of a drag on State and Local governments by not having sub-standard infrastructure anymore.
    -The upskilling of millions of workers in badly need skills.
    -Managers learning how to handle large projects which could carry on over into other projects.
    -Americans as a nation learning that they still have the engineering prowess of past generations giving overall confidence.
    -Massive profits to be made by American companies in supplying the equipment and services for all these projects, again boosting the economy.
    -Wall Street getting their share in helping finance all these projects.
    -America’s reputation getting a boost throughout the world.

    America’s 21s century elite: ‘Nah! We’re not gunna do any of that.’

      1. a different chris

        Bingo! I gave up around here:

        >The great economic equalizer is this: …crucial to achieving a more equal,

        Haha our overlords do not want to live in that world. We became a third-world nation when they discovered that living in such a nation is pretty darn good if you’re on top.

        >where Ross reskinned and improved some of the systems on a tired Class A office building on Madison at 59th.

        Nice. But generally everybody of Importance will, if given a chance, tell you that “oh it’s too much trouble to fix up this old building/house/whatever gotta plow it over…”. The thing is they want to be part of something Big, and a nice little useful domestic airport (as Yves example) doesn’t get anybody’s name in “the right circles”.

        >Too much in the way of existing buildings would need to be destroyed.

        This is correct, but it isn’t the reason. We’ve leveled Bagdad, why should we care about not leveling our own environment? It only costs money which we can print, and eminent domain is easy.

        We don’t do because the upper class is not real interested in taking a train.

  4. Synoia

    Americans will always do the right thing, only after they have tried everything else.

    Winston Churchill

    1. Dirk77

      Yet to me the main flaw is not doing the wrong thing, but feeling the need to do something rather than just leave it alone. It’s like the US has been the leading obsessive-compulsive nation since WWII, to judge by its need to control everything foreign policywise. Ironic in a way.

  5. Adam1

    When I was a kid you’d see state workers doing most highway projects. My grandfather was a county highway foreman and he used to point out all the bridges he managed the construction of. Today there aren’t even enough state highway employees to fill in the pot holes each spring. And everything of any meaningful size is a one-off project even though there are enough bridges and miles of road that need repair and replacement each year that could easily sustain a 5 or 10 year plan – but efficiency might mean less grift (or higher worker pay) and that can’t be supported.

  6. Another Scott

    This is one of those areas where everyone has their own idea as to the cause of higher infrastructure costs in the United States, and my guess is everyone’s right. Each of these causes adds a percentage point (or even part of a point) to the cost. When we only focus on one, the group responsible then says, “why is all the focus on us? We’re only responsible for 5% of the total construction costs. Those guys over there are a much larger cost.” This approach also means that there are other avenues to inflate costs because if you’re already spending $1 billion on a major project, what’s the impact of a $10 million architectural flourish or $5 million more in mitigation?

  7. Mike R.

    Infrastructure “talk” is easy if you are a politician and want to rev up the economy and generate higher inflation for the Fed. I mean, who is going to challenge the American Society of Civil Engineers?
    I will. And I’m a mechanical engineer.

    What we will end up doing is more of the same wrong stuff. More roads which we should stop building. We need strong policies to disincentivize road travel by cars and trucks, but that would be impossible to pass. We need policies to stop building and expanding airports.

    We don’t need more internet and wireless phone capacity; we need to reduce our frivolous use of these things and cut way down on the energy needed to supply those toys.

    We do need a new and vastly improved regional train system; NOT high speed though as it is too expensive and unnecessary.

    We do need improved water systems in many communities.

    1. Rod

      Man, we need a Plan–badly.
      You are right–we do not need: more of the same wrong stuff.
      I disagree on Internet/Broadband as we need, imo, to get everyone Information and the Ability to Communicate(Covid and Schooling) to overcome this imposed Inertia.

    2. The Historian

      I guess what we ‘need’ depends on where you live.

      For instance, I moved from an area, DC, with great internet and wifi service to an area with shabby, to say the least, internet and wifi, Idaho. Getting good reliable internet service is something this area desperately needs.

      I also live in an area that has roads and bridges that need to be replaced. Since this area is mostly rural, we need our cars and trucks which means we need our roads and bridges to be in good shape. We still have communities that are shut off for periods of times because of road problems like rock falls and avalanches. I can find no feasible way to make public transport work well in this area between many of our small rural communities – there just aren’t enough people that would or could use it. More trains to larger metropolitan areas, like Seattle or Salt Lake would be nice, especially high speed trains – it would definitely cut down on air transport. We are in the middle of nowhere – our only options are to drive or fly.

      My main complaint around here, though, is our electrical grid. We lose power at least 10-12 times a year, mostly from cars hitting poles. And then of course our only way of communicating is by our phones, so yes, we need good phone connectivity.

      Interesting enough, one of my son works from his home for an international company. They are so fed up with the power outages in the US that they are buying portable generators for all of their US employees. What does THAT say about our electrical grid?

      1. Bruce

        Less reliable utility service and limited infrastructure is part of the deal when you move to a rural area. I’m assuming you were attracted there by something else, perhaps something you couldn’t have in DC?

        I’d love to see stars at night and have a mountain behind me, but that isn’t part of the package in my urban area, where we have excellent internet, transit, and power reliability. We have the density to support those things.

        1. tegnost

          what’s really funny is amazon just set up a deal with idaho for for energy gobbling data centers because they could be close to that hydro electricity and get it on the cheap! Yay America!
          I bet we could genetically engineer a sedentary salmon.

      2. The Rev Kev

        ‘Interesting enough, one of my son works from his home for an international company. They are so fed up with the power outages in the US that they are buying portable generators for all of their US employees. What does THAT say about our electrical grid?’

        And there is the quote of the week.

    3. Anthony G Stegman

      What we really need are fewer people doing fewer things. Things like traveling, like making consumer goods, like buying consumer goods. We need to shrink the overall “economy”, not continually grow it. We need to get started on this pronto as time is running short if we are to save ourselves and the planet we inhabit.

  8. Robert Gray

    > Having grasped the power of the German system of autobahns while a general in World War II, President
    > Dwight D. Eisenhower would … creat[e] the interstate highway system.

    I was taught a rather different version of this history, in which the need for good roads was implanted in Ike’s mind at least a decade before WWII. In 1932, while serving as a junior officer on Douglas MacArthur’s staff, Eisenhower was frustrated by the difficulty of moving troops around in the action to suppress the Bonus Marchers. The 1956 law establishing the interstates (which I have heard old-timers still calling ‘Eisenhower highways’) is usually known as the National Interstate and Defense Highways Act.

  9. upstater

    HSR in the US isn’t a nonstarter. There are many corridors where right of way outside of urban centers is feasible. And the notion that population densities don’t justify it is nonsense.

    Having said that, “higher” speeds for conventional passengr rail is doable now, without dedicated ROW. Adding capacity with double tracking, sidings and signaling is comparatively easy. The major problem is freight railroads are privately owned and there is no interest from politicians to address this. In New York state, a draft EIS to improve capacity in upstate has been under review by USDOT for a decade! This is no doubt because CSX opposes more passenger trains and has it bottled up. Amtrak has statutory authority to operate passenger rail and can, if motivated and funded, to impose solutions. But the last thing TPTB want is attractive passenger rail.

    re. Highways, “build it and they will come”. The interstate highway system is the primary driver of sprawl and the decline of American cities. Looking at it from FIRE perspective, it is the match that lights it and makes the mortgage industry and big boxes possible. Land becomes a consumable.

    Yes, the grid needs trillions of expenditures. I have a difficult time seeing 50% more transmission being built or HVDC. And this doesn’t address the major redesign of distribution and construction of substations to support things like EVs or all electric households. The obvious solution is funding energy conservation as infrastructure, but it ain’t gonna happen.

    I’m afraid Biden’s infrastructure push is simply a way to stuff pockets of grifters.

    1. Yves Smith Post author

      “Outside urban centers”. What the hell is the point then? Instead of the Japanese bridges to nowhere construction boondogle, you are advocating for HSR to nowhere?

      1. upstater

        Texas, much of the south, even upstate NY or the midwest would for passengeronly ROW. In France the TGV HSR uses legacy railroad infrastructure into center cities and dedicated ROW outside of cities.

        Yes, it would be difficult to build true HSR through New Jersey or southern Connecticut. But somehow Japan, China and Germany managed to build HSR. They apparently don’t have the grifters like California does.

        1. drumlin woodchuckles

          Why High Speed? Why not just fairly fast? And there would have to be some kind of super tremendous bus or shuttle system to get passengers from “fairly close” to urban centers to “right inside” those urban centers, or it won’t attract the people it would hope to attract.

  10. Mikerw0

    I really don’t want to sound to cynical, but my take as to why infrastructure is all talk and little action is that the elites use a different infrastructure than the general population.

    – Their kids go to well funded private schools; a category that is important and not discussed above
    – They fly out of smaller airports in private planes
    – They can afford the costs of high speed internet to their homes
    – They de facto live in “gated” municipalities where local roads, water, power are well maintained with local tax dollars

    The elite includes the elected elite.

    And, we need an infrastructure for a 2050’s economy, not a 1950s economy.

  11. Rod

    It’s a big Elephant but here is a couple of small bites:

    In America, Public School Construction should have some Standard Design Portfolio( not refering to IBC)–to standardize the Building Shell as well as incorporate Solar Collection.
    Archtects make a % of overall costs–more Custom = more Cost.
    Virtually all School Buildings in my State have ‘Flat’ Roof design supported by Bar Joist ideal for bearing low weight Solar Arrays–of which their are virtually none existing now. Dominion Energy–and our PUC Regulators and Captured Legislators is an impediment to this happening now.

    Utility tries to block people from speaking at solar hearing in SC. Higher fees loom.

    Solar on Schools demonstrates to all those Parents(Citizens) and Kids(Citizens) that Alternative Energy is here, usable, and readily adaptable now.
    Thinking Tomorrows and not demanding Todays is being blind to our future unfolding.

    1. The Historian

      Wouldn’t it make more sense to have solar farms in high sun areas instead of individual solar panels? For instance, how good would solar be in Seattle? And there are many areas in this country that get a lot of snow. Do flat roofs make sense there?

      1. upstater

        I live in central NY state, the second most cloudy region after the Pacific northwest. We also get 3+ meters of snow. I have a 5KW ground mount PV system and it zeroes out my consumption over the year. We build an accounting surplus starting now and draw down in winter. Even in December we generate 30% of our consumption.

        Distributed generation obviates the need of a greatly expanded grid. Any surplus we generate is immediately consumed by neighbors. PV should be mandatory infrastructure on any suitable roof. Distributed generation is the enemy of grifters.

        1. Susan the other

          Why don’t we have solar inserts for windows/walls? Wouldn’t that eliminate snow and rain complications? Passive solar is very effective for warming a house. Even on partly cloudy days.

        2. scott s.

          “We build an accounting surplus” IOW, you use the grid as a battery. How much do you pay to support that capability? And for distributed generation, what responsibility do you have to maintain voltage, frequency, and power factor that you are feeding into your neighbors? If there is a fault in the distribution system who is responsible to repair it? Are you going to trust your neighbors to disconnect from the distribution so you can grab that cable?

          1. Dirk77

            Your points are taken. Yet, say there was no grid to park his excess energy to retrieve later: would living with a not perfect source of energy still make a productive life? Would the internet and light going down two hours after sundown when the batteries went dead, less in the winter, be all that bad?

      2. Darius

        Do we need to industrialize the countryside or remote wilderness with solar farms when there are millions of square feet of industrial, commercial, or institutional flat roofs all over the country?

  12. Psoc

    Alon Levy at Pedestrian Observations is the goto person when it comes to transportation infrastructure costs. His research is quite surprising as far as who does it cheaply (the Nordic countries — who knew?) and who doesn’t (Japan is surprisingly costly, though still better than the US), and his analysis and theories are thoughtful.

    The US is thoroughly screwed in this regard: a terrible funding process, runaway labor costs, and barely any oversight mechanisms.

    1. Felix_47

      In any projects I have worked with the only ones that seem to get done are ones with labor contractors (to deflect liability from the general contractor) who hire illegal labor. So we contract the framing, plumbing, roofing, concrete etc. out. We control costs by being sure to use cheap labor. The results are far more quality at a much better price. Government infrastructure is hobbled by prevailing wage, huge amounts of legal and. other rent include a lot of political rent seeking. And with domestic workers the medical and workers comp costs can be huge. Tort reform and national health care with cost controls would help quite a bit.

      1. tegnost

        same old train that brought us here is gonna be the one that carries us away.
        Cheap labor will fix it, that and contracting out all the risk…kaching!

  13. lyman alpha blob

    Actually very surprised Trump didn’t accomplish much with infrastructure improvement. Even though supposedly more into branding these days than constructing actual buildings, Trump must have had extensive contact with contractors at some point along the way. Infrastructure improvement seemed ripe for some grift among Trump cronies. I thought for sure we’d at least get some Big Dig style debacle that was grossly overpriced with contractors making out like bandits for decades, but we didn’t even get that.

    1. drumlin woodchuckles

      Trump would have wanted to make it such a total Public Private ripoff give-away that he might not have gotten enough support to get it passed even if he would have had the attention span to stay with it.

      Which he didn’t. And doesn’t.

  14. Dirk77

    As I started to read this article I was forming a joke paraphrasing Hilary and her non sequitur “…but will this help increase the representation of minority X in desired field Y”? Yet as I continued to read, Prim quotes some empty headed types making similar arguments. The US is a dying empire and one aspect of that is people at the top do not face any consequences for their f-ups. When was the last time anyone in DC did anything you agreed with, really, that didn’t have strings attached certain to make things worse in the long run? You want infrastructure or any sensible action? This country is in crisis, but nothing will happen until the elites feel it too. It must happen eventually, but perhaps not in your lifetime or in any way that the country would benefit. I can understand better now the motivation of anarchists such as those in Portland, though beating up on a federal building is hardly a way to precipitate a crisis for the elites.

    1. worldblee

      I think those are good points; there is no accountability for leaders on anything except certain delineated crimes or thought crimes. Say something nice about Cuba, for instance, or something criticizing Israel, and you’ll be disappeared from official channels. But have complete failures in the areas of medical care, trade, foreign policy, inequality, justice, etc. and you can stay on in perpetuity (I’m looking at you, Joe Biden).

      But onto Portland, specifically, the sidewalks here all have constructions dates on them. In my neighborhood, they all date to 1908-1911–and have never been replaced. They are cracked, broken, and can be quite dangerous to walk on, especially for anyone with mobility issues. There are streets as old (with cement and rock construction) and many streets in poor condition. To me, these are all signs of a decaying country living on its past glory without contributing necessary upkeep or upgrades. Now, the city has, to its credit, invested in public transportation, but the vaunted MAX light rail and streetcars serve few people. What serves most people is a comprehensive bus system that runs on the same old streets as the cars–much better than nothing but still a system that is running on old bones built in the distant past.

      1. Dirk77

        Assuming the town survives the anti-racist nut jobs running it currently, you could live in worse places than Portland to hear relatives talk. Are the streets with busses being maintained while others are neglected? If so, perhaps it’s a way to encourage people to use public transportation?

      2. Darius

        I was in Ann Arbor, Mich., in the early 80s, a lot of the sidewalks were stamped WPA 1938.

  15. Susan the other

    Because of my distain for our completely inept “legislature” it occurs to me that they are (unfortunately) an integral part of infrastructure. The brains – so to speak. But they are completely dysfunctional because the system is designed to prevent overreach – when even now it has finally evolved to such a crisis that we could use lots of overreach – for many decades to come. Congress must get its act together. Stop wasting people’s time, lives and money on their obscene “healthcare” boondoggles and free marketeering and focus on good infra which must include good healthcare. Without it we are not a functioning society. It must also include good education. Both are foundational. It’s a modern day tragedy that what we have for government is just a grifter-clown-show under the big-top. It’s disgusting.

  16. Sound of the Suburbs

    The Americans need to be very careful elsewhere to ensure they can afford their military budget,
    There is nothing like wasting money on futile wars, that they incapable of bringing to any successful conclusion.
    This is where the Americans like to waste their money.

  17. Nels Nelson

    Over 40 years ago I went to work as the economist in the planning division of my state’s department of transportation. I was a member of an interdisciplinary team whose job it was as required by the National Environmental Policy Act to assess the social, economic and environmental impacts of federally funded transportation projects. I worked in the transportation infrastructure sausage factory. In looking back at the many large scale projects I was involved in and compare them to what we are facing today, I could sum it up by saying “we’re doomed”.

    I am now retired and can’t begin to describe how bad the situation is. I see many simple maintenance, rehab and replacement projects that should take months to a year to accomplish go on for years and are still not completed.

    What was able to be completed back in the latter half of the Twentieth Century cannot be done today. It was a different era with a different workforce and an industrial base that is gone. Then there is the the energy base that was used to build it.

    I believe Yves linked to an interview a while back with Mark Blyth and Rana Foroohar and Mark had this to say about a Green New Deal:

    “I think there’s a slightly bigger problem lurking in the background. I think we’ve spoken about this before. For the past forty years, the administrative state, Bannon’s bête noire, of the United States has been hollowed out. I believe it was the case that part of the reason the Florida unemployment system crashed was because they couldn’t actually deal with the workflow, given they were running 486DX computers from the 1980s. It used to be the case that these were well-paid job; these are highly skilled. You thought about the FDA, you thought about several of the independent agencies: really, really smart people, career scientists, etc. They’re leaving in droves, and they have been doing it even before the Trump administration because Congress won’t pay for it”.

    “And now we’re going to tell it to do a Green New Deal. That scares the shit out of me, because nothing will delegitimate that faster than the failure of those state institutions”.

    “We’re going to take something as complex as, like, literally the biggest energy transition in human history. And we’re going to try and do it with 486 computers and a bunch of people who hate it. That really scares me”.

    The world has changed but many of the assumptions remain the same. We’ve put much of our wealth into an overly complex system of daily life which we haven’t even been able to properly maintain. Decay is all around us and failure are coming faster and faster. We need to downscale but that is not in our nature.

    We’re doomed.

    1. Dirk77

      Don’t despair. That’s my job. I’m no expert but perhaps all it takes to turn things around is countries to stop trading using the dollar. So we become just another country in this world.

    2. bob

      “What was able to be completed back in the latter half of the Twentieth Century cannot be done today. It was a different era with a different workforce and an industrial base that is gone”

      I don’t believe that is the problem. I’ve worked with plenty of people on infrastructure projects. Blaming the lazy kids is easy. They aren’t lazy, they are working harder than ever for less money.

      It’s political will. There is no trust in the institutions, and the institutions are being run more and more by politicians and MBA’s. Each on their own, bad, but put them together…ouch

  18. David in Santa Cruz

    Neta Crawford of the Watson Institute at Brown University reported that as of November 2019 the Global War on Terror has cost the United States Treasury $6.4 Trillion. We simply need to aim the GWoT money-gun at our own domestic terrorists.

    As a bonus, the carpet bombing will clear the way for high-speed rail!

  19. Dave in Austin

    Mass Transit. From the Austin airport every 15 minute a bus runs18 miles through downtown, by the U of Texas (where I live) and into redeveloped old airport— for $1.00/trip. Great deal. The last 7:30 am arrival got me an 8 am bus, complete with a friendly, shaggy old white guy smelling of urine trying to explain the Book of Dueteronomy to me. DC and San Francisco spent bags of federal money to build mass transit systems that middle-class people avoid like the plague. The newspapers mention “roving bands of youth”, if you know what that mean. So the likely mass transit in the US will be on-call little self-driving 4 passenger boxes you can rent. The model will be rental cars- with nobody telling you about the bible. Diversity and tollerence lead to the public abandoning public facities. I’d like to pass a law saying “You can do anything in a Court Room that Judges have ruled you can do on the subway”. Surely the Court would issue a Temporary Restraining Order staying that law and setting up a Preliminary Hearing and Status Call for sometime in early 2022….

    Immigration. The last time I looked the value of U.S. infrastructure devided by the number of people was $58,000. So every immigrant is given his or her share- $57,999 on arrival… and everyone else gets one penny less in infrastructure to use. As Yves said, population increase matters. And immigration at the low end also leads to “more people employed and less automation”. One of the first things Hispanic California legislators did in the 1960s was to end all funding to UC Davis for “Labor saving in Agriculture” research. Look at a U.S. construction site versus one in Canada and Germany to see the results. Every house I see being build in Germany comes with a little Hoffman mini-crane to do the heavy lifting and placing.

    Construction Costs in the U.S. The U.S. in WW II and China, Korea, Japan and France today have one thing in common: no minority and women-owned set-asides. “Here are the specs; bids due in 30 day; obey the law; lowest bidder with a bond wins”. Turning productive enterprises into social welfare programs is an old idea… remember the USSR?

    I notice that the other very large, ethnically diverse countries are India, Pakistan and Brazil, which differ significantly in development from the less diverse frontrunners, China, Tiawan, Korea and Japan. Enough said.

    And somebody has to pay off the new, huge-and-now-semi-permanant deficit. So contrary to the sunny “2%” inflation number have you noted that the value of the U.S. doller has dropped 8-13% against the other major currencies in the past year and the cost of raw materials (copper, etc) and semi-finished good (steel, etc) has gone up 10% while that basic staple of construction, the 8 foor 2″ x 4″, is up 400%? “Well honey, who are you going to believe? Me or your lying eyes?”

    Sadly, that means all my investments are now ones that generate profits and increased volume overseas- Tiawan Semiconductor, Freeport McMoRan, Vestus, Boston Scientific, Facebook and the like. I wish Biden luck… and the same for the U.S., but the odds look long.

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