Who Is to Blame?

Over the next few weeks, we are going to hear a growing debate over who is to blame for the bridge collapse. So far, I’ve heard:

  • Governor Pawlenty (for vetoing a spending bill)
  • The Taxpayers’ League of Minnesota (for encouraging smaller government)
  • The Hiawatha light-rail line (for spending money that could have been spent on the bridge)
  • Congress (for funding new projects but not maintenance)
  • Global warming

Who are your nominees?

The other thing that will happen is that everyone will jump on the infrastructure bandwagon. If there is money to be spent on infrastructure, then they will have an infrastructure project for you. The American Society of Civil Engineers thinks we need to spend $1.5 trillion on infrastructure in the next five years. This includes money for water, sewers, parks, transit, highways, airports — fifteen different categories in all. I haven’t looked at their numbers in detail, but I suspect they are heavily inflated and are merely the sum of the wish lists of fifteen different interest groups.

How should we decide where money should be spent? Charge user fees and spend money on things that produce enough revenues to cover their costs. Any other method will be susceptible to pork, which means for sure that the money will not be spent on the highest priority items.

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15 thoughts on “Who Is to Blame?

  1. aynrandgirl

    Who is to blame? None of them. The question, however, is if MN bridges are in need of repair or replacement, and that money has not been budgeted, how is MN to pay for it? On that subject, I charge two things: the light rail line, whose billion dollar construction cost can be put to better use and whose future (outrageous) operating costs can be similarly repurposed, and MN’s legislature, who divert huge portions of gas taxes, tolls, auto-related sales taxes, licensing fees, and other taxes and fees away from road construction and maintenance into “alternative transportation” boondoggles, bike paths, the general fund, and other such spending unrelated to their source.

  2. msetty

    I blame the tendency of highway advocates to favor new construction supporting their pals in the development industry over the far less sexy, mundane but vital maintenance of what we already have. Also the tendency of legislatures and Congress NOT to raise the gas tax to keep up with inflation.

    I reject out of hand the “diversion to transit” argument, if only because of the gross imbalance in government policies and two orders of magnitude difference in spending and subsidy priorities that have destroyed transit and intercity passenger service since circa 1920–but I digress and don’t care to waste my time arguing with highwaytards about it.

  3. JimKarlock

    Hey, Msetty – On July 23rd, 2007, JimKarlock said: Still waiting for your answers:

    S msetty said: In other words, the costs of congestion and transit are roughly $500 per capita per year in the Portland region, but the direct financial benefits are $1,300 annually per capita,
    JK: If I understand that statement, it is that the net benefit is:
    $1,300 savings – $500 costs = $800 net saved per capita. I this right?

    I don’t see the higher cost of housing in the costs column.
    I don’t see the price people are willing to pay for a larger back yard in that equation.
    I don’t see the cost of some people having to choose between housing and food in your calculations

    Of course, if you really want to save many Billions, you just put people in ultra high density and limit their mobility to near zero. See any state prison for how cost effective this can be for the inhabitants.

    S msetty said: a DIRECT, DIRECTLY MEASURABLE FROM SOURCES WITHOUT AGENDAS OTHER THAN ACCURATE STATISTICS, rate of return of 260% PER YEAR.
    JK: Whoh! Where did that 260% suddenly come from? If you subtract the cost from the benefit, you get the net cost of the benefit. To claim a return on investment in this situation is quite a stretch. Once you have the net benefit, the question to ask people is:

    For a savings of $800 per year ($67/month) is it worth it to put up with high congestion, double normal housing costs and no back yard?

    Heck $800/yr is probably less than the savings in the annual property tax bill by moving to an identical home in the burbs. So, lets see, we love the large back yard, good schools and quiet cul-de-sac, but to save $800 on transportation, we’ll move to the crime infested city and give up good schools. And pay $800 more in property taxes!!

    Thanks
    JK

  4. msetty

    I haven’t made an entry to my blog for a while, but Randal being quoted as an expert by the New York Times is just too much to let by without a response.

    Here is what I posted there:

    I see Randal O’Toole is cited as an “expert” by an article in today’s New York Times, http://www.nytimes.com/2007/08/07/us/07highway.html, alluding how allegedly funds spent on transit rather than highways are significant in the underfunding of roadway maintenance and rehabilitation needs. As usual, Randal’s comments lack the complete context; given the increasing “drive by” (sic) nature of the increasingly tattered “Grey Lady,” I don’t expect any follow up.

    From what I can determine from the most recent data broken out by type of expenditure, http://www.fhwa.dot.gov/policy/ohim/hs03/hf.htm, Table hf2.pdf, in FY 2002 all levels of government spent $68.8 billion on highway capital improvements out of $138.6 billion spent that year for all highway-related purposes tracked by the FHWA. Presumably the vast majority of this spending is for capacity improvements and other projects to enhance highway travel.

    To these government road construction figures one must add what private developers of residential and commercial properties directly pay for road improvements. Assuming an average of $20,000 for new streets and road capacity for each new housing unit, this would add at least $20 billion per year to overall road capacity expansion expenses. There is some uncertainty here about how much overlap there is between municipal road construction paid through development fees (partly because FHWA doesn’t track strictly private roadway construction costs), but an estimate of around $90 to $100 billion per year circa 2002 appears to be a reasonable “order of magnitude” estimate based on FHWA data.

    Since 2002, highway construction costs have skyrocketed, as documented at here. According to this summary, costs for basic roadway materials and services (crushed surfacing, hot mix asphalt, concrete pavement, structural concrete, steel reinforcing bar, structural steel, and roadway excavation) increased 40% to 50% just through 2005, and probably a large amount since. Given this recent inflation in highway construction costs, the U.S. would need to be spending on the order of $150 billion+ annually to keep up with the 2002 rate of roadway expansion. This total accounts for the level of highway construction in 2002, but does not include the additional tens of billions of dollars annually that the FHWA and highway advocacy groups claim is needed to keep up with congestion growth and general increases in highway travel.

    None of the figures above include additional expenses for new parking lots and structures for retail and other commercial uses, nor new garages and driveways for new housing. These annual expenditures for new parking capacity obviously fluctuate with new housing starts and the new commercial square footage, but is extremely difficult to estimate with any accuracy since such data is kept in the generally proprietary bowels of various highway trade associations or buried deep in the national accounts that would take too much time to decode for the purposes of this comment. However, these parking capacity expansion expenditures are probably on the order of an additional tens of billions of dollars per year on top of new road capacity expenditures as discussed above.

    This data strongly supports my earlier contention today on O’Toole’s blog that spending on new transit capacity has any significant role in causing the underfunding of roadway system rehabilitation and maintenance, including the replacement of structurally-deficient bridges such as the one that collapsed in Minneapolis. Total federal spending on New Starts was approximately $1.6 billion in FY 2007; annual spending on new transit capacity is in the range of $3-$5 billion annually, including Federal funds and state and local funding, the latter which fluctuates significantly from one year to the next based on the progress of various new rail and light rail projects.

    Adding together the $150 billion+/- that should be spent on highways in 2007 to keep up with 2002 spending levels (excluding parking), and new transit capacity expansion on the order of $3-$5 billion per year (e.g., transit is around 2% of total transportation capacity expansion spending, roughly its current share of the travel market measured in passenger miles) transit capacity hardly has any complicity in the underfunding of vital roadway and structure rehabilitation and replacement.

    As I said, Randal O’Toole may have facts, but rarely the full context!

  5. JimKarlock

    msetty said: Gridlock, YOU won’t get any more response from me, except this one. There is no point.
    JK: I just love it when the planning class is shown to have completely crappy logic, they just resort to name calling and try to change the subject or duck out.

    Lets include the background to the above:
    You, Msetty quotes some source:
    What if you could add $2.6 billion annually to your local economy?

    That’s what Portland has effectively done by getting its citizens to drive just 4 fewer miles a day, according to a briefing paper by our colleague Joe Cortright called Portland’s Green Dividend. What Joe found has big implications for urban leaders across the country
    Then Msitty adds his thoughts:
    The key facts are thus: on average, per capita daily mileage in the Portland region is 4 miles per day BELOW the averge for U.S. large urban areas, and that transportation spending is 15% of the region’s personal income, NOT 19% which is the average for U.S. large urban areas. THIS is where the link above came up with the estimated transportation savings dividend of $2.6 billion per year, or about $1,300 per capita–a large chunk of change by any measure. To offset these what I think are quite tangible benefits, the Texas Transportation Institute–another trustworthy institution–estimated that in 2003, the per capita cost for congestion in time lost was $341. Additional costs that could be added to this include the TriMet and Clark County PTBD net capital and operating subsidies (for FY 2005 from NTD data, TriMet $282 million including some tailend capital costs for the Yellow line, $23.9 million for Clark County, $306 million total, or about $155 per capita that year), using the 2 million residents figure for regional population.

    In other words, the costs of congestion and transit are roughly $500 per capita per year in the Portland region, but the direct financial benefits are $1,300 annually per capita,
    JK: Here Msitty admits that all those saved billions are only $1,300 per capita, but conveniently forgets to subtract the direct costs. I’ll do that: $1300 – 500 = $800 per year alleged benefit. Or about $2.00 per day. This is less than a latte per day or close to the average cable TV bill. For that he expects us to abandon our home in the low crime burbs on a quiet cul de sac for a higher cost home on a noisy street next to a godzilla condo riddled with crime and lousy schools. Yeah, right the higher property taxes in Portland to support all those Godzilla condos probably suck up twice that alleged $800 per year savings.

    I presume this answers any lingering doubts as to why Msitty wants to drop his little find like a hot potato.

    Thanks
    JK

  6. msetty

    This excerpt from http://www.paecon.net/PolicyImplications.htm succinctly summarizes my viewpoint regarding the benefits of transit and coordinated land use, among many other things.

    …Closely related to these new anti-neoclassical concepts is another one, sustainable development. This refers to the physical scale of the economy relative to the ecosystem. Ecological economists view the economy as an open subsystem of the larger ecosystem which is finite, non-growing and, except for solar energy, materially closed. This point of view compels asking questions regarding scale. How large is the economic subsystem relative to the earth’s ecosystem? What is its maximum possible size? What is its most desirable size in terms of human welfare? These questions, around which policy decisions will and must increasingly be made, are not found in standard economics textbooks. Neoclassical economics can not accommodate the concept of sustainable development because if adopted as a goal it requires that goods be valued in part by their contribution to that goal and not solely on their contribution to individual utility maximisation.

  7. msetty

    Well, at least one person appreciates my analytical capabilities. I will be getting back to him shortly.

    See this.

    Trolley creates a laughable fuss
    (a rubber-tired downtown shuttle in Napa)

    Wednesday, August 08, 2007

    Dear editor,

    The continuing fuss over the Napa trolley is laughable. Lots of hindsight and some amazingly far-fetched “solutions.”

    I really miss the reasoned and thorough transportation analysis Michael Setty used to contribute to Napa and Solano counties transportation issues in the Register. Did he move from the area or just give up contributing because those controlling the agenda can’t read?

    Bob Brackett / Napa

  8. JimKarlock

    msitty said: …Closely related to these new anti-neoclassical concepts is another one, sustainable development. This refers to the physical scale of the economy relative to the ecosystem.

    Ecological economists view the economy as an open subsystem of the larger ecosystem which is finite, non-growing and, except for solar energy, materially closed. This point of view compels asking questions regarding scale.
    JK: Do they have any numbers better than the Club of Rome’s Limits to Growth? Or The Baby Bomb Or the many other idiot predictions of future doom?

    msitty said: How large is the economic subsystem relative to the earth’s ecosystem?
    JK: Give us the numbers, if they have none they are merely dreaming fools, wishing for an end to modern society.

    msitty said: What is its maximum possible size?
    JK: So tell us, with good quality proof , or don’t try to infest society with it.

    msitty said: What is its most desirable size in terms of human welfare?
    JK: So tell us, with good quality proof or don’t try to infest society with it.

    msitty said: These questions, around which policy decisions will and must increasingly be made
    JK: Says who with what proof?

    msitty said: , are not found in standard economics textbooks.
    JK: No, they are found in the black arts of what feels right, the occult and witchcraft, you know – like city planning. Show us the numbers or go away. Like you slithered away after showing us the fabulous savings from living like sardines and I pointed out any savings were wiped out be increased costs.

    msitty said: Neoclassical economics can not accommodate the concept of sustainable development because if adopted as a goal it requires that goods be valued in part by their contribution to that goal and not solely on their contribution to individual utility maximisation.
    JK: Baloney! The real reason is that real economics is based on things that can be measured. Sustainability is based on BS. If you can’t write an equation for it, you don’t understand it. If you don’t understand it, you are pushing religion.

    Thanks
    JK

  9. johngalt

    Msetty, your analysis falls short because, along with solar energy, man’s mind is also without limits.

    You are starting from a false premise (that a society’s wealth is determined by its supply of physical resources–its land, labor, minerals, water, and so on) and that the world contains a limited amount of these physical resources.
    In your world economics is a zero-sum game. (if there are only limited resources, one person’s gain must be another person’s loss; the richer one person is, the poorer his neighbors must be).
    Fortunately, we don’t have to fight over slices of a pie, we can make the pie bigger or bake new pies.
    It is technology that controls both the definition and the supply of
    physical resources.

  10. Dan

    You are starting from a false premise … that the world contains a limited amount of these physical resources.

    Criminey!

    We live on an oblate spheroid of infinite dimension!

    Who knew?

    DS

  11. Builder

    The world is finite, but mankind’s knowledge concerning how to use the worlds resources is always expanding. For instance, 100 years ago many thought we would soon be running out of petroleum, but it hasn’t happened yet. I strongly suspect that when we stop using petroleum to produce entergy it will be because we have found better means to do this, not because we have run out of petroleum.

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