New Jersey’s Governor Chris Christie rekilled the Hudson River tunnel project. He had killed it before, a couple of weeks ago, but then promised to reconsider his decision at the request of Transportation Secretary Ray LaHood.
Christie did not want to burden New Jersey taxpayers with the cost overruns, now anticipated to be at least $4 billion. Canceling the project means New Jersey has to repay the federal government $350 million spent on planning the project, which seems a bargain by comparison.
Christie’s original decision led to cries of outrage from economist Paul Krugman, who compared the tunnel to “Erie Canal. Hoover Dam. [And] The Interstate Highway System.” Christie’s rejection of the tunnel, said Krugman, “was a destructive and incredibly foolish decision on multiple levels.”
Krugman seems to think that any infrastructure is automatically worth funding. This sounds like the old “build-it-and-they-will-come” philosophy. We could build a sewage system for 10 million people in Pittsburgh, but the Pittsburgh urban area has less than 2 million people and it’s not growing particularly fast, so most of that sewage system would be wasted.
These foods come with their own digestive enzymes to wikipedia reference orden 50mg viagra help break down foods. prices for cialis These reasons or diseases finally give rise to erectile dysfunction in turn ruining their sexual lives. It includes the evaluation of your blood pressure, penile organ and testicles and you may require to undergo a rectal test to viagra price uk test your prostate. I don’t believe one has to go through a great level of difficulty keeping viagra uk buy or achieving healthy erection for pleasing intimacy. Krugman doesn’t even have his facts straight. He calls the planned tunnel the “second rail tunnel under the Hudson River.” It is true that the North RIver Tunnel–actually, two tunnels–which is used by Amtrak and New Jersey Transit, is used to near capacity. But that is the second rail tunnel under the river. The first tunnel–also two tunnels–is the Uptown Hudson Tubes, used by Port Authority trains. Opened two years before the North RIver Tunnels, the Uptown Tubes are not used to capacity.
In any case, Krugman doesn’t seem to be able to distinguish between infrastructure that is worth having and infrastructure that is a waste. Was the Erie Canal worthwhile? Yes, it paid for itself. But the C&O Canal and almost every other American canal that followed proved to be financial disasters (mainly because steam railroads were already taking over by the time they were built).
Was Hoover Dam worthwhile? Probably, unless you hate Las Vegas. But dozens of other dams built by the Corps of Engineers and Bureau of Reclamation since that time were huge wastes of money.
Was the Interstate Highway System worthwhile? Overall, the answer is certainly “yes,” but that doesn’t mean that every single mile of the system was worth it or that building more miles is inevitably worthwhile.
How should policy makers decide whether a particular piece of infrastructure is worthwhile? The simple question to ask is: will it pay for itself out of user fees? If the answer is “yes,” then it is worthwhile. Of course, if the answer for the proposed Hudson River Tunnel was “yes,” then Governor Christie would not have had to cancel it.
“Krugman doesn’t even have his facts straight.”
What else is new?
“Was Hoover Dam worthwhile? Probably, unless you hate Las Vegas.”
Or Lake Mead, an ecological disaster with its unintended consequences associated with ending the Colorado’s periodic flooding.
In Oregon we have recently replaced bridges that had many years of useful life remaining and used stimulus to overlay roads that did not need overlays. Government will always spend money that is available even if projects are not yet needed. This is like throwing away new clothes or trading in a one month old car, it makes no sense.
The problem of cost overruns is something that must be addressed. Planners and project proponents routinely underestimate costs in order to ‘sell’ projects knowing there will be no consequences for going over budget. That isn’t mistakes being made, that’s telling lies.
Christie did the right thing and the future of NJ transit projects will be positively influenced by the decision.
Krugman doesn’t even have his facts straight.
Oh wow – I had no idea I should privilege a minor Libertarian think-tank employee over a Nobel Laureate and prominent public intellectual!
Nonetheless, I too am glad Christie p*ssed away all that money in order to save himself ~half that. Well done Mr Fiscal Sanity!!!
DS
Oh wow – I had no idea I should privilege a minor Libertarian think-tank employee over a Nobel Laureate and prominent public intellectual!
You don’t have to “privilege” anyone, I feel that it’s better to think for yourself. Public intellectuals are dangerous because they believe they know much more than they really do (see Robert Reich), and that this knowledge can easily be extended to academic fields unfamiliar to them (i.e. Krugman).
The question of whether the project is economically worthwhile is irrelevant to Krugman. His support for the project is couched in naive Keynesian arguments about raising aggregate demand via fiscal stimulus, so the larger and more costly the project, the better. It is somewhat akin to Bernanke’s tongue-in-cheek remarks about shoveling cash out of a helicopter as a way to stimulate the economy.
But since we’re making appeals to authority, I’d like to invoke another Nobel Laureate who was a no-so-public intellectual, (Hayek) and reminded us that “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” The politicians and planners who promote the ARC project imagine they can design and optimally invest in transportation networks in the absence of a functioning system of prices, just as Krugman and others believe they can optimally control the economy by managing “aggregate demand”.
I also wouldn’t say that Christie “pissed away” money. It’s not as though that $350 million won’t be spent (it will be wasted somewhere else instead). And it’s a smart move when the alternative is committing yourself to a megaproject that will cost your state untold billions. Again, the importance of ignoring sunk costs. If this project really were worthwhile, the Port Authority and one or both of the states could issue revenue bonds to be recovered from users. Better yet, let the project as a concession to private firm to avoid exposing these public entities to copious amounts of risk.
It is puzzling how often major public works run so far over estimates. After the Boston Big Dig, I don’t blame any state from being afraid of taking on a huge open-ended liability. A state is basically risking future years of many other projects across the state on one big gamble.
I wonder about the federal requirement to have to repay planning funds if the project doesn’t go forward. It kind of violates the “sunk costs are sunk” principle.
“Oh wow – I had no idea I should privilege a minor Libertarian think-tank employee over a Nobel Laureate and prominent public intellectual!”
“But since we’re making appeals to authority, I’d like to invoke another Nobel Laureate who was a no-so-public intellectual, (Hayek) and reminded us that ‘The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.'”
Was going to mention the blatant and low-wattage appeal to authority, but you beat me to it MJ.
A Nobel does not necessarily mean much, especially for econ, & it is based upon a specific area of study, within a field (for the academic categories). For Krugman, that was mass production & scales of economy. There are many highly respected & accomplished economists that know about the flaws in Keynesianism & money, & such.
For Krugman, Barnancke, Reich, Summers, Romer & many others, with a gov bias, there views will not always be accurate. To learn more, these sources have plenty of material:
Capitalism
FEE, Foundation for Economic Education Ludwig von Mises Institute
For a big project–set aside the funding aspect, for now–look at the value. What can ~$10 billion produce? How about a nuclear power plant that would supply electricity for the needs of 6-9 million people?
How about cost-benefit analysis on the tunnel, for cost/trip? Depends how it’s amortized, including interest. An extra $2/trip? Maybe more.
Would riders be willing to pay that? Shouldn’t they be charged? That’s a very easy, proper, direct, user fee to charge. Why should non-tunnel users be charged. Pleas don’t make faulty comparisons, which would probably fall under the category of “2 wrongs make right” or that “this is unjustly paid for, therefore, so should this.”
Should many products & services be partially pais for by others? It’s done often, particularly with medical, for decades.
Hey, ticket prices for pro-sports games are too high.
Should others subsidize them? Guess what? It’s already being done. Many stadiums receive taxpayer money.
Oh wow – I had no idea I should privilege a minor Libertarian think-tank employee over a Nobel Laureate and prominent public intellectual!
I believe such reasoning is termed argumentum ad verecundiam, or the
Oh wow – I had no idea I should privilege a minor Libertarian think-tank employee over a Nobel Laureate and prominent public intellectual!
I believe such reasoning is termed argumentum ad verecundiam, or the appeal to authority fallacy.
Like I said, the troll Dan is here merely to defend every extravagant delusion dreamed up by his planner buddies. He didn’t even bother to comment on the actual value of the project, though he seems to think that paying billions in state money for the privilege of receiving a fraction of that in federal funds, is a worthy transaction.
I believe such reasoning is termed argumentum ad verecundiam, or the appeal to authority fallacy.
“Who ya gonna believe, me or your lyin eyes?”
I guess if you have to believe this is an appeal to authority, there’s not much to say is there? Except you’ll never set policy. Ever.
DS
If we go by the user fee thoery, much of the Interstate system would never have seen the light of day.
The only roads which are self-supporting from user fees are the tolled turnpikes.
“Free” Interstate highways are notoriously non-self-supporting, as can be demonstrated by a simple calculation:
Average Daily Vehicle Miles per Mile of Road * Motor Fuels Tax per Gallon / Average Fuel Economy in MPG.
150,000 vehicles * 40 cents per gallon / 25 mpg = $2400 per day per mile of road. This works out to a perpetual value of around $10 million. You can’t build a mile of 6 lane urban interstate for $10 million, and you certainly can’t generate the money necessary to maintain it, police it, and pay for capital reconstruction every 30 years or so.
While the gas tax hovers at a rate of 4 cents per mile or less, toll roads cost nearly 10 cents per mile to drive on.
What an education in these comments. Good thing my 12-year old is taking a logic class – otherwise I wouldn’t have a clue about the fallacy of the “appeal to authority” logic.
A real education, the government doesn’t function like a business or even you when you manage your own personal finances. People need to be reminded of that regularly.
The Antiplanner wrote:
> Christie’s original decision led to cries
> of outrage from economist Paul Krugman,
> who compared the tunnel to “Erie Canal. Hoover
> Dam. [And] The Interstate Highway System.â€
> Christie’s rejection of the tunnel, said
> Krugman, “was a destructive and incredibly
> foolish decision on multiple levels.â€
I frequently agree with Krugman (consider his brilliant pre-real-estate-bubble-burst description of areas subject to Smart Growth land use policies as “the zoned zone” and areas with less restrictive land use regulation as “flatland”), but on this I believe he’s wrong.
Most of the funding for this incredibly expensive project was going to come from patrons of the N.J. Turnpike and from patrons of the toll crossings operated by the Port Authority of New York and New Jersey. Especially Turnpike users were not going to be getting much benefit from this tunnel either. Curiously, as I understand it, New York City and/or New York State were not putting up any dollars for the project.
And even if new rail capacity under the Hudson River was a good idea, this project is not.
This project would have resulted in a “dead end” tunnel on the New York end – as Peter Samuel reported, there would be no possibility of extending the tunnel to the east (in the direction of Long Island) or to the north (in the direction of Grand Central Terminal).
I asked this the other day, but got no response…
What is the Antiplanning alternative to the Keynesian approach our government is currently using? Seeing as the market was in the process of devouring itself, are we just simply to let that happen leaving everyone with the exception of the top 0.001% in it’s wake?
“The great and terrible irony of capitalism is that if left unfettered, it inexorably engineers its own demise, through either revolution or economic collapse.”
This is one rerun that that was just as good the second time around.
Any chance we could get Christie to kill this boondoggle every two weeks through the end of the year? It’s like watching Wile E. Coyote fall off the cliff, it just never gets old.
bennett asked:
> What is the Antiplanning alternative to
> the Keynesian approach our government is
> currently using? Seeing as the market was
> in the process of devouring itself, are we
> just simply to let that happen leaving
> everyone with the exception of the top 0.001%
> in it’s wake?
I am not the Antiplanner, and I definitely don’t play him on T.V., but in the context of this project, given that there is (apparently) plenty of demand for a new rail crossing of the Hudson River from North Jersey to Manhattan, why not ask private companies to submit proposals to own and operate the existing tunnel crossing to Penn Station and add capacity, and charge the users of the tunnels a toll?
Don’t laugh – trains can be charged tolls, as the privately-owned Channel Tunnel between England and France does (though it’s not an especially successful project in financial terms), or with greater success, the government-owned but privately-financed Øresund Fixed Link (actually a bridge-tunnel crossing for high-speed passenger rail, freight rail and motorway traffic) does between Sweden and Denmark.
I guess if you have to believe this is an appeal to authority, there’s not much to say is there? Except you’ll never set policy. Ever.
I’m not really sure how my own credentials fit into this discussion, Dan. The topic of the debate is Paul Krugman’s opinion on whether this tunnel should be constructed using quantifiable criteria typically being need (i.e. user demand) and financial merit. Krugman received his Nobel Prize in economics for his contribution to New Trade Theory, a subject far-removed from transportation finance. He is certainly fallible and it is worth questioning his opinion and arguments when there are facts that directly conflict with those opinions. Assuming that Krugman’s arguments are more valid than Mr. O’Toole’s simply because Krugman has a Nobel Memorial Prize is the fallacious reasoning I’m talking about.
C.P.,
You make a good point, particularly relating to today’s post, but what I was trying to get at is much broader.
The economy was collapsing. The government stepped in and applied a Keynesian approach. Many here deplore this tactic. I’m wondering what policy/approach would they recommend. It seems to me (and I could very well be wrong) that they would prefer a depression over Keynesian intervention.
Other than you, I’m getting the John Boehner treatment (i.e. we’re against it, but have no alternative to offer). So let me rephrase the question:
If the stimulus is wrong, what would the opponents of the stimulus do instead? Is the answer “let market forces sort it out” (i.e. nothing?, i.e. bring on the great(est) depression?)?
That is a good question, bennett. There is a lively debate among economists on how much influence Keynesian stimulus can have. It will be interesting to see what the post-mortem on the recession and the stimulus bill turns up.
I think some programs will be found to have some influence. Certainly worthwhile development projects helped if they were “shovel ready”. Projects that still haven’t employed people certainly have not helped. I doubt make-work projects help. The Cash for Clunkers program was clearly an abject failure:
We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended.
http://papers.nber.org/papers/w16351#fromrss
“The economy was collapsing. The government stepped in and applied a Keynesian approach.”
You’ve got it all backwards. The economy was collapsing BECAUSE of Keynesian approaches.
Check out Wiki for an overview of New Keynesian approaches which include “macroeconomic stabilization by the government (using fiscal policy) or by the central bank (using monetary policy)”.
“Stabilization” includes removing market mechanisms for monetary supply; interest rates are artificially adjusted downwards (and sometimes practically eliminated) to increase the monetary supply. An increased monetary supply through artificial means results in asset bubbles, inflation, debt and devaluation of currency.
So this business of government “stepping in” is pure hogwash; the government has been in since the establishment of the Federal Reserve in 1913. Since then, the dollar has been devalued by more than 95%, and inflation robs wage earners of buying power; this invisible tax is how government services its ponderous debt, which at the time of this writing was $13,663,891,267,223.32. (That doesn’t include perhaps $50,000,000,000,000+ in unfunded liabilities.)
The government has been “stepping in” by borrowing/printing money for decades; the government stepped in when we went off the gold standard in 1971 and when FDR made it illegal for Americans to own gold through a Depression-era executive order.
“Many here deplore this tactic. I’m wondering what policy/approach would they recommend.”
I’m for giving anarcho-capitalism a try. Let’s look to the Austrian economists, who predicted the current collapse while Keynesians like Ben were saying the economy was just swell and would continue to grow.
“It seems to me (and I could very well be wrong) that they would prefer a depression over Keynesian intervention.”
Again, we’ve had Keynesian intervention for decades. What has it gotten us? Full employment like Keynes promised? What a joke. It is precisely Keynesian intervention that caused and prolonged the Great Depression and the current market correction.
“If the stimulus is wrong, what would the opponents of the stimulus do instead? Is the answer “let market forces sort it out†(i.e. nothing?, i.e. bring on the great(est) depression?)?”
Let the market correct. It wants to. It needs to. We have a phony economy; the house of cards, built on debt and consumption rather than savings and production, is falling.
Wake up. This “downtown” could signal the onset of a currency crisis; look at commodity prices over the last several years; in September alone many jumped 20% or more. Inflating the money supply is the wrong thing to do. It needs to contract. We need deflation and a stronger dollar. Consumers need to dig themselves out of debt and start saving money.
Running up the deficit and propping up sagging housing prices through quantitative easing is more of the same failed Keynesian policy.
Hey Dan – Did you read your hero, “Nobel Laureate [sic] and prominent public intellectual” today?
His brain just devolves to naked fear-mongering. “So if the elections go as expected next week, here’s my advice: Be afraid. Be very afraid.”
Seems like he is more scared of democracy than of cost overruns.
Your language is foreigm to Dan. Try Planspeak.
Andrew, Not sure what your point is with your obfuscation.
Do you believe that each person should pay for everything that one receives? Should there be a head tax per person on all gov expenses? Are you saying that since that is not possible & that few projects come close, then any gov expense is justifiable?
You stated that “if we go by the user fee theory…”
Well, it’s not a theory (more like a procedure or operating system), but regardless of your wrong word choice, your intent is mostly there, but not totally coherent.
You go on …” the interstate system would not have been built.” Why not just apply to all–no government, if you want to apply your reasoning?
Your conclusion is wrong for many reasons.
1.You figures are guessed & inaccurate; those alone have many errors. For one, you didn’t adjust for the CPI.
2.Suppose there was some funding from other sources. If it was to be built on user fees only, those could have been increased.
3. The goal is primarily, if not all, to be paid for use fees; could be debatable on degree.
4.The extra funding, by general taxes, is insignificant, where the item (freeways) is used directly by 80%+ of all people, one of the highest % of any public expense. Whereas transit is regularly used by <4%, and the tunnel is used by ~1/600 of the whole population, but 1/3 funded Federally, which can be said to have money collected from 100%.
5. There could have been tolls, but that adds much cost & many other negatives.
6. The simple thing if you want to theorize about a different past, would be to have charged a higher gas tax.
7. The maintenance & such is separate from building, but that can be covered now. Gas tax yields over $100 billion/year.
8. The cost was split Federally & with states, so right there you are only talking about 50%.
Dan, you have done nothing to defend Krugman, or, more importantly, his content. If his credentials are "superb" then you should have no problem doing that. Do you continually fail & make fool of self in public too, or just in these anonymous situations?
It’s funny that you stick up for Krugman, when when you vehemently disagree with him on “policies increasing housing prices”, such as in his articleThe Zoned Zone, very similar to Glaeser, which you even pasted once, but missed the point.
Bennett,
For Keynesian spending, it doesn’t work. I could type pages explaining why, but I’ll be brief.
See here if you really want to learn:
http://fee.org/
http://www.capmag.com/
http://mises.org/
Public spending takes from private spending, in fact that’s the source of gov money (duh).
So, with a $14 trillion GDP, that 6% of pseudo-stimulus is just replacing 6% of private spending. That money for bonds would have gone elsewhere. There are numerous examples in history; other countries too.
The Great Depression last a decade, extra long because of the New Deal. WW2 was not a recovery either. Although there was high output, and unemployment was low because of soldiers.
Look at the 1920 recession (& Andrew Mellon) to see how cutting taxes & gov spending, lead to a big recovery.
See these about deficit spending:
http://fee.org/featured/goal-freedom-keynes-returns/
http://www.amconmag.com/article/2009/apr/20/00022/
http://www.american.com/archive/2009/february-2009/taking-the-name-of-lord-keynes-in-vain
http://www.capitalismmagazine.com/economics/6028-Keyness-Theory-Depression-Critique.html
http://www.econlib.org/library/Enc/KeynesianEconomics.html
http://www.heritage.org/Research/Commentary/2010/08/The-Fatal-Flaw-of-Keynesian-Stimulus
http://www.thefreemanonline.org/columns/john-maynard-keynes-the-damage-still-done-by-a-defunct-economist/
http://www.thefreemanonline.org/headline/democracy-deficit-and-debt/
@ Frank, Borealis and Scott,
Thanks for the response. I can’t say I really disagree with any of you. It’s a nasty catch 22 however. “Anarcho-capitalism,” is a seductive idea, but a brutal one as well (and IMO, not sustainable).
I will also say that I don’t think the current economic crisis is as 1 sided as Frank and Scott see it. Government spending no doubt has its role, but I would argue that the repeal of glass-steagall and other de-regulatory strategies from the right, helped us get to where we are today.
I suppose government intervention is a necessary but dangerous balancing act, and like most things it comes down to where we are comfortable drawing the line.
Let’s be clear here: The Banking Act of 1933 (“Glass–Steagall”) was NOT repealed. A provision that prohibited a company that owned a bank from owning another financial services company was repealed by a law signed by President Clinton in 1999. Again, the Banking Act of 1933 was not repealed. We still have the FDIC. By repealing this one provision while maintaining deposit insurance, the government set up a scenario of private profit and taxpayer losses, but these never would have materialized without extremely low interest rates set by the Federal Reserve first in an attempt to re-inflate the dot-com bubble and subsequently to get consumers borrowing/spending post 9/11.
Requiring banks to keep 100% of demand deposit accounts on hand would eliminate the need for the Banking Act of 1933; coupling this with an end of fiat currency would end asset bubbles of the size and frequency seen since 1913 and especially since 1971.
There was not deregulation under Bush!
Why do people think that? No examples are ever given.
BO does says that often, but then he is very dishonest & talks so much crap. However, the MSM, has been doping a biased & terrible job for years.
Glass-Steagall was reduced under Clinton, which played a minor role in the banking crisis anyway.
Sarbannes-Oxley created major new regs & costs, for all businesses, under Bush.
The recession was caused by Dem policies that pushed banks to make more loans to unqualified people. Part of that through the GSEs (Fannie & Freddie), which was given extra promotion by Barney Frank & Chris Dodd, who are the major creators for the new financial reg bill, which excluded the GSEs.
The housing prices increased a lot in a few markets, due to various restrictions on supply, when the prices dropped, many people defaulted on mortgages.
There are other elements that created the recession: interests rate being too low, then jacked up; mortgage-holders increasing loan amount on new, temporary equity; rating agencies doing inaccurate job; naked short selling.
Here are further explanations.
http://radio.foxnews.com/2010/10/27/gibsons-column-the-road-to-the-ditch/#axzz13bpZQPct
http://www.newgeography.com/content/00369-root-causes-financial-crisis-a-primer
http://fee.org/doc/the-house-that-uncle-sam-built/
http://www.thefreemanonline.org/headline/have-economists-been-bought/
I’m not real familiar with Anarcho-capitalism.
The Vienna School approach will work fine. Their basic description of the recession cause is “misallocation of resources”, mainly towards homeownership, promoted by government (non-free market forces).
It’s really strange how “free market” is often blamed, when gov interferes in many ways. Free market does not mean anarchy, nor, not to have & enforce laws against fraud, slander, cheating & such.
“I’m not real familiar with Anarcho-capitalism.”
Yet you listed Mises as a source.
Maybe you’re not familiar with terminology. The Austrian School of Economics (which you’ve referred to as the Vienna School) often leans AC. From classical liberalism and the Austrian School, Murray Rothbard synthesized his version of AC. More here.
Now whether AC or minarchist are more practical remains a debate for another time, perhaps even another era. As Thoreau stated, when society is ready, that (AC) is the type of “government” we shall have.
Assuming that Krugman’s arguments are more valid than Mr. O’Toole’s simply because Krugman has a Nobel Memorial Prize is the fallacious reasoning I’m talking about.
Ryan, the overarching issue is whether someone who didn’t finish Master’s level econ has better analysis and decision-making slillz than someone with a PhD, who also teaches at an excellent Uni with top students, and who has discourse with the best economists and scholars and practitioners on the planet.
A few wish the former choice is more compelling. Almost all functioning adults realize the latter is much more likely to be useful. If some wish to feel that this is appeal to authority, there’s really not much to say is there.
And the overarching point in my original comment bears repeating:
The surprise that a project – any project – like this was stopped mid stream shows how odd this…erm…”decision” was. An odd way to express your politics, surely.
HTH.
DS
There’s the troll Dan again, justifying his beliefs. Krugman is a maniac. Anyone who believes his economic gibberish is deluded
For an interesting take on the cancellation of ARC, see Tom Nemeth’s editorial in the latest Railpace. It’s not online but can be ordered here:
http://www.railpace.com/
bennett commented:
> You make a good point, particularly relating
> to today’s post, but what I was trying to
> get at is much broader.
O.K.
> The economy was collapsing. The government
> stepped in and applied a Keynesian approach.
> Many here deplore this tactic. I’m wondering
> what policy/approach would they recommend.
> It seems to me (and I could very well be
> wrong) that they would prefer a depression
> over Keynesian intervention.
I agree with you, at least in part. I sure as Hades don’t want a depression of any kind.
But recession or not, I don’t think building questionable rail transit projects that require enormous public subsidy to build (and then to operate) is an especially good idea. If we are going to build things, let’s build things that can pay back the construction costs and not burden the taxpayers in the future with massive operating deficits. That probably means adding toll highway capacity, as is being done in some states (Maryland’s ICC and I-95 ETL projects, Virginia’s I-495 HOT lanes and New Jersey’s Turnpike widening projects are examples).
Restructuring the ARC project (as a private concession) so that not just New Jersey Transit can use added tunnel capacity seems like a good idea, though many (most?) transit supporters in the U.S. are hooked on the idea that all transit capital improvements must be funded by non-transit users. Stated differently, transit in the United States is profoundly auto-dependent.
> Other than you, I’m getting the John Boehner
> treatment (i.e. we’re against it, but have
> no alternative to offer).
I don’t especially care for Mr. Boehner.
> So let me rephrase the question:
> If the stimulus is wrong, what would
> the opponents of the stimulus do instead?
> Is the answer “let market forces sort it
> out†(i.e. nothing?, i.e. bring on the
> great(est) depression?)?
See above. There are plenty of other projects that can (and probably should be) built in the United States. Unfortunately, I am of the opinion that some of the projects with the greatest merit (such as the completion of I-710 (probably with a tunnel)) in Los Angeles County are opposed by environmental and NIMBYist groups, which practice the same brand(s) of politics as Mr. Boehner when it comes to highway improvements, which is to say no (and in some cases, offer phony alternatives in the form of rail transit lines and Portland-style land use policies that do not solve the problem).
And we should not forget freight rail projects (especially eliminating bottlenecks, of which there are many), which tend to get ignored because freight rail does not get the loud support that rail transit projects do.
Dan continually fails to see the content & value, in words, instead looking to the fact of being an established academic (w/PhD), as enough. Krugman’s views on certain econ elements are contradicted with other Nobel winners.
A Nobel does not mean complete mastery of all aspects of the field. I already pointed out that his area for the Nobel is not even relevant in the econ are that we are discussing.
It’s unbelievable that Dan avoids seeing that there are many contradictory views among many respected & educated professionals.
Also, when favoring redistribution, & when working for the government (relying on force) there are many biases, which are held by Krugman, James Hansen & many others, who are looked at for being intellectual.
It’s hilarious how Dan attacked a poster as not setting policy or never will. That had no relevance. It was Dan’s pitiful puerile personal attack, to redirect. Setting policy is wrong-headed, usually makes conditions worse, & is not wanted by people who: know the reality of economics, know that free enterprise creates wealth (not gov), & appreciate the Constitution.
Just Dan protecting the planner’s status quo as usual. Nothing to see here.
unintended consequences associated with ending the Colorado’s periodic flooding
Unintended? Wasn’t that one of its major benefits, known in advance?
Dan
Ryan, the overarching issue is whether someone who didn’t finish Master’s level econ has better analysis and decision-making slillz than someone with a PhD, who also teaches at an excellent Uni with top students, and who has discourse with the best economists and scholars and practitioners on the planet.
Oh no, Dan. If that’s the issue then you don’t have an argument. You are simply deploying the ad hominem fallacy (or the argument from authority, take your pick), for Krugman and against O’Toole.
Oh no, Dan. If that’s the issue then you don’t have an argument.
If you have graduated from high school or have your GED, you can check the catalogue of the Community College in the area and see if they offer a PHIL class past INTRO. If so, the catalogue description will tell you if that class offer rhetoric or critical thinking. Sometimes they offer Critical Thinking in the English section.
DS
“…was repealed by a law signed by President Clinton…”
and passed by a republican congress. But, whatever. That’s not the point anyway.
How about a class in say, justifying expensive boondoggles through contemptuous dismissal of your opponent’s points and irrelevant references to your favorite moron economist’s education? That sound like something you’d take, Dan?
Dan, Nice of you to explain how you got your fallacious reasoning, from a CC class, in order to avoid the substance & critical thinking.
Yep, if you cannot give evidence or logic to counter content, there are many other items & logic twists to use, to make it appear that have rebutted. You have learned well on how to pretend to argue without having any valid points.
So, what good has Krugman or Bernacke said about deficit spending & hue public projects?
Poor Dan, give him a break, he’s afraid he’ll be out of work if he ever admits that even one boondoggle really is a boondoggle.
Speaking of wasting money, anyone see that Dan’s buddies have wasted 108.5 million “planning” on the Columbia River Crossing so far? Not counting inflation, I believe the original spans cost only a fraction of that to build:
http://www.columbian.com/news/2010/oct/30/planning-tally-for-new-i-5-bridge-million/
I asked this the other day, but got no response…
What is the Antiplanning alternative to the Keynesian approach our government is currently using? Seeing as the market was in the process of devouring itself, are we just simply to let that happen leaving everyone with the exception of the top 0.001% in it’s wake?
What I thought was wrong with the Keynesian stimulus approach, along with some alternatives, is outlined nicely in this talk by Arnold Kling in February 2009.
The alternative of doing nothing is, regardless of its dismissal by pundits like Krugman, a viable option, and quite possibly less costly than the path we actually chose. The UK, for example, is adopting the opposite measure of sharply cutting government spending in an attempt to reduce deficits and increase confidence among households and businesses. This should provide an interesting point of comparison for the US as it tries to pull itself out of recession.
I do not believe that “the market was devouring itself” or that we were headed for another Great Depression in the absence of larger bailout or fiscal stimulus measures. I believe that we were sold a lot of scary stories about impending doom by the architects of both the TARP bill in the Bush Administration and the stimulus bill in the Obama Administration. Meanwhile, before Obama even took office and enacted the stimulus bill, there was evidence that job losses were declining and that we were reaching the trough of the recession.
I am wary of those who cite the repeal of the Glass-Stegall Act as the primary cause of the recession, and even more wary of those who cite “deregulation” more generically. The reality is that, especially in the financial industry, the regulators are always going to be a step behind the industry’s innovators who are constantly developing new products (including derivative securities). Regulators could not even oversee the activities of the government-sponsored enterprises in the housing sector, which look as though they will eventually cost us between $150 and $400 billion. I think the best we can do is to make the rules of the game explicit (no “implicit guarantees”), so that those who take large risks are on the hook for the consequences.
As a follow-up, if it was determined that more fiscal stimulus were needed, one possibility would be to adopt an “infrastructure-heavy” type of bill which focused on repairing facilities that are currently in poor condition and could be completed rather quickly. Contrary to the $50 billion stimulus jobs bill proposed by the Administration, which seems to lean more toward spending on new infrastructure (which will eventually also have to be maintained), the program could focus on deficient bridges, worn-out pavement, and the backlog of maintenance projects for the country’s largest transit systems, which have been chronicled on this blog.
This could be financed with scheduled increases in the federal gas tax over a number of years so that it doesn’t contribute further to our national debt.
Here’s Peter Schiff on Krugman. It’s only the first three minutes.
Spells out how Krugman’s got it all wrong.
Spending does not equal prosperity.
Apparently many Americans to not think Obama follows Keynesian economics, though maybe they are confused….
http://www.youtube.com/watch?v=_23Nt5XumaU
Nice link Borealis!
The infamous New Left Media was out at the Rally to Restore Sanity, and while most were much more informed than their Tea Party counterparts many still flopped.
http://www.youtube.com/watch?v=02KvD4DvX9c&feature=player_embedded