Christie and Infrastructure Folly
I used to characterize the contemporary GOP as a party whose economic policy is “let’s eat the seed corn,” but perhaps that was unfair, and informed too much by my interest in infrastructure policy, as opposed to tax policy or regulation, where, at least in my ignorance, I can imagine Republicans faring better.
But Chris Christie is doing a good job of validating my characterization. Killing the ARC project is a crystal-clear example of destroying long-term prosperity for a trivial short-term fiscal advantage. The really sad thing is that the short-term fiscal advantage isn’t even terribly significant, especially since New Jersey will have to cut a $300 million check to the federal government immediately to pay the Federal Transit Administration back for the money it’s already spent on construction. The governor’s worry that the project could cost much more than expected is a reasonable one, and the moratorium to investigate projected costs and their associated risk for the New Jersey budget was prudent, but cancelling an absolutely essential project to safeguard against cost overruns is like euthanizing your beloved pet dog to make sure he doesn’t run away.
For a broad view of the economic realities that Christie either doesn’t understand or has chosen to ignore, read Aaron Renn’s analysis at Urbanophile.
Also, an update that may make the decision seem less totally crazy: Ray LaHood, the US Secretary of Transportation, is going to Trenton, along with with the head of the Federal Transit Administration (FTA). It’s possible that Christie announced the project’s cancellation merely to establish a negotiating position with the FTA. Depending on what he’s negotiating for, that could be a smart move. If he’s just trying to ensure that New Jersey isn’t on the hook for cost overruns I can’t blame him, but foisting the risk on the FTA or the Port Authority won’t improve the project by itself. If he can negotiate for a different route (the ARC route is far from optimal) or for better project management, then this political stunt, if that’s what it turns out to be, could end up benefiting the project, and in turn benefiting taxpayers and commuters.
The problem is that these big projects get mired in red tape and take years to complete. They are also ripe for corruption and mismanagement (see Big Dig). We need a way to expedite them but it’s nearly impossible with government beauracracy.Report
I used to characterize the contemporary GOP as a party whose economic policy is “let’s eat the seed corn,”
Rather, let’s find the people that are already the best fed, give them the seed corn, and tell the starving remainder that it’s their own fault.Report
If the project is “absolutely essential,” is it priceless?
I’m frankly an agnostic on this issue. I don’t have a position. But how much would it have to cost before you would concede it’s too much? How wasteful would it have to be?
Or — given its importance — aren’t cost-control safeguards proportionally more important? With essential projects, contractors become the agents in a principal-agent problem. They’re difficult to control; they know more than you do; and they have a personal profit motive.
What would you recommend?Report
@Jason Kuznicki,
With essential projects, contractors become the agents in a principal-agent problem. They’re difficult to control; they know more than you do; and they have a personal profit motive.
This isn’t really about this project in particular, but a couple years ago, at my state university, contractors were hired to do some rennovations in my department’s (3-year old) building. They took up a whole wing of the 3rd floor, and it was rather intrusive (our weekly area colloquia were held in that wing), so one day while getting my mail (the mail room was also in that wing), I asked one of the construction supervisors how long they were going to be there. His answer was, “Until the money runs out.”
Of course, now the university is in dire financial straights, laying people off left and right, and cutting programs. I can’t imagine how that ever happened.Report
Actually foisting any overrides on the port authority makes a lot of sense. It is in a position to tax those who would benefit from the lines, by raising the tolls on the bridges and tunnels, as well as the rail fares. In fact the port authority should pay for all (possibly raising the landing fees at the airports to pay for it, definitly at Newark, because it would allow fast rail service from Manhattan to Newark. Consider a $20 one way toll on the bridges.Report
Oh, yeah! Keep building those roads and tunnels. That way people won’t have to really consider any other way to work and shop except by physically moving.Report