This is a GOOD Sign for the United States

Thomas Friedman, and many others, think it is a sign of America's decline and some sort of failure of government will that other countries are building super-massive showcase infrastructure projects while we are not.  They would take this chart as a sign of decline:

20150114_sky

I disagree.  This is a sign of growing maturity on the part of the United States.  Many of these super-tall building projects make little economic sense, but are completed to validate the prestige of emerging nations, like teenage boys comparing penis sizes.  Grown men are beyond that behavior, just as are grown-up nations.  I discussed this in the context of rail a while back at Forbes.  In that case, it seems everyone thinks the US is behind in rail, because it does not have sexy bullet trains.  But in fact we have a far more developed freight network than any other country, and shift of transport to rail makes a much larger positive economic and environmental impact for cargo than for rail.  It comes down to what you care about -- prestige or actual performance.   Again choosing performance over prestige is a sign of maturity.**

The US had a phase just like China's, when we were emerging as a world economic and political power, and had a first generation of successful business pioneers who were unsure how to put their stamp on the world.  So they competed at building tall buildings.   Many of the tallest were not even private efforts.  The Empire State Building was a crony enterprise from start to finish, and ended up sitting empty for years.  The World Trade Center project (WTC) was a complete government boondoggle, built by a public agency at the behest of the Rockefeller family, who wanted to protect its investments in lower Manhattan.  That building also sat nearly empty for years.   By the way, the Ken Burns New York documentary series added a special extra episode at the end after 9/11 on the history of the WTC and really digs in to the awful crony and bureaucratic history of that project.  Though Burns likely did not think of it that way, it could as easily be a documentary of public choice theory.  His coverage earlier in that series of Robert Moses (featuring a lot of Robert Caro) is also excellent.

** I have always wondered if you could take this model further, and predict that once-great nations in decline (at least in decline relative to their earlier position) might not re-engage with such prestige projects, much like an aging male seeking out the young second wife and buying a Porche.

Update:  Here is part of what I wrote on US vs. European and Japanese railroading, which I think is an absolutely awesome example of where the triumphalists like Friedman go wrong:

In particular, both Friedman and Epstein think we need to build more high speed passenger trains.  This is exactly the kind of gauzy non-fact-based wishful thinking that makes me extremely pleased that these folks do not have the dictatorial powers they long for.   High speed rail is a terrible investment, a black hole for pouring away money, that has little net impact on efficiency or pollution.   But rail is a powerful example because it demonstrates exactly how this bias for high-profile triumphal projects causes people to miss the obvious.

Which is this:  The US rail system, unlike nearly every other system in the world, was built (mostly) by private individuals with private capital.  It is operated privately, and runs without taxpayer subsidies.    And, it is by farthe greatest rail system in the world.  It has by far the cheapest rates in the world (1/2 of China’s, 1/8 of Germany’s).  But here is the real key:  it is almost all freight.

As a percentage, far more freight moves in the US by rail (vs. truck) than almost any other country in the world.  Europe and Japan are not even close.  Specifically, about 40% of US freight moves by rail, vs. just 10% or so in Europe and less than 5% in Japan.   As a result, far more of European and Japanese freight jams up the highways in trucks than in the United States.  For example, the percentage of freight that hits the roads in Japan is nearly double that of the US.

You see, passenger rail is sexy and pretty and visible.  You can build grand stations and entertain visiting dignitaries on your high-speed trains.  This is why statist governments have invested so much in passenger rail — not to be more efficient, but to awe their citizens and foreign observers.

But there is little efficiency improvement in moving passengers by rail vs. other modes.   Most of the energy consumed goes into hauling not the passengers themselves, but the weight of increasingly plush rail cars.  Trains have to be really, really full all the time to make for a net energy savings for high-speed rail vs. cars or even planes, and they seldom are full.  I had a lovely trip on the high speed rail last summer between London and Paris and back through the Chunnel — especially nice because my son and I had the rail car entirely to ourselves both ways.

The real rail efficiency comes from moving freight.  As compared to passenger rail, more of the total energy budget is used moving the actual freight rather than the cars themselves.  Freight is far more efficient to move by rail than by road, but only the US moves a substantial amount of its freight by rail.    One reason for this is that freight and high-speed passenger traffic have a variety of problems sharing the same rails, so systems that are optimized for one tend to struggle serving the other.

Freight is boring and un-sexy.  Its not a government function in the US.  So intellectuals tend to ignore it, even though it is the far more important, from and energy and environmental standpoint, portion of transport to put on the rails.  In fact, the US would actually probably have even a higher rail modal percentage if the US government had not enforced a regulatory regime (until the Staggers Act) that favored trucks over rail.   If the government really had been asleep the last century, we would be further along.

  • Ward Chartier

    Thinking about your post of 12 January, very possibly legislatures enacting fewer very good laws, and even repealing some laws, would be a sign of growing maturity.

  • Onlooker from Troy

    Face it. Friedman and his ilk are simply national socialists. It's apparent in all that they spew.

  • Rob McMillin

    Re this:

    But in fact we have a far more developed freight network than any other
    country, and shift of transport to rail makes a much larger positive
    economic and environmental impact for cargo than for rail.

    I think you omitted the word "passenger" before the last "rail".

  • Onlooker from Troy

    Excellent analysis on railroads. Great stuff

  • Matthew Slyfield

    It would also make sense if you were to substitute "passengers" for rail.

    "makes a much larger positive economic and environmental impact for cargo than for passengers."

  • Mike Powers

    Friedman is one of those people who, when discussing Mussolini, would say "yeah, but, y'know, he *did* get the trains to run on time..."

  • http://EasyOpinions.blogspot.com/ Andrew_M_Garland

    All government projects are boondoggles, and the bigger the better to hide the favors and expensive contracts among the complexity. Politicians will spend huge amounts to hide the cash flows that count, the ones to their families and friends.

    The governmental love for green energy is a classic Bootleggers and Babtists construct. The public wants a better planet. The politicians want grants and loans to support their cronies and more big projects. It is a feature, not a bug, that the green energy projects are new and unproven. When they fail, no one investigates where the money went. But, the contractors for those projects make nice money, and the losses come from unrepaid loans given by the government. (See the great movie "The Producers" for more details.)

    Phase 1: "These are loans, not an expense for the taxpayer."
    Phase 2: Failure. "It was new technology, and one can always expect early failures."

    Remember Rahm Emmanuel, former chief of staff for Obama, "Never let a crisis go to waste" when angling for greater power. "Never let a project go to waste" is the motto for government projects.

  • Elam Bend

    Once you get past about 50 or 60 floors the economics for high rises start to really suck.

  • HenryBowman419

    For at least a decade now, Mr. Friedman has exhibited the unmistakable signs of chronically-worsening dementia. He really should seek treatment, preferably at a psychiatric institute.

  • HenryBowman419

    And it would be even better should legislatures begin repealing horrible laws, of which there are a plethora.

  • JW

    Keep in mind that Friedman is a babbling idiot, only able to speak in 4th grade level metaphors. In olden times, he would have been stashed away by his family where he couldn't be found and spoken of only occasionally in hushed tones.

  • JW
  • http://togetrichisglorious.blogspot.com/ Colin77

    The Economist has referred to US freight rail as "the world's best." http://www.economist.com/node/16636101

  • SethRoentgen

    I don't think Japan is an appropriate comparison for the US. Japan comprises mainly a spine of mountains with the main population centres located on small isolated plains (e.g. Kanto, Kamsai). Virtually all raw materials imported to Japan comes by sea and is offloaded at the point of use. Similarly, Japan's exports go out through the same ports. There simply isn't the need for bulk transport of materials and products throughout the nation that the US sees.

    The Japanese railway system was built at a time when Japan was a poor nation transforming itself from a feudal society and in the process of industrialisation. Whereas the US railway barons were able to roll out X-ty miles of broad gauge per day across the empty prairies, Japan's railways had to be chiselled out of, bridged over and tunnelled through continuous mountainous terrain. They were and are narrow gauge and they were built to transport people. Stuff went by coastal shipping.

    That logic held when the Shinkansen system was developed and introduced, and it still holds now. The jet age was just starting, and air travel was an expensive non-starter for most. Few people had cars, and the expressway system was practically non-existant. Travel by road was very slow. When my wife left Tohoku to start university in Tokyo in the late 1960s it took about 7 1/2 hours by train to cover the 350-odd km. The Tohoku Expressway opened in 1972, and I can drive from home to Tokyo station in about 6 hours today. The two alternatives are: 1) drive to Yamagata airport (40 minutes), wait, fly to Narita or Haneda, train into Tokyo, or 2) walk across the road to the station (about 100 metres from my front door), catch super comfortable active suspension train with wifi, buy food/beer from trolley dolly, get off in central Tokyo 3 1/2 hours later.

    I understand your dislike (cost vs benefit) for high speed rail in California, but I don't think the Japanese railway system provides a valid comparison with the US.

    FWIW, when the shinkansen was extended from the east coast main line to Yamagata, instead of building an expensive dedicated track system, the existing narrow gauge track was widened to standard gauge, and the tunnels enlarged to "normal" loading gauge. The Yamagata Shinkansen (Tsubasa) is a "mini" shinkansen, narrower and lower than the full size sets. It runs as a standard express train limited to 100kph in mixed traffic to Fukishima, where it is coupled to the full size east coast sets and runs up and down the east coast with the big boys. It's a very elegant solution to extending the shinkansen system at minimum cost.

  • irandom419

    I never could understand why people would want to set-up shop in an expensive high rise with equally inconvenient parking. Then I heard that some executives wanted to locate downtime so their brand would be seen, while the underlings liked the burbs for an easy cheap commute. So yes, this is a wonderful thing and should be praised.

  • Magua1952

    Good article. An old friend who was a railroad enthusiast told me passenger rail was always a money loser. Railroads maintained passenger cars as an advertising and visibility vehicle. No passenger rail system is able to collect sufficient fares to pay for maintenance and capitalization costs. The Exceptions were some ancient trolley systems which eventually had to be taken over by governments. Busses and cars are superior transportation vehicles.

  • Earl T

    Excellent, but too brief, discussion on the US rail system. It was always developed for transport of goods, rather than passengers, except when in its land development capacity (as owners of tens of thousands of crony-acquired western acres) it needed to transport potential buyers out west on one-way tickets! With no passenger return trips, the railroads didn't care what their service was like!

    On another note, please avoid the false mid-life crisis analogy of a man trading in his aging wife for a younger model and a new Porsche. That's largetly a feminist-inspired myth, whose occurrence is so rare as to be virtually non-extant. Women initiate 90% of all divorces; filed, for the most part, to reap the "cash and prizes equity" award from their marriage to a successful provider-husband, which the fem-centric family courts (now being run mostly by women) will readily give them.

  • curmudgeon

    I have a friend who works in the offshore oil industry. He was telling me that these days oil platforms are completely subsea and, obviously, don't require any people. (e.g. http://www.financialsense.com/contributors/guild/final-frontier-in-offshore-drilling-subsea-rigs) He tried to sell a package to Malaysia who refused it and demanded an old fashioned above the water rig. They wanted their population to be able to see the fantastic rig and for it to generate jobs. Obviously, at great cost to the taxpayers of Malaysia who own the state-owned oil company.

  • Scottvan949

    Having the world's tallest building reflects exuberance and is usually an indicator of a coming economic contraction. The Empire State Building started in the late 1920s, Sears Tower early 70s, Petronas Towers 1990s (Asian financial crisis), Burj Dubai (mid 2000s).

  • Tim

    Two things that always get ignored in the high speed rail discussion:

    - Europe's rail system is mostly less than 70 years old. The allies bombed the snot out of German controlled rail assets, and it was rebuilt, at least in Western Europe, in the postwar years. It's a lot easier to do the things you need for high speed rail if you start from scratch instead of trying to retrofit over an existing infrastructure.

    - The distances are a *lot* smaller; so it makes sense for high speed rail than it would in the US. For example, London to Paris is 883 miles by the Eurostar; (about 3 hours). Even at Eurostar speeds, New York to Chicago would be about 5 hours. You could fly faster, even taking into account airport check-in times. New York to Los Angeles would be about 15 hours at Eurostar speeds, which is just stupid slow.

    One other minor thing; European high speed rail is from dense city center to dense city center; and those cities also have fairly good public transportation options. That's true for most US East coast cities; but not every city that is targeted for high speed rail has those attributes.