Infrastructure Bait and Switch

President Obama wants to spend something like a half trillion incremental dollars on "infrastructure".  I have found that these initiatives to sell infrastructure tend to be great bait and switch programs.  Infrastructure is generally the one type of government spending that polls well across all parties and demographics.  So it is used by government officials to pass big spending increases, but in fact what really happens is that the government takes a wish-list of stuff that most of the public would not be OK with increasing spending on, then they put a few infrastructure projects on top like a cherry to sell the thing.  They call it an "infrastructure" program when in fact it is no such thing.

Obama would never do that, right?  Hope and change?  In fact, he already has.  The first time around he sold the stimulus bill as mainly an infrastructure spending bill -- remember all that talk of shovel-ready projects?   Only a trivial percentage of that bill was infrastructure.  At most 6% was infrastructure, and in practice a lot less since Obama admitted later there were no shovel-ready projects.   (also here).  The rest of it was mainly stuff like salary support for state government officials.  Do you think he would have as easily sold the "wage support for state government officials" bill in the depth of a recession?  No way, so he called it, falsely, an infrastructure bill.

The other bait and switch that occurs is within the infrastructure category.  We have seen this at the state level in AZ several times.  Politicians love light rail, for some reason I do not understand, perhaps because it increases their personal power in a way that individual driving does not.  Anyway, they always want money for light rail projects, but bills to fund light rail almost always fail.  So they tack on a few highway projects, that people really want, call it a highway bill and pass it that way.  But it turns out most of the money is for non-highway stuff.  That is the other bait and switch that occurs.

Expect to see both of these with the new infrastructure proposal.

By the way, Randal O'Toole has a nice summary of the drawbacks of light rail and trolley spending

For the past two decades or so, however, much of our transportation spending has focused on infrastructure that is slower, more expensive, less convenient, and often more dangerous than before. Too many cities have given up on trying to relieve congestion. Instead, they have allowed it to grow while they spend transportation dollars (nearly all paid by auto users) on other forms of travel such as rail transit. Such transportation is:

  • Slower: Where highway speeds even in congested cities average 35 miles per hour or more, the rail transit lines built with federal dollars mostly average 15 to 20 mph.
  • More expensive: In 2013, Americans auto users spent less than 45 cents per vehicle mile (which means, at average occupanies of 1.67 people per car, about 26 cents per passenger mile), and subsidies to roads average under a penny per passenger mile. By comparison, transit fares are also about 26 cents per passenger mile, but subsidies are 75 cents per passenger mile.
  • Less convenient: Autos can go door to door, while transit requires people to walk or use other forms of travel, often at both ends of the transit trip.
  • Less safe: For every billion passenger miles carried, urban auto accidents kill about 5 people, while light rail kills about 12 people and commuter trains kill 9. Only subways and elevateds are marginally safer than auto travel, at 4.5, but we haven’t built many of those lately.
  • roxpublius

    i'd like to quibble slightly with your analysis of "More expensive". Do you include the road and road subsidies in your cost per vehicle mile? Do you include the rail in the rail figure? It seems that it's inconsistent to include one and not the other.

    Carry on.

  • sean2829

    Your right, there were no shovel ready projects and the Federal funds ended up replacing the state funds or money from bonds that had already been obtained to fund projects. In essence, there was no increase in infrastructure spending, just a change in who picked up the tab for it. What is really galling is that "recession proof" industries like healthcare ended up getting twice as much stimulus money through extra support for Medicaid. And remember all that money that went to renewable energy projects and was billed as a jobs program? I've read that 70% of the manufacturing for that went overseas.

  • randian

    You seem to have missed Randal's use of the word "subsidies".

  • roxpublius

    yeah, i suppose i did, but i still question it. I guess what i mean is the initial costs. So, i doubt the initial cost of the road is included, but suspect that the initial cost of the rail is. maybe i'm wrong.

  • mesocyclone

    They like light rail because then they can be the cool kids at the urban planner and politician get-togethers.

  • HoratiusZappa

    As you say, the infrastructure component of ARRA was always just bait. People in public service would have to have the situational awareness of gravel not to know that public infrastructure projects in this era can not be kicked off in time to serve the effect intended by Keynesian stimulus. They aren't that stupid; "infrastructure" was camouflage for transfers to other levels of government.

    The basic political strategy was simple. Action to resolve the fiscal crisis was set in motion by the prior Congress and outgoing administration; the incoming Congress and new administration simply had to manage the programs initiated and the subsequent recovery. The Democrats guessed that the recovery would manage itself and be well on its way in a few months. Provide 6 months of top-up pay for unionized employees of other levels of government (payoffs to supporters) to span the revenue gaps early in the recovery, pass exciting new healthcare act ("third leg"), ride recovery and voter approval to re-election in 2 years.

    They incorrectly assumed recovery would occur without effort; they failed to select and maintain the correct aim (jobs etc), and here everyone is.