The Most Expensive Mile of Subway Track on Earth

by on December 29, 2017 at 7:22 am in Current Affairs, Economics | Permalink

Blogger Alon Levy first drew attention to the fact that building a subway costs far more in New York City than elsewhere in the United States or the world. In a superb investigation the NYTimes updates that finding and investigates why:

The estimated cost of the Long Island Rail Road project, known as “East Side Access,” has ballooned to $12 billion, or nearly $3.5 billion for each new mile of track — seven times the average elsewhere in the world. The recently completed Second Avenue subway on Manhattan’s Upper East Side and the 2015 extension of the No. 7 line to Hudson Yards also cost far above average, at $2.5 billion and $1.5 billion per mile, respectively.

So why are costs so high? The NYTimes concludes:

For years, The Times found, public officials have stood by as a small group of politically connected labor unions, construction companies and consulting firms have amassed large profits.

Trade unions, which have closely aligned themselves with Gov. Andrew M. Cuomo and other politicians, have secured deals requiring underground construction work to be staffed by as many as four times more laborers than elsewhere in the world, documents show.

Construction companies, which have given millions of dollars in campaign donations in recent years, have increased their projected costs by up to 50 percent when bidding for work from the M.T.A., contractors say.

Consulting firms, which have hired away scores of M.T.A. employees, have persuaded the authority to spend an unusual amount on design and management, statistics indicate.

Where the Times piece goes well beyond what has been discussed before is the detail by which it supports these conclusions and the careful comparison with similar but much cheaper projects elsewhere in the world such as Paris.

It will not escape notice that New York buys subway construction the way all of America buys health care.

Read the whole thing.

1 Bill McCullam December 29, 2017 at 7:53 am

In 1970 for a Federal study of all the nation’s infrastructure, we pointed out to congress the extremely high costs of NYC subway construction. If memory serves it was in the range of $1,500 per square foot at that time compared with a quarter to half that elsewhere. WMATA was then around $500. To take one example of why this was so; consider two different Unions, one staring their day at 7AM, the other at 8 AM. The one may begin their day at a central terminus and get the time riding to the job site; the other may start their day at the jobsite. Each has set break times. So, if one is, say, electricians and the other safety flagmen, it’s possible to develop a scenario where their working hours only overlap 1.5 hours out of 4. On the other hand, at that time, the Federal subsidy was $0.50/ rider for NYC and $3.50/rider for WMATA.

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2 rayward December 29, 2017 at 8:39 am

Soft costs (design, engineering, and management) account for a third of the total costs. A third! In addition, construction companies have an incentive to maximize total costs because their profit is based on a percentage of the total costs. Sure, unions (labor) add plenty to total costs, but high labor costs are more of a symptom than a cause of high costs: labor benefits from very high soft costs and built-in incentives for the construction companies to maximize total costs. That’s the take-away from this very thorough article in the NYT.

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3 James Lavin December 29, 2017 at 9:04 am

And The NY Times believes the answer for almost all problems is more government? Fortunately DeBlasio and Cuomo will aggressively solve the problem (LOL).

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4 mavery December 29, 2017 at 12:55 pm

The point is that costs in the US are way higher than Paris, France, where government and labor are arguably stronger than in the US in general and NYC specifically. I don’t think you can just through Libertarian platitudes at this issue.

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5 Boonton December 29, 2017 at 1:14 pm

The Blog Commentators Union has in their contract a quota of 10 Libertarian platitudes on all posts related to policy, 5 related to economics, and 2 when the topic is food.

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6 dect December 29, 2017 at 2:49 pm

…cost of living in NYC is only ~15% higher than Paris. You have no knowledge of how Parisian public works projects are managed nor what the working relationship is between Paris labor unions and Paris city government. Empty assertions differ little from platitudes.

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7 Harun December 29, 2017 at 7:04 pm

uh, I think you can just throw libertarian platitudes in this case.

Its progressives who believe in government spending as the key factor to explain what they are doing.

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8 Joël December 29, 2017 at 7:18 pm

in France, employees of the RATP (the MTA of Paris) are very strongly unionized, but constructions workers are not. Many are illegal immigrants, afraid of protesting even obvious abuses. Thus the subway extension was not realized by strongly unionized workers.

I do not know if eminent domain was used in either the Paris or NYC extension of the subway.
if it is, France uses it without any moral doubt, and pay to the expropriated owners not a cent above the market price. This may limit costs of many construction projects.

There has been many scandals of inefficient works in the last three decades in France, a lot of corruption scandals, politicians disgraced or sometimes sent to prison. In certain places at least, such as Paris, this has led to much better practice.

Bottom line: things are complex, many factors are at play. In fact, the sheer size of the discrepancy (one mile 7 times more expensive in NYC than in Paris) indicates that there is something completely dysfunctional in NYC, that won’t change with a few simple solution.

It reminds me of recent discussions about the prison population is the US. The number of inmates by inhabitant is so much bigger in the US than in other advanced countries that no single factor come close to explain it. Say for example you’re from the left and blame “racism” for the large black prison population. Okay, but free overnight all blacks people form jails, and the US will still be a clear outlier among developed countries with many amor people in prison. Same if you blame “war on drugs”, etc.

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9 Richard Berger December 29, 2017 at 9:05 am

“..public officials have stood by as a small group of politically connected labor unions, construction companies and consulting firms have amassed large profits.”

“Construction companies, which have given millions of dollars in campaign donations in recent years,”

Funny how the Times views these two facts as disconnected.

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10 clockwork_prior December 29, 2017 at 10:11 am

I’m sure our real estate mogul will know how to handle this properly when doling out all the infrastructure goodies.

He is a man who seems intimately familiar with the connection – ‘Trump circumvented Internal Revenue Service (IRS) rules by routing the money through a charitable entity, the Donald J Trump Foundation, which is prohibited by law from making political donations. More controversially, however, Bondi’s office was at the time mulling whether to join a New York state probe into allegations that customers who paid thousands of dollars to Trump University, Trump’s for-profit education company, for a real estate investment course were ripped off. Just days after Trump’s donation arrived, Bondi dropped her investigation into the alleged fraud, citing “insufficient grounds” to proceed.

The donation was three years ago. Why is the case back in the news now?

The story gained some traction in June when the Associated Press reported that Bondi had personally solicited the donation from Trump to a political group supporting her re-election campaign. But last week’s Washington Post report that Trump had paid the IRS a $2,500 penalty for the “improper” contribution sparked renewed scrutiny, quickly followed by a “he-said, she-said” disagreement this week over whether Trump and Bondi had ever actually discussed the affair.’ https://www.theguardian.com/us-news/2016/sep/07/donald-trump-donation-pam-bondi-florida-attorney-general

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11 GoneWithTheWind December 29, 2017 at 10:34 am

I am shocked! Shocked! that unions and dishonest politicians are responsible for these escalating costs of public works. Shocked!

It is way past time to get rid of the Davis-Bacon act (and it’s siblings). It may be time to get rid of all the protections for unions as well.

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12 Mark Thorson December 29, 2017 at 12:48 pm

My friend Vito Corleone wishes to point out that this ensures that everything runs smoothly. Costs would rise if there were a strike or failure to deliver construction materials during the project. That would sure be a shame.

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13 TMC December 29, 2017 at 1:34 pm

These days, we call him Mr. Mayor.

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14 Rick December 29, 2017 at 9:17 am

Milton Friedman noted long ago that any government project typically costs twice the price of the same project performed solely by the private sector. Inefficiency, waste, and corruption are endemic to government undertakings because the economic incentives and legal controls are much different.

New York has always been an extreme case of intrusive government in America; organized crime is also still a big factor in NYC labor unions and construction companies. Indelicate libertarians might also consider the NYC government itself as resembling the model of organized-crime.

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15 Mulp December 29, 2017 at 11:23 am

OK, nuclear power plants built by private corporations are built at low costs in the US or anywhere in the world?

Ie, the two reactor nuclear plant currently under construction will be build for far less than $12 billion, and will be in service for longer than the minimum century of service of the subway section?

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16 dect December 29, 2017 at 3:01 pm

…every aspect of nuke plant construction & operation is heavily regulated and controlled by the government — the most comprehensive and intrusive government regulation in America. No way that nuke plants are built purely by private industry.

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17 Mulp December 29, 2017 at 11:50 am

Or, BP drilled an oil well in the GOM for real cheap….

About $68 billion dollars once they paid all the bystanders harmed by their blowout preventer failing after the private contractor failed to properly cement the well.

Much cheaper cost drilling a well that won’t produce anything compared to a $12 section of subway that will still be carrying passengers in over a century…..

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18 Al December 29, 2017 at 2:48 pm

‘Harmed’

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19 Viking December 29, 2017 at 5:17 pm

The shakedown of BP is another symptom of rule of man rather than the rule of law.

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20 Alan December 29, 2017 at 6:41 pm

Seeing blowout preventers stacked six high on a rig tells me one thing. BOP’s dont work.

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21 Owen December 29, 2017 at 2:48 pm

There is a middle ground between the Republicans which want to absolutely minimize government and consider it a victory if they keep it from doing anything effectively at all; because then, the private sector HAS to step in, enriching them and their billionaire cronies; and the Democrats, who want to expand government influence without care of the consequences or proper oversight of the costs, which leads to rampant corruption and too many pigs feeding at the trough.

The middle ground is called EFFECTIVE government. Limited, but EFFECTIVE. That is something that is completely lost on both sides of this argument. Government should be limited in scope, but it definitely should have a role. However, what it does – it should focus on doing WELL. Europeans, by and large, are MUCH better at this than we are.

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22 ladderff December 29, 2017 at 4:45 pm

Limited by whom? Or what?

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23 Alan December 29, 2017 at 6:43 pm

Perhaps we need some sort of founding document that puts government in a box?

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24 ladderff December 29, 2017 at 7:03 pm

I could have sworn that’s been tried…

25 Harun December 29, 2017 at 7:06 pm

+1000

Progressives need to stop proposing new programs and instead get dirty fixing current programs. That progressive gets elected, and maybe convinces me that more taxes are a good idea.

Gavin Newsome might be someone like this…but probably not.

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26 David D December 31, 2017 at 11:28 am

Gavin Newsome is the definition of an empty suit. Platitudes and hot air. Good luck California, you will need it.

Effective government can only come from effective government employees… right now, it’s more of a social engineering/vote purchasing tool than an actual problem solving post. It’s the same reason that German auto unions build superior cars: one group sees their membership as owed to them and another sees it as a privilege. Our government is staffed by much more of the former than the latter.

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27 Mm December 30, 2017 at 12:07 pm

Gov Cuomo finds this project to be very effective-NYC gets a subway & he gets millions in political contributions from unions. What is the problem?

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28 Floccina December 29, 2017 at 5:27 pm

+1 People talk about the south but the north eat government look like the tend to be very corrupt.

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29 zack_kerwin December 30, 2017 at 1:05 pm

Don’t know the cost the private sector could deliver a subway in Spain but Barcelona has built 30 miles of subway for 7.9 billion USD recently while NYC is spending 4.5 billion USD for 1.7 miles and LA 8.6 miles (subway to sea) projected cost 6 billion USD. I am sure there are differences and the further you go presumably the cost per mile decreases but when it comes to planning and execution of PT projects in the US it is fair to say we are inept

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30 chuck martel December 29, 2017 at 9:30 am

NYC transit projects are just the biggest sharks in the bay. Sports stadiums, public buildings, university campus facilities, bridges, just about anything that involves public money anywhere, are rife with financial chicanery.

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31 Careless December 29, 2017 at 6:40 pm

While I don’t know if your claim about stadiums is generally true, I do know that the three most expensive ones in the US were mostly or entirely funded by their teams, not the public.

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32 ItMe December 29, 2017 at 8:57 pm

Huh? It looks like the Las Vegas Raiders stadium, the #2 most expensive by some rankings, got $750 million in public funding.

https://mobile.nytimes.com/2016/10/16/sports/football/oakland-raiders-las-vegas-move.html

Public waste on sports stadiums seems just as bad as public waste on transit projects.

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33 Careless December 29, 2017 at 11:27 pm

ok, I was working off a list that predated its existence (2015). How the hell did they spend two billion without being in Manhattan or being ridiculously large?

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34 ʕ•ᴥ•ʔ December 29, 2017 at 9:51 am

What is the psychology of sweating $12 billion of new subway and shrugging off $1.2 trillion in new debt?

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35 clockwork_prior December 29, 2017 at 10:12 am

One can count on the Mercatus Center to come out with a study dismissing such trivial concerns.

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36 Gabe Atthouse December 29, 2017 at 10:27 am

Good point, I’m sure you’re the life of the dinner party when you say “who can talk about Porzingas at a time like this, we have $1.2 trillion in new debt!”

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37 ʕ•ᴥ•ʔ December 29, 2017 at 10:35 am

It was just my early morning thought that $12 billion seems really *small*, you know?

And that is probably what NYC, with a city GDP of $1.5 trillion, thinks as well.

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38 Gabe Atthouse December 29, 2017 at 11:04 am

As a NYC resident, I can tell you that no one is thinking about the relative size of the $12 billion. We see the misallocation of funds toward boondoggles like this or the World Trade Center station and wonder why we can’t get the trains running on time. It’s not a question of “are there other dollars that are being spent more inefficiently than these $12 billion”, it’s the fact that the $12 billion is being spent right under our noses on something so similar to what we’d like it to be spent on. We compartmentalize the different components of the budget, like I would imagine anyone else would, so we don’t care so much that there might be $12 billion dollars of waste in the sanitation budget; this $12 billion feels different.

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39 ʕ•ᴥ•ʔ December 29, 2017 at 11:17 am

I can’t argue with that. If you live there and want to improve local government, more power to you.

But from far away it looks a bit like “millionaire spends $50 for a hamburger” .. “OMG hamburgers cost $50 now!”

No, they only cost that much when rich people are buying them. Poor people would, of necessity, spend less for burgers or subways.

40 Mulp December 29, 2017 at 11:14 am

The subway will still be in service in more than a hundred years when the will seem very small. The NYC subways, like Boston subways, include segments built well over a century ago at costs considered outrageously high at the time.

Of course, Reagan won in part on promising to eliminate the massive Federal debt of $900 billion or so. Which a decade later was tripled.

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41 Careless December 29, 2017 at 6:50 pm

yes, and trillions of dollars will be wasted on maintenance in that time period compared with what other countries spend on it. Our government isn’t just incompetent in the original building of projects

42 Thomas Sewell December 29, 2017 at 7:37 pm

It’s pretty hypocritical for you to complain about the person who proposed lower spending level to not increase the debt in his budgets to Congress and then had to compromise with the people you support (Democrats) who controlled Congress at the time and were the ones who demanded more spending instead.

And lest you complain about “tax cuts”, Federal per capita constant dollar revenue during Reagan’s terms increased, it didn’t go down, so the only issue was increased spending.

43 Floccina December 29, 2017 at 5:41 pm

@ʕ•ᴥ•ʔ Most of Medicare and Social Security money goes to people who would not need it if he programs did not exist. USA government’s defense spending is probably more that double what we need for defense. Happy?

http://un-thought.blogspot.com/2011/09/why-eliminating-deficit-is-easy-but.html

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44 Floccina December 29, 2017 at 5:44 pm

Of course everyday when they ride the subway they probably think why can’t this be better.

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45 Brian Donohue December 29, 2017 at 11:50 am

Some perspective:

First there is the matter of the $20 trillion in old debt.

Next there is the matter of the $10 trillion in “new” debt expected over the next decade before the impact of the recent tax bill.

https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/reports/52370-outlook_0.pdf

The $1.2 trillion of “new new” debt over the next decade from the tax bill is just a cherry on top.

It is not surprising that such numbers dwarf the cost of a single project in a single metropolitan area, but they are both numbers. They have that much in common.

Anyway, the “new new” debt has brought out the deficit hawk in a surprising number of lovers of big government.

Not you though. You react to these horrific debt numbers with a breezy “anything goes” justification of egregious costs for single projects.

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46 ʕ•ᴥ•ʔ December 29, 2017 at 11:55 am

You are a dick. I know, because I have never been “anything goes.” I have always been “ROI,” but what the he’ll do you care.

As long as you can build your self-esteem on a lie.

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47 Brian Donohue December 29, 2017 at 12:13 pm

Damn, I’m trying to be less of a dick. I even agreed with a comment you made yesterday.

I’m pretty sure this isn’t about my self-esteem, but who can say what their subconscious motivations are?

Anyway, you said the $12 billion number was “small” compared to the $1.2 trillion number. And it is- it’s only 1%. I missed the part in your comment about ROI.

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48 ʕ•ᴥ•ʔ December 29, 2017 at 12:16 pm

Obviously I found the “Not you though” line annoying, for reasons explained below.

49 Sebastian H December 29, 2017 at 12:15 pm

Wouldn’t the return on investment be much better if we could build a world class subway at Paris costs? Or maybe we could build twice as much subway for the same costs! Perhaps more people would support much better subways at the same current cost instead of tiny, poorly planned extensions.

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50 ʕ•ᴥ•ʔ December 29, 2017 at 12:18 pm

Of course, says the rational part of me, but expect less, says the cynical part of me.

As much as I would like great ROI everywhere, I think I have a reasonable expectation that the “rich” overspend. This might even related to Wagner’s Law.

51 Anon7 December 29, 2017 at 6:18 pm

If you weren’t such an insufferable hack, you’d be complaining that the $12 billion would be much better spent on vagrants in the city.

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52 ʕ•ᴥ•ʔ December 29, 2017 at 12:10 pm

OK, it is possible that you see my cynicism about NYC projects as happy acceptance.

That’s kind of dumb, but not as bad as just making things up. The truth is, as much as I desire good governance, positive ROI on government projects, and counter-cyclical fiscal policy, I recognize that the real world is messier.

Do I think San Francisco’s $6 billion Bay Bridge project is a good idea? Hells, no. But I’m not surprised by it.

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53 Brian Donohue December 29, 2017 at 12:17 pm

Fair enough. Do I think a tax cut emanating from a GOP Congress and GOP White House that adds $1.2 trillion in debt over the next decade is good policy? Hell no, but I’m not surprised by it, and it’s not as bad as what we got the last time the GOP held all the cards.

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54 ʕ•ᴥ•ʔ December 29, 2017 at 2:57 pm

I took a strenuous bike ride and now feel less cranky, fwiw.

55 Matthew Young December 29, 2017 at 1:43 pm

Federal tyaxpayers pay an excess fee to the Wall Street banks to push government paper. It is a monopoly market, there is only one Wall Street capable of pushing the amount of paper. Hence, the banks charge the federal taxpayers for transportation (and housing) expenses in and out of the debt machine. The banksters also charge federal taxpayers for any excess DeBlasio taxes he charges.

The response to high subway costs has been Fintech, automate the debt slinging process so it can be performed in New Hampshire by microprocessors. Anyway, that is John Sanunio’s (governor New Hampshire) opinion, and he has legalized automated debt slinging in the state. Winnipeg Canada wants to do the same, legalize automated debt slinging in large data centers encased in ice.

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56 Al December 29, 2017 at 2:57 pm

Brian let you off the hook. I want to see all of your posts from from 2008-2016 decrying the debt and how we have to think of the children.

I’ll wait.

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57 ʕ•ᴥ•ʔ December 29, 2017 at 3:22 pm

You are still an idiot Al. I can observe that even in my relaxed state.

(But google MR for “counter-cyclical” in comments and there is a good chance it was me.)

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58 Engineer December 29, 2017 at 9:56 am

Just think of it as the most fully developed instance of single payer construction.

I’m sure single payer education, and single payer healthcare, will avoid these problems.

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59 ʕ•ᴥ•ʔ December 29, 2017 at 10:04 am

Of course they do, in documented instances around the world.

It is part of the American dysfunction that we can screw up in unique ways, ignore better examples, and still declare “we’re the best!”

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60 jim December 29, 2017 at 2:09 pm

I was forced to go to a Canadian hospital. I was frightened and horrified. Worse than a third world hospital, with, for the most part, worse than third world clients. Looks to me that just as people who sing the praises of “diversity” spend a lot of money to stay away from “diversity”, people who sing the praises of the Canadian medical system spend a lot of money to stay away from that hospital

They say “follow the money”. Well, if you want to see good health care, follow the medical tourism, which leads us to Singapore. Best healthcare in the world, and the most free market and capitalist health care in the world, with people for the most part paying for health care out of their own pockets, or out of forced savings accounts which will eventually wind up in their own pockets, or the pockets of their family if not spent on healthcare.

Single payer systems that are substantially cheaper on the US save money by murdering their clients.

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61 ʕ•ᴥ•ʔ December 29, 2017 at 3:40 pm

I have only been to a Canadian clinic, with a travel bug, but I really liked it.

Our experiences aside though, I think Tyler has convinced me of something about medical costs. People need less attention and service than they think they do. This is true for Medicaid patients, as well as Gold Plan customers who think they need to see *their* doctor *now*.

The reason the Canadian system can produce longer life expectancies at lower cost is that higher medical spending has low ROI.

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62 carlospln December 29, 2017 at 8:02 pm

“Single payer systems that are substantially cheaper on the US save money by murdering their clients”

No they don’t.

But your health care system does.

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63 Bob December 29, 2017 at 11:30 am

Madrid’s subway has the cheapest construction in western countries, and it has a far larger public component than NYC. The difference is in incentives and pork…. and you have to work real hard to be better at corruption than Spain.

I could also compare this to many insane IT boondoggles that you find in the private sector too. A well known Fortune 500 company just outsourced most of their IT staff, thinking about long term savings, but I am told that the bill for the next 3?years is actually higher, every support ticket takes at least three days to be looked at, and the entire network is down for the entire workday at least once a week. They send their people home because they can’t work: France style hours, in practice.

But no, let’s just generalize based on government vs non government, because the label at the top is far more important than how things actually get done.

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64 TMC December 29, 2017 at 1:50 pm

I don’t know how many times I’ve seen the IT outsourced like that. And it’s always a failure. I’ve been tangentially on both sides of the equation, but never directly effected. Either way I wondered what the hell were they thinking. They put up with a painful transition in order to save no money at all, most likely costing more. The only reason I can guess is it’s too get rid of a bunch of employees that they are unwilling to fire by conventional means.

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65 Engineer December 29, 2017 at 2:52 pm

I’ve seen it done where cost savings was offered as an excuse, but the real driver seemed to be that IT wasn’t perceived to be a core function, and the people and projects were notoriously harder to manage. It was believed to be easier to manage via a contractual rather than internal interface. Depending on the level of chaos in your internal IT organization, this may even be true.

Of course, some organizations outsource accounting and even HR. GE has appearantly recently decided to outsource executive air transport 🙂

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66 CorvusB December 29, 2017 at 10:09 am

Having spent one career in major infrastructure construction projects, (in the management side, working on cost, actually) I believe that Alex missed the pithiest paragraph of the article. From said article: [i]”Public officials, mired in bureaucracy, have not acted to curb the costs. The M.T.A. has not adopted best practices nor worked to increase competition in contracting, and it almost never punishes vendors for spending too much or taking too long, according to inspector general reports.”[/i] I worked in one city where croneyism was a big factor, and yes, it did indeed increase costs. I worked in another city in the NE, Boston, where old unions were a big factor. Interestingly enough, the projects I saw there were a decade or more behind the times on current safety practices. While I am pro-union, I found my example to be indicative of short-sighted attitudes in the entrenched unions in the area. That NYT article underlined that they believe they are seeing an extreme example of short-sighted cultures in both the local unions, and the local bureaucracy.

On a minor note, quoting Alex: [i]”It will not escape notice that New York buys subway construction the way all of America buys health care.”[/i] I don’t see how you get that conclusion. Neither before the ACA, nor after, do I see a resemblance in the bidding markets. Are you saying you see croneyism and a lack of competition in the insurance market? Or maybe it’s that the NYC bidding market somehow resembles our regulatory support for big-pharma monopolist pricing? Maybe that’s what Alex is saying – NYC govt practice is supporting the croneyist lack of competition that, according to the article, typifies NYC infrastructure construction bidding. Kind of a far reach, if you ask me, but ok.

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67 Careless December 29, 2017 at 11:25 pm

Yes, that sentence from Alex made no sense. I mean, at least when we spent a shitload on medical care, we get something like the very best medical care. We don’t have far and away the best subway systems.

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68 clockwork_prior December 29, 2017 at 10:19 am

‘It will not escape notice that New York buys subway construction the way all of America buys health care.’

Will sure it will, because that is not true. Though who knows, maybe nobody in the GMU econ dept. uses Kaiser Permanente for their health care provider, like in the old days.

‘The Kaiser Permanente plan provides a wide range of health care services for medical, behavioral health, dental, vision, hearing and pharmacy needs.

Kaiser Permanente members must receive their care from a Kaiser Permanente provider in the service area. Your Kaiser Permanente physician provides or arranges all services. Please visit Kaiser Permanente or call member services at 800-777-7902 to select a primary care physician and/or to find a facility near you. Each person covered by Kaiser Permanente must select a primary care physician.

There is a $25 co-payment per visit for a primary care physician and a $40 co-payment for a specialist. Specialty care is provided on a referral basis only. Please note you are required to pay the total cost for care not provided by or arranged by your primary care physician with the exception of services for a life-threatening emergency.’ http://hr.gmu.edu/benefits/health/kaiser.php

And for those unfamiliar with Kaiser Permanente – ‘Kaiser Permanente is an integrated managed care consortium, based in Oakland, California, United States, founded in 1945 by industrialist Henry J. Kaiser and physician Sidney Garfield. Kaiser Permanente is made up of three distinct but interdependent groups of entities: the Kaiser Foundation Health Plan, Inc. (KFHP) and its regional operating subsidiaries; Kaiser Foundation Hospitals; and the regional Permanente Medical Groups. As of 2017, Kaiser Permanente operates in eight states (Hawaii, Washington, Oregon, California, Colorado, Maryland, Virginia, Georgia) and the District of Columbia, and is the largest managed care organization in the United States.

As of October 2017, Kaiser Permanente had 11.7 million health plan members, 208,975 employees, 21,275 physicians, 54,072 nurses, 39 medical centers, and 720 medical facilities. As of December 31, 2016, the non-profit Kaiser Foundation Health Plan and Kaiser Foundation Hospitals entities reported a combined $1.9 billion in net income on $64.6 billion in operating revenues. Each Permanente Medical Group operates as a separate for-profit partnership or professional corporation in its individual territory, and while none publicly reports its financial results, each is primarily funded by reimbursements from its respective regional Kaiser Foundation Health Plan entity. KFHP is one of the largest not-for-profit organizations in the United States.

KP’s quality of care has been highly rated and attributed to a strong emphasis on preventive care, its doctors being salaried rather than paid on a fee-for-service basis, and an attempt to minimize the time patients spend in high-cost hospitals by carefully planning their stay.’ https://en.wikipedia.org/wiki/Kaiser_Permanente

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69 Dick the Butcher December 29, 2017 at 10:32 am

Similarly, in democrat-controlled dystopias (Connecticut, Illinois, NJ also come to mind), highway/road construction costs are multiples of similar projects in America.

It’s all good! NY state and local taxes are too damned high, but they aren’t the highest in the US.

Something to consider. Highways are mainly funded by gasoline taxes. What happens to road construction/maintenance funding when we convert to electric cars?

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70 ʕ•ᴥ•ʔ December 29, 2017 at 10:37 am

It is even worse in California, where Democrats control the earthquakes.

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71 Dick the Butcher December 29, 2017 at 2:37 pm

CA income taxes are too damned high. That gives the Democrats too much money that they have to spend. Old saying, “When you’re holding a hammer, everything looks like a nail.” Give the impresarios of coercion an deceit less of your money and they’ll have less opportunity for graft.

I understand that Proposition 13 keeps residential property taxes under “control.”

St Andreas, What are you waiting for?

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72 Mulp December 29, 2017 at 11:04 am

Is built property as dense in Kansas and Iowa as in areas where transportation infrastructure is built in Democratic areas?

Do people in GOP areas not have property rights so State government just bulldoze everything to build roads to cut costs?

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73 Engineer December 29, 2017 at 11:21 am

I think they are already starting to move to a mileage tax. Coupled with gps, thas the considerable advantage of allowing higher tax rates on socially unjust “bad” miles; wrong place, wrong day, wrong time of day, residence in a low density suburban area, routine commuting, etc. It offers lots of potential for social micro management.

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74 Moo cow December 29, 2017 at 12:13 pm

They are? Where? How is this working?

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75 Engineer December 29, 2017 at 12:53 pm

Initial concept testing appears to be underway in 7 states … The differential rate on “bad” mileage is, I think, a reasonable projection given congestion pricing experiments, and the general animus toward private vehicles. Give it 10 or 15 years.

Washington state to test pay-by-the-mile as a way to fund highways

“Beginning early next year, the state will start a pilot project in which 2,000 volunteers pay a mock tax on the number of miles they drive on Washington state roads, rather than on the amount of gas they use.

Washington is using a federal grant to fund the pilot project, and six other states have received similar grants.

Oregon already has about 1,000 volunteers who are actually paying a road-usage tax, using a mileage meter instead of paying the gas tax.

“We’ve tested the system from beginning to end,” said Michelle Godfrey, a spokeswoman for the Oregon Department of Transportation. “And every process has worked very smoothly.”

California concluded a nine-month pilot program in March, with about 5,000 participants testing out various methods of recording mileage.”

https://www.seattletimes.com/seattle-news/transportation/washington-state-to-test-pay-by-the-mile-as-a-way-to-fund-highways/

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76 Boonton December 29, 2017 at 1:58 pm

Seems like a wash to me. If the tax is meant to raise, say, $10B a year and cars consume 20B gallons of gas then the tax would be $0.50 per gallon. If 10% of cars go electric and gas then raise the gas tax by 10%. Electric drivers get a break at the expense of gas drivers. You can keep doing that until the ‘break’ for electric starts feeling grossly unfair so at some point just switch to total miles combined with the car’s weight (electric vehicles would probably still get a break because they tend to be lighter).

The GPS argument doesn’t seem to follow unless you have a lot of drivers who argue that their miles are driven out of state so such a tax would be unfair on them. But then the state ‘pays it back’ because a miles tax wouldn’t impact out of state drivers who pass thru the state.

Controlling traffic by time of day can be done easier via congestion pricing….essentially putting tolls on various roads that vary by traffic and time of day. To do that you don’t need GPS monitoring of all cars. Just a mechanism to charge the cars that are on particular roads at particular times.

As for social ‘micro-management’….you do realize with 90%+ of people riding around phones building a relatively accurate map of where everyone is at every time during the day is more or less here already.

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77 CorvusB January 2, 2018 at 1:57 pm

Last time I checked – a year or two ago, but within the last 5 – I seem to recall that only about a third of highway cost was provided for by gasoline taxes. Which would put the “mainly funded by” clause in the fake news category, eh?

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78 Mulp December 29, 2017 at 10:48 am

“…have amassed large profits.”

Given profits are claimed to be the way to get more of something, the US must have the most ongoing transportation infrastructure construction in the world.

Or is Alex an economist who argues any profit means too little is provided by monopoly restriction on supply to force high prices and high profits with costs driven down by transferring costs to bystanders.

In other words, the high profit building a mile of subway comes from the low costs of destroying buildings along the way with no compensation, but charging prices as if the buildings were not harmed an iota.

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79 Mulp December 29, 2017 at 11:58 am

So, does Alex support giving unrestricted rights to Elon Musk and his Boring Company to all land below 10 meters not currently built?

Or to any one like Elon Musk, eg Bezos, Brin, et al on a first to start and complete in a decade basis?

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80 jseliger December 29, 2017 at 12:07 pm

I’d love to see Matt Yglesias’s “Someone killed a congressional inquiry into America’s sky-high transit construction costs” name checked too: https://www.vox.com/policy-and-politics/2017/5/24/15681560/gao-report-transit-construction-costs

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81 rayward December 29, 2017 at 12:15 pm

Whatever the cost/value ratio of NYC subways, the cost/value of an education at GMU came in 99th out of 100 public universities according to Kiplinger’s Best College Values released today: https://www.kiplinger.com/tool/college/T014-S001-kiplinger-s-best-values-in-public-colleges/index.php Oh, my! Worse, it came in 100th out of 100 for out of state students. Unions, I suspect.

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82 rayward December 29, 2017 at 12:56 pm

For some reason, sharing this information reminded me of the time, many years ago, when my good friend’s wife ran off with the tennis pro. The female tennis. Of course, you know the comforting words I said to my friend: “You were such a horrible husband you turned your wife into a lesbian.” What are friends for.

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83 Beefcake the Mighty December 29, 2017 at 8:36 pm

Solid burn.

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84 Boonton December 29, 2017 at 2:10 pm

It seems like a large part of the cost can be explained as:

1. These expansion projects have become much less common. So when another mile of subway gets added in NYC, those in a position to take advantage do so.

2. These are unusual projects, so a lot of ‘reinventing the wheel’ happens each time they are done.

3. Relatively speaking the costs are minor. The metric to think about here is not NYC’s GDP. It’s NYC GDP over the life of the asset discounted for time. NYC’s Lincoln tunnel is nearly a century old. Holland even older. If someone told you back in 1927 the Holland tunnel opened 3 times the budget it should have taken to build it you would….what? You would shrug and not care. Barring the invention of teleporters or NYC getting swamped by rising oceans or nuked by aliens, 150 years from now that subway line will still be going.

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85 Beefcake the Mighty December 29, 2017 at 8:36 pm

Even by your standards this is a remarkably stupid comment.

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86 Boonton December 30, 2017 at 6:33 am

Thanks for your insightful fact filled comment.

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87 Beefcake the Mighty December 30, 2017 at 9:09 am

This coming from someone who invokes alien invasions in his “argument”.

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88 Boonton December 30, 2017 at 4:03 pm

That’s your contribution to this discussion? A proposal to ban alien invasions as a light hearted hypothetical in analysis?

89 Beefcake the Mighty December 30, 2017 at 10:12 pm

Not sure what “analysis” you’ve provided here.

90 Harun December 29, 2017 at 7:08 pm

Remember guys, the progressives will tell you that we can achieve French spending levels for single payer healthcare, too.

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91 Harun December 29, 2017 at 7:10 pm

But a simple request for NYC, our best city full of our best people, to merely match French subway expenditures, and pshaw! That’s impossible!

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92 Careless December 30, 2017 at 12:24 pm

Oh, and don’t forget this idiocy from Tyler favorite Noah Smith on the subject 7 months ago https://www.bloomberg.com/view/articles/2017-05-31/the-u-s-has-forgotten-how-to-do-infrastructure

He just can’t figure it out: US construction workers only make $36,000 a year!

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