The EconLog team winning strategy

Pretend Arnold Kling has departed, get under the salary cap, take on Garett Jones and Luigi Zingales (sixth man), keep Bryan and David in the starting line-up, and then get Arnold back again.  Here is Arnold’s very important post on NYC recovery.  I don’t myself have any particular prediction, but I will say this is a real test of how well this country can these days do infrastructure.


small steps toward higher ground

Closed loop network that amplifies itself in a feedback loop getting stronger, but not better, every day.

Except probably less than almost anything else one can think of. Every day they are open for criticism from anyone.

I was thinking about how maybe I should have been a lawyer because my only real competition is people I see personally. Even your competition isn't really your competition, as in The Lakers and The Heat aren't really competitors. It seems like a great racket.

How is your only competition people you see personally?

In ways other than how my main competition right now is guys I'll never meet in Japan.

These guys do indeed suffer from a substantial amount of group-think, but I have to say, they also challenge their own beliefs openly a substantial amount too. Caplan vs Dickens; Caplan vs Tiger Mom; and Caplan vs Caplan come to mind.

When was Caplan versus Caplan?

Caplan vs Kling on anarchy was a good one. Caplan also doesn't think much of Hayek, unlike the other two. And Kling's views on macro are very different from Caplan and Henderson, who are basically Sumnerians.

The issue Caplan addresses is how it can be that idaivinudls acting as consumers and producers behave as the sort of rational, self-interested actors classical economics both presumes and predicts...Do they? Of course what is a "rational" decision is also likely fairly ripe with subjectivity.

I don't see much question that the lower manhattan recovery will be swift, because that's where we keep many of our rich white people. "How well we do infrastructure" isn't well-defined until you specify who benefits, at which point it becomes highly predictable.

Actually, the group that will benefit most disproportionate to population are the high IQ Asians that increasingly dominate America. Your little jab at "rich, white people" is pathetically dated. You don't actually spend much time in Manhattan or around rich people, do you? It isn't 1970 and hasn't been for a while.

Market-dominant minority, baby. Get used to subservience.


Arnold is back? That's great news.

As you say, that's a very strong lineup now.

The beneficiaries of any publicly funded infrastructure clean-up are property owners, the immobile factor. I know not the ethnic composition of those owning lower Manhattan, nor the rest of the city, nor do I care. The only distributional question of interest is whether those owners contribute proportionately in taxes or not.

Unless Dr. Kling has recently received an engineering degree his weak attempt at returning to blogging was a waste of electrons on the Internet. No nothings should not conjecture.

And what would you do with your new found extra time?

One problem with "how well we do infrastructure" that some people ignore is that there can be a case for doing less infrastructure by the government, if we do it badly.

On the specific example of mass transit and intercity rail, the US frequently is given figures that exceed 5 or 10 times the cost per mile of a variety of competing countries, including wealthy countries like France, Spain, Germany, or Japan, but also middle income and developing countries. That huge extra price tag per mile is the same for small or large scale projects, and some of the competing projects (as in Japan) have even more complex engineering challenges than in the US. If you look at mass transit, the problem is not even so much how much the US spends (totaled up among various political units) but how little we get from it.

It's very unclear to me why certain things should be so much more expensive in the US. It does mean, however, that it's not entirely reasonable for people to oppose spending on it if it's going to be that inefficient.

1) The US has much higher salaries than those other countries.

2) The US mandates inefficiency in government funded infrastructure projects. For example: its illegal for the corp doing the building to look for cheaper labor contracts than whatever is defined as the "prevailing" wage.

3) The reporting, licensing, and paperwork requirements are so strenuous that they are often impossible to follow. Because of this, its often necessary to hire people who don't actually do anything but are politically connected.

4) When its possible to follow those rules, you still need to hire expensive and very sought-after specialists who's only purpose is ensuring compliance.

4) Non-asian ethnic minorities, women, and veteran owned businesses get preference by law in the government contracting process. So to compete, the actual people running the company will give a portion to a minority-veteran. This gift effectively increases capital costs.

5) US environmental regulations are the strictest in the world. Millions must be spent on lawyers and scientists to ensure that its legally allowable to build at the location.

6) Once a building site is chosen, permission must be gotten from the local governments. This often means having to bribe and or make campaign contributions to politically powerful, local governments. These local governments can block a federal project by lobbying against it. The US, being a rich country, means that these bribes can be huge. For example, if you want to build a toll road in Texas, you have to have it pass through or near land owned by someone politically powerful, and buy that land for orders of magnitude more than its market price.

7) After you have all the permissions, you still need to fend of lawsuits from environmental and NIMBY groups. These suits can take years of time and cost millions.


It would be useful to someday see a comparison of the cost of high speed rail in Spain vs. California. Why is California, which got so many vast infrastructure projects done in 1900-1975, so inept today?

Lower Manhattan isn't the Lower Ninth Ward. It'll be cleaned up in a hurry whereas the areas gutted by flood and fire out in the Rockaways will remain a mess for quite some time. The country "does" infrastructure with an urgency that correlates to the monied interests that prod it.

80% of the subway system in NYC is running as of today, Monday, November 5.

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