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Irene Lesson #4 – You Can’t Spend a Lot of Money When You Don’t Have a Lot of Time

Vermonters already know that the State will spend less than half the amount originally estimated to fix the state roads and bridges decimated by Tropical Storm Irene; this post is for people in the rest of the country who will benefit from the lessons we learned.

The job got done in less than half the time anyone thought it would take – crucially all bridges and all but one state highway have been reopened prior to serious winter weather and in time for the skiers. Turns out that getting the job done fast and getting it done cheap are two sides of the same coin.

The original worst case estimate for this job was $600 million according to a story on VTDigger.org quoting Irene czar Neale Lunderville; but the final toll, according to a New York Times article, will be in the range of $175 million to $250 million. The original estimates were made quickly and were meant to be conservative; the people who made these estimates were literally up to their necks in more urgent problems. But the estimates were indubitably made according to a standard set of estimating formulas which have been in use (hopefully updated) since the time thirty years ago when I was Vermont's Transportation Secretary. History is that estimates tend to go up – not down!

The cost should've come in high. There was no time for competitive bidding. People worked overtime until they dropped (and were probably pretty tired before they dropped). Local supplies of almost everything including people and machines were exhausted. Rocks for building new embankments had to be hauled in on special trains. But the costs came in low.

The VTDigger article explains some of the reason for the savings:

"State officials attributed the drastic reduction in costs to a variety of factors, including the efficacy of emergency construction techniques and the extraordinary dedication of VTrans workers, the Vermont National Guard and private contractors. In all, 500 miles of roads were reopened in just two months after the Aug. 28 storm…

"The state also saved millions of dollars by taking short cuts during the post-Irene emergency that normally would be prohibited under state and federal laws. The standard pre-construction procedures for road and bridge repair were abandoned in order to expedite the process, according to Sue Minter, deputy commissioner of the Agency of Transportation. The processes that are normally followed for transportation projects — federal and state permitting, environmental mitigation, design review, planning, right-of-way purchases – went by the wayside.

"Transportation workers didn't have to keep roads open and contend with traffic. In some cases they used gravel and rock dug from rivers and collected from fields where floodwaters had left deposits of aggregate [my note: Working in the rivers is usually totally off limits]…

"Minter pointed to a bridge project in Newark as an example of how a brief road closure can hasten VTrans work and save the state hundreds of thousands of dollars. A bridge on Route 114 in the town was closed to traffic for one month during construction. As a consequence, it cost $300,000 to build instead of the average $1.5 million pricetag for bridge installation, she said. The bridge was completed in three months, as opposed to several years."

In other words, there wasn't time to spend a lot of money on either bureaucratic delays or costly attempts to keep the public happy by avoiding the inconvenience of temporary closings.

Vermont has learned from its experience. John McClaughry writing on VTTiger.com quotes Democratic Governor Peter Shumlin:

"You can be assured that in the interest of delivering the best possible roads and bridges and transportation infrastructure that we can to the hard-pressed taxpayers in Vermont, we have asked the Agency of Transportation… to assess how we can bring this kind of good news to future road project."

John also quotes House Republican Leader Don Turner asking: "If we can bypass some of those steps in an emergency situation and save hundreds of millions of taxpayer dollars, why can't we do that all the time?"

Like the reconstruction effort itself, learning from it is bipartisan although, as you might expect, there are many who think the state went too far in its rapid reconstruction and would like to make sure that never happens again.

IMHO there are four lessons here:

  1. Americans can still come together and do remarkable things.
  2. Government spends more of our money than we would want it to in order to keep us short-term happy – as in building a temporary bridge instead of telling us to go around during construction.
  3. The regulations which started as well-intentioned and needed protection for neighbors and the environment has turned into a nightmare of expensive delay which at least doubles the cost of both public and private projects.
  4. If we remember the three lessons above and reform both government construction practices and permitting, we can rebuild our infrastructure for less than half of what we thought it was going to cost and have a boom in private construction as well.

Related posts:

Shumlin Appointment of Lunderville as Irene Czar Great non-Partisan Decision

Irene Lesson #2: Nothing in America is Shovel Ready – Until It Has to Be

Jobs Rx: Make America Shovel Ready

Too Many Employees Means No Jobs

There is only one woman visible in this CNN picture of a Chinese factory. Since the article is about a decline in Chinese factory orders, I think it is meant to be an illustration of layoffs. But look more closely; her chair is on a rail so she apparently can tend all those spools by herself. This is a highly automated factory. Looked at another way, whether this factory succeeds or fails has little to do with the cost of labor in China; the labor component of cost is low. Put more positively, productivity is high.

Now look at the second picture from a Daily Beast article about the failure of Evergreen Solar, a builder of solar panels heavily subsidized by the state of Massachusetts, which shipped its manufacturing from the Bay State and Michigan to China – and then went bankrupt with the loss of 1000 US jobs. Notice that the man in this picture from the Massachusetts plant appears to be putting solar panels together by hand. Even though there was indubitably some automation in this factory, the picture illustrates low productivity and a high labor cost per unit produced. Of course Massachusetts subsidized this factory because of the number of jobs it would create; so, in the search for subsidies, high productivity and low job count is a negative. Trouble is that, in the real world, low productivity and high job count leads to business failure. Exactly what happened here.

Private investors demand high productivity; democratic governments, as investors, looks for low productivity and high job counts. When I was Vermont's Stimulus Czar, we used to joke that we could make Washington happier with our job numbers if we banned the use of power tools on construction projects. We didn't laugh at our own joke.

The political problem with government investments is that some of them – like Solyndra and Evergreen – fail. The real problem with "job creation" investments by government is that they encourage inefficient enterprises and discourage private investors from putting their money into more efficient competitors, since the private investors don't want to compete with "free" government money.

New Chinese factories are highly automated and efficient even though they are often subsidized by government money or are simply government owned. The Chinese seem to realize that they need to efficient in order to compete. IMHO, however, the Chinese government investments are also riding for a fall; the Chinese bet, for example, that the West would continue to subsidize the purchase of solar panels. Meanwhile strapped governments in the Europe and the US are cutting back on and ending subsidies; not even cheap Chinese solar panels are a good business proposition without subsidies. Political favoritism plays an even greater role in the allocation of government subsidies in China than it does here in the US.

We now have a great opportunity to bring manufacturing jobs back to the US. The fact that labor costs are lower in China is less and less important as productivity rises everywhere. We have lower energy costs than China; we have the similar supplies of rare earths; it is obviously cheaper to transport goods to the giant US market from here rather than from China; and the Chinese have disappointed many of their American customers with poor quality (and dangerous additives). Some jobs are coming back already.

What we DON'T need is more government investment or even tax breaks for those who create "the most jobs". Lean factories will survive – and create high-paying jobs for American workers. Over-staffed enterprises will fail and create no jobs except for bankruptcy lawyers. American companies are sitting on piles of cash. Increasing sales – like those on Black Friday – will encourage them to build capacity, lean capacity. The big companies are sitting on so much cash, on which they earn almost no interest, that they don't even need the struggling banks to finance their expansion. And they certainly don't need the government to dispense even more subsidies to the inefficient.

The greatest stimulus government can deliver would be cutting the red tape needed to build and to tap into our own energy supplies. The second biggest stimulus would be an announcement that government is no longer going to try to pick industrial winners and losers – and recognizes that rewarding excess "job creation" is a surefire way to destroy private sector jobs.

Related posts:

Jobs Coming Back from China

America's Industrial Revival

Jobs Go Awaiting… Or to China

Everything is Shovel-Ready in China

Construction in China happens very quickly; but people with shovels have hardly disappeared. This crew rebuilt a section of road near the Beijing Zoo in a few hours. Possibly it was more efficient to use them than to bring in heavy equipment for a very small job; possibly the government is reserving some work for unskilled labor – I had no way to tell. Even in Beijing food is very cheap and workers can live on a low end salary of about $10/day.

On the other hand, when China decides to have a stimulus program, they can build big and fast. At $750 billion their stimulus program of 2008, which was passed to counter a slow-down in demand from customer nations, was about the same size as ours. The difference is that they actually managed to build infrastructure with the money. The already-planned high speed rail network was accelerated. The line between Shanghai and Hangzhou opened in October of 2010 and the 819 mile Beijing-Shanghai line started service at 236 mph in June of this year just slightly more than three years after construction began!

These trains run on a specialized elevated roadway built out of concrete with almost no curves and very little grade. It goes through hills which can't be moved out of the way. Huge equipment as well as massed manual labor was used in the railroad expansion project. Acquiring right-of-way is apparently not difficult when the government owns all the land to begin with; environmental permits weren't a problem.

But all is not well with the high speed project to build high speed rail. On July 23, 2011, a train which had been disabled by a lightning strike was hit from behind by another train – something the signaling system was meant to prevent. The government says that 40 people died; some Chinese we talked to said the actual death toll was much higher (they get their information from the Internet, natch). There has not yet been an official announcement of what went wrong.

Whatever the truth is about cause and fatalities, the government abruptly shut down the entire railroad construction project countrywide by denying the responsible ministry the authority to issue further debt. According to China Daily, $40 billion was just released, but that may be just enough to pay contractors and laborers for work that was done prior to the defunding – all payments stopped after the accident. We saw partially done rail projects in several parts of China and no evidence of ongoing work.

When we took the train from Beijing to Shanghai it had been slowed down to 186 mph for "economy and safety reasons"; so the 819 mile trip took 4 hours and 45 minutes with one stop. Obviously this is still very competitive, downtown to downtown, with flying the route – the distance is a little less than the highway miles from New York City to Chicago; imagine a train that did that in under five hours. Eighteen car trains run several times an hour during the day although some have more stops. This is infrastructure that makes a difference, although I have no way to judge the cost/benefit.

We don't have to adopt China's political system in order to make major infrastructure projects feasible again in the US. But, unless we reform our permitting system and curb the power of NIMBY to cause endless delay, we won't be able to compete with China's economic system.

Related posts:

Google Finds Nothing is Shovel Ready, Not Even for Free Fiber Build

Irene Lesson #2: Nothing in America is Shovel Ready – Until It Has to Be

America's Industrial Revival

Green Mountain Power Sets Good Precedent on “Bad” Project

Green Mountain Power says that it will try to collect damages from those who obstruct its already-permitted and approved Lowell Mountain wind project. It would be a wonderful precedent for Vermont if the cost of post-permitting delays were born by those who cause the delays. There's no good reason why Vermont ratepayers should be saddled with both the extra cost of wind power and the extra-extra cost of harassing delay tactics by project opponents. If we establish the principle of delayer pays once a project has been approved, we will be able both to protect the environment with tough standards and attract good projects, whose sponsors will appreciate the certainty once approval has been achieved.

I actually don't think the 21 turbine Lowell project is a good idea. It will supply a negligible amount of amount of not-very-dependable power at a high price even after various subsidies. We can literally get hundreds of times more carbon-free kilowatt hours reliably at 20% of the price with no further subsidies just by keeping Vermont Yankee open. But I – and other opponents – had the opportunity to make our case before the Public Service Board and failed to do so. We didn't succeed in convincing the Vermont legislature to be responsible about Yankee or to be realistic about the cost of "green" electricity. The town of Lowell voted overwhelmingly in favor of the project, despite the fact that they'll be able to see the turbines on the ridge. We opponents lost; we don't have a right to impose penalty costs on the project now that it's been approved – although we can catalog the actual costs and try to block similar projects from being approved in the future.

Every project of any consequence is in someone's backyard. Every project will have opponents. Some projects shouldn't get approvals for environmental or other reasons. Opposing a project during the hearing and approval process is both legitimate and necessary if you think the project is harmful. Projects like Lowell Wind, which impose extra costs on ratepayers in return for dubious benefits, merit opposition. But, once a project has won approval and assuming it complies with the conditions of approval, we don't have a right to impose penalty costs and delay on the developer.

Related posts:

America's Industrial Revival

Google Finds Nothing is Shovel Ready, Not Even for Free Fiber Build

Irene Lesson #2: Nothing in America is Shovel Ready – Until It Has to Be

Scale Matters

Jobs Coming Back from China

Automation means low labor wages are less of an advantage than they used to be. If you only use a few workers to achieve high output, you are less sensitive to what you pay them and more sensitive to their individual skills since each worker is responsible for an increased amount of output. As Chinese wages go up and the labor content of manufactured goods go does down, China has less of a manufacturing advantage over American rivals – so long as those rivals aren't hampered by obsolete factories or labor-increasing work rules.

There's an example from an article in The Wall Street Journal:

"Bruce Cochrane is emblematic of the incipient shift [of jobs to the US]. He's opening a furniture factory in Lincolnton, N.C., a rare event in a region and industry that have been walloped by outsourcing. Employment in U.S. furniture factories fell by 60% over the last decade.

"Mr. Cochrane says furniture made in China and sold in the U.S. previously had a price advantage of up to 50%. That's often down to 10% to 15% now, in part because wages in China are soaring—up 15% or more a year in some locales. Shipping costs, he says, have doubled from a few years ago."

Proximity to markets counts, too. It's unlikely that Cochrane will make furniture for the Chinese market in North Carolina anytime soon. But he can deliver furniture to US markets for less than it costs including freight to get it here from China. The article doesn't mention it but furniture-quality wood is in better supply in the US than in China. We don't need to import the raw materials for furniture making.

The article continues:

"…he's buying state-of-the-art saws, routers and other machinery for his facility, exemplifying why productivity is robust in the U.S.

"The flip side, though, is employment. When North Carolina's newest furniture factory is up and running, Mr. Cochrane expects to accomplish with 135 employees what it took 250 to do in the past."

Do you count this as gaining 135 jobs or losing 115? That's really an academic question. If we want manufacturing jobs in the US – and I believe we do – then we must be as automated and efficient as any rival - preferably more so.

It's not only expensive-to-ship goods whose manufacture is coming home; quality counts, too. The WSJ article tells another story:

"'We're in the process of bringing everything back from China,'" says David Gil, marketing director for Sleek Audio, which makes high-end tunable earphones. Along with rising costs in China, quality control proved a headache.

"The company sells its SA Six earphones for $250, and the price won't change when production moves to Palmetto, Fla., though costs will rise about 20%. Mark Krywko, the chief executive, says better quality control and less lost inventory will offset those increases. 'Profits will go up,' he says."

Long supply chains mean increased vulnerabilities to foreign disasters as well as our own. Currently, according to my friends in telecom, fiber optic cable is in such short supply in the US that there is a danger some broadband projects won't meet their stimulus deadlines. Turns out that raw fiber is made mainly in the areas of Japan affected by the tsunami. Smart manufacturers want diversity of supply – so long as costs are reasonably close.

It was heartening to hear most of the GOP presidential candidates last night agree that the US can survive and flourish in economic competition with China. Winning means supplying much (but not all) of the needs of our own markets for many (but not all) goods and achieving a large secondary position to foreign manufacturers in meeting the needs of their domestic markets. It doesn't hurt us at all if a US furniture manufacturer becomes stronger by building a Chinese factory to meet the rapidly-growing needs of the Chinese market; it only hurts when the US market is served by that factory instead of one here with no offsetting reciprocal trade in other products.

We have the huge advantage of being near our own market and bountiful supplies of raw material including rare earths. If we will let ourselves, we can have a huge advantage in energy price and supply. Our engineering schools still train the world's top engineers; we just need to make sure that they can flourish here and don't all leave for places where projects can be built without twenty years of regulatory delay. Rising wages in China and India not only level the playing field but also increase global demand – we can benefit from both.

Related posts:

The Inconvenient Good News in the Employment Report

Jobs Go Awaiting… Or to China

Google Finds Nothing is Shovel Ready, Not Even for Free Fiber Build

America's Industrial Revival

The Inconvenient Good News in the Employment Report

Both Democrats and Republicans were quick to leap on the superficially tepid jobs report Friday to prove their partisan points. Both sides studiously ignored the good news hidden in the details: the private sector added enough jobs in September (137,000) to lower the unemployment rate if all things were equal. All things aren't equal, however; the public sector is still shedding jobs (34,000), and so NET job creation (103,000) was slightly below the level needed to keep pace with population growth. The overall unemployment rate stayed at a very high 9.1% as some formerly discouraged workers began looking for jobs again. The shift from public sector employment to the private sector is healthy and, to use an overused word, sustainable. As the public sector burden imposed on each private sector job decreases, it gets easier and more attractive to create private sector jobs – a virtuous circle.

The fear had been that public sector layoffs would subtract so much demand from the economy that the private sector would shrink as well - a fate that may well await Greece, for example. If the private sector continues to grow, we will reach a point at which it can support the level of public services we want (which is probably still lower than the level of public sector employment we have today). At that point the public sector stabilizes; total employment is not struggling to grow despite the loss of public sector jobs and buying power; and the economy accelerates the way we all hope it will except, apparently, highly-partisan Democrats AND Republicans.

Both average hours worked and the average hourly wage inched up slightly. Employment in finance was down slightly; like public sector employment, a lower ratio of these jobs to goods-producing jobs is a good thing for the competitiveness of the economy as a whole. That isn't to say that we don't need government or banking, just that we don't need as much of either one as we've got. Manufacturing jobs were very slightly down, though; the best news was a reasonably large increase (26,000) in construction, which the Bureau of Labor Statistics analyzes as driven by non-residential construction. Non-residential construction means we are investing in infrastructure and in new places for people to work.

Partisans of both parties, however, studiously ignored any possibility of good news – it doesn't fit their message. Republicans say that the low numbers are one more bit of evidence that President Obama and the rest of the Democrats need to be replaced by Republicans whose pro-business policies will make employment skyrocket. Democrats say the low numbers make it clear that Stimulus II needs to be passed right away and that Republicans are standing in the path of its job-creating potential. Republicans are also ignoring that the recession began with a Republican in the oval office and Democrats are ignoring the failure of Stimulus I to keep employment below 8% as promised.

Countries with governments ranging from the fiscal left to the right all partook in the great recession. What if government policies don't have much to do with the short-term direction of the economy? What if politicians really can't create jobs? It's at least arguably possible that we would have recovered faster if TARP hadn't merged zombie banks into even more too-big-to fail entities which don't lend money to small businesses anyway. Housing may have bottomed out by now if banks hadn't been encouraged to paper over their book-value losses from underwater mortgages and instead had to deal with their customers to restructure loans in both their interests. We might have more jobs today if we hadn't attempted an ill-planned stimulus which actively discouraged states from dealing with program bloat and which didn't build needed infrastructure but did help dig a deeper budget ditch and encouraged companies to chase grant dollars rather than customer value.

But this campaign is all about jobs! Both sides have to use the fear of what the other side will do to us to get us to vote the rascals out (and the new rascals in). With the country's opinion of politicians at an all-time low (at least since there's been polling), we're much more likely to vote against than vote for. Isn't that what "change" was all about? So neither side wants to see an economy which is actually starting to heal despite the ill-designed treatments they forced it to undergo. Neither side wants to see the shoots of economic spring. What if tax revenues were to increase because of prosperity? Then we wouldn't have to raise taxes as the Democrats want or cut government services as much as the Republicans want. Neither side wants to campaign on boring issues of how government ought to do its job while we do our best to create jobs for ourselves and our neighbors.

Caution: I'm deliberately being a Pollyanna to make the point that politicians will be the last to see a recovery. One shouldn't judge the direction of an economy from a single monthly report which is, itself, statistically derived and routinely corrected. That's as dumb as judging climate from a single year's weather.

Related posts:

Jobs Go Awaiting… Or to China

Confessions of a Stimulator

We've Been T*RPed

Where Did All the Tax Revenue Go?

Ben Bernanke's Blunder: How NOT to Solve the Mortgage Crisis

 

 

 

Jobs Go Awaiting… Or to China

"China, which currently mines most of the world's rare earths of both types [light and heavy], has a chokehold on heavy rare earths, producing 99 percent of the global supply.

"In its report last December, the Energy Department said it could take up to 15 years [emphasis decidedly mine] for the United States to break dependence on China, based on how long it might take to obtain federal permission to open new mines and processing plants…" NYTimes story by Keith Bradsher.

China, as you may remember, has choked back exports of rare earths in order to force high-tech factories which need these materials to locate in that country. Turns out that most rare earths can also be found somewhere in our huge country. It would be nice to have those factories – and working mines and processing plants - here rather than in China.

It's likely that the companies building the factories want some geographic and supply diversification and want to avoid absolute dependence on China, which is also forcing companies which locate there to turn over intellectual property to Chinese joint venture partners. Moreover, Chinese wages are going up along with the standard of living and China has an energy problem. The US is a huge market. There are lots of reasons we could be a competitive place – especially if we had an active supply of rare earths.

Of course we can't do away with all regulation of extraction; there ought to be environmental approval of new projects and enforcement of the conditions of any such approval with harsh penalties for violation. But we've tied ourselves in handcuffs; fifteen years is absurd! What are we going to learn about a project in fifteen years that we can't learn in two? Conditions may actually change in fifteen years. Market conditions may change as well so who wants to start a project now for a market that may or may not exist in fifteen years?

Now imagine a two-year review process (up or down) and, should approval be granted, no delay through injunction or appeal unless the appellant posts a bond for the damages that delay will cause. Imagine the flood of private investment which could go first into rare earth extraction, then into processing, and finally into the industries which are dependent on rare earths and all the supporting businesses. Imagine the jobs that would be created, the economic growth, even the taxes collectible.

BTW, this particular story has good news in it: Molycorp has discovered that it has a source of heavy rare earths in an area of the US where it already has permits. They say they can begin extracting in a little more than a year – that's more like it. They are already building a processing plant for both heavy and light rare earths. We need to see this story replicated a hundred times over. And it can be… if we take off the handcuffs.

BTW # 2, in the same edition of the Times there is an article by economist Bruce Bartlett saying "Academic research has also failed to find evidence that regulation is a significant factor in unemployment." Maybe Bartlett and the academicians ought to read the newspapers. How much more evidence of glacially-paced regulatory approval costing jobs do we need beyond the fact that China will have a virtual monopoly on a key industrial ingredient for fifteen years because that's how long it takes to get the feds to say yes to mining in the US?

Related posts:

Google Finds Nothing is Shovel Ready, Not Even for Free Fiber Build

Irene Lesson #2: Nothing in America is Shovel Ready – Until It Has to Be

America's Industrial Revival

Irene Lesson #2: Nothing in America is Shovel Ready – Until It Has to Be

"There's no such thing as shovel-ready projects," President Obama told the New York Times last year, reflecting on why the Stimulus Act didn't do what he had hoped it would do.

Less than two weeks after Tropical Storm Irene carved 166 gaps in the Vermont highway system and closed 450 mile of road to travel, there were only 33 closures and 340 miles had been reopened according to Transportation Secretary Brian Searles. More than twenty towns were initially cut off from the rest of the state; all were reconnected in less than a week. Rivers were wrestled back into their old channels – or into new ones. Temporary bridges were built immediately where the permanent ones couldn't be repaired. Miles of washed away roads were either rebuilt in place or newly carved higher up on the cliffs. Of course much of this work will have to be redone before winter sets in; more will be redone in the years ahead. When the construction is truly finished, we'll have a better and more flood-resistant highway and railroad system than we did before.

When we have an emergency, we get shovel-ready in a hurry. The new Guidelines for Instream Work from the website of the Agency of Natural Resources say that the agency "recognizes that recovery from this state-wide flood disaster will require extensive in-stream work… Conditions that existed prior to the flood may, in cases, not be desirable or even possible to recreate." In normal times it can take years to get permission to work in the water; it is almost impossible to get permits to relocate a stream. Now permission can be given on the phone if necessary. In another common sense move, the agency suspended limitations on operating hours for gravel pits and allowed closed pits to reopen. We need the fill.

From my experience as Vermont's Chief Recover Officer (Stimulus Czar), nothing is shovel-ready during ordinary times – just as the President said he learned. Like other states, we spent most of our allocation of highway funds repaving roads and making minor repairs that were in the existing right of way and didn't require permits. It takes more than 20 years to get approvals and fight your way through appeals, restraining orders, injunctions, and other delaying tactics before anything substantial can be built with either public or private money. If Congress appropriates more stimulus infrastructure money, as the President just asked, only states like Vermont with an ongoing emergency will be able to spend it on projects of any significance. The rest of the states are in danger of having to repave the same roads that they already repaved with the money from Stimulus #1.

All over the country there is infrastructure which needs to be built or rebuilt. You don't have to be a Keynesian to see that it makes sense for government to concentrate its construction spending during periods of unemployment, both to get better prices and to put people to work. You don't have to be an economist to understand that it is OK for government to borrow to build a new asset which will pay back the debt by improving the economy and that it is not OK for government to go into the hole to perform routine maintenance. So the President isn't wrong to propose more infrastructure spending; but he seems to have completely forgotten what he told the New York Times – we're not shovel-ready; we can't ramp up our infrastructure build during the current malaise; we're in our own way. The money he is asking for, if appropriated, will NOT get spent on long term projects. It will NOT generate the return necessary to pay the further debt the federal government will take on.

The President approvingly discussed Lincoln's support for the transcontinental railroad and the economic growth that came from knitting our resources together. He's right about that. But he didn't mention that, if the railroad has been proposed in more recent times, we'd still be fighting off appeals from the Pony Express whose business the railroads did destroy, from adjoining landowners who never thought that other people would be able to get to where they located, and from Luddites who believed that the pounding of locomotives would cause the earth to split and release Hellfire (I'm not making that up!).

There was a token mention of regulatory reform in the President's speech: "We're cutting the red tape that prevents some of these projects from getting started as quickly as possible." But he doesn't say how we'll do that. There is no mention of expediting projects in the fact sheet the White House supplied to go with the speech. The President can act on his own to reform the federal permission process and speed up projects and cut red tape. He could have announced some executive action without waiting for Congress; he didn't.

But Congress – including Republicans – should take him at his word. They should pass permitting reform as part of any appropriation for infrastructure. If we could cut approval of projects from more than twenty years to two; if we could stem the ability of anyone who doesn't like a project for almost any reason to impose almost indefinite delay on a project, we would have a major infrastructure building from both the public and the private sector beginning almost immediately. That would happen even without an appropriation. But an appropriation without breaking the permitting logjam and reforming the appeals process will neither create long term jobs and an improved economy nor justify even more debt. We can protect the environment just as well in two years of hearings as we can in twenty

This is, after all, a jobs emergency. We need a happy medium between the necessary rush and chaos of repairing emergency damage and the now nearly endless process of appeasing and fighting special interests to build anything at all. We can do that. We can be shovel-ready when we want to.

Related posts:

Jobs Rx: Make America Shovel Ready

Stimulus Interviews on NPR and Fox Business

America's Industrial Revival

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