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Jerome Lyle Rappaport

Jerome Lyle Rappaport
Founder and Board Member
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Edward Glaeser

Edward Glaeser
Professor of Economics at Harvard University
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Stephen P. Johnson

Stephen P. Johnson
Executive Director of Phyllis and Jerome Lyle Rappaport Foundation
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Greg Massing

Greg Massing
Executive Director for the Rappaport Center for Law and Public Service
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Alasdair Roberts

Alasdair Roberts
Professor of Law and Public Policy at Suffolk University Law School
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Joseph Curtatone

Joseph Curtatone
Mayor, City of Somerville
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Tim H. Davis

Tim H. Davis
Independent Research Consultant
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Scott Harshbarger

Scott Harshbarger
Senior Counsel, Proskauer Rose LLP
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Vivien Li

Vivien Li
Executive Director of The Boston Harbor Association
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Guest contributors

Monika Bandyopadhyay
Suffolk University Law Student

David Barron
Harvard Law School and former Deputy Counsel for the Office of Legal Counsel in the US Department of Justice

Linda Bilmes
Senior lecturer in public policy at the Harvard Kennedy School. Assistant Secretary of Commerce during the Clinton Administration.

Brandy H.M. Brooks
Director, Rudy Bruner Award for Urban Excellence, Bruner Foundation

Felicia Cote
Rappaport Fellow, Harvard Law School/Harvard Kennedy School.

Amanda Eden
Suffolk University Law School student

Sara Farnum
Student, Suffolk Univ. Law School

Kristin Faucette
Student at Suffolk University Law School

Benjamin Forman
Research Director, MassINC

Arthur Hardy-Doubleday
JD/MBA student at Suffolk University Law School and the Sawyer School of Business

Theodore Kalivas
Boston Green Blog, Dukakis Center for Urban & Regional Policy

David Linhart
Student, Boston University School of Law

Antoniya Owens
Research Analyst, Mathematica Policy Research, Inc.

Susan Prosnitz
Senior Advisor, TSA, Washington, DC

Ben Thomas
Boston Green Blog, Dukakis Center for Urban & Regional Policy

Matthew Todaro
Student at Boston College Law School

Alexander von Hoffman
Senior Researcher, Joint Center for Housing Studies

Brett Walker
Student, Boston College Law School

Margarita Warren
Student at Suffolk University Law School

What Crisis? Inadequacies with the nation’s infrastructure have been oversold

Friday, April 8th, 2011
By Edward Glaeser

DOES AMERICA suffer from an infrastructure gap that requires spending hundreds of billions of tax dollars rebuilding America? Is President Obama right that the nation needs “the fastest, most reliable ways to move people, goods, and information’’ to attract new businesses? Of course, battered bridges and ruined roads should be repaired, but any larger federal infrastructure agenda should be approached with caution because the crisis has been oversold, and the current political climate practically ensures massive misspending.

One piece of evidence allegedly indicating the nation’s infrastructure inadequacy is that 68.2 percent of American households, as opposed to 95 percent of Koreans, have broadband, according to the National Telecommunications and Information Administration.

But only 3 percent of Americans without broadband said that it wasn’t available; 46 percent said they didn’t need it or weren’t interested. Limited interest in online information suggests a worrisome lack of curiosity, but it doesn’t imply an infrastructure crisis, or justify the $7.2 billion proposal to expand broadband deployment.

Alarmists also note that the US infrastructure ranking in the Global Competitiveness Report has declined to 15th worldwide. But the nation did far better on infrastructure than on other “basic competitiveness requirements,’’ such as “institutions’’ or “macroeconomic environment,’’ where we ranked 87th. A report that ranks us 118th worldwide in budget balancing and 68th in public waste cannot be a justification for borrowing even more to fund massive public projects.

That report gives the United States pretty good marks — 5.5 out of 7 or more — in every infrastructure area except rail. The low rail ranking is surely correct regarding passenger trains, but wrong regarding freight rail. Decades ago, railways were wisely deregulated, enabling them to specialize in what they do best: moving goods. As a result, 43 percent of goods are moved by rail, while only 18 percent of European Union shipping goes by train.

An infrastructure crisis is also proclaimed by an American Society of Civil Engineers’ Report that gives America a “D,’’ but that report contains no quantitative benchmarks, no global comparisons, and not even the faintest whiff of trading costs against benefits. The nation’s drinking water gets a “D-’’ despite the report’s verdict that “Americans still enjoy some of the best tap water in the world.’’ The low marks are used to justify a call for $2.2 trillion of spending over five years. One wonders whether this is just another special interest lobbying for more public spending on its industry.

America already has more motorways per capita than almost anywhere, but according to Smart Growth America, one-third of the stimulus surface transportation spending went to build more highways. The Office of Management and Budget gives the highway program low marks and reminds us that “projects are chosen by the states themselves and are not based on need or the value-added to the nation’s highway system.’’ The poor targeting of spending makes it hard to support the call by the civil engineers’ group for an extra trillion dollars on roads and bridges over five years.

The US economy is built around ideas and services, not moving manufactured goods cheaply, and our economic future depends far more on the knowledge in our children’s heads, not more roads. Before increasing infrastructure spending, we should make current spending more efficient.

Better infrastructure spending would make more assiduous use of cost-benefit analysis vetted by outside experts. The Obama administration’s proposed infrastructure bank would surely lead to more such analysis, and the proposal would make sense if it were an experimental “fund’’ seeded with existing highways funds, not incremental spending.

Better infrastructure spending would rely on states, not the federal government, to fund repairs and new projects used primarily by residents of one state. States can better judge local infrastructure needs, and they will make wiser decisions if they pay for costs of their own infrastructure.

Most new investments, especially those that aid business, should be funded with user fees, not tax dollars. Really valuable investments — like the Erie Canal — can pay for themselves. Local infrastructure authorities with tolling power have long been able to borrow without any federal infrastructure bank.

Infrastructure spending should get smarter before it gets bigger.
 


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