Andy Kessler: Put Down That Shovel (Gov't Projects for a Recovery) | Hacker News Reader

Andy Kessler: Put Down That Shovel (Gov't Projects for a Recovery)

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9 pointsgrellas12 comments

These sound like good ideas, but it doesn't change the fact that, every once in a while, roads and bridges need to be rebuilt. Our transportation infrastructure has been in need of an update for years.

I (mostly) agree. It would seem that to do infrastructure especially in the middle of a recession (when you might be able to get it done cheaper) is the time to do it. That being said, you have to layer on the inevitable inefficiencies/corruption when such projects are rushed in order to have any impact to a recession.

I wonder if there are more creative ways to go about it like encouraging private firm participation through road privatization (which means that you get the same impacts without the government spend from private firms that are incentivized to be more efficient to maximize ROI). There are also creative experiments like congestion pricing that have the potential to greatly recoup costs while improving productivity.

There also obviously environmental impacts though of cheap free roads which have also been blamed for enabling urban sprawl. Again, it would just seem to me that yes, infrastructure is important (and much of the existing infrastructure is aging and needs to be replaced) but the way that we've gone about building it in the past and in how it's being proposed to build out now as stimulus, is less than optimal.

There are very few examples that you could point to where privatizing a public good has been successful. In general it leads to rent-seeking behavior and slow decay while the current owners try to wring every last possible nickel and dime out of users before reselling the husk down the line to someone else who thinks they can squeeze a few more pennies before the state eventually steps back in to clean up the mess. Private enterprise does exceedingly well in many areas, but infrastructure and sustainable resource management are not areas where it excels.

"There are very few examples that you could point to where privatizing a public good has been successful." I suppose that depends on how a public good is defined. After all, airlines for some countries were considered to be in the national interest to the point that many were owned by their national governments - ditto for steel plants, etc.

These days, I'm not sure the issue is black and white what with quasi public/private partnerships where an infrastructure project is owned by the public but leased to an infrastructure firm, or capital is raised using bonds sold to the public.

I think it's a bit naive to think that in the hands of government, rent seeking behavior doesn't happen - it is possibly even worse with contracts developed and awarded based on political connections/favor or in building roads/infrastructure in places that neither need it or even want it in some cases. There are however good and bad ways to privatize as well. I live in Ontario and the privatization of the 407 has been highly successful (both profitable and useful for private users and performs its function admirably). I try to avoid it during rush hour because of the cost (as is encouraged) but it's quite well maintained and built. Can you provide a few examples where roads have been privatized but made public again because "rent-seeking behavior and slow decay while the current owners try to wring every last possible nickel and dime out of users before reselling the husk down the line to someone else who thinks they can squeeze a few more pennies"?

Yes, the article sounded like it was presenting a false choice: why, exactly, could we only have national wireless and broadband infrastructure if we stopped building bridges? (The only reason I could see was if we had some sort of budget limit, which it seems we don't really have, given that we're spending borrowed money anyway.)

Roads and bridges won't help move information, at least not directly; and moving information is more important to our economy now than it was in the 1930s. But information is far from the <em>only</em> thing we move, thankfully. As long as we've got the workforce and the will, let's work on both kinds of infrastructure.

Neither medical idea is feasible.

You don't need 100,000 biologists to sequence every cancer; you need 100,000 Illumina machines (or, take your pick of next gen sequencers).

You don't need to scan all old medical records right now. You need a system that makes it worthwhile for doctor and patient to have digitized records. (And I'm not talking about "doctors will get punished until they go digital" as being an incentive. I mean true, medical or productivity-oriented incentives: your job will be done 10% faster; you will be able to identify trends in your patients' disease patterns; etc.) Once you provide the medical world with software that actually improves what it's like to be a doctor, or improves patient care, or both, we'll gladly jump aboard. And sure, you can threaten with payment withholding at that point if you need to.

Two big reasons this article is wrong:

1) The more sophisticated a technology, the poorer a job that government is going to do picking winners. The US Interstate Highway was an unvarnished success - it is used, well, rather often. The National Information Infrastructure? That was a failure.

2) Paying to create good jobs is worthwhile and concrete infrastructure generates jobs of some reasonable social value. A massive biological program simply couldn't hire enough biologists to put a dent in unemployment. Even concrete infrastructure programs need sophisticated tech too, so it wouldn't all be shovels.

Now, I'd mention that rebuilding the school system would also qualify as basic infrastructure. And that's beyond over-do. Of course, the problem is most reform has gutted actual learning a la no child left behind. Hard to know what to do...

Isn't the IPv4 internet --- the product of DARPA, run with federal money for decades --- kind of a stark counterexample to that?

No, sorry, I considered this before my original post. The Internet is not an example of the government picking winners.

The Internet was just one of many inventions government research produced through DARPA and many other agencies. IP, a portable protocol that a variety of companies simply picked up, won despite any bets of policy maker, not because of them.

The Internet was never the subject of a massive infrastructure funding drive. It was not seen as a technology which would jump-start the economy until people started making money through servers stored in their dorm rooms. No, the boom was not the result of government picking winners here.

My argument: Government doing basic research = good. Government picking particular winning technologies = bad.

Securing and developing right-of-ways for bulk fiber is also not an example of the government picking winners. I suspect you're being a bit knee-jerk.

Yes, the IPv4 internet is a good example of a technology project managed by the federal government that went well. But I think that it is worth pointing out that it was not created and managed by congress (of which I have a very low opinion, I have always had trouble seeing a group of 500 people ever being able to reach a worthwhile decision, especially if they all are also trying to keep thousands of other people happy with their decisions). But was created and managed by the military due to their fear of nuclear war.

If all you have are 2 data points for argument #1, then I'll take my chances with the government picking, what, Wifi technology? How hard can that be, and more importantly, how bad could the consequences of picking a 'non-winner' be?

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