The US has forgotten how to do infrastructure
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If you look at old blueprints for projects in the past, they are a LOT less detailed. They had to be, because it was physically more difficult to produce them since they had to be drawn by hand. A lot was left to the contractor to figure out in the field.
Now, drawings are more detailed and contractors are incredibly reluctant to make even the smallest decisions on their own. They don't want to assume the liability and risk getting sued if they do something wrong, so they push that off on the engineers and architects.
This means every time there's a question, it has to be submitted through a formal process, tracked, answered, documented. And if the change has any cost impacts, the contractor tacks on a hefty premium because they know they can get away with it (and they probably underbid in the first place to win the job). Delays pile up, every clarification becomes an expensive change order, construction workers twiddle their thumbs while designers get around to addressing questions and this all costs money and time.
If I walk down the street and there is a group of workers excavating a road, there's a lot more of a relaxed attitude about fencing, walking underneath construction equipment, etc.
After all - use your common sense - don't fall into the hole. If you do, isn't it kind of your own fault? Nobody's going to sue anybody.
Additionally, it's not a big deal to close or severely impact a road due to construction - just shift around the fantastic public transit infrastructure, and everyone carries along. A bus only needs one lane in both directions. Another thing that would never fly in North America.
Both of these problems are deeply cultural. Lawsuits have become a form of welfare. Sure, you might not have government healthcare if you get hurt or sick, but maybe you can sue somebody and get paid for your suffering?
And America's love affair with the automobile is a well-known abusive relationship that America will never have the courage to leave.
Just like a an abusive relationship, the car love affair still produces some good things. It's not all dark and dreary.
"I hate that he comes home drunk and hits me, but he's so loving and apologetic the next morning."
"I hate that I get so stressed from my daily commute, but being able to drive to the countryside on the weekend is so nice."
You can be in a relationship without dealing with abuse, and you can get to work less stressfully and still have the freedom to explore the world.
That's what makes the relationship so sinister; it's Stockholm syndrome.
"How could I ever live without him, even though he hits me sometimes?"
"How could I ever live without driving everywhere, even though the country on the whole is getting more unhealthy, we continue to use up our limited resources, and the ability to walk around and individuals' quality of life is reduced?"
Of course you can live without those negatives. There are ways out. There is a better life possible.
I have truly never understood this line of thinking. These two are not tied together.
I grew up in a car-centric city, but moved away in my teens. I've never personally owned a car and haven't had one in the household since I was 17. I hear this supposed "upside" of cars from my friends who are still stuck in LA, and what no one has ever been able to answer is:
What prevents you from renting a car when you want to drive out to the countryside? I drive out somewhere beautiful on a sunny weekend probably 3x as much as any of my friends who own cars, and I'm still paying less for total transportation than they do (let alone the occasional hassle that owning a car exposes you to). The only actual negative I can think of is the mental friction of having to pay each time, and this is just an irrational speedbump that really isn't that difficult to surmount.
Public transport is a good thing overall, but I do get tired of people talking about it like it's heaven 'if only it were more available'.
It's pretty much impossible to leave this relationship unless you live in one of the larger US cities. If you live in a suburb, rural area, or city that's not in the top 10-15 in terms of size there's literally no other option that exists or that could easily exist.
And for a few things it IS better. But there are a whole lotta costs, too, with the top 3 being being actual financial cost, grinding on the faces of the poor, and making us fat.
The difference is networks of buses and trains that the countries and cities invested in over decades.
America went in another direction, and looks no closer to changing it's mind.
From what I have read, Millenials are putting noteworthy pressure on this aspect of American culture.
Also, I gave up my car years ago. With the magic of the internet, I work online. I mostly walk everywhere and occasionally take public transit.
I think we can change this substantially.
Since then, I haven't driven a single day. I walk, take the metro or get an Uber.
I haven't been happier. Driving was easily the worst part of my day.
Which is great for us developers, but not so much for most service industry workers.
What you describe could also be understood as an inefficient way of organization that is peculiar to the United States, and a by-product of American business and economic logic. Firms (i.e. vertical integration) exist to reduce the comparative inefficiencies of having separate, independent entities. Most other countries still have huge conglomerates (e.g. Japan, Korea), or contractors enjoy closer and longer-term business relationships.
With rare exception (Berkshire Hathaway, Elon Musk, etc) Americans have systematically shifted toward looser organization of smaller, independent business entities. One of the downsides is the exploding cost of orchestrating these entities for big projects, and the loss of knowledge about how to manage such projects.
As for direct liability costs, I can't remember if I've read any recent studies of those. But I went to law school (I'm not an attorney, though) and several of my family members are tort lawyers, and I can tell you from everything I know and have learned that liability costs are overblown. The fact of the matter is that every society will force negligent businesses to internalize the costs of their negligence. Some countries (esp. common law countries) emphasize the ability of individuals to seek compensation for actual damages. Other countries emphasize prevention and enforce a much stricter regulatory regime. Either way the costs can be considerable, but in any event the U.S. doesn't stand out among developed countries AFAIK.
I just watched the Wizard of Oz this past weekend and in one of the opening scenes Miss Gulch, who was bitten by Toto, threatens to sue Dorothy's Aunt & Uncle for everything they have, taking away their farm. Point being, Americans have always had a somewhat irrational fear of litigation. It's a cultural thing. That same fear existed back in a time when building big infrastructure projects was cheap.
How do you know that? It seems like a really difficult number to account for like the cost of medical lawsuits. Sure, you can look at malpractice insurance, legal fees, and damages awarded to plaintiffs - but how do you properly count the extra tests, procedures, pharmaceuticals, man-hours, etc. that result from the increased defensive posture of doctors and hospitals?
I guess also, ever do a home renovation on a house > 40 years old? You usually walk into a disaster of things not up to code. These days, it would just be done correctly, just as cheap as possible, and not built to last. Most recent housing developments near here are just ways for developers to make money and run, as the infrastructure (housing, not utilities, etc) is not going to last all that long. The developers don't care - they'll be enjoying their profits States away, as the city that is home to their developments are quickly crumbling.
Not that I'm bitter on the changing landscape of my city, or anything. But a housing boom has dark sides.
I don't know why you think proper change control is a bad thing. In both software and systems engineering you submit change requests that are tracked, reviewed, assessed for risk, approved and documented. You do this to create an audit trail to identify "how we got here". Any concerns? It's documented in the ticket.
Now when it comes to civil engineering projects, where bridges can collapse, you should WANT that kind of rigorous change control of tracking, approving, and documenting.
Yes, documenting change control requires more work, but it also saves lives and creates an audit trail in case of a grave error.
As it stands now, some unforeseen circumstance in the field will necessitate a minor modification to the design. The contractor knows perfectly well what needs to be done, but instead of simply doing it, they will ask the designers to tell them to do it, so they aren't the ones responsible for it. The designer of course can't simply rubber stamp whatever the contractor says, so they have to spend time figuring out what the issue is and whether the contractor's solution is adequate. All that adds up.
You always want peer review, even for a minor modifications. We have a similar process called code review.
It's not bad, it's just more expensive than not doing it. Thus, infrastructure built today costs more.
Both true. But the interesting question is if and when the costs outweigh the benefits.
There was an article shared to HN some time ago arguing that the kinds of cost overruns that we see so often on infrastructure projects in the US are almost endemic to common-law countries, and radically less prevalent in civil-law countries.
I haven't been able to find that article again, but its conclusion has come up in many similar discussions since.
From time to time, each of the siblings has built a new home, and they just do it themselves in their spare time. My friend was telling me about helping his sister with her home. His sister has moved into a very rural community in the western U.S. When the family showed up to pour the footings, they asked for a copy of the footing plans. Their sister handed them an 8.5x11 sheet of paper with a hand-drawn floor plan.
"Where's your official plans? The plans you submitted for your permit? The ones with the footing details?"
"That is the paper we submitted for our permit. See the stamp that says 'Approved'?"
All the other siblings live in Clark County, Nevada. The permitting process there is excruciating. They looked at the paper, looked at each other, shrugged, then built the house. They know how to build a footing. They know how to frame. They know how to build a house. The sister's house was built with the same quality as the other siblings' in a fraction of the time.
But if one of the big builders tries to put in a subdivision in that little town, I hope the municipality watches them like a hawk. Big builders don't build homes. They cheat and connive and do everything to push product at the lowest possible cost.
In a world without trust, you cannot afford to let people self-manage.
I always say there are not too many lawsuits, but too many laws. Legislatures think they are making something better by passing more rules, regulations, and laws. But, for every rule, regulation, or law, you have an opportunity for a lawsuit. Use more common sense? Sure, but then don't pass a multitude of laws regulating the subject.
Why are infrastructure projects' costs higher here? I don't know really. My guess would be that compared to say Germany and Japan, everything here is the U.S. is huge. I mean probably 10-30% larger in size than those other countries with the resulting higher costs. But, this is just my personal observation.
Actual construction is performed by contractors, corporations that are contracted by the government. In the US, it is rare for a construction project to be built, or even be designed, by government workers. These corporations and their workers can be sued, and take on additional liabilities due to the contracts and laws that apply specifically to them.
Which is to say, you are spot on. Most of the work government engineers do is oversight. Oversight is really important.
I've constantly read that in the US due to ideological reasons the agencies that handle oversight are chronically understaffed which results in delays and inefficiencies. Delays are a big problem in the US. The slower a project is done the more it costs. Without proper oversight, you have an inability to efficiently manage design changes leading to delays and or less efficient construction.
What? Two women suing McDonalds because they got fat from eating too many cheeseburgers is not a regulatory issue. A canoe company being sued for not having lifeguards posted every mile of the river they serve is not a regulatory issue. Parents suing a city because their idiot kid fell off a slide is not a regulatory issue.
America is lawsuit-crazy. Anybody can sue anybody for anything, regardless of whether regulation surrounds the issue or not. If anything, regulation acts as a legal protection against lawsuits, and many regulations are enacted in response to frivolous lawsuits from assholes who think the world owes them something because they can't take personal responsibility.
The litigousness argument seems to be interesting from that perspective, but I'd be hard-pressed to believe that France or Germany are less detail-oriented in their planning, given that the same tools that allow better blueprinting are available everywhere.
Europe is less litigious, mainly because they have massive government oversight and regulations.
https://en.wikipedia.org/wiki/English_rule_%28attorney%27s_f...
In summary, end contracting and subcontracting.
You might claim that there are no state-run construction companies because of free-market ideology or some such bogeyman. But that doesn't explain why the private contractors don't integrate vertically.
My own guess is that even a vertically integrated entity would be risk averse and have to create expensive, slow, internal sign-off procedures.
I also wonder about the effect of building codes, etc.. It might be interesting to plot construction costs and number pages of building code vs. time for the U.S., Japan, France, etc., and see if there are any correlations. That type of plot seems like it might almost be doable.
So basically in digital terms it went the opposite way from HTML where everything is more relative to each other to print where everything is exact.
I wonder if there is some underlying principles hiding in this. Have to think about it some more but thank you so much for your insightful comment.
Now it could be that litigation pays for medical costs, whereas other countries pay medical costs separately from project costs.
Design/build raises the level of dumb even higher by giving all parties powerful incentives to build the cheapest, minimally viable slop possible.
That suggests that U.S. costs are high due to general
inefficiency [...] Americans have simply ponied up more
and more cash over the years while ignoring the fact that
they were getting less and less for their money.
For example, if a big irrigation project will force taxpayers to subsidise corporate farms, the corporations have a big incentive to spend on ads and campaign contributions. Or if you have to give $60 to a private company for tax filing software, they have a big incentive to lobby and make campaign contributions to keep the tax system complicated.
I'm sure construction projects are subject to the same pro-waste incentives.
I'm not sure what the solution to this is - campaign finance reform, perhaps?
Abso-fucking-lutely. I think in order to run at any levels of office, you should be using public money. For simplification, let's say if one wants to run for president, they can only use whatever is in the FEC public coffers. In return, we levy a federal FEC tax to boost it way higher than its current rates. We replicate a similar tax at state and local levels. Completely remove private donations and PACs and all that shit from the lawbooks. A fuckload of people want to run for president? Well, you better get creative with your tiny slice of the pie. Show us how fiscally responsible you really are.
People would scream and holler about it not being American, but it's one of the only ways, I think, to really take a large stab at our chronic corruption.
The idea is a sort of non-partisan "un-PAC" -- a fundraising organization explicitly dedicated to combating corporate political donations. If a presidential candidate or his affiliated PACs recieved eg. $5MM in fundraising from oil executives, the un-PAC would spend $5MM on negative advertising linking him in the public's mind with that industry. If the un-PAC raised enough money, eventually a large multiple of corporate donations could be spent counteracting them, and at some point it would become uneconomical for politicians to accept those donations at all.
We spent about $6B on the 2016 federal elections (https://www.opensecrets.org/overview/cost.php). That comes out to about $20 for every American. That's a big number to beat, but not impossible, and every bit along the way helps.
This should be more obvious in US (and Canadian) politics than it is. But politicians are rarely willing to admit their malleability when it comes to both businesses and non-profit organizations (or special interest groups) influencing them. So the problem persists.
This is a big thing many small-government conservatives seem to miss. They think that capping financing of political parties is anti-business. But in reality it's only incumbent businesses who fleece the government for contracts or exploit government policy to create barriers of entry for their competitors who back ending these policies.
Even though small/medium business represents 60%+ of employment they are largely ignored policy-wise. Then when big-corps exploit market dynamics then ever more regulation are put in place that only hurts the small businesses rather than the big corps (see: minimum wage).
So those of us who support small-government, we're often left with only choosing between big government liberals who are indifferent to the ROI of ever-expanding government power/tax base or small government conservatives who let corporate influence in politics run free. It's difficult to tell which one results in the most abuse these days.
Even if this stops being a problem it has existed for decades and these 'gray' connections between politics and business is everywhere in North America. It would take decades to reverse their influence which is a shame because it's very existence is self-reinforcing (much like those organizations whose very existence depends on the continuation of government financing as opposed to depending on their utility to the public).
What in particular would they not be allowed to use private money to do?
Would individuals that aren't running be allowed to use private money to do those things?
Nobody in their right mind would elect me, but I have yet to see a fair way to exclude me.
But that requires to unfuck the entire american political system and weird fascination for corporations being people, so this might take a while.
Which leads to the other possible amendment, up ending the monopoly the political parties have on the primary voting system. One way that sounds nice, but is specious, is destroying the political parties - simply disallow their existence. Probably better is to change the voting system:
a. Range or preferential voting in a single election rather than the current tribal primary system which is not controlled by law but by each political party. Primaries encourage members of the tribe to vote in a reactionary way, the extremes of each party tend to win.Range or preferential voting is better than runoffs, it's basically an instant runoff system.
b. Get rid of the Electoral College. The idea it will keep us from getting incompetent presidents is pretty much proven wrong, plus it's been broken again by the two political parties who have gotten states to enact laws that require electors explicitly to not vote their conscience, under penalty. So it doesn't at all do what it was designed to do; and it comes from our racist slave history, the southern slave states wouldn't ratify the constitution without this provision. So get rid of it. The only thing worse than tyranny of the majority is tyranny of the minority.
Anyway, it's not going to fix itself. People will have to want to fix it.
Imagine that you are the Sierra Club and you want to block construction of a new highway. You can lobby:
* The President, who signs the appropriations bill * EPA, Department of Transportation, and any other three-letter federal agency that gets to weigh in on the project * Congressmen and Senators of affected regions/states, and remember that Senators can filibuster legislation to make it require a super-majority * State governors * State legislators * Local governments whose land the road will pass through * Indian tribes, if their land is affected
And if above doesn't work, you can sue in federal/state court.
All that adds to the time and cost of a construction project, assuming that it will be even approved. And once its approved? You still have a million ways to delay/obstruct the project through lawsuits and lobbying the bureaucratic process.
That's why there are no 'shovel ready' projects. We'll never be able to build another Hoover Dam or the Interstate Highway system.
Obviously other countries have division of power too. But the effect is much less pronounced.
EDIT: As for why the U.S. of a century ago wasn't as paralyzed, well, that's partly because of the growth of the administrative state (bureaucracy), growing importance of interest groups as sources of campaign funds, more regulations in general (which makes lawsuits possible), and fragmentation of party discipline.
Damming our rivers like that has had such terrible and unforeseen environmental and economic consequences that I can only hope we un-dam wherever possible.
Democracy is, after all, a system in which a determined voting majority can use the hammer of the state to extract wealth from the rest of the population. Many people vote in self-defense.
I know that arguing for smaller government and less democracy is an unpopular position, but it is the only way to achieve long-term success. The areas of the economy with the most government involvement and regulation are where we find costs ballooning out of control: healthcare, prisons, infrastructure, student loans, military. Continuing on the present course is not sustainable.
Come on. Really? Healthcare is heavily regulated, yes, but a lot of that comes from regulating a fucked up mix between public and private institutions along with insurance companies thrown in the mix. Single-payer would absolutely lower these costs substantially. That's the opposite of less regulation.
And prisons? We have private prisons...as in, corporations that have a financial incentive to put more people in prison. Not just that, they lobby the government to create more laws or have stricter penalties to keep more people in prison. You can't seriously tell me that's too much regulation.
Infrastructure? Absolutely needs to be government run. Private companies have no incentive here, unless heavily subsidized by the government, in which case they would just balloon costs as much as possible in order to squeeze as much blood from the stone as they could.
Student loans...if a dog put on a pair of glasses it could get a student loan. That's a lack of regulation. The only real regulation making it balloon out of control is that bankruptcy doesn't absolve your loan debt (whether it should or shouldn't, that's another issue).
Military, I agree with you on! Less military spending! We can use the money for (public) schools and make sure our country isn't made up of complete imbeciles in 20 years.
The US has the most money in politics per capita in the western world, and yet, given how much a company can get per dollar spent, lobbying and donations are an absolute bargain. Handing money to a politician directly is very effective, but in practice, even a lobbying group that didn't spend a dime in elections would still be worthwhile for industry groups.
The dynamics of collective action don't even need government to be true: You see the same behaviors in large corporations, where departments can cause a lot of overall damage to a company by causing small inefficiencies to everyone else: Not enough to organize against. Having worked in government and in big enterprise, if anything government is better, as the lobbying and the cajoling is far more visible.
The solution to the general inefficiency problem in infrastructure in other countries is, against what you would think, is to align goals empowering government vs contractors. The places where we have more inefficiencies is where we are trading not money fork work, but knowledge for expertise: The more layers of expertise we borrow, the harder a contractor is to replace, and thus the higher the final markup.
There's a great study on this regarding the Madrid subway. The subway authority has a budget, and in practice it will go up if they have more ridership. It's in their very best interest to have a large, high quality network, so to keep costs down, they do most of the planning themselves, have a lot of the engineering in house, and most of what they farm out is basic construction and drilling: They'll go as far as to give different contractors different sections to drill, because different sections of tunnel are easier to handle with different techniques and machinery. It's not as if Spain doesn't have insane infrastructure inefficiencies overall, but in this case there's enough goal alignment, and enough decision making outside of the political arena, that they save an order of magnitude per kilometer and per station than the US equivalent, while typical highway construction, decided at the political level and handed to big contractors, aren't really any cheaper.
In software terms, it's the difference between handing the work to a small startup that lives and dies by its runway, or handing a project to big software contractors, healthcare.gov style: The big project handed to the big contractor will very rarely work right, and it will be incredibly expensive.
But these are things we as a society have deemed important. Its not acceptable for lives to be lost. It's not acceptable for construction workers to accept low wages. It's not acceptable to recklessly degrade our environmental resources, and it's important to have diversity in this industry.
I don't know if it's true in other countries, but it seems the USA vascilates between priorities depending on the public administration. I am young so my experience is short. Bush saw a real estate bubble, Obama saw an insurance bubble, Trump et al aim for a construction boom. I would add that in New York my home state, a Democrat state, there is a large infrastructure program starting, so it's not just Republicans.
I will give you some (sparse, 1 every 10 years) datapoints:
1983 - 2 or 3 copies of any drawing or letter/calculation
1993 - 6 to 8 copies of any drawing or letter/calculation
2003 - 12 to 20 copies of any drawing or letter/calculation
2013 - 16 to 24 copies of any drawing or letter/calculation
And of course this increase of copies is due to the increase in permissions/authorizations/approvals/checks needed and due to "stricter" (actually only more complex) construction codes and changed calculation methods I would say that the number of documents (before making the copies) has increased by 1.5x every ten years, i.e. something that was built on 1,000 drawings/documents in 1983 was built in 2013 on the basis of more than 3,000.
The number of people involved (not labour, but management, engineers, surveyors, technicians, etc.) need also to be multiplied by a factor of 3 2013 vs. 1983.
The actual production (thanks to a few computer-related innovations and the availability of better, bigger machines) has increased, but all in all you do the same amount of work with less people (labour) and lots of people looking at what the workers are doing.
This is a classic meme, but is not that much far from reality: https://web.archive.org/web/20131005125257/http://ajotube.it...
Google Translate: >This tunnel under the A12 is one year old, and closely sealed EDE - Just a year and a day, it's already waiting under the A12 at Ede: a large tunnel, intended for the Park Avenue, the route that must open in Ede East from the A12 to the N224. As it turns out, it will take another year for road construction.
The audacity of the thing and sheer impossibility of doing anything remotely like it in today's America makes it seem like a relic from an ancient civilization.
It felt like visiting the pyramids in Egypt.
They aren't gifts bestowed by the gods upon the completion of sufficient human sacrifice. Deaths and injuries are minimal with construction equipment and safety techniques.
It's also hard to imagine building the interstate highway system today but, in general, a greater concern about the environmental impact of infrastructure projects isn't really a bad thing.
Yes, but Japan and Western Europe surely care as much about the environment as the US does, don't they?
Plus a lot of the times you have a incredibly amount of money spent on environmental review for things like, a housing complex in the middle of SF being torn down to make way for a taller housing complex. That's not going to impact "the environment" as the term is usually used. It's not dropping new development in a forest or building a dam.
https://www.youtube.com/watch?v=J7CmcsOubZ8
No hard-hats
No shirts
Free climbing tower with no safety lines
Cigarette hanging from mouth
No way they could ever pull this off today. No way the Apollo program could be pulled off either.
It is no wonder "farmer" is one of the most dangerous occupations in the US. They're the last to be impacted by health and safety regulations.
In that context it's not at all impressive that they're just getting past beating 60s technology, and not even in all cases. Yes they've got reusability, but there's still nothing as big as the Saturn V.
Edit: To clarify, I think SpaceX is very impressive, but I think we as a species are doing proportionally less impressive things than in the 20th century given the level of technology we have. It's not their fault we aren't spending multi-percentage points of GDP on similarly impressive projects.
One of my favorite photos looks down on him running a small horizontal drill rig into a cliff while suspended on a rope several hundred feet above the river. Just a rope knotted around his waist, no harness.
Definitely would not pass today's construction safety regulations.
I agree about the relic-feeling. I guess there were giants in those days.
For the curious, here are some photos of that place:
https://pemco.com/blog/Lists/Photos/denny_creek_viaduct_capt...
0 - https://www.scientificamerican.com/article/will-a-nicotine-p...
And people were happy to be working because they were in many cases about half starved. So they put up with it.
Contrast that with now. Medium articles about toxic passive aggressive workplaces from people making $120K/year and who spend a lot of that screwing around and in meetings. In air conditioned offices. And that's just the start!
Not suggesting we return to the bad old days, but that is one of the major differences. Nicotine is an extremely minor one.
Things like CAHSR instead of agreeing on a goal and deciding we should have a CA-wide rail system, so then establish a division of Caltrans which we fund to incrementally build/acquire/run a network through ROW acquisition, running DMUs on the routes in the mean time, making it compatible with existing systems, etc. instead becomes one giant $60b acquisition that is master planned for a multi decade time frame to be built almost entirely as a stand alone system the benefits of which can't really be enjoyed until decades in the future.
1. http://blakemasters.com/post/23435743973/peter-thiels-cs183-... (Section I. The End of Big Projects)
A certain portmanteau describes it perfectly:
The obvious solution here is for the federal government to have less of a role in infrastructure spending. It should only be infrastructure that is nationally or regionally strategic. The rest should be handled by the states. In turn the budget (and thus federal tax) should be reduced by this amount for the states to pick up with their own taxes. (Don't get me wrong I'm not a full libertarian states rights type person but in this case it's pretty cut and dry situation where states should handle their own infrastructure planning.)
Admittedly anecdotal, but after having lived near two major DOE national laboratories (where >40% of my neighbors worked at the lab), I wouldn't be surprised if 60-80% of the workers at these labs could be eliminated under a combination of audit-based reform, regulatory reform, and management changes. Without any change in output or results. I've listened to descriptions of what people do at these labs, and it blows me away how low productivity they are compared to the private sector. I've known people who work entire workweeks that could be consolidated into 3-5 hours of work, and they're willing to admit it. In fact, those that would try to change from within have told me they would feel vulnerable to retaliation if they went through with it.
And that's before we get into the shitshow that is federal contract work. We've turned federal contract work into a goldmine for whoever has enough lawyers to win a bid. And we don't even know how many people are employed doing that contract work [0]!
At this point, meaningful reform means taking 10's of millions of people and forcing productivity on them to the point where most of them are unnecessary. We could probably double the unemployment rate with the right reforms. That's why it won't happen.
[0] http://www.govexec.com/contracting/2015/03/even-cbo-stumped-...
I mean, the federal government is supposed to create jobs by spending money. Doesn't matter what they spend the money on.
The only acceptable way to measure economic output is in terms of the dollar value of all the goods and services bought and sold. It could consist of marijuana farming, muscle car paint jobs, bass fishing lures, watery beer, custom gun barrels, cow-brain sandwiches and East European strippers. Doesn't matter. We can't go around imposing our value-based notions of "bullshit jobs" on top of that measurable dollar amount.
That wouldn't be economics.
Infrastructure? Same thing. There's something distinctly American in how slow and expensive it is. These are systemic issues, not some single-cause thing that [liberals|conservatives] can finger-point to a partisan villain.
Where's that?
Where Japan differs is strict price controls - all medical procedures and products cost a fixed price, set by a government panel. This helps guarantee that the various private health care providers can make a profit and stay in business, but are not profiteering or abusing customers.
Healthcare in Switzerland is universal and is regulated by the Swiss Federal Law on Health Insurance. There are no free state-provided health services, but private health insurance is compulsory for all persons residing in Switzerland (within three months of taking up residence or being born in the country).
> and by a charge of 10% of the costs over and above the excess. This is known as the retention, and is up to a maximum of 700CHF (PPP-adjusted $429) per year.
That is absolute peanuts in terms of costs in the US.
And yet, even that delivers a cost structure that is infinitely preferable to our circus over here.
I personally favour socialised medicine. The point is that whichever extreme you go to, it's going to be better than the morbidly obese, hyperinflated, worst-of-all-worlds catastrophe in the US.
Just more regulated.
No one wants to send their kid to an unproven, experimental university. No city wants to beta test a new style of road building. No patient wants to be the first to try a new treatment. We are so dependent on these things that the cost of failure is astronomical. Because no one is willing to try new methods of doing things, costs never go down. There are marginal improvements, for sure, but no disruptive changes.
It feels like a weird manifestation of NIMBYism. We all want innovation, but we want to test it on someone else first.
Plenty of patients are willing to try new treatments. New treatments are incredibly expensive, but unlike in other countries and industries, old treatments/technologies continue to get more and more expensive. The problem there is that pricing is totally obfuscated, and providers are able to get monopolistic profits as a result. The government could step in and hold down prices, as they do elsewhere (or at least require transparency), but their pockets are too stuffed by the monopolists to do anything. "Free markets!" they declare, destroying capitalism.
I strongly suggest you read "The Complacent Class" if this is a subject that interests you
http://www.remodeling.hw.net/products/house-systems/californ...
I was surprised the article didn't address regulation much nor the fear of litigation (when I googled for canada pex legal, I found class action suits...)
The towns there are small, but full of people hungry for opportunities and good work.
Yet everywhere you go there is no work to be done. Businesses—even big box stores like Walmart or Target—are closed down. Homes lay vacant despite their reasonably cheap (at least for someone living in Silicon Valley) $20,000 price tag. Even churches in the area have to close their doors but leave their steeples standing, unable to draw in an audience or—and most importantly—any money to maintain things.
This isn't Detroit I'm talking about, it's a fairly typical suburb of a larger metropolitan area in the midwest.
The answer for many of these people has largely and loudly been: "Bring back jobs from overseas! Stop outsourcing work to China!"
But of course that's not a valid answer, since the problem is that the jobs these towns once knew now belong to machines which can work tens of times harder and longer at a fraction of the cost of their former human counterparts. Yes, some of the work has gone overseas, but much of it has just become "modernized" by technology.
And here's the thing: the infrastructure for things as simple as Internet access in these parts of the US just isn't there.
So nobody goes to school to learn programming or design or how to be a modern entrepreneur because they (the individuals and schools) just don't have any connection to those parts of the landscape. And when they do, their model is wildly out of date.
One of the Universities I visited and, later, a high school had each just opened a computer lab for students in which the goal wasn't to help students learn programming, or design, or anything like that, but merely how to type.
This of course added on top of the decrepit roads, buildings, etc. The state is wildly out of money because it can't put people to work, and the people can't work because the infrastructure just isn't there. It's depressing to see, really. I want to know how we can improve this, and what someone living on the other side of the country might do to help.
It used to be that the Midwest exemplified "typical America". Now, that role belongs more to the Southwest, Texas, the New South, etc. Dallas and Phoenix probably represent the average, everyday American more than Chicago and Detroit do nowadays.
Why should everything be about big supply chains run by big business powered by big finance? Maybe the Amish have the right idea.
http://slatestarcodex.com/2017/02/09/considerations-on-cost-...
http://slatestarcodex.com/2017/02/17/highlights-from-the-com...
That is something that would be good to understand with precision, hence the study.
http://www.businessinsider.com/giant-chinese-infrastructure-...
It's hard not to be impressed by that list. And China is undertaking these scale projects abroad as well from Latin America to Africa.
It's should be no surprise that you get really good at something the more you do it. What was the last project that the US Federal Government undertook on a similar scale as one of these? "The Big Dig[1]"? Notable for being the most expensive highway project in US history and yet served only Boston?
The US seems to spend interminable months squabbling over whether or not its un-American to use imported steel to replace parts of its crumbling infrastructure(see Bay Bridge, Tapan Zee projects etc.) while the Chinese seem to spend that time actually executing the project.
Just pay the same Chinese companies to build our roads, cities and railways.
Driving through the Holland Tunnel into or out of NYC during rush hour its not hard to quantify the cost to the economy in terms of lost productivity.
Decades of expertise might be a reason here, France has the longest amount of (high speed rail miles / country area), and the non high-speed network is also huge. It's also possible that the monopoly of having only one, state-owned, railroad company (SNCF) let that company negotiate/choose better prices much more aggressively than if there was many companies. I don't think it was stupid at the time to have such a state-owned monopoly for building this key infrastructure.
Also I'd think that with that big of a network, some things start to become less costly because of economies of scale. Last April SNCF bought 30 trains to Alstom for 250m€, with the current US infrastructure I doubt the US needs that many trains. If one day like France they have 450 high speed trains, maybe it'll cost them less to have more built.
Japan and France are dense countries, the area of France is roughly equal to the area of Texas, it's hard to imagine 450 high speed trains there, where they're struggling to even get one high speed rail line between Houston and Dallas.
https://en.wikipedia.org/wiki/DART_Light_Rail -> System Length 93 mi (150 km) https://en.wikipedia.org/wiki/Trams_in_Melbourne -> System Length 160 miles (250 kilometres)
However, your point that the decentralization plays a difference is very valid. The Melbourne network is a dense grid which serves a much more compact area whereas the Dallas system consists of a small number of lines that stretch very far out into the low-density suburbs. Hence, far fewer people are near a DART station.
0 - https://en.m.wikipedia.org/wiki/Light_rail vs https://en.m.wikipedia.org/wiki/Tram
Just simply incompetent (at best) people milking the projects for insane amounts of money while adding no value. Actually in many cases adding negative value.
Basically low-level corruption like scheduling an extra couple construction laborers to a project that only needs half of what you assigned.
It's the same problem with the means-tested entitlement programs in the US. Sure outright fraud (e.g. welfare queen) is not worth talking about it's so rare. But the day to day low-level fraud that is endemic and pervasive to the system? Never counted in any studies.
The general incompetence and fraud has slowly (the older I get) become the norm. It's rare you come across competently done projects these days that are not swamped by fraud and waste.
I guess my point is that it's so common it's simply become normalized these days, and people no longer even see it as fraud/corruption/sloth - it's simply the way things are. It's not just construction - it's practically everything. I guess it's pretty similar to cost disease.
Otherwise, a lot of the "corruption" is just federal contracting hoops and hurdles--again, in place, theoretically, to limit corruption. More irony: Republicans are, essentially, arguing that old-fashioned cronyism is more efficient and cost-effective. Last laugh: It might be.
Come now, citizen, you used the wrong word.
In newspeak the word is "Profit".
Every company working on a project deserves to make profit, right? and they deserve to make more profit than ever before, right? So they made $100 million in profit 10 years ago, $1 billion last year, you know for sure they are going to make > $1 billion this year, otherwise they are an outright failure.
I was reading recently about corruption in Jared Kushner's businesses; these detail some of the ways and means it happens: City approves large fancy tower complex, but construction company hires expensive out-of-state workers, fails to pay taxes that benefit local schools, etc.
- http://www.baltimoresun.com/news/maryland/baltimore-city/bs-... - http://www.dailykos.com/story/2017/5/29/1665349/-Meet-Jared-...
So she will be working on the project for 30 years; her entire career... something is pretty broken about the government structures around these projects.
Earn a million dollars worth of either earned or unearned income, and you pay either (simplistically) 39.6% on earned and 23.6% on unearned income. That's too f'n goddamn cheap. It encourages peopel to pay that tax and put it into one of the above, rather than take the risk by starting or growing a business and taking a tax deduction for business expenses.
When the silent generation was in charge of things, income tax was never less than 75% for the top tax bracket, for over 40 years. And during that time there was massive private and public infrastructure being built, and we didn't have a $20 trillion national debt.
I wonder is our construction regulations are much more stringent than other western nations?
Italy, for example, is a real estate developers nightmare. Every rock or patch of dirt has a decent chance of sitting atop an Ancient Greek or Roman ruin, and the process to ensure that construction won't damage any heretofore unknown ruins is agonizingly slow.
It boils down to political power and cultural preference. Americans are fine with tearing down almost anything (except designated landmarks) to build something "better" than before.
Unless that "anything" are super-expensive detached single-family homes on relatively large lots, and the proposed replacement is something that increases density. :-)
Oh, I'm obviously taking a pot shot at the Bay Area, but the influential underlying psychology exists to some extent everywhere else in the country, too. The vast majority of the country has zoning rules designed to prevent any expansion that isn't horizontal.
And this isn't unique to that area: Transform a cornfield into low-cost housing next to a "nice" area. Put a halfway house in place of a fire-gutted house. Even worse, put in a prison (which keeps crime rates lower than average).
The Crossrail project in London had over 100 archaeologists working on it:
http://www.crossrail.co.uk/sustainability/archaeology/
Edit: The Forth Crossing bridge uncovered sites roughly 10,000 years old!
https://www.bostonglobe.com/magazine/2015/12/29/years-later-...
I suspect this is because there is a high incentivize to get a toll road up quickly and start generating revenue to pay back the initial investment.
Residents generally hate tolls, but its a good motivator for infrastructure to go up quickly.
I never understood why similar incentives wouldn't kick in for mass transit projects.
(This is the third reboot of this project... or maybe fourth. I've lost count.)
Not only does the local transit agency have _nobody_ who can manage the project, but the government doesn't even have the capability to assess contractors who might do that job. So they are totally at the mercy of commercial firms, who get paid whether they deliver or not.
The latest move is to hire a project manager for about $400k/yr (on a contract basis, naturally) to try to "save" the project, which has already spent $1 billion, yet has not put a shovel in the ground. (Ok they did fix up one bridge, woo hoo.)
Unfortunately, this PM is only one guy, and he's being assisted mostly by (you guessed it) more contractors. Even more comically, the contractors who are assisting him are the exact same ones who blew the first billion dollars.
Needless to say I don't have a lot of confidence that the incentives are aligned with me ever riding on this line.
https://en.wikipedia.org/wiki/I-35W_Saint_Anthony_Falls_Brid...
When there's a replacement bridge under construction around here, business at the local dunkin donuts goes up ALL DAY, not just at lunch and shift change. Everybody's there: laborers, supervisors, delivery drivers, managers, engineers, owners' reps from the state DOT and the towns involved.
And, in Massachusetts we have a peculiar extra cost: The police force has a monopoly on doing the traffic safety work that flag people do everywhere else. They have the right to arrest people who work in or near roads if they start working without a paid police detail on the site, or keep working after the police detail leaves. Slows work down; gives people a reason to wait around after arriving on the job.
Here in Hawaii, Laborer Prevailing Wage is $50+ an hour, toss on our mandatory insurances worker's comp and taxes and it costs almost $80 an hour to pay that worker before profit and other overhead.
Laborer rates vary by locality, but no construction worker who gets more than 3-months of Davis Bacon pay is averaging $35,000 a year it's going to be closer to $50,000.
Whenever we do any State, or Federal work there is a huge stack of submissions that have to be made, I kill trees like it was my job, shoveling paperwork out the door for these projects.
Maybe this is mere cynicism, but if the workers and materials don't cost that much more than in France, my immediate reaction is "excessive profiteering", or, to put it another way, "because we can, and nobody is stopping us".
The same applies to our unreasonably high education costs, and healthcare (although that's much more complex an issue, but at its root, it is too many fingers in the pie).
I think it comes down to new non-functional requirements: safety, environmental concerns, accessibility, liability protection, etc. With these requirements, Paris or London or New York would have never had a subway system in the late 1800's or early 1900's. By now though, all these systems have been maintained and modified to comply to the new non-functional requirements over time.
So if you added the accumulated cost of running a subway system today, while adding all the maintenance costs over time, it might be the case that the cost of building the same thing from scratch would be cheaper, but unfortunately without the benefit of having passengers enjoy it (and pay for it) for over 100 years (thus partially subsidizing the maintenance costs).
So you could even consider something as rigid as a subway system built in an "agile" way, with a quick and literally dirty MVP out of the way early, and additional non-functional requirements added over the course of decades. It's just that those requirements weren't known or wanted initially.
Now would it be ok to do the same now? Have a subway system in a city that needs it, but without bathrooms in stations, with no pollution requirements initially, not accessible to the disabled, (name your other requirements not necessary for a MVP), but with the benefit that at least it exists now, it can be subsidized by passengers that are willing to use it, so that over time those other requirements are met. Better have them later than never.
The smaller 25k person town I live in doesn't nearly have the same issues. We've managed to put up new school buildings the last couple of years with not too much fuss and on budget. On the other hand, the town is relatively well off and there is seemingly good community participation.
Most infrastructure projects have incentives to delay. The longer the project, the more time for more people to make more money.
https://www.tesla.com/gigafactory https://en.wikipedia.org/wiki/Apple_Park
I think the Federal Government looks at infrastructure as jobs programs and this is why they are drawn out. The job is the end not the thing they're actually building.
For example: Mayor Ed Lee being fast and decisive. Building teacher housing during such a state of emergency that SFUSD has trouble filling its open teaching positions. About $300,000 of city money budgeted per unit, and it won’t be open until President Trump’s successor is halfway through his/her first term, if we’re lucky. http://www.sfchronicle.com/news/article/Mayor-comes-up-with-...
That's a tall order. It'd be nice to see the article suggest a way to accomplish that.
The contractor was not experienced and totally muffed the job.
Rather than penalizing the contractor, they paid the contracter to build the road again, plopping asphalt on top of the concrete after grinding the concrete and redoing the joints that they screwed up. The asphalt hasn't lasted that long, so it will need to be redone again soon.
So, the contractor was inept, but so was the government overseer.
Yes, the US is overdue for infrastructure investment. Yes, its costly and unproductive Federal and State entitlement obligations compete for these dollars. But the expense of building infrastructure in the US is justified by the longevity of its engineering and build quality. This is not the case globally.
Railway systems in Japan and France (taken as example in the article) are high quality and last long as well. Yet construction railway is way less expensive there.
Not only this but the engineering challenges overcome in France and especially Japan are much more than we would likely face here in the continental US. Japan has rail service between islands under the seafloor in one of the most seismically active areas on earth. I have a hard time imagining us in the US matching that engineering achievement without huge cost, debate, litigation.
What do you mean by land use issues?
Japan isn't using maglev for commercial high-speed service yet. Japanese high-speed trains have steel wheels that make contact with a steel track, just like regular trains. Their maglev trains are limited to experimental research and development [1], or low-speed urban transit [2] (which was built as a showcase for a World's Fair).
France's and Japan's high speed trains are based on the same technology as their lower speed counterparts, including American freight rail. How does a differing level of experience maglev technology cause a difference between different countries' quality of infrastructure, when that technology isn't being used?
It doesn't address any of the numerous political issues with American infrastructure, but it could be good for repair and maintenance
That sort of thing should be readily explained by accounting: follow the money.
Public infrastructure should be financially transparent.
Municipal or County level projects probably have so much variability that it's hard to make any definitive statement.
http://www.freep.com/story/news/local/michigan/2017/01/05/si...
The problem is that labour is simply too expensive now. And, to a lesser, extent, so is real estate.
In the 2000s Australia experienced an unprecedented resources boom fuelled by China's growth. This especially impacted Western Australia and Queensland. WA in particular is rich in iron ore, oil and gas and other resources.
In Perth in 2000 you could buy a 70s 3 bedroom house within a few miles of the city center for <A$100k. By 2005 it was $350k. Capital projects for the resources industries were in the works amounting to over A$100B. All of these have a huge construction component that soaked up the construction supply.
In the 90s you could build a house in as as little as 3 months. From the early to mid 2000s that time frame is now closer to a year and costs 5 times as much.
So homes became much more expensive. Of course building commercial and industrial property also got more expensive. Property costs are a significant input cost into any business that operates there. Increased residential costs soak up disposable income and lead to wages growth. Increased wage costs makes things more expensive and the cycle continues.
So Perth transformed in the 1990s from a city that was very affordable with a good standard of living to one of the haves and have nots. The haves are those in the construction and resources industries. They were making crazy money. Everyone else was pretty much a loser.
Arguably this is dutch disease [1].
So now the city wants to do things like build train lines. Well labour is stupidly expensive because the cost of living is so high and buying up real estate to put said train line on is also super expensive.
A lot of people don't seem to feel this because they're incumbents (ie they bought their houses 15+ years ago). Others have immigrated so have foreign money bypassing the local economy.
So look at the Second Avenue Subway as one example. $17B for a few miles of tunnels? Really? Well that's the cost of labour in the US and real estate in Manhattan. Since it's underground I don't imagine a large percentage of the total cost is real estate either.
So it seems like when a lot of this infrastructure was built, the relative cost of labour was much lower. The standard of living was also much lower, apart from the 1950s and 1960s, which can be viewed as a transitional anomaly more than a normal equilibrium.
Also, I don't think the article mentions the benefits costs: healthcare and pension costs for government and union workers in the US are higher than in other countries.
http://www.npr.org/2017/05/31/530843665/blame-the-top-20-per...
Are your costs Hawaii costs as the username suggests?
We are typically lucky to make 10 to 15% profit on Prevailing Wage Work, (Federal or State).
We do occasionally but it's generally luck coupled with good management and having the ideal crew on the job.
https://labor.hawaii.gov/rs/files/2012/12/WRS489.pdf
Prevailing Wage Schedule for Hawaii for Public Works. New York localities are even higher.
We do laborer classification work, with some small percentage of "Operators". The skilled trades are even higher.
The next bump for Laborer 1 (what we pay the workers when they are performing asbestos removal) occurs in September 2017. At that point they will be making $55.66 an hour.
We pay the entire Base wage and Fringe to the workers, as opposed to union shops.
Just recently, I was watching a housing development in San Francisco, and the neighborhood merchants’ association filed a CEQA (California Environmental Quality Act) appeal to the Board of Supervisors claiming the EIR (Environmental Impact Report) was inadequate. Strangely, the Board of Supervisors refused to consider the merits of this claim, but kept delaying the hearing to talk about it.
After 6 months, the merchants’ association withdrew their complaint. Was it because the EIR was fine after all? No. It was because the local area’s supervisor, the merchants’ association, and the developer did backroom negotiations until the developer gave enough concessions that the merchants’ association was satisfied. These concessions will inevitably come out as higher prices for housing. https://missionlocal.org/2017/05/deal-approved-to-green-ligh...
for instance: countries X, and Z could both have the same list of rules on the books, but folks in country X actually comply with the rules even when nobody is looking, whereas folks in country Z just look at the rules and ignore all the ones they think are stupid.
He asks "How can you afford such a house if you a just a government official?"
The European says: "Look out of the window. can you see the bridge?"
The African: "Yes"
The European: "See, the government paid for two train tracks but the bridge has only one."
The African says: "I understand".
2 years later the European official visits the African in Africa. He invites him into his house and his house is a luxury palace.
Now the European is shocked. He asks "How can you afford such a palace? Recently you were so impressed with house and now you live in a palace?"
The African says: "Look out of the window. can you see the bridge our taxpayers paid for?"
The European: "No."
s/our/your and you have an explanation why many projects funded by the richer Western governments in any development country (no matter if Africa, Asia or Eastern Europe) tend to fail. Endemic corruption (and preventing it) is not very high on the radar of the funders, all the politicians are looking for when funding development projects is "we spent X US$/y % GDP in development aid", but unlike private charities which have to prove that they're not wasting money, there's no incentive in government-supplied monetary aid to check for efficiency.
Same goes for food or clothing aid - Europe just dumps excess (food) or waste (2nd-hand clothing, where the "cream" goes to Eastern Europe and the leftovers to Africa) onto developing countries without taking care to not destroy local industries. As a result, refugees come in, and most often those politicians allowing the ruinous exports in the first place are the first ones to complain about the refugees their very own actions caused.
It's sick.
Yeltsin visits US on an official trip; Clinton is hosting. The banquet is lavish, and after gorging himself on delicacies, Yeltsin asks Clinton where the money for all that came from. Clinton gestures him to the window, and points at river, with bridge in the distance.
"See that bridge?"
"Yep."
"We budgeted 100 million dollars for it, but our innovative construction companies managed to complete it for 50 million. The rest of it went into our reception fund".
Next year, Clinton visits Russia. The banquet is even more lavish. Clinton asks Yeltsin the same question. They walk to the window, and Yeltsin gestures at the river.
"See that bridge?"
"Um... no?..."
"But we budgeted 100 million dollars for it. So..."
Which, I guess, also tells you a lot both about how US was perceived in Russia back then (I'm sure the notion that American contractors could do the work under budget is utterly unbelievable to most Americans; yet its believability is at the heart of this joke).
We detached this subthread from https://news.ycombinator.com/item?id=14453781 and marked it off-topic.
In China, they're building mad infrastructure--big state. In Europe, they're providing a good quality of life--big state.
The "small state" places I can think of, none of them are places people are flocking to for an improved quality of life.
Why can't we see how well this idea works out in practice? Why does no one ever say "look at [minimal-state place X] and see how people are happy, thriving, and free"?
https://en.wikipedia.org/wiki/Rail_transport_in_Japan#Major_...
It's really hard to claim libertarians believe uniformly in some things (they're wildly across the board on pretty much every issue), but most libertarians I know would cringe and fight back on higher gas taxes and airport fees.
To answer your question more scientifically, a preponderance of the evidence does suggest that countries with smaller governments as a percent of GDP do experience higher growth in standard of living [1]. So if your goal is to maximize long term standards of living, you would tend to support a relatively smaller government than is common among rich countries today.
[0] https://www.theatlantic.com/business/archive/2016/10/no-not-... [1] https://taxfoundation.org/what-evidence-taxes-and-growth
I suspect these studies are massively skewed by low tax asian countries which have had high growth due to the catchup effect, and very high savings rate. Also cultural peculiarities means e.g. Countried like Japan doesn't need as much welfare system. You already got lifelong employment and companies trying to keep employees in downturns.
What I like about China is, it illustrates how effective a mostly benevolent dictatorship is. It is the optimal political system imho, provided it remains benevolent of course, which is no small feat.
Provided they don't trip and fall, if China is not the absolute supreme leader of the planet in 25 - 50 years I will be shocked.
But rather than getting bogged down in quantifying the exact degree of its benevolence, it's key not to let your larger and more important point get lost alongside that red herring, and it's one that gets little press here: China and SE Asia have shown, over a period of decades, that heavy-handed state-guided development alongside market forces is a credible third alternative to the One True neoliberal agenda the West has pushed since the 1980s.
Japan and South Korea also "grew up" in a heavily state-sponsored manner and with closed private economies. Despite its visible lack of conformity to official American prescriptions about how to do things, the US tolerated it during the Cold War as part of the general bargain with those countries, in which they were allowed to develop as they saw fit and to have unrestricted and preferential access to America's bottomless consumer market. In return, they paid in unwavering anticommunist allegiance.