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Comment by simonw | Hacker News Reader

The most interesting thing about this article to me isn't the "spending too much on consultants" bit, it's the bit where the agencies in charge of budgets for these enormous projects no longer have staff that are capable of managing them, having outsourced that institutional capacity to consulting companies for far too long.

This seems like a viciously difficult problem to solve to me. How do you hire someone for a city's transport agency who has the ability to manage a multi-billion dollar construction project? Anyone with those skills will surely be able to earn 10x more in the private sector.

But without that talent in-house, even the consultants are frustrated (or at least the ones that actually want to deliver projects) because they don't get the answers they need from their customers in order to move ahead with projects.

View on HN

The absurd part of this is that the solution is so clear and easy in the United States: Use the scale of the federal government.

We got to where we are, in the U.S., because we've got massive inefficiency in state and local government. There's only a handful of cities that are massive enough to do projects that would require hiring highly paid specialists to manage these huge projects. Similarly, most states have very few opportunities for long-term career-building public project management. (There's like 3 west of the Mississippi.)

But consolidating all of this expertise in a federal agency tasked with planning and executing massive public projects would allow us to hire career-oriented planners and keep them busy for ever. It's how we run the military, of course. And, ironically, the military is a leech on the U.S. taxpayer, massively bloated and throwing money at foreign problems in the most ham-fisted way just to justify itself – but if you shifted even 20% of the military's spending to a domestic public works department, all that money would not only be to the benefit of the U.S. taxpayer, but you could hire tens of thousands more American workers to do the jobs. It's a win-win for everyone. And it's probably something a lot of legislators could get behind.

Not only that, but a federal public works department would quickly be able to aggregate learnings on improving efficiency – knowing what works and what doesn't – while also being able to wield the power of the federal government to negotiate lower prices.

Tunneling and underground work is a uniquely localized specialty. A national organization that runs underground work is going to still need specialized knowledge for each region both because of local ground conditions and local contracting practices. It is very difficult to export know-how from one area to another. Site sampling/testing practices are not even consistent across regions.

Beyond that, as someone with extensive experience with underground projects and the federal government, the federal government doesn’t pay nearly enough and its benefits lag private industry significantly at this point.

It’s also worth noting that this agency already exists somewhat but spread across departments (FHWA, EPA, etc.). They still outsource to consultants.

Out sourcing to consultants is not the problem. The problem is that we don't have the ability to manage those consultants. We are also outsourcing management of consultants, including gathering requirements. At no point does anyone get cost control as part of their goals, and in many places they get instructions that are contrary to good cost control.

You honestly think that the federal government would be more effective at managing consultants? The majority of additional costs in any underground job fall into one of two buckets: third party disputes or differing site conditions. A national agency will do no better than a local agency at managing these and will probably be worse because they won’t have any relationship with the locals. At the end of the day an infrastructure project has to be built locally, not in Washington.

I won’t even touch the fact that most infrastructure jobs are only partially funded by the federal government with the remainder funded by local tax or rate payers. The federal government has no interest in cost controls beyond their own money and the residents of State X have no interest in funding more of the infrastructure of State Y than they already do.

I didn't say anything about federal control. Others have, but i'm not seeing anyone interested in solving the problem at any level

Yeah, but that's technical knowledge, not project-management knowledge.

The article argues that the real gap is not in people who know how to build things, but in dedicated civil servants who know how to manage those people.

And that is a much more transferrable skill than "how to build this kind of rail tunnel through that kind of soil composition" or whatever.

Just saying “that is a much more transferable skill” does not make it so. Effective management on any infrastructure job is, again, highly dependent on relationships with local agencies and the local population.

>Tunneling and underground work is a uniquely localized specialty. A national organization that runs underground work is going to still need specialized knowledge for each region both because of local ground conditions and local contracting practices. It is very difficult to export know-how from one area to another. Site sampling/testing practices are not even consistent across regions.

Read the report the article is about. Milan fills this role for the rest of Italy and somehow figures it out just fine.

Italy is 3/4 the size of California.

Does Milan run all of the EU’s jobs too?

Irrelevant to the point. If the south of Italy is different geologically, the size of Italy vs anything else doesn't matter.

Local contracting practices are only tangentially related to geology. They are very closely related to geography - hence the word "local."

The whole point is this stuff isn't contracted out.

Local contracting practices is about the CONSTRUCTION COMPANY, not the consultants. You know, the general contractors and subcontractors.

How many are the examples when the federal government was more efficient (as in effect per unit money) than a commercial company? Certainly there are some. How many examples are there when it was the other way around?

Asking unironically, because in a monopsony situation when there's only one buyer, a state or federal agency, commercial companies compete in materially different ways than in a free(r) market.

Read up on the design and construction of the pentagon and los alamos national laboratory. The relationship between the US federal government and private sector changed tremendously over the 20th century.

I'm thinking health care and education.

Veteran's Affairs, the postal service, social security benefit enrollment and payment processing, the irs, and public education is generally more efficient than commercial offerings at multiple points in their historical existence. Many of them are currently hampered by underfunding though, so I don't know how efficient they are now (being unable to invest enough to maintain themselves would force them to make long-term inefficient tradeoffs).

Aren't VA hospitals hopelessly corrupt with such a low standard of care that any veteran avoids them like the plague if they're able?

Please read my entire post.

VA hospitals were like that 50 years ago too though

Please read my entire post. I never cited a specific time of efficiency. I only said that there exists a point in time that a service was more efficient than equivalent, private sector services. If you want to disagree you will have to prove that in the entirety of the VA's existence it has never been more efficient in any of its services (they cover housing too) than private sector.

Yeah, fair enough.. I don't want to get into a big flame war here, but you should look up the concept of the "motte and bailey" fallacy or "moving the goalpost"

You pop into a conversation about private industry vs government and insist that government organizations have often been much better historically, but they're underfunded now so they're all suffering. Then someone points out that one of your examples is grossly terrible and has always been terrible, and you retreat back to a nearly-meaningless interpretation of your argument: "Oh, I wasn't saying we should actually have the government run things, I just wanted to say that possibly there have been good government bureaus at some point in the past! If you very carefully cherry-pick just the right instant in time and space!"

To that, all I can say is ".. OK"

I don't think you set out to be a troll or anything, and the post office is a pretty good example of exactly what you're trying to say. But you're getting really combative and watering down your core argument that "The Government CAN get things done and has in the past" by attacking people in defense of the nearly-universally-hated VA

I haven't motte and bailey'd anything. I made one statement that at some point these organizations offered efficient services, and cannot verify if that is still the case. I was very clear about this. I haven't moved any goalposts. Yes, this is a largely vague statement because I am not researched enough to say "in X time the USPS, in Y time the VA, in Q time the IRS...".

I think you're actually trying to hold me to a more precise standard than I ever set out to say. It's like strawmanning my argument. I don't know where my being called combative is coming from; I'm merely pointing out that I never said the things that are being argued against.

Corrupt? I haven’t heard about widespread corruption at VA hospitals. Do you have a source for this claim?

This is a good list. But doesn't "underfunded" mean "the society refuses to pay the whole price of the service"? That is, it's sort of more expensive, but is kept both starving and alive by fiat?

Regarding public transportation, for instance: New York's MTA receives about half of its financing as a subsidy. London Tube is a statutory corporation, and can cover only 90% of its expenses from fares. Tokyo Metro is a private entity that shows a healthy profit, and Moscow metro also used to be profitable for a long time. Both Moscow and Tokyo underground infrastructure and service at least are not inferior to NYC's and London's (from my personal experience with 3 of the 4 of them).

I didn't include public transportation in the list so idk.

No, underfunded means republicans (and occasionally democrats) have hampered these groups for decades, under the guise that "government can't do anything", and then point to the kneecapped government actions as reason to believe the government can't do anything.

If you disallow the government to pay its bills, or effectively haggle, or build the kind of teams it needs, of course it will do a bad job. Meanwhile lots of countries have shown you can have in house teams in the government who make great things.

People will say "the government can't do anything" while cashing their social security check, after driving on the federal highway, drinking their usually clean water, and yelling at their kid's teachers for stupid reasons. We have had 60 years of starve the beast, this was all intentional.

There is no reason public transport should aim to be financed entirely by fares, or to make a profit from fares. It benefits people who rarely or never use it.

It is not always comparable between cultures. If the Tokyo Metro was found to be blatantly profiteering, the president of the company would probably resign due to the cultural shame. In the US, it would be, "welp, that's the governments fault..."

> How many are the examples when the federal government was more efficient (as in effect per unit money) than a commercial company?

The real question I think is whether there are examples where larger companies gain efficiencies, and if the most efficient way to do something is at a national or international scale, do you want to depend on a massive private companies (likely heavily subsidized) to do it?

That's not handing a public function to the private sector for the sake of finding efficiencies or to fund emergent innovation through competition, that's handing risk-free concessions to a cronies.

Amtrak is a disaster, both inefficient and undercapitalized and dangerous. The U.S. Congress nationalized passenger rail in 1971, gave Amtrak the extraordinarily Northeast Corridor backbone, and yet America has easily the worst passenger rail in the developed world. Amtrak's cost per passenger mile is 3x or 4x higher than flying with a worse safety record.

That's because there's a poison pill in the Amtrak world. With few exceptions, Amtrak doesn't own any of the rail network they use. They run on rails owned by BNSF, Norfolk-Southern, or Union Pacific.

It was on HN just two months ago. The One Tiny Law That Keeps Amtrak Terrible: https://news.ycombinator.com/item?id=34336653

Amtrak trains could run on precise schedules--while probably slowing down cargo--and long routes would still be underutilized because most people don't want a more expensive days long train trip rather than a few hour flight.

Yes but properly speaking Amtrak should have cross-country high speed rail routes and lower costs than flying. Amtrak can't even imagine high speed rail as long as they are stuck renting routes where they are limited to 140km/h, less than half the speed of high speed rail in other countries. Even Amtrak's fastest lines, the Acela in the NE corridor, only manage 240 km/h along one or two sections.

We nationalized the passenger services that were losing money, that’s why the railroads wanted to get rid of them.

Most of Amtrak’s service runs on track they don’t own, at the mercy of the freight railroads for scheduling and track maintenance.

They are pressured to keep their long distance trains that lose money as a public good, but they aren’t given consistent public funding in return. We treat them as a company that should turn it own profit. We don’t expect the DOT to turn a profit on highways, because we recognize the greater economic impact of having useful highways.

The Northeast Corridor is the exception and notably seems to be the best performing part of the Amtrak network.

Seems to me like the standard American public-private practice of privatizing the gains and socializing the losses, and then complaining about how the government loses money.

> The Northeast Corridor is the exception and notably seems to be the best performing part of the Amtrak network.

And, interestingly, the worst part of the Northeast Corridor is the part that's not owned by Amtrak (the Metro North territory between NYC and New Haven).

> the standard American public-private practice of privatizing the gains and socializing the losses

It isn't only the US that suffers from this. The UK has a bad case of it and even Norway is in danger of doing it.

Same for France sadly... but we always take US worst ideas ;-)

Framing the comparison as cost-per-passenger-mile is unfair to Amtrak, though. Amtrak on the NE corridor enables many trips between nearby cities in ranges of tens of miles that are too short for an airline to serve. Using passenger-miles as the denominator misframes Amtrak's strength as a downside. Amtrak is serving a very useful service there in displacing those trips from cars or buses.

It's true that Amtrak isn't all that useful beyond the NE corridor, although that's as much a function of the scale of the US as of Amtrak itself.

If the government is a monopsony for a good like “subways” or “highways”. It’s advisable to have an in-house alternative to the commercial sector. Commercial firms are obligated by incentive to increase profits over time - whereas in-house teams are obligated to increase organizational size/pay over time.

Competition between the two should lead to an equilibrium between organizational bloat and profit taking.

> How many are the examples when the federal government was more efficient (as in effect per unit money) than a commercial company?

Here is the thing: commercial companies have incentive to stay efficient as long as there is viable competition from a public agency, which provides a baseline in terms of cost and quality.

As soon as public agencies are out of the picture, then there is little incentive for private companies in staying lean and efficient: Why deliver what you promised when you can go over-budget? The threat that an expensive project will be left unfinished gives you leverage to ask and approve excess costs. Why compete with other companies when you can collude with them and laugh together on your way to the bank?

Something like the https://en.wikipedia.org/wiki/Works_Progress_Administration

FEMA can't even show up to emergencies in a timely manner, or produce functional online training courses. Why do you think more federal agencies are an answer?

Draining the US military of 1/5 of it's budget while Russia is invading it's neighbors and China is more aggressive with Taiwan is probably unwise.

Then bringing in federal assets to run an extremely local project (forcing those people to also travel for extended periods of time), with no jurisdiction (fed can't overrule state laws on planning typically) sounds like a disaster.

The government also has a very spotty track record with construction projects.

US military spending exceeds the next 10 nations COMBINED. Of those 10, half are allies (UK, France, Germany, SK, Japan). Surely, we could cut 20%, still outspend our rivals (China, Russia, India) by >30%, and be ok?

The goal since WW2 has been dominance, not just in Americas, but also in East Asia, Middle East, etc. China, on the other hand, has had the luxury to concentrate its efforts more strategically. To reduce military expenditure, the US would have to dial back the breadth and depth of reach. Giving up on Taiwan, and then letting Korea and Japan fend for themselves against China would probably also be needed if it were to cut back on its ambitions. Nuclear proliferation would be an immediate outcome.

The US could cut back and still compete in the West Pacific/South China see but it would have to focus there very heavily to the detriment of the existing implied obligations to NATO. Part of the US's politically dominant position post WW2 is that we've signed ourselves up to be anywhere in the world fighting a large scale conflict inside of a month with huge stockpiles of everything you need to fight all over the world, including one floating one that can backup the standard land based prepositioned stocks. [0] Granted a lot of that was also enabled by being the only major economy not significantly bombed through the war but that advantage was heavily invested in since then.

[0] Wendover Productions has a great video about the insane amount of logistics dedicated to the goal of never having to wait for materiel practically anywhere in the world. https://www.youtube.com/watch?v=iIpPuJ_r8Xg

Coincidentally, this whole Russia Ukraine war has pushed most NATO nations to build up their military and re-arm. If Europe can actually defend itself, the US's obligation there reduces significantly.

Yeah and it's much cheaper to operate locally and defensively than it is to have a very expeditionary and overseas force the US has so they /could/ close the capability gap for less money. There is a bit of difficulty having so many different militaries needing to work together but it's something that works with practice.

The issue is not that the US needs to be stronger than China.

The issue is that the US population has a very low tolerance for combat losses (especially losses defending a foreign country), and the Chinese population (read Communist Party) has a much higher one (especially losses towards what they perceive as country reunification). If in a fight the US inflicts one million Chinese casualties, while incurring one hundred thousand, then the US might call it quits.

The US need not only be able to defeat China, but do it with minimal losses. That's why you need to maintain the huge capabilities gap that currently exists.

An interesting question is why you think the military is good when domestic services are bad. Could it be that domestic services are intentionally strangled, the military is used to pry open new markets from weaker countries, and private business benefits and fails to share the bounty with neither (poor) Americans nor with the subject foreigners?

We spend more, separately, on health, social security and income security than the military. Military spending is tied with medicare.

https://fiscaldata.treasury.gov/americas-finance-guide/feder...

Not to mention the existing debt problem. Just the interest alone on the debt is beginning to exceed the amount spent on the military alone. Something needs to be done, and sooner or later, the usual throwing more money at the problem is not going to work.

>Then bringing in federal assets to run an extremely local project (forcing those people to also travel for extended periods of time), with no jurisdiction (fed can't overrule state laws on planning typically) sounds like a disaster.

I won't speak to whether or not its wise to reduce military funding, but your statement about why you can't have non-locals working on local projects runs counter to my experience.

From about 2004 to 2014, the state of Oregon spent somewhere somewhere around $1.3 billion to repair hundreds of bridges. The consultant managing the effort assembled a team of dozens of highway and bridge engineers, who worked closely with Oregon Department of Transportation, the NTSB and the Federal Highway Administration to make sure it all complied. For the record, getting a state to sign off on bending state regulations is typically a lot easier than getting the Fed to sign off on bending Fed regulations, to the extant that if a state has less stringent road requirements, those state requirements only apply on roads not covered by the FHWA.

At the end of the project, most of those consulting engineers then got flown to other states (Florida and Pennsylvania come to mind) to work on projects of similar sizes. Does a transplant from Oregon have more knowledge of local concerns than a native Floridian and Pennsylvanian? Of course not. But it turns out that you can hire local for negotiating with contractors, but you cannot just hire local when it comes to managing billion-dollar construction projects, if those don't happen very often locally.

The only difference between a federal organization to manage projects of this scale and a private consulting firm is that the bill to the taxpayers on the latter is an order of magnitude larger.

Interesting idea. Something needs to be done, because right now, the US can't even construct a nuclear power plant in Georgia on time and within reasonable budget range.

We have the army corps of engineers, which maintains a lot of the dams. We could expand from there.

I was thinking of them, too. We could utilize the military directly rather than siphoning off their funding.

What was the size of the organizations that actually made the New York Subways, on time, and on budget?

What size organization made the Verrazano and the Golden Gate bridges?

What size organization made the Hoover Dam and the Pacific coast Route 1? Using tiny (compared to the equipment we have now) steam shovels?

All of those projects were built nearly 100 or more years ago. Public works can't be built in the same way anymore because laws are different and there's vastly more complexity in property ownership.

>There's only a handful of cities that are massive enough to do projects that would require hiring highly paid specialists to manage these huge projects.

If you use the Census Bureau's broadest definition of economically intradependent regions, the Combined Statistical Areas — defined roughly by commuting patterns, which is the relevant scale for a transit system — there are in fact eleven major cities at populations of seven million or higher: New York, Los Angeles, Chicago, Baltimore-Washington, Dallas, San Francisco, Boston-Providence, Houston, Atlanta, Miami and Philadelphia-Wilmington. Over a third of Americans live in one of these "agglomerations". But establishing a system to handle regional planning would require crossing state boundaries in six of those cases.

There are some advantages to local expertise: the geographic and social factors affecting Miami are very different from those in Dallas, which are both very different from San Francisco, which are all totally unlike New York. Establishing the necessary agencies and securing their purview would require federal action, though, I agree.

> But establishing a system to handle regional planning would require crossing state boundaries in six of those cases.

6 of 11 is more than half of your examples. That alone seems to suggest there would be efficiencies in federally-supervised planning simply to cross-cut inter-state concerns. (Such as with roads, the use of "inter-state" there is not an accident.)

Scrolling further through the list of CSAs the ones between a million people and seven million that are multi-state seem too often to be the least well served by public transportation access today compared to their peers, and that doesn't seem to be a coincidence.

> This seems like a viciously difficult problem to solve to me. How do you hire someone for a city's transport agency who has the ability to manage a multi-billion dollar construction project? Anyone with those skills will surely be able to earn 10x more in the private sector.

You recruit and reward just like any employer. The issue is that in government it looks bad to be paying market rate for talent, and yet the optics and blowing money on consultants with no results is practically ignored. Oh and there’s the plausible deniability when the consultant goes off the rails.

Our federal government up here in Canada can’t tie its shoe’s without a consultant. Gutting government in favour of private consultants is a really really big problem that’s being actively pursued, marketed, and lobbied for by these firms. In fact a lot of politicians come from consultancies (like McKenzie) and the ties are blatent. So basically capture.

The study even explains how to do this. Milan maintains in house experts by loaning them to other agencies. The US could do the same if there was more cooperation and less of an adversarial relationship between agencies.

Yeah, the USA should definitely study what they've done in Italy. In about 15 years Italy has massively improved its train systems.

Also because working for a private company that provides services to governments is infinitely better than actually working for the government. So in some fields it’s effectively laundering a nicer place to work than government is willing/able to provide.

> In fact a lot of politicians come from consultancies (like McKenzie) and the ties are blatent.

The phenomenon is so pervasive in governments it has a name:

https://en.m.wikipedia.org/wiki/Revolving_door_(politics)

NYC can hire someone to manage adding elevators to stations. The Americans with Disability act passes in 1990 - more than 30 years ago. That is plenty of time for someone to be hired to manage what should (but isn't...) a smaller project of remodeling just one station, and thus get experience. Then you promote those people from within an develop expertise in more complex projects.

All stations should have a minor remodel every 10 years, and a major remodel every 30 years - just for structural reasons. NYC has enough stations to keep a small department of people busy constantly remodeling stations.

The MTA is controlled by New York State, and most of the state has no interest in making the subway nice.

The misalignment of economic ties and political borders is something that the US makes almost impossible to change, but leads to a lot of dysfunction all over the place.

Compare New York and its subway with Madrid, which has the most efficient Subway operation in Europe. Madrid's subway is also controlled by its state, instead of by the mayor, but go look at the state borders: It's pretty much the metropolitan area. It makes the voters' interest line up pretty well with each other as far as functioning government goes. It's not that there's no corruption in Spain: there's plenty. But bad results can be punished electorally.

In contrast, look at US borders, where a whole lot of metropolitan areas are split, and we have many states with multiple metropolitan areas. What does someone in Branson, Missouri have to do with someone in Kansas City? And yet, Kansas City is in two states. We also have metropolitan areas with dozens, if not hundreds of municipalities, which try to fund themselves via sales taxes and highway tickets, as those are often paid by people that don't live in the municipality, but just pass by. The people that control the majority of the votes and those that suffer the consequences of the decisions don't line up.

If you gave a foreigner an population map of the united states, and handed them a bunch of demographic layers, like where people go to work, or some basic political opinions, and told them to create a map of states and metropolitan borders, the map would be completely different from what we have. And it'd be especially different around our metro areas. And yet, we couldn't change any of those things to save our lives. It's not hard to draw borders that lead to more efficient government, and where more people are either happy with their government, or have a realistic chance to change its composition.

So ultimately blaming this on consultants is not going deep enough: We have very few forces pushing for a government that is efficient, with sufficient state capacity. But while a company can reorg, state borders are too important for national politics to change.

I’m not blaming consultants, I mean sure the big four suck at everything but they don’t add that much cost.

NYC is an interesting case. The city used to control the subway system, but early 20th century progressives in an effort to combat corruption pulled control to the state. This was an effort to professionalize government and establish a technocracy of sorts where learned people dictated outcomes dispassionately. Their legacy has been anything but impressive.

The US also isn’t carved up into political units based around cultural/linguistic groups with economies centered around old imperial capitals. There aren’t strong internal borders, so when a big city is on a state border, it accrues development across that political division. If the Eurozone lasts another 150 or so years, you might see more cross border metropolitan areas.

The NYC subways were built and operated by private companies in the late 19th and early 20th century (you can still see where the different companies had service because they built infrastructure that is stupid unless you are trying to compete with someone else). The city did regulate prices to too low to pay for ongoing maintenance, but otherwise did not control the subways. Of course that lack of maintenance did mean they eventually had a system they couldn't run at and they sold out cheap, but that was the mid 20th century.

You see the same thing in Boston. North Station and South Station don't have a connection. A link is periodically studied and discussed but it hasn't happened.

I’m obviously oversimplifying, and I meant regulatory control.

Assuming you mean McKinsey, this is such a great Canadian typo.

Take off, hoser!

(For those of you who missed Hamlet retold as a pair of drunk Canadians saving the world, the McKenzie brothers are the main characters of the movie Strange Brew.)

One of my relatives worked for the MTA for 20+ years until moving to a new role in 2022.

He's mentioned consultants a lot, and has said the reason they relied heavily on consultants and contractors is because hiring or firing an MTA employee is a complicated and time-consuming process, and it's easier to hire consultants you can decide not to renew instead of risking a bad hire (that said, the way he's described the bidding process for new contracts also sounded extremely complex and time-consuming to me - I'm speculating that getting rid of a bad hire is somehow worse than that).

He's also talked about a different kind of consultant, namely a cadre of management consultants that were brought in under Andrew Cuomo to restructure the agency. He didn't like those folks very much.

It sounds like one of those situations where workers' rights backfire by making it so onerous to hire and fire them that it's safer not too, just in case you end up with a dud, or a role evaporates. It's a tricky balance and I don't claim to know where the sweet spot is in terms of worker's vs. employer's rights, but we may have overshot.

Similarly, I see a problem wrt tenants' rights where it becomes so difficult to evict a tenant that no landlord will take a risk on someone who appears to be even slightly risky. It ends up with hordes of unhoused people at the bottom of the "desirable tenant" spectrum getting bumped onto the street in affluent cities, because no landlord will take a chance on the middle, let alone the bottom. Again, obviously tenants need rights, but it seems like many jurisdictions have overshot the sweet spot.

These things are so complex and have so many facets. I'm not confident that excessive tenants' rights are truly a problem, but I it's possible.

> Again, obviously tenants need rights, but it seems like many jurisdictions have overshot the sweet spot

Tenants need rights and landlords need tenants. In some cities (SF) the demand outstrips supply sufficiently that you won’t easily find housing but in other cities (NYC) there’s such a diversity in housing options that you’ll always be able to find a closet to rent somewhere.

I think it’s hard to say that tenants have too much rights. There’s no reason to enter the business of land letting unless you are comfortable with the regulations. Laws and their purpose come before profits.

I think you missed OP's point...

There are plenty of landlords right now happy to rent an apartment to a couple each with 6 figure salaries and no debt. But if they can't find such a couple, they'd rather leave their apartment empty.

There are lots of landlords like that, and the end result is there are lots of empty apartments and lots of other people who can't find housing.

> There are lots of landlords like that, and the end result is there are lots of empty apartments and lots of other people who can't find housing.

The solution for that are serious vacancy taxes. If people are unwilling to assume the risk of hitting a "dud", they can always sell their property to some large-scale landlord.

That's why those landlords need to be taxed more : so they lose a great deal of money if they don't rent.

(if they sell up because they can't stomach the taxes, reducing home prices that is also a positive outcome)

Landlords taxed too much for vacant properties would just knock the property down and keep the land. Then later, when they want to recoup their investment, they rebuild.

Most properties it isn't the building that is valuable, but the inner city land where one can build a building.

>Landlords taxed too much for vacant properties would just knock the property down and keep the land.

Unless that was what was taxed.

>Most properties it isn't the building that is valuable, but the inner city land

Precisely my point. If you slap taxes on land you increase the available supply.

The vacancy rate in the US is not high, at least according to statistics. I don’t know where this “lots of vacant apartments” narrative is coming from.

It most definitely backfires in SF.

When i gave up my rent controlled apartment my landlady said she was leaving it empty.

Why?

Because she was retiring soon and in a 4-unit building the value of it goes up by $100,000 - $250,000 for each unit that is empty.

Why?

Because rent control locks in rent and this future income. Evictions can takes up to a year or more and mandatory payouts are often in the tens of thousands if you do evict without cause (say owner wants to move into a unit).

If the unit is empty someone can move in right away or rent for market rent.

The units were renting for ~$3,000 per month, so as long as she sold it within 9 years she wad ahead of renting the unit out.

I agree that landlords need to go in eyes wide open, but the challenge is rules can change after you get tenants.

And the big lesson here is landlords respond to incentives too. If regulations make it cheaper to do something negative, they’ll do it. Most people would.

That has nothing to do with workers' rights. Firing with notice is how the problem is solved in Germany. When your boss fires you, you don't get chased out of the building, no, your employment contract transforms from indefinite to definite and you just wait until the contract runs out. Gross misbehaviour like theft allows immediate firing. Also new hires have a probatory period (several months) during which firing works exactly the same way it does in the USA e.g. you can fire immediately for any reason.

Americans will tell me how onerous this is and yet they somehow managed to screw it up anyway because I constantly read on the internet about "unfireable" employees which is a ridiculous concept. Even hiring quotas for large corporation's and government funded institutions (universities for example) don't matter when making firing decisions, the point is to let people with other backgrounds into the door, not keep them locked in.

Gov’t jobs often require due process to dismiss. This can involve steps that are almost impossible to fail. They also often have a probationary period. It’s cool that Germany does things differently.

I don't believe that the US Federal government can't lay people off.

Quite. What they generally mean is they have managers that are too incompetent or too temporary to do the work to get rid of people.

> That has nothing to do with workers' rights

A french court would disagree with you - the German process you described is impossible in france. once an employee has finished their trial period, only gross misbehaviour or an official economic redundancy plan can get rid of them...

You're saying that in France it's against the law to fire someone for performance related reasons?

Employers in France need valid grounds, which may be personal or economic. Personal grounds includes poor performance. Easier said than done though, it requires a lot of documentation proving that the employer provided sufficient training/retraining to improve performance, regular documented meetings to discuss performance problems, etc. If the worker stops showing up to work at all it becomes easier, but if the worker wants to drag out the process they can.

That sounds perfectly reasonable to me, and is a far cry from the OP's assertion.

only if the employee plays ball. all they need to do is go to the doctor, say that they're burned out, and no amount of poor performance reviews will be enough. the next step will be a negotiation between employer and employee

You can fire someone in France for poor performance.

But it's not like in the US where you just declare this, and then fire them. It works like in many union shops in the US. You need to document that poor performance, show missed deadlines, show that you attempted to train and accommodate them, give them a few months of heads up to adjust, and then you can proceed with dismissal.

Just think of France as an all-hands union shop.

> I constantly read on the internet about "unfireable" employees which is a ridiculous concept.

Anecdotally, I've heard about companies with these, which got that way by getting sued over and over again for wrongful termination. Now they are scared to even discipline employees engaged in sub-extremely-egregious behavior.

Like one story I heard was, "As long as they spend more time working than looking at porn, let's just let it be."

My 2 cents on this: Your company gets this way with poor leadership. Terminations without your i's dotted and t's crossed, and also an unwillingness to take some things on the chin for a broader view of how things are going to go.

Quite the opposite. In many ways employers are like tenants - they rent out the position to you and in return cash in a certain part of the value you produce. Just like with landlords in a properly just society you do not need that middleman ... The hordes of unhoused people are there not because of desirable or undesirable tenants, but because of landlords gatekeeping the access to homes.

I have a rental house next to me. They got raided by SWAT a few years ago for using it as a selling house for fent.

I'm ok with some gatekeeping. There are some undesirable tenants.

I don’t think this is as big of a problem as it is made out to be.

Not to be snippy, but did your relative spend most of those 20+ years in management? I ask because I work for a government agency with civil service rules, unions, etc. that probably make the hiring and firing process similarly onerous as at the MTA, and I hear this sentiment from management but never from an actual worker. I note that the answer Slate comes up with is a management choice to outsource, by the way.

Anyway, your relatives idea sounds like finger pointing to me. Many of the countries that absolutely kick the US' ass in subway and el train construction costs are to be found in Western Europe where labor law is much more employee-sided than even US civil service government jobs. They can do it even with a portion of lazy bums doing nothing all day, so why can't the MTA?

IDK in other countries but in Spain infrastructure is outsourced to a bunch of well known companies. There's engineering and budget oversight, and the state still has engineers and managers inhouse but they are basically "product owners" with very strict rules.

But in the end, 99,9% o the planning is done within such companies.

I hear this sentiment from management but never from an actual worker.

Unfirable people don’t complain about being unfirable. You don’t say!

Let me begin by saying that we're not unfirable. It takes a bit more doing, but you can either be shown the door eventually or reshuffled into a go-nowhere job with no responsibility that'd otherwise be done by a new hire or something.

Don't know if you've experienced this where you work, but we love to complain bout other union employees in other departments. I've done it and heard others do it more times than I can count. "Oh, this work is being sent to so-and-so? Good luck." "You have to get a report from that department?" - that kind of thing. There's not exactly a deep and abiding sense of union solidarity or anything.

Just, most of the credit for broad disfunction, at least where I work, goes to management. Too many of them doing too little. Politics, chasing around every silly idea that pops into upper management's head, working to justify what they already decided, that kind of thing. When a big project here fails, that's the talk around the water cooler, at least. I don't work at MTA but I guess most big organizations would be similar.

The MTA has many many problems.

Perhaps the main root is that the governance structure diffuses responsibility. When the governor is asked about problems at the MTA she points out that she doesn’t have full control of the agency and that’s true. Nor does any other elected politician.

But if we go beyond the root causes and look at the proximate causes—yes, that includes understaffed and incompetent management, too many contractors picked and supervised via a terrible bidding system, lack of cooperation from other government agencies, excessive litigation costs—-but also union/civil service featherbedding.

The people that live here see municipal workers standing around doing nothing. We read about those gaming the overtime system and building secret clubhouses. We know about rubber rooms where teachers sit for years while the process to fire them plays out.

A famous New Yorker once wrote a book titled “Don’t pee on my leg and tell me it’s raining!” That’s basically how I feel about the unions in NYC.

>The people that live here see municipal workers standing around doing nothing. We read about those gaming the overtime system and building secret clubhouses.

I would argue that in many cases these kinds of things are management choices, too. As an example, I'll use my dad who works in a more traditionally blue-collar local government union job doing construction work. When I was young, he busted his butt building stuff, now near retirement he spends much of his time "standing around doing nothing" - however, this comes down to outsourcing and lack of hiring.

All large projects now are outsourced (this gives the opportunity to graft, and may or may not actually reduce cost). However, they still need a skeleton crew of actual staff for projects that don't make sense to outsource short of contracting the whole construction function: fix a broken window, paint a wall, hang a door, change a broken window AC unit. Now, he may have one or two such hour-long jobs to do in a day, and he is able to spend most of the day "standing around doing nothing" while completing every request on time, and he's not exactly rushing the work.

The other things about standing around is modern machines get so much more done that most of the time it doesn't pay to work. A single scoup of an excavator is more than one person with a shovel can do in the day, so what is the point of even trying. Sometimes someone needs to dig by hand. Now it may seem like get rid of people, but the problem is every 20 minutes you need all those people to do something that must be done by hand, then they all work for 5 minutes and stand around again while the machine works.

>>Let me begin by saying that we're not unfirable. It takes a bit more doing, but you can either be shown the door eventually or reshuffled into a go-nowhere job with no responsibility that'd otherwise be done by a new hire or something.

The phrase “we’re not unfirable” is incompatible with the statement “you can be shown the door OR reshuffled into a go-nowhere job” in my mind. If your response to “we can’t fire union workers” is “well but you can give us a big paycheck based on our seniority to do a job a new hire could do” then I guess you really can’t be fired.

Even amongst the union it seems like you realize the union is inefficient and staffed with layarounds. But when there’s a problem you blame management? And you think that there’s too much management while this article mentions downsizing of management/engineering by a factor of 10 (1600 -> 124)?

>“well but you can give us a big paycheck based on our seniority to do a job a new hire could do”

That's not really how it works here. Pay band for a given job title is strict and relatively narrow, and the way you substantially increase pay is by moving into management or getting a new title, which are both up to management to decide. So, the hypothetical loafer/shirker long-tenured guy may be getting paid 15%-20% more than the guy in his title who's just out of school, not exactly a big paycheck.

>Even amongst the union it seems like you realize the union is inefficient and staffed with layarounds. But when there’s a problem you blame management?

Funny. Most of the "layarounds" we all know about are heavily protected by their management, either they're on very good personal terms or are very narrowly doing the work they're asked to make the boss happy and don't care much about a request from me. I've seen quite a few people pushed out the door here and it's typically not one of them, usually it's those with personal issues with the boss.

You don’t get it: if you should be fired then you should be getting paid 0%-0% of what a guy just out of school is getting paid, not 15%-20% more. And you sure as shit shouldn’t be getting benefits, accruing years of seniority, and accruing years towards your retirement benefits.

> The most interesting thing about this article to me isn't the "spending too much on consultants" bit, it's the bit where the agencies in charge of budgets for these enormous projects no longer have staff that are capable of managing them, having outsourced that institutional capacity to consulting companies for far too long.

I don't see how you can avoid this problem without building far faster than the US currently wants to. (Largely because many argue that we don't need to build dozens and dozens of new projects simultaneously, whether subway or anything else infra-wise, all at once.)

You won't get competence in managing the budgeting, planning, and execution of a subway line without doing it a lot.

So how do you break the cycle of inefficiencies leading to people scared to start enough projects necessary to build expertise?

There's a bit in here https://chrisgagne.com/1255/mary-poppendiecks-the-tyranny-of... about how we haven't matched the construction speed of the Empire State Building since then, and a lot of it is because the depression + war that happened right after it was done cause all that knowledge to be forgotten.

The trick would be to build lots of itty bitty extensions continuously and have a small constant staff rather than big bang projects where the knowledge poofs into thin air, although now the cost has gotten so out of hand that we can’t afford to do that either.

This is the answer but small improvements aren’t “flashy” enough for the politicians (and voters) involved.

> You won't get competence in managing the budgeting, planning, and execution of a subway line without doing it a lot.

> So how do you break the cycle of inefficiencies leading to people scared to start enough projects necessary to build expertise?

I wonder if this could be something that's only possible when you're riding on fast exponential growth - fast enough that you can afford starting more and larger projects faster than population growth (or at least faster than competent people entering management work), with confidence that this "spending spree" is self-sustaining. Once you lose that confidence, you start worrying, lose velocity, and then lose capability.

This would explain why it seems that nations tend to rapidly industrialize and improve across the board, in a kind of push that lasts for couple decades, and then runs out of fuel, leaving the nation barely able to do any large project anymore.

An analogy in my mind is to a scramjet: an engine that allows you to achieve extremely high velocities, but which itself needs you moving very fast to even start it - and conversely, if you let your airspeed drop past the threshold, it will stop working.

Japanese housing policy has what seems like an inefficient system of knocking down any buildings older than some age when sold, with wood being 22 years, reinforced concrete being 47 years.

But it has three really great side effects

1. Because they always need to be building, they never run into this problem of losing institutional knowledge to keep building. 2. Buildings are periodically refreshed up to code for things like Earthquakes. 3. Because housing is never seen as an investment they don't get the NIMBY problem.

Maybe NYC doesn't need to build more. However there are a lot of cities that don't have nearly the metro system that NYC does. Minneapolis could use one downtown (they have light rail, but downtown it is just buses), and this could go to St Paul (ie make the green line a subway). Kansas City, Denver, Dallas are just a few of the large cities that could use a subway system but don't have it. Des Moines has more population than Stockholm when Stockholm started building their subway - that enabled a transformation of Stockholm's build form to become much denser (as opposed to become a car first city as the people got rich enough to afford more)

NYC needs to build more.

Transport networks really benefit from network effects; each additional line benefits from connecting to the existing network. The IBX rail project was recently proposed in New York and found to have 100k+ daily riders, which blows pretty much everything else in the US out of the water.

The other issue is that land use planning in the US except in a select few places like New York is really bad for transit. Transit can certainly be "build it and they will come", but also the land around transit needs to legally permit that as well. Rail is only really efficient at high utilization, and most US cities refuse to permit the development that makes rail useful.

This comparison picture really brings home the point that in most US cities the land use is causing rail value per dollar spent to be really low: Atlanta and Barcelona had similar population numbers and metro lengths in 1990. https://ti.org/images/AtlantavBarcelonametro.jpg

You need to set up management at a level where there is sufficient demand for it. Right now most projects are managed at the local level where yeah a rail extension is probably a once in a generation project, but at the state, regional, or federal level there's generally always something that needs doing.

How do you hire someone for a city's transport agency who has the ability to manage a multi-billion dollar construction project? Anyone with those skills will surely be able to earn 10x more in the private sector.

NY/C governments overpay low skilled workers (especially once benefits and work rules are factored in) and dramatically underpays highly skilled workers. Since there are a lot more unskilled roles, fixing the one problem would free up plenty of money to fix the other.

A lot of that money feels like hazard pay, if you ask me.

A cop or a bus driver, sure.

But why is the janitor at a city hospital making twice what one at a private hospital makes (inc benefits) while a doctor at a city hospital is making half what his private sector counterpart does?

Some crane operators in NYC apparently make up to $500,000!!

Kind of crazy that some skilled work pays so much. That may be fine, but makes me wonder if any planners/civil engineers/whatever are making anywhere close to that.

From 2011: https://www.wsj.com/articles/SB10001424052702303936704576399...

Those are private sector jobs, no?

Sort-of. There’s a tangled weave between the union and the licensing authorities. On top of that various tax and zoning considerations often force the use of union trades on building projects in NYC.

Being union or having regulated labor doesn’t make someone a public sector worker.

> Some crane operators in NYC apparently make up to $500,000!!

Not totally crazy when you remember how much weight they're dangling above people's heads. If they fuck up they could cause dozens of deaths and many millions of dollars worth of damage in a split instant. The damage a civil planner can do is more subtle and long-term, not quite as easy to recognize and understand as a crane collapsing onto a crowded street.

Still, that's more than (most? any?) airline pilots make. But maybe with some NYC cost of living adjustments it's not such a large gap.

This is part of the reason the majority of high rise projects in NYC don't use cranes. It's insane.

Then what are they using instead ... drones?

They carry it up. I'm not joking.

https://www.city-journal.org/deconstructing-new-yorks-buildi... (ctrl+f crane)

"ability to manage a multi-billion dollar construction project"

Some of them apparently graduate with degrees in "project management" from schools like this:

https://foundrycollege.org/about-us/team/

... so don't overestimate the talent here.

I believe that would be quite a few people who would choose to work for public projects rather than as consultants, simply because doing something that is relevant to society can be quite fulfilling.

The main problem in my opinion, is that it is impossible to have that on the local level. Multibillion-dollar project at rare events, even if you develop that talent locally, you will never need it again.

I think the solution would be government employed large project professionals on the federal level.

It should be doable at the state level, though. If a state isn't large enough to have consistent, large-scale projects, they probably shouldn't be an independent state.

Heck, it can be even smaller than that. The Los Angeles Department of Water and Power is regularly working on extremely large scale projects, and maintaining the ones they built.

The problem is exacerbated by the "revolving door" mechanisms between government and private consultancies. Work few years for the government, hire extensive consultants, then become expensive consultant yourself and milk the system. Nowadays this is common collusion among all levels of government and private industries feeding of governmental contracts or consulting fees.

In the UK I’ve seen this called the “intelligent client” model. Basically a core group of PMs who outsource everything. In my narrow experience of being on the inside of this, it failed drastically as the internal PM team lacked the technical expertise to foresee and plan for challenges, and really understand what was going on. The sea of external consultants all had differing incentives (other than earning money) - and the contracts written weren’t watertight or ever enforced to stop runaway spending.

Most PMs I've dealt with have no bloody idea what is happening most of the time, both in an actual day-to-day, but also in a technical sense. PMs are glorified secretaries.

Does managing a 10 billion dollar construction project take dramatically different skills than a 100 million dollar construction project?

The government doesn’t need the best of the best for this stuff they just need basic competence.

A 10 billion dollar project is 100x larger. It's definitely more difficult to manage.

Sure it’s more difficult, but the difficulty doesn’t increase linearly with budget. A 100m dollar project isn’t 100x as difficult as a 1m dollar project.

I am not saying anyone can make the jump, but promotions often mean handing an order of magnitude larger projects.

I'm not sure how you can conclude that for any infrastructure project, complexity scales sublinearly. This feels true in software, but not real world matters IMO.

Think of all of the politics & hard choices involved, for instance, in displacing people vs. bending over backwards to accommodate them with the California high speed rail project.

If anything, complexity probably increases exponentially as you have to consider ever more permutations of possible project.

I agree, and think that this should be incorporated into the cost.

Ie, a project twice as complex should be 5x the cost due to the additional management, comms overhead, permutations and potential risk.

Said another way the curve is logarithmic and there's a theoretical upper bound on project complexity.

Total project complexity isn’t the relevant metric here, a project with 100x the budget has more people managing it any many decisions don’t make it to the top.

Also, if a 2x as complex a thing takes 10x the budget then that scaling is already part of the budget figure.

Urban planning is pretty complex. Basic competence is a higher bar than you may realize and anyone really good at planning this stuff can make more money in the private sector.

Some people take staff jobs because they are good at the bureaucratic stuff. This does not necessarily mean they actually complete projects. It does mean they tend to keep their job and get viewed as competent, even if they may not be, really.

A good reason to take a staff job is you are good at the planning part and not so good at being an entrepreneur and would like to actually get paid for your work. I have no idea how many people fit this profile versus how many people are good at playing the game without actually getting all that much done.

If you are unlucky the project you are managing doesn’t scale linearly. So a 10 billion projects is 99999999 time more difficult than a 100 million project.

Then we have the problem of previous experience. How many 10 billion projects do we have in the whole country? And maybe they take 10-15 years to finish. You might get one chance at managing and then it’s time for retirement.

When projects of this size start they often have “wicked problems” [0] which demand a lot of competence.

https://en.wikipedia.org/wiki/Wicked_problem

> How many 10 billion projects do we have in the whole country?

Right now I would guess a few hundred, going back and adjusting for inflation it’s easily thousands. For scale a single aircraft carrier costs more than 10 billion. The US operates at a scale that’s hard to comprehend.

Also,100 million dollar projects also run into Wicked problems.

honest question: when the US Navy builds a new $10bn super-carrier, who is actually managing that project? is it US Navy staff, or is management of that project outsourced to a US company? i am genuinely curious.

Folks that graduate from schools like this:

https://foundrycollege.org/about-us/team/

It's not true that you need a superspecialkid to manage a billion dollar project. Just get a guy with a good reputation at the office.

The problem is not giving normal people an opportunity and always going for these big companies where people that are normal but good at selling themselves steal taxpayers money with "consultancy".

Just choose a guy with a good reputation in the office to lead the thing, don't bother him and it will be done well and at a fraction of the cost.

Perfectionism is ruining society

>This seems like a viciously difficult problem to solve to me. How do you hire someone for a city's transport agency who has the ability to manage a multi-billion dollar construction project? Anyone with those skills will surely be able to earn 10x more in the private sector.

You pay them 5x as much as they would get in the private sector. In all my hiring trouble never have I been in a position where spending what I was told was unreasonable money on staff did not result in a better outcome.

My only explanation why no one else does this is that CEO will never let anyone else in the company earn more than them.

Industries exist where “workers” can make way more than the leadership - sports, movies, etc.

> How do you hire someone for a city's transport agency who has the ability to manage a multi-billion dollar construction project? Anyone with those skills will surely be able to earn 10x more in the private sector.

It seems you could hire them by paying them 10x more than you would usually do. And if it's a multi-billion dollar construction project, that's a rounding error.

People have a hard time grappling with the balance of government workers making good money vs being wasteful with tax money. No one seems happy with the government to having sub-par employees, but no one wants to pay for good talent.

Also possible the private sector simply pays too much, inflated payscale of CEO's blow everything else out of the water. The private sector can afford to pay double the current ceiling of essential government infrastructure workers when those figures are chump change compared to returns.

You pay them the market rate. That's certainly expensive. But as illustrated by the article, the alternative is more expensive.

> Anyone with those skills will surely be able to earn 10x more in the private sector.

This seems extremely easy to solve then, if it weren't for weird hangups about government employee salaries vs government spending.

It’s unfortunately not weird, or at least not uncommon. It’s the party platform of one of the two major parties and probably over half of the second one also doesn’t like the idea of paying competitive salaries.

"viciously difficult problem to solve"

It is very easy in fact: abolish public-private partnerships, they have been an abhorrent failure from the Smedley Butlers of the world [1] to the Norfolk Southerns of recent news.

You want to have "a company in the free market", very well, do it, no state funds, no grants, "hustle", be innovative well within the regulations, whatever.

You want to have a state, very well, do it, be interested in educating people as soon as they can talk, take care of the basic needs for all people (food, shelter, safety, healthcare, meaningfulness), make the state interface an absolute pleasure, perhaps develop even some status games, reward people for following the laws, for developing a community (invert the reinforcement curve, less punishments, more rewards), and so forth.

What we have today is simply a criminal joke: some nameless suits (random pick, who is the COO of CVS Health? [2]) meet in various glass buildings and print trillions for their own benefit. No society will be able to withstand this kind of sociopathic behaviour for more than a few centuries, vide Senatus Populusque Romanus [3], not like that's any consolation for us living today.

[1] "I feel I might have given Al Capone a few hints. The best he could do was to operate his racket in three city districts. We Marines operated on three continents." https://en.wikiquote.org/wiki/Smedley_Butler#:~:text=I%20fee....

[2] CVS Health is the 4th company in US by Fortune 500 in 2022; Jonathan C. Roberts was the COO until 2022 apparently, now there is no COO, https://drugstorenews.com/cvs-health-coo-jonathan-roberts-re...

[3] An example would be the story of Marcus Licinius Crassus, https://en.wikipedia.org/wiki/Marcus_Licinius_Crassus#Rise_t..., Crassus became wealthy, "the richest man in Rome", from real estate, among others: he would buy burned houses for nothing and use slave labor to rebuild; he also had his own fire brigade, the first ever in Rome: the firefighters would start fighting the fire only after Crassus finished the 'negotiation' with the owner for the price of the burning house.

yeah - a person capable of managing such complex infrastructure projects could earn more in a private sector environment.

however - there's still plenty of "incentives" legal or not that the government can take to ensure those people work in civil service and are well taken care of.

plenty of gvts including the 'US' have had such appointments that can't be turned down.

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