On One Hand

December 7, 2008

Lets Make Something that Lasts

Filed under: Uncategorized — ononehand @ 1:41 am
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Last week President-Elect Obama announced that his economic stimulus plan will include the largest public works project since the interestate highway system. That means that before even taking office, Barack Obama is setting the stage for a lasting legacy to match the historic nature of his election.

The great thing about a public works project is that it is nearly impossible, save for utterly disastrous misjudgement, to fail to produce some change. Unlike corporate bailouts, which seek to keep things running based on a calculated guess of how much bad risk should be bought off by taxpayers, a works project is guaranteed to put money in the hands of working people – likely the very blue-collar workers who would otherwise be losing their homes and livlihoods – employed as managers and construction workers. Even a well-intentioned education or healthcare program, even if well worth the risk, could fail to solve the problem it targets. But a works program is guaranteed to keep those it helps busy, so they are not receiving free handouts or becoming complacent.

Besides feeding and and housing its workers, a well-planned works project can stimulate external economic activity in a number of ways. Those who directly benefit from the project spend their paychecks in retail, and might even invest some of their income. A good project might also spark other corporate investments – a train system, for example, will stimulate new construction projects like lofts and shopping centers, around the transit stops.

A well-perceived construction project could also benefit the economy on an emotional level, sparking confidence in achievement therefore boosting spending and investment even far beyond the direct footprint of the construction site. It gives Americans awe in themselves, the way projects like the Hoover Dam and landing on the moon have.

Then, say, hypothetically, the worst-case scenario comes true: that all of these factors fail. The economy is so sour that workers use their paychecks just to scrape by, saving much of it, and private companies fail to capitalize on a new transportation system until after the recession is over.

Well, at least you have a train now. That is, ultimately, the reason why a public works program is foolproof when it comes to building a lasting legacy – it goes beyond a simple welfare program, corporate or otherwise. At least you have something concrete and material you produced with the 800 billion dollars you just spent, which is not the case if those funds are pumped into struggling financial companies that fail anyway or used to feed people. You have a train, a dam, a power plant, a ship, a school building, a university, or something that will last a long time. Something that can be sold off if needed, and almost assuredly be used by someone.

A public works project is a chance to see an exciting investment that can improve the way we live, forever, speeding advances in technology or providing the nudge that sends us on an entirely better, smarter or more effecient trajectory.

Here are a few things I think MUST to be part of that plan:

MASS TRANSIT

As I wrote above, mass transit is something proven to stimulate private investment; demand for residential and commercial construction, and thus land values, increase dramatically immediately around stops, and pedestrian-friendly retail lasts longer without becoming outdated than suburban strip malls do. But beyond that, the right kind of transit has the added economic advantage of reducing dependency on automobiles and airplanes and other fuel-inefficient modes of transport. That isn’t only good for the environment, it also means that every dollar NOT spent on gasoline can stay with American consumers to spend it on some other industry, providing opportunities for growth elsewhere that will be hard to pinpoint or measure, but will be of certain impact. Every dollar of gas you save is at least fifty cents not sent off to Saudi Arabia, Russia, or Iran, to instead circulate through American industries.

I’d call for an investment in some kind of transit expansion in every major city in the country, allocated to each municipality or state based on its population – often expanding on the existing systems in place, otherwise installing new ones – and to include subways, monorail lines, light rail lines, busses and vans.

I’d also call for an investment in a bullet train system linking city to city across the country. Long-distance trains are over five times more fuel-efficient than airplanes, and the right technology could have them going fast enough to be competitive (considering reduced ticket prices) with airplanes and long-distance car travel. Their hubs can be conveniently placed closer to downtown or to residential areas than new airports would be since they are smaller and more nimble, and don’t produce as much smog and noise pollution. Increased mobility from city to city not only means all the afformentioned benefits of a transit system, but also makes it easier for people to move city to city to seek jobs and thus better respond to economic shifts when one city is cutting positions and another city is adding them. You can also commute farther for work without dramatically increasing your carbon footprint or spending a huge portion of your income on gas.

RENEWABLE ELECTRICITY

Wind energy is currently the fastest-growing form of renewable energy that has become economical, and with every new engineering advance, it becomes more productive and feasible as a form of stable and reliable electricity. Aside from that, there is potential in tidal and geothermal energy that are also perfectly clean and are sure to not run out for billions of years. You can invest in mining a ton of coal, and your profit lasts as long as it takes that ton of coal to burn. Invest in mining the wind, and your profit is perpetual – continuing costs are simply maitainence of the equipment, since the wind is free and infinite. That’s more economic power used on permanent, rather than expendable things, freeing up future labor and energy to be used in other sectors.

RESOURCE RESEARCH

Private investors aren’t going to put money into the countless fringe ideas out there because they involve too much risk. You don’t want to spend a quarter of a billion dollars exploring nuclear fusion only to conclude that nuclear fusion is impossible to achieve in the next 100 years. But if you pursue enough options, you know that somewhere you’re going to hit gold.

What if there are valuable trace elements in space debris? What if there’s ample supply of heavy hydrogen and helium on the moon (something that has long been speculated) that are scarce on Earth but useful in nuclear power? What if solar panels in space could prove more efficient and long-lasting than those on the ground, and there’s a safe and cost-effective way of beaming that energy down to stations on Earth through microwaves and magnetic fields? What if vertical farming is the answer to land and water scarcity, while also cutting down on shipping costs? What if cellulosic ethanol (alcohol that could be burned as fuel distilled from cornstalks and wood chips) is the answer to making corn ethanol green and economical without subsidies? If even only one of these ends were achieved, the economic impact would pay off the research to all of them, and keep paying off indefinitely since a technological advance never expires.

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2 Comments »

  1. Amen on the bullet train. I REALLY hope he builds those.

    Comment by micahblitz — December 8, 2008 @ 6:33 am | Reply

  2. Comment

    I agree very generally with your comments, especially with regard to public works – it’s true that at the very least, infrastructure spending gives you an investment in future economic activity.

    I’d add one thing on your comments about mass transit.

    The biggest help to mass-transit would be a gasoline tax – a proposal that is nearly political impossible now (recession) and reviled (to my knowledge) by Labor on the left and the Populist elements of the Right.

    The biggest issue for mass transit is that in the Midwest, Southwest and South, the city infrastructure and designs are built around the highway system and are thereby highly decentralized. Density is a serious issue in that you need dense space – like in NYC and DC – in order to achieve the agglomeration that people want when they travel.

    Pre-car cities on the East Coast have a logical economic relation to mass transit because the density and agglomerating hubs are there.

    Simple federal investments in mass-transit in every U.S. city is going to have very mixed effects. In Dallas (where I lived previously) it’s hard to put together a scenario where, by itself, extending the light rail (expensive) or subsidizing various bus routes is not going to be sufficient to encourage people to swich away from driving.

    Using mass-transit in a city like Dallas is costly because few stops bring people very close to their final destination. They need serious incentive to switch from driving.

    Comment by sleepyreaderz — December 8, 2008 @ 6:21 pm | Reply


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