Friday, February 18, 2011

Reject the “Jobs” Justification for Transportation Projects

I fully agree with Robert Poole's article which in part reads as follows:
  • On a tour of China, government officials took renown economist Milton Friedman to a major construction site, where Dr. Friedman expressed surprise at seeing legions of workers digging away with shovels. When his host responded that a major purpose of the project was to create jobs, Friedman replied that if that was the case, they should equip the workers with spoons instead of shovels.
  • That point was underscored in a report issued last month by the Bipartisan Policy Center. “Strengthening Connections Between Transportation Investments and Economic Growth”, written by economist Douglas Holtz-Eakin and civil engineering and urban planning expert Martin Wachs.
  • Instead of focusing on short-term construction job-creation, the authors argue for a focus on long-term returns from infrastructure investment. “Over the long-term, higher productivity—the ability to generate more output and income from each dollar of capital or hour of work—is the key to higher labor earnings and improved standards of living,” they write.
  • Hence, infrastructure policy should select projects that do the most to enhance long-term productivity—as did the creation of the Interstate Highway System, which dramatically lowered the cost of personal and freight transportation, leading to the world’s most productive logistics system.
Speaking of highways, three California Congressmen are asking that the funds of the California high speed boondoggle be diverted to correct the ills of SR 99. Part of their positions is as follows:
  • The economic and environmental benefits of SR 99 improvements are strongly contrasted by the uncertainty of California’s now infamous bullet train, which has been described by the national press as “the train to nowhere.” Providing the state the option to redirect high speed rail funding to SR 99 will give state and local leaders the opportunity to step-back from what is likely to become a bottomless pit of spending.
The bottom line is government needs to invest taxes in productive and necessary infrastructure. For Hawaii this means road repairs, water and sewer line repairs, and airport and harbor upgrades within our ability to borrow and pay. All these are necessary projects and with proper scheduling and financing they can get done without breaking the citizens' backs.

The airport modernization, and the Middle Street merge fix projects that Gov. Abercrombie wants to do should be done asap. The Mufi/Carlsisle rail boondoggle needs to be thrown in the trash. The accumulated rail funds should be used immediately for the Middle Street construction, the Honolulu airport upgrades and for the design of the secondary treatment facility mandated by the EPA for our Sand Island effluent treatment plant. Now these are construction and engineering jobs worth paying for.