
Andy Kessler: Put Down That Shovel (Gov't Projects for a Recovery) - grellas
http://online.wsj.com/article/SB10001424052748704107104574572230780152344.html?mod=WSJ_hps_sections_opinion
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hypersoar
These sound like good ideas, but it doesn't change the fact that, every once
in a while, roads and bridges need to be rebuilt. Our transportation
infrastructure has been in need of an update for years.

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

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

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

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

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

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

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

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carbocation
Neither medical idea is feasible.

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

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

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joe_the_user
Two big reasons this article is wrong:

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

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

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

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

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

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

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

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

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

