The US has forgotten how to do infrastructure • Hacker News Board

Re: The US has forgotten how to do infrastructure

#71

Post by cletus » Wed, May 31, 2017, 5:04 PM UTC

The US hasn't forgotten. Nor is this unique to the US. It seems to be a widespread issue in the developed world.

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 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.

[1] https://en.wikipedia.org/wiki/Dutch_disease

Re: The US has forgotten how to do infrastructure

#72

Post by ams6110 » Wed, May 31, 2017, 5:04 PM UTC

chromaton wrote: post #42

I-85 in Atlanta was repaired in just over 6 weeks. So things can get done quickly if the incentives are right.

Yes incentives. The I-85 repair had huge political pressure to get it done because a major highway was closed, inconveniencing many voters and commercial entities.

Most infrastructure projects have incentives to delay. The longer the project, the more time for more people to make more money.

Re: The US has forgotten how to do infrastructure

#73

Post by Frondo » Wed, May 31, 2017, 5:04 PM UTC

Kenji wrote: post #41

The solution is shrinking the state to the bare minimum and making as many transactions as possible voluntary.

I wish the Libertarians who post this solution ("shrink the state to the bare minimum") would ever actually show us where it's working in practice, to provide a decent quality of life for people.

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"?

Re: The US has forgotten how to do infrastructure

#74

Post by mistermann » Wed, May 31, 2017, 5:04 PM UTC

michaelt wrote: post #12

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. There's a general effect in political systems, that if a law takes $20 from 1,000,000 people and gives $100,000 to 200 people, the people who lose money won't have enough incentive to put up a big fight;…

This sounds like an excellent description of US politics for the last 30+ years.

Re: The US has forgotten how to do infrastructure

#75

Post by andrewmutz » Wed, May 31, 2017, 5:05 PM UTC

Apreche wrote: post #2

It costs extra because CORRUPTION. They're skimming off the top at every level, and that's why they can't let anyone investigate.

I would like to read more about corruption in American infrastructure. Can you provide a link?

Re: The US has forgotten how to do infrastructure

#76

Post by savanaly » Wed, May 31, 2017, 5:05 PM UTC

michaelt wrote: post #12

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. There's a general effect in political systems, that if a law takes $20 from 1,000,000 people and gives $100,000 to 200 people, the people who lose money won't have enough incentive to put up a big fight;…

If the explanation is some fundamental law of economics/politics as you seem to be suggesting, what is the reason the USA is afflicted more by the problem than other first world nations, or than the USA of a century ago?

Re: The US has forgotten how to do infrastructure

#77

Post by pilom » Wed, May 31, 2017, 5:06 PM UTC

noonespecial wrote: post #51

I thought about this when I visited the Hoover Dam. 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.

#1 reason we wouldn't do things like that today: 112-154 people died during construction (number depends on if you believe that carbon monoxide poisioning during construction was purposely mis-diagnosed in order for the company to skip on paying death benefits).

Re: The US has forgotten how to do infrastructure

#78

Post by bogomipz » Wed, May 31, 2017, 5:07 PM UTC

I don't know if "forgotten" as used in the title is the correct word so much as just "out of practice." Look at this list of infrastructure projects in China in the last decade or so:

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.

[1] https://en.wikipedia.org/wiki/Big_Dig

Re: The US has forgotten how to do infrastructure

#79

Post by vmarsy » Wed, May 31, 2017, 5:08 PM UTC

> Yet France’s trains cost much less.

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.

Re: The US has forgotten how to do infrastructure

#80

Post by imgabe » Wed, May 31, 2017, 5:08 PM UTC

I don't know the answers, but as someone who works in the industry (on the design side). I think a big unmentioned factor is probably liability and the prospect of litigation.

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.