Seventy-nine years ago today, President Franklin Roosevelt dedicated Hoover Dam. He traveled by train from Washington and told the crowd, “I came, I saw and I was conquered…” by an “engineering victory of the first order — another great achievement of American resourcefulness, American skill and determination.” FDR went on: Throughout our national history we have had…More
Last week I lamented that Americans seem stuck with a mostly 1970-era infrastructure and lack the political will — certainly not the money, considering the trillions we blew on failed wars — to move forward. This is not the nation that built transcontinental railroads, the Interstate Highway System, the waterborne trade of the Mississippi…More
The Times’ Jim Brunner wrote an insightful article earlier this week about the connection between the region’s infrastructure projects and political gridlock in Olympia. The state faces $21 billion in unfunded highway, ferry and transit projects. Bus service could be cut 16 percent. And opposition is stoked by foul ups, such as boring the…More
I find evidence of the Puget Sound economy’s long reach all over, including in the June issue of Trains magazine. An article highlights the 25-year survival of Montana Rail Link, with a 623-mile main line running from Sand Point, Idaho, to east of Billings, Mont. This is the former Northern Pacific, the first transcontinental to reach our region. But it became redundant with the 1970 merger involving the NP and the Great Northern and creating the forerunner to today’s Burlington Northern Santa Fe. BN did a lease-purchase agreement with MRL founder Dennis Washington in 1987; in 2047, MRL has the option to purchase the main line outright. BNSF uses the former Great Northern as its main rail route, although it sends trains over MRL, too. And MRL has been successful in keeping and growing its own traffic.
One big blow came during the recession when Seattle’s Plum Creek Timber sawmill in Pablo, Mont., was permanently shut down. As a result, MRL was forced to close an entire branch line. “Losing Plum Creek was like losing Sears and JCPenney out of a mall,” the article quotes MRL President Thomas Walsh. The company was hammered by the housing collapse. It had also become a real estate investment trust, a boon to investors who get most of the profits, but a situation that doesn’t allow executives to be patient.
Meanwhile, the magazine — and you have to buy it, this isn’t available on the “tubes” (what a concept) — has a fascinating map showing all the trains operating on Montana Rail Link at 10 a.m. on Feb. 25. Again, the Puget Sound is heavily represented.More
The Interstate 5 bridge that collapsed into the Skagit River was 58 years old. It was built when the U.S. population was about 166 million and the Northwest was a far-away place for most Americans and much less built up. Hundreds more bridges in Washington are vulnerable. The average age of the nation’s 607,380 bridges is 42 years. the seasonal mudslides along the rail line north of Seattle, first built in the late 19th century, are a scandal of sloth and aimlessness. Sometimes I think we are living off the investments of previous generations with the obliviousness of the characters in the movie Idiocracy . This would be an excellent time to be repairing existing roads and bridges, as well as spending on a more diverse multi-modal system, including expanding and rebuilding our passenger train system and adding capacity to major freight corridors. It would put people to work at a time of high unemployment, more than pay for itself in long-term productivity improvements and interest rates are incredibly low. Even better if we make our bridges here, instead of buying them from China.
Yet I’m not optimistic that this most recent evidence of our failing infrastructure will be a wake-up call any more than the lethal Minneapolis bridge collapse of 2007. An $8.5 billion transportation bill is bottled up in Olympia. The critical Columbia River Crossing is stymied because some in Vancouver, Wash., are afraid of light rail. In the other Washington, the misbegotten culture of austerity and sequester is making it impossible to do much more than tread water, if that.
To be sure, the infrastructure debate is complex. The United States ranks 7th on the latest Global Competitiveness Report by the World Economic Council. That doesn’t seem to show a nation in crisis, although we did fall two notches from 2011-2012. Boondoggles do happen, although more often on roads and freeways we don’t need than with light rail and transit. Funding streams are distorted and as often steered by powerful members of Congress as by actual need (wait for the federal money to be spent dredging eastern harbors to the detriment of Seattle and Tacoma).More
A reader, no doubt trying to play “gotcha,” sent me an email, subject line: “Dr. Paul Krugman.” The reader writes, ” ‘The effects of federal public works spending were largely offset by other factors, notably a large tax increase, enacted by Herbert Hoover…’ Dr. Paul Krugman, New York Times, 11-10-2008.” End of email.
Krugman’s actual point was that Hoover’s tax increase was one of the drags on the economy inherited by Franklin Delano Roosevelt. And although the New Deal put millions to work and alleviated suffering, it never deployed enough stimulus needed to fill the demand hole left by the Great Depression. Krugman writes:
And F.D.R. wasn’t just reluctant to pursue an all-out fiscal expansion — he was eager to return to conservative budget principles. That eagerness almost destroyed his legacy. After winning a smashing election victory in 1936, the Roosevelt administration cut spending and raised taxes, precipitating an economic relapse that drove the unemployment rate back into double digits and led to a major defeat in the 1938 midterm elections.
Shippers pay $1.25 for every $1,000 worth of cargo that goes through American ports. This is the Harbor Maintenance Tax. Canada and Mexico don’t charge a similar tax and a new report shows that the levy does put U.S. ports at a competitive disadvantage. “Pacific Northwest ports are facing an invisible blockade that is sending our business to Canada,” U.S. Rep. Rick Larsen, D.-Wash., said in a prepared statement last week. Larsen is the ranking Democrat on the Coast Guard and Maritime Transportation Subcommittee, which has jurisdiction on the issue in the House.
The Federal Maritime Commission study found that Canada and Mexico are not breaking any trade laws. It also stated that “many of the advertised benefits of foreign ports are not as significant as may be believed, for example, the transit time from China to inland destinations such as Chicago and Memphis through the Port of Prince Rupert as opposed to ports in the United States.”
American ports are found to be competitive internationally. “However, it would appear that the (Harbor Maintenance Tax) makes the challenge more difficult. This is especially the sentiment of the ports that are competitive with Canadian and Mexican ports.” It quotes Tay Yoshitani, CEO of the Port of Seattle: “A lot of factors go into the routing of cargo and a lot of carriers/shippers want diversity in how they get cargo to warehouses…cost is always an issue, and the HMT clearly disadvantages us against Canadian ports.”More
The economy is near stall speed, no matter what Ben Bernanke says. The Obama stimulus was too small to fill the demand hole left by the Great Recession. It was poorly aimed and now is running out, and the reality is that Obama has presided over one of the lowest-spending terms over the past 60 years. Government cutbacks are a further headwind to recovery (something Reagan didn’t face in 1982).
Unemployment remains high and growth is slowing. Most people think we’re still in a recession. Europe is in a recession and threatening to bring the world into a deep downturn. The GOP House and minority in the Senate will resist any measures to move the economy forward — at least until President Romney is sworn in. So welcome to the next few months.
What would you do to fix it?
Read on for the best links of the week and the haiku:More
As you know, the California solar energy company Solyndra received a $525 million loan from the U.S. Department of Energy, made some bad bets about the direction of raw materials prices and technology, forcing it to file for bankruptcy protection. This has produced a House investigation, with Solyndra executives taking the Fifth. If they were investment bankers, this would be another day at the office, but never mind that.
To the critics that say the Obama administration’s effort to seed a renewable energy sector with $22 billion in loan guarantees, former Reagan administration trade and commerce official Clyde Prestowitz says:
These are precisely the wrong conclusions to be drawn from the episode. As a former director of new product development at Scott Paper Company, I can tell you that any corporation or venture capitalist would be happy if as many as one in ten investments in new products and ventures paid off. The Solyndra loan guarantee of $535 million represents only about 2 percent of the Energy Department’s $40 billion portfolio of loan guarantees whose recipients mostly seem to be doing pretty well. Indeed, the number of jobs in the U.S. solar industry has doubled to 100,000 since 2003.
Those who hold the superstition that an Ayn Rand “free market” is the cure to all ills — despite its disastrous results in 2008, etc. — meet every constructive idea to get the American economy out of the ditch with: “That’s industrial policy!” Industrial policy, you see, is always some failed commie central planning nightmare from the Soviet Union and eastern Europe circa 1980. And that’s been swept into the dust-bin of history.
In fact, America does have an industrial policy, one constructed by years of often convoluted, often ineffective measures produced by Congress and presidents, pushed by the army of lobbyists for the connected huge corporate interests.
American industrial policy includes big tax cuts for the wealthiest and legal tax dodges for big corporations; special treatment for a few big exporters such as Boeing and Caterpillar; huge agricultural subsidies; encouragement to offshore jobs; the Military-Industrial Complex (Iraq will buy F-16s from Uncle Sam); taxpayer backing for deregulated Wall Street and the TBTF banks no matter what they do; union-busting NLRBs; heavy subsidies for house building, especially sprawl, and house ownership; more subsidies for the fossil fuels industries; decades of federal support for airlines and freeways, but not trains and transit; a for-profit health system supported by Washington; incentives for job-killing mergers; failure to protect small competitors with antitrust enforcement against consolidation. I could go on. But none of this comes from the benign magic of the “free market.”More