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Reasonable People: Transportation and Infrastructure Spending
November 10, 2012

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    Today continues the Reasonable People series seeking questions and answers on policy that’s desirable in a world not with zero government failure, but rather in a government functioning near the higher end of its realistic range of performance in a high-trust (and highly trustworthy) society. First question today: is there any federal highway spending that a reasonable person would support?

    States should be able to handle this just fine (and if anything they too will absurdly overbuild highways). In the ideal case there’s reason to keep an eye on network externalities in the long run, in the event that states should lack the incentive to maintain connectivity that would have net national benefits…but even that’s probably stretching it. I say we try Hayekian demobilization: taper down federal spending to zero but be watchful for emergent harms (especially network harms). Network externalities are one small black mark* on the record of airline deregulation–and the primary harm resulting from our neglect of railroads in favor of highways–so we should keep an eye on these phenomena in cutting federal highway funding. Same goes for rail/airline subsidies; I think a reasonable person wants to cautiously provide funding in clear cases of network benefits but nothing more.

    • Side note, the article on airline reregulation neglected the role of fuel prices in creating stranded cities. Under CAB we’d have seen price pressures rise so high that either of two outcomes would have occurred: marginal cities would have been under threat anyway, or cross-subsidies would have been so expensive that major corridors would be gravely overpriced. Tyler Cowen in sharing the link surely realizes this but it bears mention.

    Caution all around is overdue here. Hayek’s fears about planning fallacies came true yet again in our disastrous highway orgy to the detriment of all other transit. Despite his brilliance I think Peter Thiel is too generous to Robert Moses–for each visionary, brilliant public park Moses built he left a boneheaded I-290 or a Lower Manhattan Expressway-type scar. So a reasonable person is probably angsty and uncertain about what to do, other than recognizing the general point that there’s a baby and there’s bathwater in our total transportation spending but they’re hard to reliably identify and monitor in the long run. So again, I say Hayekian demobilization: gradually throw away what looks like bathwater, but listen carefully for crying babies/crying AMTRAKs that end up on the lawn. (Forgive the double entendre…I mean that funding AMTRAK’s rail infrastructure spending has positive spillovers for the whole rail network but has been “thrown out with the bathwater”, and that AMTRAK has been something of a crybaby as it fails to pressure Congress to ease up on the long-haul passenger carriage mandates that weigh on its finances.)

    We modern urbanists and environmentalists forget all too easily the decades of anti-urban/anti-environmental consequences of transportation planning. Perhaps if we hadn’t oversubsidized the Interstate we’d be less burdened with calls for oversubsidizing high speed rail. HSR has emerged as an unfortunate fusion of the liberal demand for something to balance the hyper-subsidization of the automobile (manufacturer bailouts, ‘free’ roads, zoning-mandated free parking, untaxed carbon…) on the environmental left with the nationalistic desire to say “our trains go faster than China’s do” on the right. Unfortunately even underpriced, publicly managed toll proposals have stirred the ire of voters and privatization remains beyond the pale in much of the United States (though oddly not in Toronto). Interestingly, we haven’t seen environmentalists oppose the transportation public employee unions who bargain specifically to limit the number of EZ-Pass lanes (at least in NY) and altogether prevent the implementation of high-speed, no-stop tolling (the technology for which has existed in Norway for decades). What about concerns over large and needless stop-start and queued idling fuel waste? What about ‘environmental justice’ arguments about pollution hotspots from elevated emissions near unneeded full-stop toll booths? Not to mention the aggregate wasted hours in toll traffic. Even if the gains are relatively small in terms of air quality, no-stop tolling is technically a very low-hanging fruit and its slow development stateside is a textbook cynical government failure.

    FAA: Does anyone know if there’s a complete argument for keeping flight controllers under the FAA? This seems like one of those cases where the costs of coordination failure would be…let’s say, ‘nonlinear’. But is that a reason to believe that private provision would really do worse? Perhaps there’s something about military airspace planning and Air Force activities requiring a federal connection to centralized flight management…suggestions welcome on a reasonable position.

    NHTSA: Crash-safety testing is already privately provided by the Insurance Institute for Highway Safety; there might be an argument for keeping both as competitive checks. Crash testing isn’t extremely expensive so the ex ante unknowable benefits of competition perhaps give the Feds the benefit of the doubt here. The research role they provide is probably tough to dispute (as is much R&D at current margins). There’s not a strong argument for their recall powers given how effectively voluntary civil society has handled automotive defects: journalists do the monitoring, consumers and equity traders do the punishing (often in $billions; there are serious market incentives for safety).

    TSA: The Atlantic and many others have had excellent reviews of Federal “security theater”. End the TSA! Or more accurately, hand it back to the airlines. Though technically part of DHS, it’s primarily a transportation issue. It’s an open-and-shut case: we’re spending billions of dollars and billions of traveler-hours to violate our own civil liberties in exchange for a negligible security boost. There is no reason to believe the purely psychic benefits of “feeling safer” will be privately underprovided; to stay in business, private airlines will provide enough security theater to assuage nervous fliers. They’ll still have fancy uniforms and everything!

    There will likely be a followup on the history and role of private/public mass transit in a future Reasonable People: Urbanism post; I won’t leave it out. Otherwise, turning over the Interstate to the individual states and winding down all Federal transportation functions outside this post seem quite reasonable, but odds are I missed at least one important thing! Write in your comments and suggestions on reasonable roles (if any) for Federal transportation rules/spending to be added to this topic.

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