Public transportation

New York's Subway Boondoggles Illustrate How Governments Bungle Infrastructure

Why don't "we" build anything anymore? Because corrupt unions and politicians recognize a guaranteed payday when they see it

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Who's ready for $1 trillion of this! ||| Matt Welch
Matt Welch

Back when then-president Barack Obama used to lament and lament some more that the United States no longer builds amazing infrastructure projects like the Golden Gate Bridge (setting aside for the moment that it wasn't the federal government that created America's finest span), buzzkills like us would point out that A) the American Recovery and Reinvestment Act of 2009 included a whopping $105 billion for infrastructure, characterized by Obama at the time as "the largest new investment in our nation's infrastructure since Eisenhower built an Interstate Highway System in the 1950s," and B) "Every dollar that governments spend on every level gets inflated by contracting rules, social engineering, environmental aspirations, and sops to public sector unions."

A detailed and infuriating illustration of that latter point comes in today's New York Times, which, following up on a previous indictment of how the city and state of New York have let the subway degenerate into almost comical disrepair, deconstructs "The Most Expensive Mile of Subway Track on Earth." The nut:

For years, The Times found, public officials have stood by as a small group of politically connected labor unions, construction companies and consulting firms have amassed large profits.

Trade unions, which have closely aligned themselves with Gov. Andrew M. Cuomo and other politicians, have secured deals requiring underground construction work to be staffed by as many as four times more laborers than elsewhere in the world, documents show.

Construction companies, which have given millions of dollars in campaign donations in recent years, have increased their projected costs by up to 50 percent when bidding for work from the M.T.A., contractors say.

Consulting firms, which have hired away scores of M.T.A. employees, have persuaded the authority to spend an unusual amount on design and management, statistics indicate.

Public officials, mired in bureaucracy, have not acted to curb the costs. The M.T.A. has not adopted best practices nor worked to increase competition in contracting, and it almost never punishes vendors for spending too much or taking too long, according to inspector general reports.

As a resident of the Empire State, I do not want to hear another goddamned word out of Chuck Schumer's mouth about how the forthcoming federal infrastructure spending plan must be 100 percent public.

When Democrats talk about the evils and corporatey-corporateness of letting (involuntary shudder) private companies finance and maintain stuff like roads and bridges and trains and tunnels and airports, know what they are defending: a system of money-sloshing shielded at all levels from the discipline of competition. You just want the one percent to get richer!, they will cry, as the status quo they defend continues to build bupkus while diverting taxpayer money to the millionaire friends of the Cuomo dynasty.

There is a better way. For those serious not about graft but about building and maintaining the best and most cost-effective transportation infrastructure at all levels, begin with the half-century's worth of work put into this topic by Bob Poole and the Reason Foundation. Here's hoping the infrastructure bill resembles Poole's vision more than the corrupt swamp from which President Donald Trump emanated.

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  1. Obviously the solution is to just have a government run construction company that will eliminate the waste and greed that’s there due to the private contractor middlemen.

    1. Anybody have a god look at cost overruns in the Soviet Union and China?

      Seriously, I know (I HOPE I know) you were being sarcastic, but the State Worshipers really WILL believe this. They are a far bigger danger to Western Civilization than the Islamopests.

      1. They are a far bigger danger to Western Civilization than the Islamopests.

        Oh, easily. The most extreme Islamacist just wants to kill us. All of these people wish to save us. History has shown the latter to be far more dangerous.

      2. Yes I was being sarcastic, but there probably are people who would be seriously in favor of such a thing.

  2. No one likes it when you upstage a sixteen-year veteran of Reason’s morning links, Matt.

    1. Matt is wearing a bow tie and a backpack right now and he doesn’t give a FUCK.

  3. NYT: “The French do it better.”

    Those Commie fucks!

  4. Because of that and some technical issues, Mr. Ramond said Razel-Bec was losing money on the job. Usually, he said, the firm makes a profit of about 5 percent.

    Stop it.

  5. “You didn’t build that”

  6. Does people really expect different?

    Is peoples really surprise?

    Is functional is not.

  7. I found the NYT article very informative, but it doesn’t, in and of itself, provide any evidence that public-private partnerships would be better. It shows that American government and NY State in particular are bad at managing public infrastructure. However, the examples cited, like Paris’ new metro line don’t cost 1/6th the price because of private public partnership but because it had more competitive bidding. Also it had less soft cost because the agency is doing more design in-house so arguably they’re relying more on the public sector than we are. (Technically RATP is a state-owned enterprise -make of that what you will). To the degree that the article can explain America’s bloated public infrastructure costs, it’s because of corruption. Parsons-Bicherhoff or whatever they’re calling themselves now and certain unions fund political campaigns and then win all the contracts with fat margins and bloated payrolls. Is there any reason to think they can’t win public-private partnership bids as well only now they get to pull in an investment bank to fund it rather than issue cheap as hell munis? If anything the article suggests that the best way to lower infrastructure cost would be to better insulate the MTAs of the world from the politicians a la Robert Moses or to insulate elected officials from the bidders via public financing of campaigns, but I assume neither of those conclusions gel with Reason’s world view.

    1. I don’t get it.

    2. “If anything the article suggests that the best way to lower infrastructure cost would be to better insulate the MTAs of the world from the politicians a la Robert Moses…”

      Are you fucking kidding me?? Robert Moses, The Power Broker, is your example of sound government infrastructure development? Moses built his power base by throwing contracts to the same public sector unions, contractors and consultants who are now getting their cash directly from the politicians. In fact, Moses’ “insulation” from “politicians” allowed him to get away with even more mischief. At least a politician can get voted out of office. Moses couldn’t.

      If this is your answer to “Reason’s world view,” you lose.

      1. I agree Moses was a tyrant who wrecked much of New York. But he wasn’t beholden to politicians who were beholden labor unions and contractors. I’m really not sure what the solution is. It’s just that this NYT cross county case study doesn’t get to public private partnerships.

    3. Parsons-Bicherhoff or whatever they’re calling themselves now and certain unions fund political campaigns and then win all the contracts with fat margins and bloated payrolls.

      ^ This sentence right here is a big red flag with bold-type all-caps saying “I HAVEN’T THE FOGGIEST IDEA WHAT I’M TALKING ABOUT!!!”

      Routine cost-overruns on public works aren’t “because Parsons-Brinckerhoff (a completely different firm from Parsons Corporation) is bribing elected officials.” The cost overruns are largely due to unions in combination with other public contracting requirements that drive up costs. Profit margins for contractors on public works are typically in the 2-5% range.

      Campaign contributions from unions and contractors are intended simply to up the volume of infrastructure spending, to be captured during the normal course of public bidding.

      1. Did you read the article? Cause the article claims there’s a lot of padding, and political contributions. And why spend all that on campaign contributions for such a shitty margins?

        I’m not sure how you botch the Big-Dig to the degree that they did and remain a going concern that sells for 1.25 billion without a lot of regulatory capture.

    4. Forget public-private partnerships, how about just privatization, like in Hong Kong and Japan?

      1. I assume you’d then be bitching about eminent domain, because while I love the HK model, it’s basically a land developer that uses the profits from seizing and re-zoning land around stations to finance rail construction. Also, it’s public.

  8. As a resident of the Empire State, I do not want to hear another goddamned word out of Chuck Schumer’s mouth about how the forthcoming federal infrastructure spending plan must be 100 percent public.

    Fixed for you

    1. Yes, Matt, but how do you REALLY feel?

  9. mired in bureaucracy

    Irrelevant. This is a basic incentives issue. It’s not the bureaucracy that matters. It’s the insulation from harm that increases as the size of the state increases. Who’s going to punish the MTA? The voters can’t directly. They kinda can via proxy. And yet they re-elected a Communist.

  10. Fact: The Subway Boondoggle is my nickname in the local fast-casual chain sandwich shop scene, which i am no longer allowed to patronize.

    1. Y-you mean – you’re Jared?!

      *backs away slowly*

  11. “A half-century’s work” by “Bob Poole and company”! Hell of a lot of good that’s done. This shit just keeps happening, worse and more malignant then ever before. Might as well have burned all those Reason Foundation reports etc. over the last 50 years. Would have at least created a nice bonfire.

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