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Tag Archives: Edward Glaeser

Our Transportation Infrastructure is Crumbling

I have to admit that the Pulaski Skyway terrifies me. Driving across it, I always remember the Minneapolis bridge that collapsed during rush hour in 2007.

The Pulaski Skyway is an 80-year-old rickety looking structure. A sister to the Minneapolis bridge, the skyway is among the network of roads leading to lower Manhattan through the Holland Tunnel. With no trucks because of its narrow lanes and no tolls, it is the fastest and cheapest way for me to get into the city.

The congressional battle about transportation funding is what started me thinking about the Pulaski Skyway. Unable to agree on long term policy, Congress just approved a 90-day stopgap measure that temporarily funds ongoing transportation projects.  If Congress is unable to act and New Jersey has big budget problems, how to fund a $1 billion+ Pulaski Skyway project?

That took me to Harvard Professor Edward Glaeser. He says that during our (national) youth, we built the Erie Canal (1825), the first Transcontinental Railroad (1869), the Panama Canal (1914) and (as a young adult) the first interstate highway system (1956). But now we are middle aged. We have to forget about the romance of high speed rail. No longer can we dive into massive politically attractive projects with federal funding. Instead, we need “smart, incremental changes” with users paying the bills, congestion pricing, more private participation and more buses.

So yes, I would accept congestion pricing, a toll, and a higher NJ gas tax for a new Pulaski Skyway. (But the bus? Probably not.)

The grade that the Pulaski Skyway received? With 9 the best and 0, a shutdown, both the Pulaski Skyway and the (collapsed) Minneapolis bridge got a 4 for structure from federal inspectors.

Our bottom line: This about a lot more than the Pulaski Skyway. It is about a wise fiscal approach to an aging transportation infrastructure.

Please note that this entry was edited after it was first posted.

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According to Harvard economist Ed Glaeser, big US cities deserve our attention. Rather like a ripple, first, as ports, they attracted commerce. Commerce led to more affluence. The affluence brought more people. The people wanted better education. Better education generated more innovation. Combine people, income and education and they attract more people, income and education.

Statistical proof? Los Angeles, New York, and Chicago represent almost 20 percent of the US GDP. The 2000 and 2010 Census Reports also tell us that the trend continues. People are gravitating toward the US West and East Coast.

Such a wealth of data has immense significance for the budget debate. Among the many issues cited by Dr. Glaeser, he asks “whether attempts to bolster depressed areas are actually stopping people from migrating to areas where they might lead more productive, happier lives.” Your opinion?

The Economic Lesson

In a wonderful Teaching Company lecture, Macalester’s Dr. Timothy Taylor, explains why sub-Saharan African geography hindered their economic growth. Lacking port cities for international trade and rivers that connected to the interior, trade and development were constrained.

Apply the same variables to the US and you can see how geography matters.

 

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In the U.S. 81% of us live in a city. Saying that cities generate more wealth, productivity and innovation, Brookings’ Research Director Alan Berube and Harvard’s Edward Glaeser applaud urbanization.

In China, though, Grandma might not be so happy. More urbanization means less family cohesion. Offspring leave the farm for the city and leave parents and grandparents behind. Imagine this, though. China’s Civil Affairs Ministry is considering making adult children visit their parents. According to one article, if approved, the new mandate means parents can sue adult children who are insufficiently attentive.

The Economic Lesson

Cities facilitate spillovers. A spillover is just the spread of something, such as a new idea, beyond the spot where it originated.

When a new idea easily spreads because firms are interconnected and people communicate more easily, we would say the spillover created a positive externality. That just means that an accomplishment that originally involved 2 entities, rippled outward to benefit many.

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We will never know for sure whether the $787 billion stimulus package really made a difference. According to NY Times columnist David Brooks, President Obama’s economists predicted 3 million jobs would be created or saved while others suggest the impact will be much smaller.

How are we doing so far? Is the U.S. economy faring much better than it would have without massive spending? 

Looking at research by Harvard professor Edward Glaeser, we see the data from individual states provides no definitive answers. We cannot say for sure that unemployment numbers and the change in government spending are related. Also, even with the Recovery Act, we still have a 9.7% unemployment rate and I wonder how you can prove that government “saved” a private sector job. As Dr. Glaeser points out, because “there are too many moving parts,” we cannot identify definitive empirical evidence supporting or refuting a Keynesian approach. 

Even for the Great Depression, economists disagree. Some say FDR’s spending was crucial. Others believe that World War II was the answer. Meanwhile a third group asks us to focus on monetary policy problems. 

The Economic Lesson

British economist John Maynard Keynes (1883-1946) said that government economic intervention could be beneficial during a recession. “Prime the pump” through government deficit spending. Then, when the private sector regains its strength, government can reduce its spending.

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