Monday, August 9, 2010

Roads: Krugman vs. Stossel

Paul Krugman has been leaning on the doomsday horn pretty heavily lately. There was his delightfully titled "Who Cooked the Planet?" column a few days ago, and now we've got "America Goes Dark", with the following opening chord: "The lights are going out all over America — literally." The "literally" has to do with a town that decided to turn off a third of its street lights in an attempt to save money, which admittedly sounds a little odd. And apparently other jurisdictions are starting to tear up infrastructure rather than maintain it: "... in a number of states, local governments are breaking up roads they can no longer afford to maintain, and returning them to gravel."

Well, maybe if he weren't such a Chicken Little generally, these kinds of stories would have more effect. But maybe not. Because it's not as though there isn't reason for concern -- it's just that, the Nobel Prize Committee notwithstanding, his Big Gov, Tax 'n Spend, Loot the Rich panaceas seem increasingly wild-eyed (and have you seen his eyes?), obsessive, and unconvincing. As just one alternative view, see Stanford economist John Taylor's view of Congressman Ryan's "Roadmap", which Krugman scorns for cuts in tax 'n spending, vs. what he calls the real "Road to Ruin".

In any case, the mention of governments tearing up roads rather than maintain them raised an interesting point of comparison with another post, this one by John Stossel: "Private Enterprise Does it Better". Here are the two at their most general -- first, the gloomy, embittered Krugman:
The antigovernment campaign has always been phrased in terms of opposition to waste and fraud — to checks sent to welfare queens driving Cadillacs, to vast armies of bureaucrats uselessly pushing paper around. But those were myths, of course; there was never remotely as much waste and fraud as the right claimed.
Okay, there wasn't as much. Anyway, here's the cheerful Stossel, in flat contradiction, and without a mention of welfare queens:
Free enterprise does everything better.
Why? Because if private companies don't do things efficiently, they lose money and die. Unlike government, they cannot compel payment through the power to tax.
Even when a private company operates a public facility under contract to government, it must perform. If it doesn't, it will be "fired"—its contract won't be renewed. Government is never fired.
Contracting out to private enterprise isn't the same thing as letting fully competitive free markets operate, but it still works better than government.
Roads are one example.
I know that Stossel is just a TV commentator who lacks a Nobel Prize. And his sentences are a little short. But in this comparison it was that last line, obviously, that caught my eye, and sure enough we soon get an example of a government option re: its roads that constrasts sharply with Krugman's example:
Indiana used to lose money on its toll road. Then Gov. Mitch Daniels leased it to private developers. Now it makes a profit. The new owners spent $40 million on electronic tolling. That's saved them 55 percent on toll collection. They saved $20 per mile by switching to a better de-icing fluid. They bought a new fleet of computerized snowplows that clear roads using less salt. Drivers win, and taxpayers win.
A nice alternative to tearing them up, don't you think? And if that sort of thing can work with roads, why not with infrastructure generally? And if with infrastructure, why not with state-run services generally?

UPDATE: Speaking of roads, here's a Marginal Revolution post by Alex Tabarrok, "Spontaneous order on the road", about experiments in doing without traffic lights or stop signs -- as he says, "Order ensued"!

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