The Trains Don’t Run on Time: The Hidden Costs of Failing to Invest in Infrastructure

April 21, 2011

04/21/2011—It was 9.30 pm and I had been standing on the platform at Dupont Circle for 25 minutes with my blood pressure rising. I was beginning to give up hope that the subway train, which the electronic message board had been promising for the last 15 minutes, would arrive in time for me to catch the last Amtrak train back to New Jersey. I made it with a couple of minutes to spare. As I headed back North, I reflected on what the decaying transportation infrastructure said about the dysfunctions of the government responsible for it.

The DC Metro was once a jewel in the rather small crown of mass transit in the US. Clean, quiet, efficient, and cheap, it made it easy to get around our nation’s capital. However, the last several times I’ve gone to DC, each time on an Amtrak train that was also inexplicably delayed, I’ve noticed that a growing number of the Metro’s escalators are under repair. It appears that years of deferred maintenance are finally taking their toll. Similar problems exist across the country – from the nation’s bridges to our universities.

The contrast with our competitors is quite stark. It doesn’t seem right that, riding on a South Korean bullet train at over 200 mph, I’m able to have a clearer Skype conversation with my family half a world away than I can manage from just a few miles away on my cell phone on Amtrak. (Without wireless, Skype isn’t an option).

Transportation infrastructure investments, when done right, can be a win-win-win-win. They create desperately needed high-quality jobs in the short term, boost productivity for millions of people in the long term, while improving the environment and enhancing community by providing a system where individuals from all social classes and ethnic groups mix on equal terms.

My favorite example of doing such investments correctly came when we were living in LA in 1994. The Northridge earthquake had collapsed an entire section of the 10 Freeway connecting Santa Monica to downtown LA, the most heavily traveled morning commute in the country. Experts estimated it would take a year or more to fix. Contractor CC Myers bid to do it in just 140 days, with an incentive-filled contract that imposed a penalty of $200,000 for every day he was late and a $200,000 bonus for each day he finished ahead of the deadline. He finished 74 days ahead of schedule, earning a bonus of $14.8 M, but saving LA commuters and businesses billions of dollars in lost productivity in the process. View 6.9 on the Richter Scale.

It is the public good nature of such infrastructure investments that makes them a natural role for government. With the current spike in oil prices we have an opportunity for a similar win-win public policy: state and federal governments should set a floor under US gasoline prices, indicating that they will not be allowed to fall again under today’s average price (about $3.80/gallon last week); when the situation stabilizes in the Middle East and global oil prices fall, the difference between the market price and the floor prize could be captured in additional tax revenue that would be earmarked for investments in mass transit – in turn, reducing congestion and our dependence on fossil fuels.

Such a policy would still leave Americans paying far less at the pump than consumers in any of the other advanced industrial countries. And like 2008 when we last saw high gas prices, we’d start to see real changes in consumer behavior. Not convinced? Check out the changes in prices for used cars that are already under way: Gas prices starting to change cars' value.

Unfortunately, given the current aversion to anything resembling tax increases, there appears to be little likelihood such a policy will be adopted, even if would create jobs, improve the environment, and enhance US competitiveness. I can’t help wondering if the outcome might be different if most of our elected representatives were walking up those broken escalators each day on their way to work.