tv Larry Summers on Public Investment CSPAN January 10, 2017 1:57am-3:00am EST
join the discussion. >> now former economic director talks about public investments during the trump administration. he also spoke about different ways to fund infrastructure projects. the brookings institution posted this event. [indistinct conversation] >> good morning. i am director of the center on fiscal and monetary policy. the center was formed three years ago now. this is our third anniversary.
to improve the quality of physical: monetary policy and public understanding of it. i think this is a good embodiment of what we had in mind when we started the center. brookings gift of a trustee. because i think there is a role for research and both shaping good economic policy and in helping the public better understand and. and certainly, infrastructure spending and investment in human capital are one of the things or two of those things that are often reduced to bumper stickers, sometimes with no evidence whatsoever behind them. i want to say a word about the hatch and center. as of today, we have done 44 events. today we will publish our 26th and 27th working paper. explainers, part
of our public understanding. and we have done one computer game that helps educate people on the federal budget and there will be a laptop or ipad set up outside if anybody wants to try it. today we have a simple question with unfortunately not a simple answer. say you want to spend more money on public investment. that seems possible during the campaign. where should you spend it to get the highest return and on what evidence? our attempt today is to begin with some discussion of the evidence and the argument for public investment. those of you look at the program know we will start with a keynote from larry summers who among other accomplishments as chairman of the hutchins center advisory committee. then we have a panel of academics i will introduce later to talk more about the evidence on physical infrastructure. then we will turn to human
capital. it is our believe that too often the conversation in washington separates investments and physical capital and human capital and today we attempt to bring them together into one thing. the other thing we tried hard to do was to avoid advocacy for one particular form of public investment taste on the interest of the people promoting it. there is an entire industry dedicated to telling us we ought to put all of our tax money into pre-k and another who says we should put it all into rows and bridges. we hope to shed some light on .he evidence for this also, the questions that remain to be answered. i think we would be foolish if we pretended that all of the questions had answers. following the panel i will moderate, we are fortunate to have a speaker from wellesley college who will talk about
payments, particularly so low investment families can consider them for investment. then we will break for lunch and return with a talk about education and what we have learned about research and education and the efficacy of that. then we will move to a discussion about the politics and practicalities. it is a long day. i appreciate everybody coming on time. we are on c-span and the brookings website. so be careful what you say. but not too careful. except for you larry, you don't have to be careful. [laughter] david: my colleagues would appreciate it when you get up a few take the papers from the floor and put them in the recycling in the back. and with that, larry summers. [applause]
much, thank you very david. i am very glad to be here and to onticipate in this event what i think are a very consequential set of subjects. eitherare looking for predictions as to what will happen in the next several months in washington or you are looking for politically useful judgments about what could washington over the next several months, my talk is you should pay attention to. instead, i want to do four things this morning. talk about why i think infrastructures west -- infrastructure is so important. second, make the overwhelming
case for the program of expanded investment in infrastructure maintenance. third, make what i think is the more speculative but still compelling case for a broader program of infrastructure improvement and forth, remark on ,he important role of markets prices, and the like in improving the ways in which we infrastructure. so, question one. is do i think infrastructure so important and a compelling need in the united states right now? at one level, there are a variety of studies and discussion and subsequent panels
the return case that on infrastructure investment as conventionally measured is relatively high, at least compared to the government borrowing rate which for the long-term in real terms in the united states is now very, very close to zero. is --roader level, there there are a set of economic observations that would suggest, to me at least, that conventional measures of rates of returns are likely to understate benefits of at least many categories of infrastructure investment. we know that more open trade generates economic benefits that substantially exceed any conventionalf
deadweight losses. perhaps because of the spur of efficiency from competition. perhaps from economies of scale aggregates,economic perhaps from the greater facilitation of specialization. in the same way, we know in ways that are not predicted by at least simple economic theories thatught in basic courses, levels of productivity are much irony presence of systemic chill of substantial conglomerations than they are in the absence of such conglomerations. again, evidence that bringing people together yields benefits. what does infrastructure do? infrastructure permits
insubstantial part -- in substantial part, larger change and reduces effective distances. thereby facilitating trade and conglomeration. it would then be very surprising if the private benefits of infrastructure were not exceeded by the social benefits. i have wondered about this for many, many years. of roberting the work fogel on the transcontinental railroad. the historians in general believe that the transcontinental railroad was central to the success of the in the lastnomy century.the 19th that was the general view of
historians. fogel demonstrated that if you calculation into you said, well, transportation is x percent of gdp and the rewards are half as expensive than canals would've been and you multiply the two numbers together, the whole thing could've only been two or 3% of gdp and therefore the whole thing was not ultimately very important. and all the historians were wrong. maybe. or, maybe fogel did not recognize and did not take account of the various other trade like benefits that were facilitated by committing together across the country -- knitting together across the costry the infrastructure permitting. i suspect at least some of the
latter. the second reason why i believe infrastructure investment is so important at both economic and a broader social level is that in things arere most increasingly mobile, private capital almost completely, ideas almost completely, private companies enormously. a nation's infrastructure is distinctively local and is distinctively defining of its strength. that means that in in economic sense, and investment in benefitscture creates of attracting mobile factors from abroad to the more
attractive infrastructure rather aan having benefits substantial part of which outside of our country. i also believe that at a time when if we have learned anything from the last election, it is the importance of responsible nationalism. that the idea of a common infrastructure in which all americans can take pride in its quality is a potentially important constitutive element .f our nation so, i think there are a priority considerations. second, the case for maintenance. me it isto overwhelming.
the american society for civil that extrastimates it because of poorly maintained roads in the state of massachusetts is about three point $4 million which extrapolates to over $100 billion for the united states as a whole. how you do thea calculations, it is between $.50 and one dollar tax on gasoline year inorists pay each extra automobile repairs because .f poorly repaired roads it is inconceivable to me that fixing the roads is not an investment with an extraordinarily high rate of
return. now, i have no idea whether the american civil society of engineers has made that estimate with precision, whether it is right to a factor of two or not. it is that is even close to -- but if it is even close to being right, it makes a case for very substantial increases in the investment. the same point, this is not something that will easily be it was made, but for me years ago when i was as was myecretary and habit at that time, every time i visited an american city, i went and visited a high school in gave a talk about the importance of financial education and education and general. i gave such a talk. this at the time i thought was a pretty good talk. i had a young teacher come up to
me and said, secretary summers, that was a really interesting talk. but, i tell you what i think the kids do not understand. and i said, what is that was marked in she said, well, you said their education was the most important thing in the world. paint is chipping off the walls and all the classrooms in this school. it is not chipping up the walls in mcdonald's. it is not chipping of the walls at walmart. it is not chipping off the walls and almost any other place except in this school. so why should they think that this society regards their education is the most important thing in the world? i am not usually at a loss for words but i had no effective
answer but what i do know is that there are 10,000 schools across america were the paint is chipping off the walls and i do know that on somebody's estimate, 20% of the chemistry labs in american high schools have hvac systems that do not work so the kids get sick when they do the labs. that cannot be right. here's another thought. fiscal prudence. the evidences, people have done these studies on delayed room construction. delayed road construction and delayed road repair. prevention is cheaper the end cure. waiting for the bridge to collapse is much more expensive than buttressing the bridge he .or it collapses -- before it collapses. yet, we have a set of
measurement systems that measure with elaborate precision and require congressional approval on a periodic basis every time we increase the value of the dollar tag of the country. but, deferred maintenance is as much a debt burden on the next generation. it is one that accumulates and compounds at a much higher rate. yet we have no mechanism for measuring it let alone limiting alone containing it. the final reason why i think the case for more patent is compelling -- i am going to go little but over time here, guys all of the is incentives for all of the actors, if all of those are against me, nobody ever named a
maintenance project. nobody ever got recognized for a maintenance project. nobody ever much got blamed for deferring maintenance during the were in office. and so, all of the incentives are two defer maintenance and also to defer free maintenance. i learned this when i was president of harvard. people running around saying more grainy.d be program should be more grainy. frankly, as an economist i was not very impressed by this stuff that i learned a little bit more about it. and here's what it turned out two-thirds of the
building stalled in harvard and 2005.90 somebody was in charge. they had a budget. they were overshooting their budget. partly because they had underestimating and partly because of the fact that we wanted to have computer laboratories or fancier offices or whatever. so the budget was being overshot. everybody was met. what did they do? at the last moment the insulation plants. in order to save money. they did save money, they got in under budget. of course, they pay $.20 a year in extra heating and air-conditioning costs for every dollar they spend so it was completely stupid in terms of the universities financial health but the incentives there do it.erwhelming to yet, if you do not think that is pervasive in infrastructure
the public sector does across the country, i have a bridge that i would like to sell you. so i think the cases overwhelming that we should be spending substantially more on maintenance. how much? if you take that $100 billion a year in damaged automobiles it is hard for me to believe that there would not be a pretty compelling case for spending half a percentage each year more on maintenance at least for the next decade as we work out the backlog. third, there is more. the treasury did a study or -- i can'td a study calculationin, the
and the study was done by infrastructure advocates. but it emphasized there were 40 projects across the country that cumulatively would cost about $200 billion in would, in present value, have benefits of somewhere between $500 million $1.120 -- 1.1 trillion dollars. i cannot evaluate that. here is one i know a little bit about. -- the air traffic control system of the united states, it is based on radar. tell you three initials that have nothing to do with the air traffic control system of the united and of america. gps. on, some ofbanging you probably heard me say this, and laguardia,rt
how terrible they were in how this was a case for infrastructure investment. how it was terrible. eventually what i thought would happen did happen which was the guy in charge, the guy from ward authority called me and tried to get me to stop and he no, he authorityom port called him tried to get me to stop and he knew he could not get me to stop telling it if he did not give me more. he said, how does the air traffic control system work when it gets really congested over the new york area? he said, they do some of it on the radar screens but there is not actually enough capacity for all of the green dots and so there is another technology they use. thumbtacks. yellow stickies. and, an old bulletin board. this is the new york area. air traffic control in what
calls itself the greatest country in the world. sense.nnot make the energy losses because we do not have a sensible national power grid transmission system. they do not make sense. the safety losses because we transport energy on trucks and trains rather than through pipelines do not make sense. me ifld not surprise there were substantial benefits to a sensibly-designed national broadband program, although that is i think a less clear question. i am familiar with all of the analysis about how mass transit doesn't work, and how high
speed rail really isn't cost benefit given how spread out american cities are. i am. and in some cases i am sure those analysis are right. on the other hand, it's hard to believe that we are not awfully grateful that people built a subway in manhattan 100 years ago. hard to believe that we are not awfully grateful that that happened. and it seems to me when we think about our obligation toss posterity in a world where things become much, much more costly to do, we need to recognize the creation of those optioned values as a value. so i think there is a strong ase for a substantially more ambitious national infrastructure investment program, perhaps on the order each year going
forward. finally, what about the role of the private sector? what about the role of prices? the case for user fees, the is, for congestion tolls it seems to me, an overwhelming e to anyone who thinks about the economics. there is no reason why people who use infrastructure more heavily should not pay for it. there is no reason why we shouldn't create infrastructure to the point where it yields benefits that are not to the at t where it is fully used
a steer price. and so part of any comprehensive approach to infrastructure seems to me has to be much more reliance on user fees. part of any national strategy for addressing infrastructure s to be addressing the effectiveness with which we publicly invest. that goes to questions of efficiency in procurement. hat goes to the enormously urdenensome systems of regulation. the bridge, as you know that connects harvard square with boston is 362 feet long. it has been under construction
-- repair, not construction -- repair for five years. five years. as i gently suggested to the people in charge, yes, this was a complicated reconstruction project. it really was a complicated project that had many different aspects to it. on the other hand, world war ii was a complicated project as well, and it had only taken three and a half years to win. i noted that prior to the advent of morales any ceasar had julius constructed a bridge across a 2,000-foot span of the rhine in nine days. and so there five years didn't look very good. it is for political scientists to figure out this problem, but
it was an immensely important one. let me say finally, and perhaps ed and i will have a chance to return to this, that i see no merit in the idea that using tax credits for contractors to implement infrastructure of tment will address any these problems. i called it somewhat inelegantly on television yesterday a potempkin village of nothing. poor k it is a singularly idea whose principal effect will be to enrich those who are the recipients of the credits, in many cases for projects that would have been undertaken anyway rather than to bring
about a necessary infrastructure revival. thank you. [applause] >> thank you very much. entertaining as always. i am still trying to get my petempkin the village of nothing. >> one of the decides advantages of no longer being a full-time reporter at the "washington journal" is too take larry's speeches and put it into a column. everything always had three points, and today you were up to four. i guess that had to do with the quantity of good ideas or
something. >> that is for others to judge. >> let me turn to you. ed glazer is one of larry's colleagues at harvard. i read a piece you wrote in city journal a couple of months ago in which you said there were three popular propositions. one that a 21st century business needs a 21st century infrastructure. second that infrastructure puts people to work. and third, infrastructure should be a national responsibility financed by popular revenues. they said all three of those were wrong. >> they said the first one was wrong too? i was on a roll. >> the floor is yours. was larry right or not? >> yes. but just as america's infrastructure needs its full-throated advocates, it also needs its skeptics. because americans are not going to get the infrastructure they deserve united states we both propose it, critique it and then argue over it.
i think in some sense that is what my job is, although honestly i pretty much afreed with everything larry said. let me go through. i think you may have missed the subtext of one of his comments, which is harvard's chemistry department really needs a new hvac system, and it is a great naming opportunity. the first point i want to make is i do want to be a full-throated advocate of a micro economic approach rather than a mac row economic approach. it looks at how many users there are going to be, the costs and ancillary benefits. i think there are a couple of micro economic approach has reason. e is that you get incredibly foolish things that would never have passed muster from a
competent cost benefit analysis. people moving mono rail. and that never would have made sense if people were actually counting bodies and trying to figure things out. second thing, if you have a focus on jobs and macroeconomic effects, it leads to infrastructure in the wrong place. the places that need more infrastructure are largely america's growing successful metropolitan areas. it is not west virginia. it is not the rust belt. detroit was built for 1.5 million people. it now has less than half of that. it is not detroit that needs new roads. it is san francisco, it is new york. third, it pushes us towards the wrong funding model. here i agree completely with larry that the primary thing should be users should pay. it is an outrage that we expect voters and taxpayers in montana to pay for the wealthy people
who take new york's airports. and it leads to miss allocation of resources. it says the most realistic expectations is drivers should pay for their own roads. the second point on the user pay principle. it is helpful in terms of project evaluation. it leads to better cost-benefit analysis. there are cases where that is not appropriate, in which case we need to find out the right subsidy model. clearly, larry not a fan of tax credits. we need a project that comes in a reveals large ex-tern lots. there are creative funding models. am a big fan of hong kong's , which sit system
funds itself by building new skyscrapers atop stops. i am not sure i trust the new york business to do that. but it ties it to things like that. third point, and i am echoing what he said. one of the biggest reasons we want to have user fees is to appropriately ration the asset to the space. the right to drive on all of america's highways and streets was not written into the bill of rights. this is valuable space. there is no reason it should be free for everyone. singapore has g.p.s.-based congestion pricing that they are working on there. is no reason that america should not of exactly the same thing to ration our space. matthew turner will hopefully say something about the fund macmullan law on terrific traffic. vehicle miles traveled increased one for one with highway miles built. if you build it, they will drive it. unless you actually use price toss ration, you just get more
and more drivers on the space. i should push slightly back about there are cases in which transportation yields things that look like conglomerations. there are also cases where you nd up de--glomeratting things. point number four, not only does infrastructure need to be paired with better incentives. it needs to be paired with the right institutions. i want to also make myself a persona non-grada in the port authority in new jersey on this. just giving money to the port authority is foolish. it does the opposite of what we want to do, which is get meaningful institutional reform. it means breaking it up. it was a poster child for good
government. it no longer is. it may well be the right answer to privatize some of those airports. the privatized heathrow example is working better than the public example in new york. private provision is not some panacea either. we have a long history of private providers subverting local governments and extracting the rents from it. all of the cautions are correct. there is a role for p.p.p.'s, but it is a role that needs to be monitored and thought through. eduardo i think always' work can show how it can go wrong. you can make your own decision about where you think the u.s. falls between the institutional quality of chile, which is hear, and frolik in. >> take a guess where we are? >> i leave that up to you, david. >> the institutional reform is
also necessary when we think about larry's comment. larry's five years is actually misleading because there were another three years wasted in the planning process before you actually got to that. so in fact it is at least eight years is actually the right thing on it. that is both about bureaucratic issues but also a planning process that reacted to the excesses of the robert moses era of big projects in which we allowed a mass builder to build bridges across new york and did things that looked very unattractive in some ways, but he got things done. everyone has a say at the table. if you want to argue which brings were wrought in for maine, you have a right to sit at this table and we want to hear you voice. you don't get things done quickly. we need to decide if we can tolerate at least community engagement to get things done. i have been vocal about community engagement making
american cities unaffordable. point number five, almost assuredly the highest returns are to maintenance. this needs to be done with robust public financing. it is very hard to imagine how we are going to do this with the current system with user feels. i like the federal moderateen where they measure and tie highway terrorist fund postgames to maintaining the quality of roads. maintenance is job one and the most important thing. there are new technologies where exciting things might happen. autonomous vehicles make it possible to autonomous lanes. when i think about a.v. lanes, or autonomous truck lanes. dedicated lanes running the big corridors, there is no reason why you can't imagine that this is going to be entirely user fee financed.
finally, i want to make a plea for the humble bus. bus are the forgotten children of american transportation, and yet they are the transportation that is often best tied to america's urban poor, to a category of people we should not expect to pay for all of their transportation. there is an old line that 40 years of transportation can be boiled down to four words, bus good, train bad. that is partially because there is not a lot you can dro a train in an urban setting than if you have a bus on an urban lane. when you think about it. part of the beauty of the bus is it is flexible. you can change the technology if the technology improvements. you can make it autonomous. it has a great ability of adaptability, which is attractive. let me end by saying i really do agree with larry, but i want to do so in as confrontational and hostile a manner as i can. thanks for giving me the chance. >> larry, let me ask you -- i
want to ask you two questions. first two questions. once upon a time not very long ago you and others advocated for more infrastructure spending as a good way to put people to work. that was then. we had a much higher unemployment rate than we have now. is that part of the argument no longer relevant? >> good question. here is what i kind of have come to think about this. you can't do large amounts of frastructure on and off in a usefully countercyclical way in a world that is remotely like the world of america today. the truth is that the obama administration wanted, would have been delighted to have the whole $800 billion stimulus
program be infrastructure investment. that the number that was chosen for infrastructure investment as the maximum number that the technocrats would accept putting in a budget was remotely feasible. and thanks to herculean efforts by the vice president, adjusted to spending in two years. otto eckstein joined the advisors in 1962 and was very impressed by the amount of counter cyclical spending that seemed to be going on all over washington as things were being built and thought it was a huge tribute to the new economics. then he asked a few questions and learned that it was the counter cyclical spending from the 1958 recession that was just kicking in. so turning large amounts on and projects is tial
turning ible thing some on and off, particularly in the maintenance area, is a fees inthing and should be an important policy tool. there is always, i think, a legitimate argument -- and i won't rehearse it in detail here -- on the secular stagnation thesis suggesting that demand shortfalls may be much more pervasive feature of economic life over the next 20 years than they have been over the last 20. and to that extent there is a case for a chronically more expansion area -- expansionary fiscal policy, and there will be chronically low interest
rates. so i think there is a demand side case as well for more infrastructure investment. i think what should vary is less the quantity of infrastructure investments than the financing of the infrastructure investments. when things are strong, there should be a guest tax in place. when things are not strong, there is a stronger case for borrowing. so i think the balance of the argument has moved over time, and i think the demands side scace a more complicated one. -- demand side case is a more complicated one. 95/5 avors taking a micro versus macroview in terms of thinking about infrastructure, i would probably take a more 70-30.
macro view. 30 >> where we sit today at the beginning of 2017, is this a time where we should borrow infrastructure or finance it by tax increases or spending cuts? >> you can't really answer that question apart from the context of what is going ton in the rest of the budget. if the only major thing we were doing was substantially increasing infrastructure investment, i would be comfortable financing at least a substantial stanchion part of it with debt, because i believe the extra revenues that the supply side benefits of the infrastructure investment would generate would largely cover the debt burdens. in the context of what i wouldn't favor but i think is likely to take place, which is
trillions of dollars of tax cuts, i don't think there is room for trillions of dollars of unpaid for tax cuts and a very large infrastructure with ion all financed borrowing. i think more generally, something that should be said is there is every reason in the for lean tax in the united states not to be allowed to have been cut in half in real terms over the last 30 years as the congestion increased, as motor vehicle burden on highways increased, as the salience of carbon increased.
less uld be taking much regulatory and much more price-oriented approaches to encouraging energy efficiency , and a are as a country higher gasoline tax would be an early and/or a carbon tax would be important steps in that direction. >> and how do we decide where user fees are appropriate and where not? it would seem to me you mentioned two different situations. e is one where there are sister-in-lawalities where they pay for things that the users don't pay for. that is clear. toward the end of your remarks you talked about buses, and you implied, i think, that buses may not pay for themselves with fehrs. and there are clear
istributional issues with user fans. there are lower congestion lanes. how do you decide when it is appropriate and when not? >> there is an old line associated with marty feld stein. i just need to know the right direction. let me be let's trite than that. the case for buses being subs tiesed is it is not a huge subsidy. it is targeted to the poor. we are doing it, and we are doing it. if you wanted to experiment with higher prices, we can do that, but it seems risky on the bus front. in terms of congestion pricing on highways. the overwhelming issue is not the economics. economists are overwhelmingly on board on the advantages of having time varying fees to try to ration the space. the overwhelming issue is the
politics. the subtext of this is rational, as people will be losers from this. there is a research that shows a way you can turn half a pay ane highway into lane and half in a free lane. that said, people raise absolute hell in porting any form of congestion pricing in. congestion pricing can be progressive. thatth is a reason -- red london, ivingston in he was doing it for several other reasons. the case where this is really doable is on new stuff. there is like an endowment effect that goes on with
voters. if you show them a new highway and says it comes with a price, they say that is fine. if you take an existing highway and slap a new price on it, there is blood in the streets. when you get new road capacity, price it. when you get new technology like autonomous vehicles, establish the principle that they are going to have g.p.s. based congestion pricing from the get-go. justify it however you want, but get it into the system so -- you can justify it by safety or any way, but get it in there so we establish this principle and keep it there. >> larry, one final question before i ask for a couple of questions from the audience. i have heard the story about this bridge over the charles river before. i want to get a little specific. if congress asks you we kind of agree it takes us forever to do anything. tom friedman once observed that the chinese can build a
convention center in the time it takes to repair an escalator on the washington metro. what specifically do you want us to regulate differently? environmental regulations, davis, zoning? what do you have in mind? >> i will answer your question, but i will tell one more story first. it was an education for me. i had a really good laguardia story going for a while, which was that if you -- some of you will probably remember this -- which if you go from the hallway where the shuttle flies into laguardia, and you go to baggage claim or where you would get a cab, there was an escalator. there was a sign on that escalator that was placed there on about october 20th, 2014.
it said escalator under repair. ew scrator coming may, 2015. implying that it was a six-month project to fix an escalator. it just seemed like something out of naru's india, and i couldn't quite believe it, and went to town with the infect walton of the public sector and all that stuff. i did learn in my conversation with the port authority, that that terminal was 100% privately owned by delta airlines, and whatever my problem with that schator was a 100% private sector problem. so i think it is a mistake to leap to the conclusion that the public sector always messes these things up.
think we have to have o ess pro miss cussly -- pro miscuesly decided power in society. a different ally balance between popular the cipation and perative of moving forward with projects. there probably needs to be less recourse to the judiciary with respect to decisions that are made by elected officials. and there probably needs to be ore recognition that
non-governmental organizations, as the e often viewed idealistic voices of the people, are often special nterest groups as well, albeit ones not focused on profit motive. >> i think the issues are quite separate from that. do you want to take a position on that? >> no. >> let's take three questions. they are going to be short because we have to get back on time. a gentleman in the back, and then there is a woman here on the aisle. and a gentlemen -- these three right here. >> george friedlander. my concerns with all of this are a million, but i will go to the two extreme ones. one is the problem at the federal level of project selection, which has never been solved sufficiently. when you have a federal role.
and then at the state and local level there is the problem of the political cycle, which is if i do things on the cheap for now, i will get re-elected. if i do what is really needed, it will be too costly, and i probably won't. a lot of it comes back to return on investment. nobody, i think, is figured out how to mesh r.o.i. on this. >> so your first point is project selection. >> brent. thank you very much. i appreciated both of your comments about user fees. i would be interested your thoughts about what i call the invisible users? there might be absentee land owners next to a new transit station or new highway interchange. they never use the highway or transit. they would get a huge winfall in terms of increased land value.
should they be paying? >> and the woman here on the aisle? >> i come to this from a very different perspective, which is you need to educate the public. if you want to make it politically work, and it is very complicated, they have to understand it. academics do not write for non-experts. they write in a very small circle. and if you want to get support for making these major changes, you need to write for non-experts. and anything that is a process i would suggest you get illustrators to help you do it. we live in a much more complex world than when i was growing up. there are many more pieces. it is a thousand-piece or 10,000-piece puzzle, and you always write about three pieces of it. insistent a very woman here. i am taking the intensity of your hand raising is a very
short question? >> i think it is short and probative. on the subject of user fees, and not all users are equal, i wonder how much amazon pays to maintain the roads for which all of its product deliveries are based? it seems to me that weyerhaueser outs west will probably be using the roads in a state other than the one it is logging. i come from wisconsin. kimberly clark is a heavy user of the roads. when you talk about user fees. where is the corporate as opposed to the individual user? where are they plugged in? >> there are more questions we have time to answer. you get to pick which ones you want to respond it? >> your indictment of economists is correct, but these two are not guilty of speaking only to their peers. >> many of our colleagues think we should speak less to the general public.
ok. >> do you want to start? >> companies pay user fees when they use the roads. in fact, the ideal schemes tend cause trucks to pay disproportionately relative to cars non-linear with the number of axles, and that would very much operate in the direction you are saying. e try to reach broad audiences. we don't always succeed. >> yes, you do. is the nk maintenance answer to some of this. if you focus on maintenance, you are not going to do mains projects on things nobody is using. the things you maintain are going to be the things that are extensively used. so if you focus on maintenance, think it tends to drive
somewhat better allocation systems. think the question of collateral rent, if i can call it that, is an interesting one. i am told that the original mass transit systems were financed in part the way golf courses and ski areas are finance today. people develop them in anticipation of being able to the land nearby. this is an additional argument for property taxation, which jurisdiction that is do that, will reap the benefits in higher property values as a consequence. but i think that is something that should be figured into the calculation. >> absolutely. would even -- even more
radically, land tax. the increment in value seems the right way to handle the incidental beneficiaries. i want to make a political point about maintenance. it is not that maintenance is the right answer all the time. politics is pulling away from minutes. as a politician, you like the new project. you don't get a lot of press for maintaining the hvac system in the school. one thing we can think about doing is shine more light on maintenance efforts. that is one of the roles that can be positive for the federal department of transportation, is regularly publicizing where maintenance efforts are going on and not going on at the local level and tying fans to it. larry's point on the axles is exactly right. i can remember once having a conversation with a public official who was a big advocate for public spending. i just want the guys to ship to
chicago without sitting in traffic for an hour and a half. i want them to get that too. i just want them to pay for it. that is really the point. we all want a better infrastructure for america. we want a 21st century infrastructure for a 21st century america, but we want it wisely and for the people who use it to pay for it. >> larry? >> what this conversation is making me realize is somebody should with some methodology for every major city and every state do a calculation of annual maintenance neglect and rank them. and if there was -- it would be like the poverty line. not that the poverty line isn't questionable in a whole set of ways. but the fact that there is a poverty line focuses attention
on poverty in a way that it never was focused on before there was a poverty line. if there was an annual deferred maintenance burden, it would generate attention on this, and people wouldn't want to be at the bottom of the list. people wouldn't want to be -- ct to the attack adams ads, and it would be something that somebody entrepreneurial, , e the brooks institution could start to generate. >> i got that. i've got an app for that. there are new technologies called street bump. it will report to city government where there are pot holes. it could be a fantastic problems for brooks. >> join me in thanking larry