On the way to the SHEAR conference in Rochester this summer (if you missed it, they apparently have local ordinances prohibiting hotels from having lobbies!), I had the chance to see the Erie Canal up close. I’d seen it from a plane before, but at ground level you really appreciate the magnitude of the project.
But even more impressive than the physical structure, I think, is the fact that it was built at all. I can’t imagine that happening today. Building new bridges and public transportation systems seems like a thing of the past, made impossible by legions of nitpickers, privatization evangelists, politicians afraid of being blamed for added expenses, and people who have somehow decided that our governments are supposed to function like our households.
The project cost the state of New York $7 million in 1817, which was about 1% of the nation’s GNP at the time. In a smaller and agricultural economy, this figure looms even larger. Plus, the 363-mile-long route crosses an upstate New York region that was – and still is – fairly empty, to reach Lake Erie and a thinly settled territory toward the west.
Just think about the scope! The percentage of the federal budget that today goes toward transportation and infrastructure projects is 3% – a fraction many in Congress want to cut. Yet even that federal figure is smaller than the relative expense of the state-funded canal. If we invested 1% of our GNP in a single project today, that would be a $140 billion piece of work.
That’s just less than the inflation-adjusted cost of the entire Apollo moon program.
No wonder they named so many things after DeWitt Clinton! But he of course didn’t act alone – the sums speak volumes about the under-appreciated state legislatures of the early republic, where we find frequent bi- and multi-partisan consensus in favor of infrastructure projects, and a high tolerance for debt-financed economic development.
Compare that with the country’s current inability – and unwillingness – to address $2 trillion in infrastructure needs that result in the occasional bridge collapse, blackout, and routine, epic traffic jams.
This legacy casts an even more unflattering light on politicians like N.J. Gov. Chris Christie, who recently killed a Hudson River rail tunnel that would have been the first built in the New York City area in more than a century. The N.Y.-N.J. Port Authority and the federal government each were kicking in $3 billion for the $8.7 billion project, and N.J. was responsible for the remaining $2.7 billion. Basing his decision in estimates of potential – yet not probable – cost overruns, Christie trashed the project’s sponsors and the unions who were already at work on the site, and announced his intention to keep the federal money. Instead, he has to give it back, with interest, and may have put his state on the hook for $600 million already spent the groundbreaking.
What’s baffling about these decisions is that the country’s population isn’t getting smaller. At peak hours, the existing Hudson River tunnel has a train passing through every few seconds. It is already at capacity. Expanded rail access would not only serve the region’s growing population by reducing commuting times and expanding transit access; it would also raise property values – one study pegged the boost at an average of $19,000 per home for a total of more than $18 billion. If you captured that gain in real estate taxes, it would pay for the debt service on the tunnel’s bonds. This project would pay for itself in one of the densest populated corridors in the developed world, and the money could be borrowed during a period of record-low interest rates and paid back over 35 years.
When New Yorkers planned the Erie Canal, they hoped for federal support. When they didn’t receive any, they built it anyway, borrowing the funds at 6% per year. They didn’t spend their time searching for reasons to abandon the project, and unlike Christie and his ilk, they didn’t see a popular project as some kind of albatross.
We have an unemployment rate of almost 10% and more than $2 trillion in needed projects. We have students who have invested heavily in their own educations entering the weakest labor market since the Great Depression. And we have international competitors boldly investing in their futures – drawing provocative comparisons to the 19th century U.S.
What a contrast to 2010, when 75% of our national budget is promised to the military and retirees, and when we see firsthand how financial downturns can turn politically regressive. There was a time, until fairly recently, when politicians competed to outdo each other in support of public infrastructure projects. Most of the Interstate Highway Act, believe it or not, passed the Congress on a voice vote.
Compare that to the buzzworthy announcement that the northeastern United States will have high-speed rail by…. (wait for it) 2040.