Clearly, a Windfall Profits Tax should be levied against “Big Construction”!

/sarc

kooly on May 4, 2008 at 11:46 AM

Kooly

“Big Construction” HEH

–

The result? The contractor restored the roads and bridges in months instead of years, and at a fraction of the cost that Caltrans would have incurred.

One of the big heros in Northridge is C.C. Myers. He pays bonuses for work completed on time - imagine that. CA has a big “Fix I-5″ project where they are closing down the freeway. They had projected 6 months closed down for this to be complete until C.C. Myers jumped in and said he’d do in a month.

Topsecretk9 on May 4, 2008 at 11:55 AM

Shouldn’t the people have just given up their cars and swum across the river to save energy?

Wouldn’t free green wetsuits and inner tubes have been cheaper?

Or just tell them to work on their own side of the river and save even more carbon?

Bridges are human arrogance!

profitsbeard on May 4, 2008 at 12:03 PM

I thought along these lines upon hearing about how shoddy some of our military barracks have become. Gov’t contractors, in my experience, are some of the laziest folks in existence (apologies to the hard working ones).

When they were building our new hangars at New River in the 80’s, I remember noticing that for every guy actually working (shoveling, hauling, laying bricks or cable), there were four other guys standing around, watching him do it. I remember thinking, “My dad (he worked construction) would’ve completed this job months ago”.

Maybe it’s time to bid these jobs out to different companies and reform the contract process so that companies can be fired for slow/shoddy work.

MikeZero on May 4, 2008 at 12:07 PM

The same results occurred in Oakland. The relatively recent tanker truck fire destroyed overpasses on a main freeway. (this occurred near the time of Rosie’s “fire can’t melt steel” pronouncement.) I don’t know who the contractor was, but they bid the job low and made multimillions on the incentives. They got the freeway repaired and running in a month or two, when it was expected to take up to a year to repair.

To you lefties out there, this is called “capitalism” and it works.

Mallard T. Drake on May 4, 2008 at 12:19 PM

Like California, this proves a lesson in free-market power to solve problems efficiently, and in the long run, less expensively…
Captain Ed

Accountability, fiscal discipline, efficiency, and responsibility are values that are encouraged by a free market system, as opposed to a Statist, centralized planning government system.

Perhaps at some point, people will learn to harness the power of the private sector more completely for future public efforts as well. If we started to apply this lesson to non-emergencies as well as emergencies, perhaps we would have fewer of the latter. When we incentivize succes, we succeed. When we incentivize bureaucracy, we get red tape, delays, and frustration.
Captain Ed

I have a friend who lives in Brazil. The amount of Statism and government red tape is already well documented:

If we define statism as an ideology which provides a preferential role for the state in society, placing the state as the main agent of social action and transformation, this sort of statism is extremely pervasive in Brazilian society. It unites people from all social classes and ideological inclinations.

As law professor Keith S. Rosenn explains, “Brazilians seem to expect just about everything from the state. From jobs, stable prices, credit, subsidies for carnival masquerades, there is hardly anything for which the government is not expected to provide.”

It is not that the ruling elite in Brazil are comprised only of bureaucrats, but rather that the state bureaucracy is the base on which all other social groups adhere by either alliance or dependence.

Since the state is the ultimate provider of resources, statism has been supported in Brazil by old-fashioned socialists, neo-mercantilist businessmen, conservatives who oppose social change, the military, privileged bureaucrats, intellectuals who seek for state subvention, and all sorts of “compassionate” individuals who think the state is the only entity with power to reduce social inequalities.

To understand the correlation between statism and Brazilian-style corruption one needs to consider this reality of a state that is historically above society. Statism in Brazil is a by-product of an old “spoils-system” inherited from Portugal, a country where the monarch granted to his staff and preferred subjects all sorts of graces and favours at the expense of the law.

Statism also finds its early roots in Portugal’s disdain for economic freedom. In Portugal’s Catholic medieval hierarchy, the class of entrepreneurs (traders) was ranked lowest on the social scale. In that country, “as in Communist China and Marxist Russia”, explains C.R. Boxer, “the merchant was regarded as a parasitic and profiteering middle-man, resolved to enrich himself at the expense of his fellow-men”.

Another factor that contributed to statism was the slavery system, which lasted longer in Brazil than in any other nation in the Western world. It was only abolished in 1888. In his 1879 visit to Brazil, U.S. historian Herbert H. Smith associated slavery with a certain “culture of indolence, pride, and selfishness” that, in his opinion, made many Brazilians aspire to live “as parasites on others or on the government”.

Centuries of slavery had the effect of debasing the value of labour and pervert the sense of individual liberty and responsibility. It generated a society with deep contempt for any work other than that of a public job.

As a result, the state became, in the words of the great abolitionist leader Joaquim Nabuco, “the refuge of the descendents of the rich and noble families who squandered the fortunes acquired through slavery”.
Brazil Forum article

She told me that the amount of time required to get government permission to accomplish simple tasks is crazy. It is so slow and inefficient, and combined with high taxation, makes Brazil a “less than ideal market” for starting a business at the moment.

However, my friend pointed out one exception to the rule above.

If one provides a bribe to the government official, then all of a sudden things start happening tomorrow.

Yet people do not criticize the statism and centralized planning government down in Brazil. After all, it is hard to criticize the “hand that feeds you.”

That is the favorite trick of the liberals: get people so dependent on government that they are willing to put up with anything.

Even the loss of their dignity. The loss of freedom.

ColtsFan on May 4, 2008 at 12:33 PM

I emailed this to our corrupt democrat, Hillary-endorsing governor and the NCDOT.

SouthernGent on May 4, 2008 at 12:41 PM

The following themes of the article need to be pointed out to American voters:

We see that all attempts to find a solution to the country’s complex social problems by increasing government interference have brought about a clear reduction of its legal accountability. It is a basic fact that much of the abuses of power in Brazil are masqueraded as guaranteeing top-to-bottom rights to the people, although this practice has produced ominous consequences for the country.

There has been in Brazil a notable increase over the years of a huge state bureaucracy ineffectively conducting the country’s public affairs, wasting its own resources, and watching out for private and corporate interests; which in turn reap immense, often illegal benefits from a notoriously corrupt government.

Hence, we also witness abnormally ineffective governmental action in areas where its constitutional obligation would be to exercise its power much more effectively, such as with public security, healthcare, and education.

As a matter of empirical fact, the value of statism has not assisted Brazilians in developing a democratic culture of equality before the law. Instead, statism in Brazil has always provided numerous incentives for widespread corruption, influence-peddling, and red tape.

The value of statism needs therefore to be seriously rethought, as it seems to benefit only a minority of privileged individuals at the expense of society as a whole.

Augusto Zimmermann is a Brazilian Law Professor and the author of the well-known books Teoria Geral do Federalismo Democrático (General Theory of Democratic Federalism - Second Edition, 2005) and Curso de Direito Constitucional (Course on Constitutional Law, Fourth Edition - 2005).
Brazil Forum article

I recommend this website to my HA friends. The articles on economics and Statism are pretty good.

ColtsFan on May 4, 2008 at 1:08 PM

Correction to my post above…..

Install and operate cameras and then issue tickets for running red lights.

highhopes on May 4, 2008 at 1:16 PM

Agree with Wanderlust… wasn’t Boston’s “Big Dig” handled by private contractors as well?

Skywise on May 4, 2008 at 1:25 PM

Yes it was. But building a single bridge of no great length. Is of no comparison to the complexity of building a tunnel under the central artery of a major city. While continuing to use the central artery. The oversight of the Big Dig should have been much better because of that.

I just hope Flatiron shares some of that incentive with the workers. They made it happen too!

aLoha Tim on May 4, 2008 at 1:45 PM

You can always find examples both ways but overall it is obvious that the private sector generally does a much better and more efficient job.

duff65 on May 4, 2008 at 2:04 PM

There was a gasoline tanker accident and explosion on a newly completed overpass on I95 in Bridgeport CT. An already heavily congested stretch of road. The fire melted the new steel girders and destroyed the new roadbed and surface. Initial estimates were six weeks to put in a new bridge.

As the whole area of the highway was under construction, they diverted materials and resources from other projects and had a new bridge up in days.

Stephen Macklin on May 4, 2008 at 2:30 PM

Health care anyone?

rockhauler on May 4, 2008 at 2:39 PM

the only problem is when the state was was cutting the red tape to fix LA after northridge , up north our freeways and bridges were still being bogged down in red tape. the bridge toll went from 2$ to 3$ the extra dollar was for the repairs after the two earthquakes now that they are fixes “well all except the bay bridge” which is a huge mess thank you brown and brown . I want my dollar back damn it , will i ever get that dollar back ???

Mojack420 on May 4, 2008 at 2:47 PM

This needs to be remembered. A very good example of how free enterprise succeeds where government fails.

JellyToast on May 4, 2008 at 4:42 PM

Ed I would also caution you about this. Procurement management is typically something that the state has no experience in whatsoever.

Google “Private Finance Initiatives” in the UK for some prime examples of this. There are a number of UK companies who are going to make an absolute killing out of UK PFI deals at the taxpayer’s expense because of the incompetence of the government functionaries who negotiated the deals…

Ares on May 4, 2008 at 5:18 PM

The result? The contractor restored the roads and bridges in months instead of years, and at a fraction of the cost that Caltrans would have incurred.

And I’ll bet in Mn. just like in Ca. a number of “prominent” people will cry and moan and sue because they are just too short sighted to see or appreciate the huge amount of money and time (which represents more money) saved by offering incentives and getting over it from paying them.

Speakup on May 4, 2008 at 6:33 PM

Ok, MNDOT bids out projects like bridge construction - that’s business as usual. They’ve also come up with the design-build approach to speed projects. That’s all good.

However, MNDOT does an absolutely pitiful and woefully inadequate job of road maintenance. I’ve seen large cracks in concrete pavement on a major highway sit untouched for 5 to 10 years - meanwhile the usual MN freeze-that cycles damage the pavement further, resulting in a more expensive repair later (assuming they ever do make the repair). Basically, there is zero preventive maintenance of road surfaces.

What MNDOT should do is outsource road maintenance and repair, like they do with building bridges and offer incentives based on a) improving quality of the driving surface, b) doing preventive maintenance and c) quickness in responding to fixing problems when they first occur.

MNDOT also needs to strengthen the contruction standards for new roads they build. Some of the roads built in the last 20 years that are not lasting the supposed 30 year life span the standards call for. I’ve seen some have major deficiencies in less than 10 years.

Dr. Bob on May 4, 2008 at 8:49 PM

As a resident of Hermosa Beach at the time I well remember the sinking feeling that any commute between the Valley and the LA basin would be living hell for YEARS after the Northridge event which proved, “yes, Virginia, concrete CAN bend!” (Look up the parking structure photos. As an engineer who drove by it in that bent state it was surprising to see. The rebars provided the “structure” but the concrete had more cohesion than I ever expected to see.)

Anyway, the private contracts for repairing the bridges in the LA area were a master-stroke. It saved Los Angelenos and their neighbors untold millions of dollars in wasted commute time alone.

The moral of these stories is, “If you have a problem then make it worth the while of someone in the private sector to fix it. Then stay out of their way except to perform normal inspections during construction.”

{^_^}

herself on May 5, 2008 at 2:47 AM