A Place of Sense

I have faced a little bit of criticism over my claims that investing money in the New Orleans levee system maybe wouldn’t have worked. Well, now the National Academy of Engineering seems to be insinuating that levees won’t work, no matter what we do.

There had been “undue optimism” about the ability of the protection systems to withstand the impact of a storm on the scale of Katrina.

“the risks of inundation and flooding never can be fully eliminated by protective structures, no matter how large or sturdy those structures may be”.

So, no matter how much money we contribute to levees or any structure, there is always the potential risk that a natural event will exceed our design. We can only minimize risk to the extent it is economically feasible and set up systems to mitigate the effects when disasters occur. I don’t think ASCE or any engineer should be promising that investing in our infrastructure will result in perfect designs or elimination of risk.

There has been a lot of attention and press given to deficit spending, borrowing money, and taxation recently, especially concerning infrastructure investment. Generally, you hear from two camps:

1. people who feel that government should only spend money when they have a surplus
2. people who feel that government must spend money during an economic recession

The first theory follows the logic that since the United States is a representative democracy, we are the government. Obviously, you don’t want Uncle Sam signing notes in your name and then using the funds to bet on lame get-rich-quick schemes. Deficit spending might be the worst thing to do. Therefore the correct thing to do is cut all spending so we can manage the budget and not overextend ourselves.

The second theory contends that to prevent a recession from becoming a depression the federal government must continue to spend, and indeed spend even more. As long as money is flowing and jobs are created, then the government will act to stabilize and grow the economy. So we can dispense with any concern for utility and, as Keynes suggested, bury money in jars underground and watch a thriving money mining operation employ everyone. Sounds good, right?

Of course, both of these approaches ignore common sense. If the federal government is entirely elastic, swelling and contracting in step with the economy then it will just amplify the boom/bust cycles. On the other hand, borrowing money to reduce taxes or purchasing military toys is plain stupid. There is no free lunch, after all.

In my opinion, the government has two roles to play in the economy:

1. Providing a stable economic environment that is fair and certain
2. Finding the best way to meet the needs of the citizenry

Notice there is no requirement to tax or spend minimally, only wisely.

So if you were the mayor of a hypothetical SimCity, what would you consider “wise”? Tax rebates to everyone? Returning 100% of taxes would not generate additional revenue, no matter what those silly economic multiplier studies would have you believe. How about establishing new agencies and programs with huge budgets and paying people much higher salaries than their services are worth? It’s not much different than the first option, actually. Here’s an article by the New York Times on deficit spending that has some ideas about how to do it right, and how to do it wrong:

In 1929, President Herbert Hoover thought that the best response to a collapsing economy was to balance the federal budget. With incomes and tax receipts falling sharply, that meant cutting federal spending. But as almost all economists now recognize, President Hoover was profoundly mistaken.

If we simply use the money to buy bigger houses and cars, deficits make us unambiguously worse off in the long run. That’s why the explosive increase in the national debt during the Bush administration was a grave misstep.

Instead of band-aid solutions in times of crisis, government must create mechanisms for individuals to produce value. Infrastructure investment is a great way to do this. For example, lowering the costs for people to do business can be much more effective than lowering taxes, because you are providing jobs during the infrastructure work and maintaining a competitive advantage for future work. Highways, Canals, and Railroads have always been an expensive investment, but a lot of times they can “grow the economy” and so the money borrowed to do the work pays off quite handsomely. Our entire society can benefit.

We have a great opportunity in this country right now; construction costs and the cost of borrowing money are at historical lows. Check out this Wall Street Journal article on lowered construction costs. If you have checked the return on federal bonds recently, you’ll see the yield is almost nil (and has been negative at times). People are so worried about company stock values they are willing to make almost nothing on a guaranteed investment, and at times have been willing to pay the US govt to hold their money. That’s rare, eh?

In any case, if people all over the world are ready to give the US a very inexpensive loan, construction costs are down, and we need to remake the entire US economy operate more efficiently with lower cost input, then I say we take advantage of our good fortune! The time is right. Let’s build a competitive high speed rail system. Let’s expand our walkable neighborhoods. Let’s invest in urban communities that have been sliced apart by Interstate highways. Let’s reconfigure our entire energy grid to take advantage of renewable opportunities. And let’s get started today!

But please, ASCE, no “sky is falling” nonsense…

I posted a few weeks ago about how I disapproved of ASCE’s infrastructure report (here and here). I just wanted to clarify how I feel about it, now that I’ve had a while to ponder the situation. Basically I still disapprove. Without qualifications.

First off, I think it blurs the line between our role as protecting the public welfare and a new role of setting policy for political gain. To me it is similar to the issues that top military leaders must deal with. It is clear that you must have soldiers to fight wars. Getting their opinion on military matters is essential. But clearly, you can’t let the military decide which wars should be fought. Not only is that a question they can’t answer, it’s a question they don’t want to. It’s a conflict of interest.

In this democratic republic we call the United States of America, there is only one group that can set policy and that is the citizenry. We vote to elect leaders to represent our wishes; on the other hand ASCE has not been elected, appointed, or chosen to act in any representational capacity on this issue (other than by us clever engineers).

Because they have no official right to set policy in this matter, ASCE is acting as a lobbyist group. And what are they lobbying for? More money. They want the US public to spend more money on civil engineering projects. Who will this benefit? Well, that’s a complicated issue. If it results in “bridges to nowhere” then additional spending won’t benefit anyone but builders and engineers. Then 20 years down the road those unneeded bridges and roads will be “crumbling” and used to justify more spending. The ability for this report to be pushed in front of the public to proclaim how much we need more bridges and superhighways is another reason I hate it.

The final reason I just wish ASCE would quit this is because it makes an implicit appeal (sometimes explicit) that spending more on infrastructure projects will provide more safety for the public. This is downright dangerous. If the last report card from 2005 had somehow convinced lawmakers to invest USD$2Trillion into all these projects, could we have averted the most famous disasters since that time? Would Minnesota’s I-35W bridge still be up? Would the city of New Orleans have been spared? The answer is no. But I have still seen these issues used to justify additional infrastructure spending.

My opinion is that until ASCE can prove that not a single member will profit from its recommendations, ASCE should refrain from making these alarmist reports on infrastructure.

So the preliminary report is out, and ASCE has graded our infrastructure at a “D” level again. Of course, this is a more a D- than a straight D. Apparently, the infrastructure system is dangerously close to outright failure. I disagree with this assessment, and even the idea of making the assessment, as noted in my previous post. But what are some other engineers saying? I love reading some of the comments on the ASCE Govt. Relations official blog….

David on 28 Jan 2009 at 6:00 pm

Every time ASCE updates their “Report Card,” I shrink in embarrassment for being a member of this organization. What an outrageous exercise! Couched in the language of an academic grading scheme, our ASCE leaders wildly shoot from the hip with purely political motives. They say our infrastructure is falling apart — The Sky is FALLING, they cry. This false alarm has no bearing in reality. Our water supply is a D-? Serving 100’s of millions, our US water supply has an outstanding record of public health. When one ponders the outbreaks of disease in our East Coast cities during the 1800s that resulted from poor drinking water quality, one realizes that modern civil engineers have made magnificent contributions to public health. Whether it is worth an “A” or a “B” I would not care to argue, but to give our system a D- is to insult our own profession. Furthermore, I would argue, that our ASCE Report Card undermines a critical plank of our professional platform, that is, Integrity. Civil engineers are to be professionals of integrity. Our leaders show little integrity in publishing this shabby, unscientific, alarmist, fear-mongering report.

Jay on 28 Jan 2009 at 7:16 pm

This report card is interesting, and may in fact be accurate reflection of our nation’s infrastructure. My question is where are the details? This report card should be the summation of some 1,000 page report that contains details on weakness, flaws, and failings of specific pieces of infrastructure.

Without more details, people are going to accuse you of scaremongering. Afterall, your members would be the most direct beneficiaries of a trillion dollar investment. Personally, I think your report is probably more accurate as opposed to less, but if you can’t back it up with detailed data and very specific priorities you can’t reasonably expect to get funded. And that would be a terrible thing.

The full report won’t be ready for a few more weeks/months. But they desperately needed something to have ready that will impact current debate on the topic in Congress. Maybe we should remind them of their obligation to “issue public statements only in an objective and truthful manner.” Personally, I can’t understand how these letter grade assessments could be considered objective. What is going on here?

Actually, I find the CBS news article a useful read. A summary from Carnegie Mellon University’s Engineering and Public Policy professor Granger Morgan:

But just because the federal government is handing out lots of money and society’s physical backbone needs plenty of repairs, that doesn’t automatically mean the government should spend most of its dollars on things such as new roads and power plants, Morgan said. Often, building newer roads doesn’t fix congestion, yet building better public transit would pay off more, he said. And spending on energy efficiency more than physical power plants makes sense, he added.

One really needs to make these choices on a bit of solid engineering economics as opposed to emotion and rhetoric,” Morgan said. “We’ve got an enormous pent-up need. The only message is: `Let’s be careful to the extent that we can in the manner we spend the money.

Since ASCE is so hell-bent on muddying the waters when it comes to infrastructure design/construction and the economy, here is a good article from Time magazine that has some opinions on that too.

And finally, here’s a press release from the National Association of Realtors (yes, even they have an opinion on the infrastructure issue). They have polled ~1,000 people and have concluded that most people support fixing what we got rather than building new stuff. I concur.

NOTE: this post reflects my own personal opinions and not the opinions of ASCE or anyone else.

The American Society of Civil Engineers is a large organization that represents most civil/structural/water resources/etc. engineers in the US. This organization advises state boards on licensure policies, sets educational guidelines, and lobbies for engineering activities. In their own words: “ASCE‘s mission is to provide essential value to our members, their careers, our partners and the public by developing leadership, advancing technology, advocating lifelong learning and promoting the profession.”

ASCE does a great job on educational and professional development, and they do add a necessary voice in the public forum. They are leaders in the quest for transparency in the design and construction fields, helping ACET distribute their new Ethicana movie. The goal of this venture is to remove fraud, bribery, and corruption from the construction industry around the world. It is a noble goal, but I believe ASCE must first come to terms with its own conflict of interest before instructing the world how to act.

2009 Report Card for America’s Infrastructure
Every four years or so, ASCE releases its “Report Card” which sums up the entire state of all infrastructure in the US in one convenient letter grade. This year apparently the situation is so dire that ASCE is releasing their report early. The most recent report card (2005) gave our collective infrastructure a grade of “D”. My advice to ASCE (though it won’t be followed) is to drop this report immediately and to end this silly process altogether. Here are my reasons why:

• Representing the entire infrastructure of the United States with a single metric makes no sense. Maybe it would be possible to compare each state of the US, or maybe each infrastructure category, but trying to give an overall national grade letter is inane.
• It reduces trust and confidence in the nation’s infrastructure. By using the words “failing” and “crumbling” ASCE is deliberately misleading the public. Very few bridges, buildings, or utilities fail in the US, even during extreme events. Even though there were a few high profile disasters since 2005, ASCE’s policies will not correct this. The New Orleans levees and the Minnesota bridge failed because of design errors, not maintenance or lack of spending. If ASCE is serious about reducing design errors, then the only solution is criminal prosecution of negligent design.
• This intention of this report is clearly a conflict of interest. ASCE is basically lobbying the US government to spend more taxpayer money on infrastructure. As designers of public works projects, ASCE members and their clients and partners are likely to benefit monetarily from any new projects. Sometimes substantially. ASCE members are not allowed to do anything that will cause the public to lose faith in their actions, and are not to make misleading statements. Why should our parent organization be free to jeopardize our trustworthiness and abandon the ethical standards that bind us together as engineers?
• The new release date was scheduled so that the report would have an impact on the new “economic stimulus” packages that congress and the federal government will be debating. Basically, the report will be used by lobbyists to petition congress for new construction projects, and ASCE will encourage it because of economic benefits. This is unwise. The state of the economy is no business of ASCE. ASCE is composed of technical specialists, not economists.
• It is already known that our current “American way of life” is unsustainable. Road-building leads to urban sprawl, but the new ASCE policy wants to address “congestion”. Building new projects harms the environment and uses a lot of resources, but ASCE does not shy away from promising sustainable development and environmental policies.

Rather than clamoring for more money and attention, ASCE should be arguing for smarter policies, and nothing else.