"There’s an old tweet I wrote over a decade ago defending a lowball projection of high-speed rail construction costs on this kind of means-ends grounds."
I'm glad Matt owns up to this because this is a perfect example of how dangerous this phenomenon is. The California voters were told they could have $50 high speed rail from LA to San Francisco in less than 3 hours for $9.95 billion (matched by federal funds to total $19.9 billion). The entire thing was a lie. The project is already up to $100 billion, the first segment (which almost nobody will ride and which will not cost $50 to ride) on flat land between Bakersfield and Merced is many years away from completion, and the project's designers have not demonstrated that it is even possible at reasonable cost to go from Bakersfield to Los Angeles (a long story that I tell on my own Substack).
The point is, this is more than a folly-- this was fraud and theft. Sponsors of a project that is likely impossible to actually complete convinced California voters to authorize billions of dollars of spending that could have been directed to solving other problems in our state. Heck, we could have subsidized clean air zero-carbon bus trips for everyone who wants to travel by land between Los Angeles and San Francisco with that money and THAT would have even been a better use of it.
And yes, it was fraud. The project organizers chose $9.95 billion for the same reason that your local supermarket marks apples at 99 cents instead of a dollar-- to make the price tag look as low as possible. They HAD to know that it would cost a lot more-- the arguments against the ballot initiative in the ballot pamphlet rationally predicted a $90 billion cost. Even the opponents estimated too low!
This is not the way to do liberalism or government. You tell the public the truth. If the public votes against you, it's OK. You told them the truth and that's democracy.
The plot in True Detective season 2 was about people trying to get a slice of the high speed rail boondoggle, which was spending a lot of money and not building much.
A big problem with that season is that Nick Pizzolatto had no idea at all how the politics of high speed rail works so the whole season is based on a bunch of absurd things happening.
My strong impression from reading even positive reviews of "True Detective" is that "the whole season is based on a bunch of absurd things happening" could be used to summarize each season of the show.
Season 1 is really good though in terms of characters and ideas and a the big story of Russ and Marty's relationship over 15 years. Season 2 doesn't really have that.
The most annoying thing is that they could have built the whole thing for $50 bn. But they'd have had to change California real estate law in some fundamental ways - include in the initiative the power for CAHSR to seize any non-federal land in the state at a price to be determined by CAHSR, with short notice period (one month would suffice), and that the only power that any former landowner would have would be the right to sue to dispute the valuation, in which case CAHSR would be liable to pay the difference in valuation (without any interest or penalty). Rely on Kelo as the constitutional justification
They'd also have had to get a competent organisation (ie not an American one) to do the construction - French, Spanish, Italian, Turkish, Japanese, Korean, Taiwanese, any would do.
The absence of any penalty - let alone any *interest,* sounds like a bridge too far to me. Slight systematic overvaluation of eminent domain seems like a massively better problem to have than any kind of systematic undervaluation.
Totally agree. Allow for interest and reasonable attorneys fees (eg 33% of the undervaluation) and there is less incentive to shaft property owners. You might also limit valuations to 125% of assessed value to reign in run away finders of fact.
I'm mostly trying to avoid a situation where CAHSR has to hold an enormous contingency budget against the risk of losing legal actions and getting rinsed by former property owners who can convince a judge to approve an enormously inflated valuation.
If there is a reasonable limit to the losses, then they can take some land, pay $1million for it, stick $250K in a contingency fund and then the only part of the organisation that has to care is group legal. That's probably the practical version of what I propose. But Kelo should mean that blocking eminent domain rather than arguing over valuations is impossible, yet CAHSR was prepared to sit and argue over a valuation rather than just picking their own valuation, seizing the land, and then arguing about the valuation later in court. I don't know if that was lack of legal authority or lack of political will, but it was a massively expensive problem.
They'd also need some variances on various regulations (particularly environmental), but those would be mostly because the way that too many US regulations are enforced is that people sue and then get injunctions to stop construction - give CAHSR a variance that if they had a reasonable compliance plan then you can't get an injunction unless you can demonstrate that that compliance plan was not reasonable (ie, just because it doesn't comply, you can't stop them building, you have to show they weren't even trying to comply).
Dilan Esper's point (in the article he linked) that the *first* part of the line to build is the line through the Tehachapis is well-taken, though. I suspect that if you got a Japanese or a Taiwanese engineer to design your railroad, you'd get told exactly how to route it so it was earthquake-safe, but neither I nor Dilan are railroad tunnel engineering experts.
Also @Dilan, one of the nice things about high-speed rail is that it's, uh, fast. That means that if you do have to go a relatively long way around (e.g. going up the coast to Oxnard or Santa Barbara before crossing the mountains), then you can do that - you can add a lot of miles in diversions at 200mph before you really start affecting the travel time. AIUI, from talking to some of the engineers who worked on the UK's HS1 and HS2 routes, you work out where you can cross a mountain chain and then you work backwards from there to identify the routes to get to the crossing. This is why the Lyon-Turin line under construction takes such an odd route on approach to the Alps - because they picked the tunnel route first and then worked out how to connect it to the rest of the system.
So the problem with going up the coast is there are tons of curves. I am not saying it is totally impossible to do but you can't use the existing SP coast route- and in addition to increasing travel time slowing down for the curves there are all the practical problems of the coastal act, rich landowners who don't want the train, etc.
Neither of us knows enough about seismic protection and tunnelling to say where the mountain crossing should be. And neither do the "Lines on Map" people. And nor does CAHSR. Honestly, I doubt anyone in the USA (or the UK) does. You want a Japanese or a Taiwanese engineering firm to do a survey, and identify where to do the crossing, and then you start designing the rest of CAHSR from there: if you cross the mountains in X place, then you have to get the track from X to LA Union Station, so you design a route from X to LAUS. Then you have to go up the Central Valley from X, so that determines which Valley cities can be reached.
Similarly in the Bay Area, you start with the mountain crossing between the Caltrain line and the Central Valley, and then you work out how far the track comes up the Valley.
I've always wondered if the southeastern US would have been a better choice for HSR.
Atlanta/Orlando is one of the busiest domestic flights in the US, there are no mountains on this route, and the distance is only a bit longer than LA/SF. My impression is that labor and land are both much cheaper in the southeast than in California.
I do wonder if swamps and crossing state lines would be huge hassles for getting HSR done though. And I suspect that a lot of the Atlanta/Orlando flights are tourists connecting via Atlanta on a theme park visit to Orlando, so connecting HSR to the airport in Atlanta would probably be a necessity.
This is correct, but... historically, a lot of the large infrastructure projects in this country were built on fraud and misinformation. The financing structure for 19th century railroads certainly wasn't anywhere close to sound (and directly lead to repeated panics and recessions). But we still had the railroads, which people could use and provided a great deal of benefits.
I guess I struggle with where you draw the line between "outright lies to voters to build something useful and long lasting" (where California HSR mostly falls) to "boring technical discussions of how this will go which is over the public's head and will be subject to its own misinformation campaign" (e.g., Obamacare). At some point, people have to accept the fact that we want government to get shit done and it ain't gonna be perfect (and if my own experience with big business is any indication, it's not much different in the private sector). So we try to mitigate the bad as much as we can and push for the good.
There’s a big difference between a terrible, criminally irresponsible process that builds something useful and one that doesn’t, especially as time passes
You are right that it is a difficult line. But nonetheless lowballing government programs is incredibly risky. The Crédit Mobilier scandal could have easily killed the whole project. They were playing with fire and got very lucky.
This was a central part of the Robert Moses strategy, correct? Dupe the state legislature into a significantly smaller cost, and then once construction has already commenced, reveal the grand plan. Although, I guess the difference between that and the LA/San Fran line was that Moses actually built things.
"Dupe the state legislature into a significantly smaller cost, and then once construction has already commenced" this is more or less basically how every weapon system the Pentagon wants gets made as well. We call this system democracy.
The HBO TV Movie The Pentagon Wars is great on this as well and pretty much sums up the process we see with transit and affordable housing as well (and anyone who's worked in software design would be familiar with this dynamic too) https://www.youtube.com/watch?v=aXQ2lO3ieBA
Also why people don't much like this anymore! Moses built things without much regard for whether it was a good idea. The backlash has been with us for over 50 years now.
It's ironic that I'm listening to the "Big Dig" podcast right now* (I grew in MA when this project was ongoing so of particular personal interest to me) because it's clearly a companion piece to your post about CA HSR.
I'm only halfway through, but it lays out in pretty painstaking detail the delays in getting the project started, the cost overruns and yes what appears to be outright lying from Bechtel corporation about timelines to complete. Specifically, it seems like Bechtel corporation basically lied about the timeline it would take to complete a tunnel across the Fort Point Channel.
In other words, you're post has some interesting familiarity to it. And yet, I think the consensus now is that it was "worth it". From a quick google search, the following benefits are noted:
- Housing: The project led to the development of 7,700 new housing units, including 1,000 affordable units
- Office and retail space: The project added 10 million square feet of office and retail space
Hotel rooms: The project added 2,600 hotel rooms
- Traffic flow: The project improved traffic flow by 62% compared to pre-project levels
- Travel time and vehicle operating costs: The project saved travelers an estimated $167 million per year on travel time and vehicle operating costs
- Urban design: The project led to new residential development near parks and open spaces
Now this is a quick google search with AI driven response, so feel free to nitpick some of this. But I think the basic contours is correct. And I think this underplays the impact. That housing, hotel and office space is located in some of the valuable real estate in all of the country. Furthermore, the beautification effects of not having an elevated highway surely has led to knock on urban development of restaurants and shops that otherwise wouldn't have exited as proximity of the highway would have meant going to certain neighborhoods that are now trendy an uninviting proposition. Lastly, I wouldn't discount the impact of the Zakim Bridge. There's a reason it was heavily featured in the movie "The Departed" as it's become a pretty iconic (and beloved) part of the modern Boston skyline.
The point being, I think there is a very strong case to be made that the "Big Dig" was worth it despite the cost overruns, extreme amount of time it took to complete and what appears to be outright fraud involved.
Which comes back to kind of the tragedy of HSR. The concept I actually think is sound. If this project was built by the Spanish I'm guessing it would be done years ago. So in theory this is actually a good project that would probably have been "worth it" with Big Dig style cost overruns. But at this point, the complete lack of progress means it probably should be junked. Someone involved in this project needs to read up again on "Sunk Costs".
* Great podcast and worth your time. Feel like it's catnip for Matt and his audience. One thing the first few episodes did was make me more sympathetic to NIMBY or I should say sympathetic to the historical reasons why NIMBY became so strong starting in the 70s (which the podcast gets into). Because listening to the show, it really hit home to me how much of this impulse is about highway building. Matt bemoans (Rightly) how much the building of highways through the middle of cities was absolutely devestating. But I feel like listening to this podcast that people put highway building in the same mental bucket as building apartments; big government + rich people building stuff to enrich themselves without any care of how it impacts the little guy. And the fight in the 60s about a highway through East Boston really hits home to me that the impulse to stop construction just generally comes from a pretty understandable place.
It's fine to say that where you have already completed something, it is worth it.
But even in the best case scenario, which the Big Dig or the transcontinental railroad is, there's some massive negatives:
1. If you fail, you end up with a white elephant that reminds the public of the folly of big government. Those exist- there are unused subway tunnels around the country, bridges to nowhere, ghost ramps and highways to nowhere, etc. And each one tells a story of how government wasted taxpayer money.
2. Even if you succeed, developing the reputation (as people are arguing here) that all projects run over is not good for the cause of big government. Remember when the Pentagon had those $600 toilet seats? I bet supporters of increased defense spending loved hearing that one brought up over and over again over the next decade plus when they asked for appropriations!
3. The public will think we are a bunch of liars and that every spending program explodes. This is a big reason, by the way, that there's a lot of green eyeshade budgeting and honest scoring of Democratic initiatives in Congress. Obama did not want the story of Obamacare to be how he promised this program would pay for itself with some minor tweaks to the tax code and modest Medicare cuts and then it blew up the budget deficit! Had that happened, maybe the Republicans get that last vote they needed to repeal it! Plus the next time we propose something, we'd get "remember Obamacare? You can't trust them".
Plus, I realize there isn't a lot of morality in politics, but this really is immoral. You don't have to be an anti-tax crusader to say that when you ask the voters for pay for something you think will be good for them, you tell them up front and reasonably accurately what you think the price tag will be. You owe them that in a democracy.
I agree. The 99 tunnel project in Seattle was a good idea and worth it despite its cost overruns which is why I would have supported it with more accurate costs estimates up front but when when everything ends up costing twice what they say it will then when folks are honest people mentally double it and then vote down good ideas.
In my business, I am required by the court to charge by the hour rather than offer a flat rate for many cases. I usually will give clients a non-binding estimate of the total costs. I always make that about 50% more than I think it will likely cost. It gives me some buffer if things go wrong. Since clients are buying a thing that they have basically no idea what it "ought" to cost, 99% of the time they agree because I have good reviews and/or I came highly recommended by a friend. When the case almost always ends up costing less than they expected they are very happy about. I've even had a few of them feel bad and try to "tip" me the difference which I always decline. I've gotten flowers sent in response to my final bill or cookies dropped off at the office for the staff from happy customers.
But many attorneys do the opposite and give a low ball estimate and then run up bills that shock the clients. (They are frankly also sometime just generally shocking and reflect a lot of unnecessary work.) They have a hard time getting paid and generate negative goodwill from clients. In my experience they often low ball because they are pretty desperate for work and think it makes it more likely they will get the job. But since I have a 99% hire rate for my practice in terms of initial consultations signing up to be clients, I think the idea that those low ball estimates are getting more people to say yes aren't necessarily as true as micro economics would lead you to believe since attorney pricing is so lacking in transparency that client usually can't really compare prices effectively when making choices. In fact, their desperation for work in a space where many of the rest of us have months long wait lists for appointments is probably reflective of the fact that they don't have good reviews or get many referrals from prior clients.
My sense is that with most infrastructure projects the public wants something and they have no idea what that thing would cost and whatever that thing would cost is going to a large number well beyond people's day to day financial understanding and approaching the range where humans only abstractly understand. If policy makers gave a slightly inflated cost estimate, built it with inhouse management and limited subcontracting and mostly came in "under budget and ahead of schedule" with only a few projects that hit unexpected snags hitting or going over the estimates, I think people would view that as a great success even if they would have viewed that same cost as a bungogle if they had lowballed it and run over cost and time as almost all projects seem to do.
I think particularly in Blue areas where progressive ideas and projects have generally support we would be having more popular figures to put up for national elections if we were honest with a bit of padding for what things will cost, actually actively managed projects with competent people and delivered a bit more than expected.
Oh I'm actually not sure I disagree with you at all. I think my point is big infrastructure projects (often) carry huge long term benefits above and beyond initial projections.
I'm not finished with the podcast but the host has alluded to the "tragedy" of the Big Dig and I think for reasons you're getting at. The cost overruns and the giant extended timeline to finish has put a huge headwind against getting infrastructure projects proposed and funded. For the exact reasons you lay out in bullet point two.
I'm living it now. I now commute to work via the LIRR to Grand Central station. I can now walk to the office as opposed to needing to take a crosstown subway journey. Considering how many people had to make that same journey previously, the impact on shorter commute times should be enormous. But there was an apparently lack of forethought as to how new train schedules would effect service to Atlantic Terminal and whether new trains needed to be ordered. So schedules are messed up the primary effect has been to increase transfer times at Jamaica station from 2-3 minutes to upwards of 10-15 minutes. For all trains, which means not only are you not saving on travel time by going to Grand Central (it should be about a 10-15 minute reduction in travel time going right to Grand Central), you've now increased travel times to Penn Station! Like..ugh!
And yet! And yet. If Albany and the city can actually get their heads straight and get transfer times at Jamaica back down to where they were, the actual impact on commutes should huge give the number of LIRR commuters. And if Long Island can actually get it together and not be the worst NIMBYs in the country this side of San Francisco, the economic benefits of the new access could be absolutely enormous.
But because this screw up happened, a lot of long islanders and New Yorkers are understandably not in a mood to throw money to the MTA and commuter rail. Which by the way, if you don't think this is a factor in Kathy Hochul's terrible U-turn on congestion pricing I have a bridge to sell you two miles south of me.
"And yet, I think the consensus now is that it was 'worth it'."
Andrew Odlyzko has a very interesting manuscript, entitled "Collective hallucinations and inefficient markets: The British Railway Mania of the 1840s", in which he argues that a lot of financial bubbles form from precisely this phenomenon: investments that absolutely are worth it *in the long term*, but is unclear if their benefits will arise soon enough for the project to be a worthwhile investment at current interest rates.
Yes! But in the case of the Seattle Big Dig there actually hit a legit, unexpected problem. There were apparently some large iron structures that were included in the fill area where they dumped the dirt from the Denny regrade that were not in any city records and the drill hit on and broke. That obviously let to cost overruns and delays. I think Seattle took it well in part because everyone was expecting the Seattle Big Dig to turn in absolute money pit based on the experience in Boston so people's expectations were so low that it more led to an "I told you so" than a revolt. But the tunnel is lovely to use and the increased land for surface development, reconnection of the waterfront to the rest of the city and massive improvements in the views for much of the City made its actual cost totally worthwhile in a way I think few people deny. (Plus it won't come crashing down on large parts of the city in an earthquake like the old viaduct was set to do so that is a plus.) Ironically the toll they set on it to help cover the costs and cost overruns is actually one of the closest things to congestion pricing I have seen in the West. Granted it isn't a charge to go into town but a charge to be able to get through downtown from the north of the city to the south of the city actually probably cover more daily commutes in our weirdly shaped and decentralized city than a downtown congestion price would do.
That's a problem but it is not the problem. The problem is that it was impossible to do at the cost that was promised (and it indeed is impossible to do the most important segment, Bakersfield-LA at any reasonable cost) and they lied to voters by lowballing the cost to get it passed and now we've sunked a ton of money that could have helped deal with our state's many problems into a boondoggle.
Are you saying that it was never achievable from a materials cost perspective? Engineering challenges? Labor? I admit it's not clear to me why it would be difficult to build that segment.
The right way to build it is, as you said, build LA-Bakersfield first, or at least the first step should have been launching the TBMs.
I'm not as convinced as you are that it's impossible to cross the mountains anywhere that is earthquake-proof (note that modern TBMs mean you're not restricted to the passes; you can tunnel right under the peaks as well, see Mont d'Ambin in the Alps), but the right approach would be to pick a tunnel route and then work out how to connect it to LA and what the right route up the Central Valley should be, rather than picking a route first and then working out how to cross the mountains, as CAHSR actually did.
Either way, neither of us are tunnelling engineers or seismologists, so I don't think there's any serious prospect of us debating the question - neither of us has the knowledge to make a serious assessment of the risks.
But, yes, CAHSR, the project as conceived, is a deceitful money-sink; I expect the eventual "solution" to be that they build a slow route (probably Grapevine) from LA to Bakersfield and then run actually fast from Bakersfield to SF, and claim that it's high-speed because the average train speed between LA and SF is still going to be 100mph or more.
You can't go up the Grapevine without massive tunneling which gets you the earthquake issue. Grapevine Canyon is a series of switchbacks with 6 percent grade.
Don’t they already have the ROW land acquired and through CEQA, and it does that weird loop above the grapevine and avoids that pathway so that politician in north LA county can be happy?
A major cause of cost overruns in infrastructure projects in the US is the start stop start stop nature of construction caused by litigation and permitting. There are huge fixed costs to infrastructure construction and it seems that we pay those costs for every project because of the time gaps between completed and new projects.
Curious to know about some of the govt boondoggles you’ve seen in Florida - we hear so much about this in California, and somewhat Texas, but I feel there must be a lot in Florida too
Boy, I so want liberal government to succeed. And then I see the California HSR and the Kathy Hochul pratfall in New York and it pushes me toward despair. Do better, our team!
You are only allowed to wallow in liberal despair for 10 minutes a day maximum. Hope is a moral obligation. Despair is the enemy of justice because the struggle for justice requires courage, persistence, and faith and all of these spring from a reservoir of hope. But, I also would really fucking like to see our team doing better.
As a licensed professional engineer I'll tell you that very large and complicated infrastructure projects almost ALWAYS go over budget and over schedule. Humans have trouble estimating ands sensing the unknown unknowns.
Whenever I had a research project due in a year, I was always confident I could meet the deadline fairly easily. The source of my confidence was that, while my schedule was currently packed which made immediate progress very difficult, that schedule would surely ease up in a few months and then I'd have plenty of time to finish the work. You won't be surprised to learn that this kind of future discounting typically led to tears down the road when said schedule was just as packed as it was at the earlier moment.
I don't know if this kind of budgeting is cynical or a form of blackmailing or just part of human cussedness to be hopelessly optimistic about future states.
I mean, I understand- they want the bid- but there's a point behind my admittedly rhetorical question. If it was just an ordinary process of "guess the costs in good faith", shouldn't, with all the experience people have, some of the guesses come in too high instead of too low?
So what does that say about what is really going on-- good faith estimates that just missed the mark, or deliberately lowballing the costs for contracting and/or political reasons to hook the public in so they are forced to pay the real price?
So, the bid is the thing, right? There is a related phenomenon in government work (work done by government organizations on a reimbursable basis for other government organizations) constrained by budgets but without a real bidding process. It turns out that it is common to significantly overestimate the initial costs of a project and then as more information becomes available and the schedule firms up the initial estimate usually (not always) comes down. Some of the pressure to reduce the estimate admittedly comes from the "customer" who does have an appropriated budget limit. The high initial estimate is how the service providers hedge against the risk of the "unknown unknowns."
I imagine at this point it would be counterproductive to accurately estimate the time and cost involved; people are by now used to undershoots so they'd assume your project would be more costly than it is if you correctly announced its cost.
i'm sure you're right that the price presented was unrealistic, but i think it is always important to point out that a great deal of the increase in estimated total project cost is just a function of the increase in real estate values. if they are to ever build the socal portions of the project they'll need to aquire a lot of privately owned real estate and the price they'd pay is much higher now than it was 15 years ago.
most of the land "in the middle of nowhere" has already been purchased, so those costs aren't going up. but the southern california segments have not been purchased, and the value of that real estate has sky rocketed.
The initiative put a $9.95 billion price tag on the whole thing!
In fact they NEEDED to start there first because LA-Bakersfield was the most important need. We have plenty of passenger rail in central California but none between LA and Bakersfield. So you start there first.
Again, the plan was always to lowball the cost and then try to blackmail the public to put up whatever obscene sum would actually be needed to get over the Tehachapis.
It's not fraud when a politician says "elect me and there will never be a cloudy day" because we all know he is lying.
But it is fraud when advocates- including many subject matter experts- say "approve this taxpayer funded program because it will only cost $9.95 billion and will yield $50 a trip less than 3 hour train trips between LA and San Francisco" knowing that isn't close to true.
But this just shows why California's system of "government by referenda" is pretty bad in my view. It's not "rule of the people" it's rule of the interest groups and campaign professionals who specialize in running ballot initiative campaigns. Personally I'd just change the system rather than trying to enforce rules that the Don Drapers of the political world have to be honest about everything all the time because of course they aren't going to do that, no more than Don Draper is going to admit that buying lipstick isn't going to make you happy.
California's system of government by referenda is how we got marijuana legalization. The politicians were NEVER going to touch this because they are so afraid of looking soft on drugs. It was only because there was an option to bring this to voters that we got the ball rolling.
It's a good system. If it requires that sponsors of projects be more honest about them, that's a good thing too.
In any event, even in a purely representative democracy, this sort of activity can still discredit advocates of government. Eventually, the voters may get sick of being lied to, and some projects will turn into white elephants such as freeway stubs that constantly remind voters that the folks who promised progress just stole their money instead.
It did. But parts of three strikes were later repealed. We also reformed our auto insurance system by initiative.
I am highly protective of our system. It's great. We allow our voters to make choices. Some of those choices are bad, but we also are able to do things to circumvent politicians when politicians are acting anti-democratically. This is how things should work.
You can argue we need a higher signature requirement. That is true. But the general notion that the voters should be able to overrule politicians is sound. It's more democratic than the alternative. And if you don't like it, don't live here.
We need a new business model for public works projects. Contractors must agree to a fixed price and not get paid until the job is completed, with penalties for delays.
Yes, the bids will be much higher in order to cover all the risks, but at least we'll know the cost up front and can make a decision if that new bridge or rail line is really worth it.
No. That contracting model is only acceptable for turnkey projects, wherein the contractor both designs and builds the new infrastructure. Otherwise, either the contract sets the minute details of the project in such stone that neither the contractor nor public officials can adapt unforeseen technical challenges; or the public officials will have the freedom to insert scope creep to the project until the contractor is guaranteed a loss. The only solution is to take the majority of the work in-house.
How will bringing the work in-house improve performance? Who will have skin in the game and suffer the consequences for cost and schedule overruns? Perhaps large, complex projects can be broken into baby steps, with a fixed price for each step, and a chance to negotiate adjustments (as well as consider new bidders) for subsequent steps.
I think you believe that public works officials are not penalized for cost overruns. I disagree with that premise; I think they lack the tools to appropriately prevent contractors from developing cost overruns through incompetence. Consequently I don't think the problem is a lack of "skin in the game"; the problem is insufficient in-house technical knowledge to break down the "large complex projects…into baby steps".
The conflation of externalities with direct subsidies is egregious and one of those things that exemplifies how journalists often are unconcerned with truth or knowing. They just want to sell a salient story. I lost of lot of respect when speaking with journalists on research I did, because of the questions they asked and the responses they were apparently seeking to elicit.
There is a reason why the public has lost trust in experts and journalists over the years and that is because actors in these positions of authority often abuse the trust of the public.
I think this is true, but also beside the point. I don’t think most journalists care if what they write is literally correct. They start with a “vibe,” do enough research to “confirm” the vibe, and then view their job as writing an interesting, possibly inflammatory story that persuades people of the vibe. Their failures come primarily from indifference for objective facts rather than mere negligence. In the legal world, we’d say they have “scienter,” something worse than negligence, though not always “intent.”
As a former journalist I’d say this is not only untrue but unfair.
You’re criticizing journalists for being one-sided and promoting an agenda, while many others criticize journalists for “both sidesing” every story. Which is it? Because it’s hard to see how it’s both.
I also think journalists get held to an impossibly high standard. Most people in most companies aren’t particularly good at their jobs, don’t know how to interpret data or think critically, and propose solutions to problems that benefit them personally. Should we really be surprised that the same applies sometimes to some journalists?
In general - almost all of my colleagues tried to treat their stories and their subjects fairly and tried to relay the facts accurately. Did they always succeed? No. But as I compare it to other industries, the failure rate was pretty low.
As someone who is held to standards of accuracy in writing, I can tell you that it is in fact not difficult to avoid the pitfalls that most journalists fall into. It is, however, hard to do that while also generating clicks. Objective facts rarely are interesting to a wide audience.
The failure rate is exceedingly high. I’d say 60-70% of articles I read on a subject of which I am an expert contain significant false premises on which the article relies and any objective researcher could identify. But these errors are not random-they invariably point towards making a story more interesting or compelling. That is the fundamental bias of the press.
The people criticizing both sidesing typically just want a propaganda piece that confirms their priors. 90+% of the time they shouldn't be taken seriously
My general critique of both-sides journalism is that it’s lazy and uninformative. Often it’s just summarizing the opposing press releases. But that isn’t the issue I’m referring to here. What I find funny is that multiple posters here have chosen to view the issue purely from a political/partisan lens. My problem, and I think Matt’s, runs much deeper.
The Fallacy of Trust occurs when a person who is an expert on foreign policy picks up a newspaper, flips to the foreign policy section, and cries out “balderdash!”
This isn’t the problem. The problem is that the same person will often read the rest of the newspaper without complaint, quietly updating their opinions bit by bit.
Meanwhile, the expert on local politics will cry out “balderdash!” in the local-politics section, but read about foreign policy without complaint.
If we assume that the newspaper is mostly wrong on both topics, then neither expert is gathering information very effectively.
"There’s an old tweet I wrote over a decade ago defending a lowball projection of high-speed rail construction costs on this kind of means-ends grounds."
I'm glad Matt owns up to this because this is a perfect example of how dangerous this phenomenon is. The California voters were told they could have $50 high speed rail from LA to San Francisco in less than 3 hours for $9.95 billion (matched by federal funds to total $19.9 billion). The entire thing was a lie. The project is already up to $100 billion, the first segment (which almost nobody will ride and which will not cost $50 to ride) on flat land between Bakersfield and Merced is many years away from completion, and the project's designers have not demonstrated that it is even possible at reasonable cost to go from Bakersfield to Los Angeles (a long story that I tell on my own Substack).
The point is, this is more than a folly-- this was fraud and theft. Sponsors of a project that is likely impossible to actually complete convinced California voters to authorize billions of dollars of spending that could have been directed to solving other problems in our state. Heck, we could have subsidized clean air zero-carbon bus trips for everyone who wants to travel by land between Los Angeles and San Francisco with that money and THAT would have even been a better use of it.
And yes, it was fraud. The project organizers chose $9.95 billion for the same reason that your local supermarket marks apples at 99 cents instead of a dollar-- to make the price tag look as low as possible. They HAD to know that it would cost a lot more-- the arguments against the ballot initiative in the ballot pamphlet rationally predicted a $90 billion cost. Even the opponents estimated too low!
This is not the way to do liberalism or government. You tell the public the truth. If the public votes against you, it's OK. You told them the truth and that's democracy.
The plot in True Detective season 2 was about people trying to get a slice of the high speed rail boondoggle, which was spending a lot of money and not building much.
That season came out almost a decade ago.
I thought it was an underrated season, and Vince Vaughn deserved some praise for his performance, which of course is the opposite of what happened.
https://m.youtube.com/watch?v=taJ4MFCxiuo&t=155s&pp=ygURbW9ub3JhaWwgc2ltcHNvbnM%3D
Is there a chance the track could bend?
Not on your life my Hindu friend!
This is the correct answer, and I even get sniped on this due to continual experiencing of Westernness.
A big problem with that season is that Nick Pizzolatto had no idea at all how the politics of high speed rail works so the whole season is based on a bunch of absurd things happening.
My strong impression from reading even positive reviews of "True Detective" is that "the whole season is based on a bunch of absurd things happening" could be used to summarize each season of the show.
Season 1 is really good though in terms of characters and ideas and a the big story of Russ and Marty's relationship over 15 years. Season 2 doesn't really have that.
The most annoying thing is that they could have built the whole thing for $50 bn. But they'd have had to change California real estate law in some fundamental ways - include in the initiative the power for CAHSR to seize any non-federal land in the state at a price to be determined by CAHSR, with short notice period (one month would suffice), and that the only power that any former landowner would have would be the right to sue to dispute the valuation, in which case CAHSR would be liable to pay the difference in valuation (without any interest or penalty). Rely on Kelo as the constitutional justification
They'd also have had to get a competent organisation (ie not an American one) to do the construction - French, Spanish, Italian, Turkish, Japanese, Korean, Taiwanese, any would do.
The absence of any penalty - let alone any *interest,* sounds like a bridge too far to me. Slight systematic overvaluation of eminent domain seems like a massively better problem to have than any kind of systematic undervaluation.
Totally agree. Allow for interest and reasonable attorneys fees (eg 33% of the undervaluation) and there is less incentive to shaft property owners. You might also limit valuations to 125% of assessed value to reign in run away finders of fact.
I'm mostly trying to avoid a situation where CAHSR has to hold an enormous contingency budget against the risk of losing legal actions and getting rinsed by former property owners who can convince a judge to approve an enormously inflated valuation.
If there is a reasonable limit to the losses, then they can take some land, pay $1million for it, stick $250K in a contingency fund and then the only part of the organisation that has to care is group legal. That's probably the practical version of what I propose. But Kelo should mean that blocking eminent domain rather than arguing over valuations is impossible, yet CAHSR was prepared to sit and argue over a valuation rather than just picking their own valuation, seizing the land, and then arguing about the valuation later in court. I don't know if that was lack of legal authority or lack of political will, but it was a massively expensive problem.
They'd also need some variances on various regulations (particularly environmental), but those would be mostly because the way that too many US regulations are enforced is that people sue and then get injunctions to stop construction - give CAHSR a variance that if they had a reasonable compliance plan then you can't get an injunction unless you can demonstrate that that compliance plan was not reasonable (ie, just because it doesn't comply, you can't stop them building, you have to show they weren't even trying to comply).
Dilan Esper's point (in the article he linked) that the *first* part of the line to build is the line through the Tehachapis is well-taken, though. I suspect that if you got a Japanese or a Taiwanese engineer to design your railroad, you'd get told exactly how to route it so it was earthquake-safe, but neither I nor Dilan are railroad tunnel engineering experts.
Also @Dilan, one of the nice things about high-speed rail is that it's, uh, fast. That means that if you do have to go a relatively long way around (e.g. going up the coast to Oxnard or Santa Barbara before crossing the mountains), then you can do that - you can add a lot of miles in diversions at 200mph before you really start affecting the travel time. AIUI, from talking to some of the engineers who worked on the UK's HS1 and HS2 routes, you work out where you can cross a mountain chain and then you work backwards from there to identify the routes to get to the crossing. This is why the Lyon-Turin line under construction takes such an odd route on approach to the Alps - because they picked the tunnel route first and then worked out how to connect it to the rest of the system.
So the problem with going up the coast is there are tons of curves. I am not saying it is totally impossible to do but you can't use the existing SP coast route- and in addition to increasing travel time slowing down for the curves there are all the practical problems of the coastal act, rich landowners who don't want the train, etc.
Neither of us knows enough about seismic protection and tunnelling to say where the mountain crossing should be. And neither do the "Lines on Map" people. And nor does CAHSR. Honestly, I doubt anyone in the USA (or the UK) does. You want a Japanese or a Taiwanese engineering firm to do a survey, and identify where to do the crossing, and then you start designing the rest of CAHSR from there: if you cross the mountains in X place, then you have to get the track from X to LA Union Station, so you design a route from X to LAUS. Then you have to go up the Central Valley from X, so that determines which Valley cities can be reached.
Similarly in the Bay Area, you start with the mountain crossing between the Caltrain line and the Central Valley, and then you work out how far the track comes up the Valley.
Although this actually is the type of project that imminent domain is supposed to be used for (roads, railways etc).
Kelo was about taking property so it could be redeveloped by private property owners.
Reanimate the corpse of Robert Moses, in other words.
That is not dead which can eternal lie;
And with strange eons even the Cross Manhattan Expressway may touch the sky.
"What is dead may never die" -- Theon Greyjoy.
GRRM knew what he was doing. The Iron Islanders are basically meant to be "Vikings who worship Cthulhu."
Maturity is recognizing Jacobs' philosophy does more harm than Moses.
They could not have built over the Tehachapis for $50 billion. The terrain challenges are far too massive.
I've always wondered if the southeastern US would have been a better choice for HSR.
Atlanta/Orlando is one of the busiest domestic flights in the US, there are no mountains on this route, and the distance is only a bit longer than LA/SF. My impression is that labor and land are both much cheaper in the southeast than in California.
I do wonder if swamps and crossing state lines would be huge hassles for getting HSR done though. And I suspect that a lot of the Atlanta/Orlando flights are tourists connecting via Atlanta on a theme park visit to Orlando, so connecting HSR to the airport in Atlanta would probably be a necessity.
It isn't clear that they can build the thing at all for any price. No one currently has a solution for building through the Tehachapis.
What is so hard in tunneling thorough mountains?
it's not just tunneling through mountains
Also tunneling through mountains isn't easy.
This is correct, but... historically, a lot of the large infrastructure projects in this country were built on fraud and misinformation. The financing structure for 19th century railroads certainly wasn't anywhere close to sound (and directly lead to repeated panics and recessions). But we still had the railroads, which people could use and provided a great deal of benefits.
I guess I struggle with where you draw the line between "outright lies to voters to build something useful and long lasting" (where California HSR mostly falls) to "boring technical discussions of how this will go which is over the public's head and will be subject to its own misinformation campaign" (e.g., Obamacare). At some point, people have to accept the fact that we want government to get shit done and it ain't gonna be perfect (and if my own experience with big business is any indication, it's not much different in the private sector). So we try to mitigate the bad as much as we can and push for the good.
There’s a big difference between a terrible, criminally irresponsible process that builds something useful and one that doesn’t, especially as time passes
You are right that it is a difficult line. But nonetheless lowballing government programs is incredibly risky. The Crédit Mobilier scandal could have easily killed the whole project. They were playing with fire and got very lucky.
This was a central part of the Robert Moses strategy, correct? Dupe the state legislature into a significantly smaller cost, and then once construction has already commenced, reveal the grand plan. Although, I guess the difference between that and the LA/San Fran line was that Moses actually built things.
"Dupe the state legislature into a significantly smaller cost, and then once construction has already commenced" this is more or less basically how every weapon system the Pentagon wants gets made as well. We call this system democracy.
The F-35 is a great example of this. https://www.defensenews.com/air/2022/09/01/lockheed-pentagon-claim-theyre-reining-in-f-35-sustainment-costs/
The HBO TV Movie The Pentagon Wars is great on this as well and pretty much sums up the process we see with transit and affordable housing as well (and anyone who's worked in software design would be familiar with this dynamic too) https://www.youtube.com/watch?v=aXQ2lO3ieBA
Also why people don't much like this anymore! Moses built things without much regard for whether it was a good idea. The backlash has been with us for over 50 years now.
Yes, but they actually got built. Moreover, historically the cost overruns were not 10x
Interstate highways were pitched as vital to beating the Ruskies in World War III!
It's ironic that I'm listening to the "Big Dig" podcast right now* (I grew in MA when this project was ongoing so of particular personal interest to me) because it's clearly a companion piece to your post about CA HSR.
I'm only halfway through, but it lays out in pretty painstaking detail the delays in getting the project started, the cost overruns and yes what appears to be outright lying from Bechtel corporation about timelines to complete. Specifically, it seems like Bechtel corporation basically lied about the timeline it would take to complete a tunnel across the Fort Point Channel.
In other words, you're post has some interesting familiarity to it. And yet, I think the consensus now is that it was "worth it". From a quick google search, the following benefits are noted:
- Housing: The project led to the development of 7,700 new housing units, including 1,000 affordable units
- Office and retail space: The project added 10 million square feet of office and retail space
Hotel rooms: The project added 2,600 hotel rooms
- Traffic flow: The project improved traffic flow by 62% compared to pre-project levels
- Travel time and vehicle operating costs: The project saved travelers an estimated $167 million per year on travel time and vehicle operating costs
- Urban design: The project led to new residential development near parks and open spaces
Now this is a quick google search with AI driven response, so feel free to nitpick some of this. But I think the basic contours is correct. And I think this underplays the impact. That housing, hotel and office space is located in some of the valuable real estate in all of the country. Furthermore, the beautification effects of not having an elevated highway surely has led to knock on urban development of restaurants and shops that otherwise wouldn't have exited as proximity of the highway would have meant going to certain neighborhoods that are now trendy an uninviting proposition. Lastly, I wouldn't discount the impact of the Zakim Bridge. There's a reason it was heavily featured in the movie "The Departed" as it's become a pretty iconic (and beloved) part of the modern Boston skyline.
The point being, I think there is a very strong case to be made that the "Big Dig" was worth it despite the cost overruns, extreme amount of time it took to complete and what appears to be outright fraud involved.
Which comes back to kind of the tragedy of HSR. The concept I actually think is sound. If this project was built by the Spanish I'm guessing it would be done years ago. So in theory this is actually a good project that would probably have been "worth it" with Big Dig style cost overruns. But at this point, the complete lack of progress means it probably should be junked. Someone involved in this project needs to read up again on "Sunk Costs".
* Great podcast and worth your time. Feel like it's catnip for Matt and his audience. One thing the first few episodes did was make me more sympathetic to NIMBY or I should say sympathetic to the historical reasons why NIMBY became so strong starting in the 70s (which the podcast gets into). Because listening to the show, it really hit home to me how much of this impulse is about highway building. Matt bemoans (Rightly) how much the building of highways through the middle of cities was absolutely devestating. But I feel like listening to this podcast that people put highway building in the same mental bucket as building apartments; big government + rich people building stuff to enrich themselves without any care of how it impacts the little guy. And the fight in the 60s about a highway through East Boston really hits home to me that the impulse to stop construction just generally comes from a pretty understandable place.
It's fine to say that where you have already completed something, it is worth it.
But even in the best case scenario, which the Big Dig or the transcontinental railroad is, there's some massive negatives:
1. If you fail, you end up with a white elephant that reminds the public of the folly of big government. Those exist- there are unused subway tunnels around the country, bridges to nowhere, ghost ramps and highways to nowhere, etc. And each one tells a story of how government wasted taxpayer money.
2. Even if you succeed, developing the reputation (as people are arguing here) that all projects run over is not good for the cause of big government. Remember when the Pentagon had those $600 toilet seats? I bet supporters of increased defense spending loved hearing that one brought up over and over again over the next decade plus when they asked for appropriations!
3. The public will think we are a bunch of liars and that every spending program explodes. This is a big reason, by the way, that there's a lot of green eyeshade budgeting and honest scoring of Democratic initiatives in Congress. Obama did not want the story of Obamacare to be how he promised this program would pay for itself with some minor tweaks to the tax code and modest Medicare cuts and then it blew up the budget deficit! Had that happened, maybe the Republicans get that last vote they needed to repeal it! Plus the next time we propose something, we'd get "remember Obamacare? You can't trust them".
Plus, I realize there isn't a lot of morality in politics, but this really is immoral. You don't have to be an anti-tax crusader to say that when you ask the voters for pay for something you think will be good for them, you tell them up front and reasonably accurately what you think the price tag will be. You owe them that in a democracy.
I agree. The 99 tunnel project in Seattle was a good idea and worth it despite its cost overruns which is why I would have supported it with more accurate costs estimates up front but when when everything ends up costing twice what they say it will then when folks are honest people mentally double it and then vote down good ideas.
In my business, I am required by the court to charge by the hour rather than offer a flat rate for many cases. I usually will give clients a non-binding estimate of the total costs. I always make that about 50% more than I think it will likely cost. It gives me some buffer if things go wrong. Since clients are buying a thing that they have basically no idea what it "ought" to cost, 99% of the time they agree because I have good reviews and/or I came highly recommended by a friend. When the case almost always ends up costing less than they expected they are very happy about. I've even had a few of them feel bad and try to "tip" me the difference which I always decline. I've gotten flowers sent in response to my final bill or cookies dropped off at the office for the staff from happy customers.
But many attorneys do the opposite and give a low ball estimate and then run up bills that shock the clients. (They are frankly also sometime just generally shocking and reflect a lot of unnecessary work.) They have a hard time getting paid and generate negative goodwill from clients. In my experience they often low ball because they are pretty desperate for work and think it makes it more likely they will get the job. But since I have a 99% hire rate for my practice in terms of initial consultations signing up to be clients, I think the idea that those low ball estimates are getting more people to say yes aren't necessarily as true as micro economics would lead you to believe since attorney pricing is so lacking in transparency that client usually can't really compare prices effectively when making choices. In fact, their desperation for work in a space where many of the rest of us have months long wait lists for appointments is probably reflective of the fact that they don't have good reviews or get many referrals from prior clients.
My sense is that with most infrastructure projects the public wants something and they have no idea what that thing would cost and whatever that thing would cost is going to a large number well beyond people's day to day financial understanding and approaching the range where humans only abstractly understand. If policy makers gave a slightly inflated cost estimate, built it with inhouse management and limited subcontracting and mostly came in "under budget and ahead of schedule" with only a few projects that hit unexpected snags hitting or going over the estimates, I think people would view that as a great success even if they would have viewed that same cost as a bungogle if they had lowballed it and run over cost and time as almost all projects seem to do.
I think particularly in Blue areas where progressive ideas and projects have generally support we would be having more popular figures to put up for national elections if we were honest with a bit of padding for what things will cost, actually actively managed projects with competent people and delivered a bit more than expected.
Oh I'm actually not sure I disagree with you at all. I think my point is big infrastructure projects (often) carry huge long term benefits above and beyond initial projections.
I'm not finished with the podcast but the host has alluded to the "tragedy" of the Big Dig and I think for reasons you're getting at. The cost overruns and the giant extended timeline to finish has put a huge headwind against getting infrastructure projects proposed and funded. For the exact reasons you lay out in bullet point two.
I'm living it now. I now commute to work via the LIRR to Grand Central station. I can now walk to the office as opposed to needing to take a crosstown subway journey. Considering how many people had to make that same journey previously, the impact on shorter commute times should be enormous. But there was an apparently lack of forethought as to how new train schedules would effect service to Atlantic Terminal and whether new trains needed to be ordered. So schedules are messed up the primary effect has been to increase transfer times at Jamaica station from 2-3 minutes to upwards of 10-15 minutes. For all trains, which means not only are you not saving on travel time by going to Grand Central (it should be about a 10-15 minute reduction in travel time going right to Grand Central), you've now increased travel times to Penn Station! Like..ugh!
And yet! And yet. If Albany and the city can actually get their heads straight and get transfer times at Jamaica back down to where they were, the actual impact on commutes should huge give the number of LIRR commuters. And if Long Island can actually get it together and not be the worst NIMBYs in the country this side of San Francisco, the economic benefits of the new access could be absolutely enormous.
But because this screw up happened, a lot of long islanders and New Yorkers are understandably not in a mood to throw money to the MTA and commuter rail. Which by the way, if you don't think this is a factor in Kathy Hochul's terrible U-turn on congestion pricing I have a bridge to sell you two miles south of me.
Someone in my city is trying to start a Museum of Political Corruption. I'll let people know here if it comes to fruition.
If there's a good kickback in it, it will get built.
"And yet, I think the consensus now is that it was 'worth it'."
Andrew Odlyzko has a very interesting manuscript, entitled "Collective hallucinations and inefficient markets: The British Railway Mania of the 1840s", in which he argues that a lot of financial bubbles form from precisely this phenomenon: investments that absolutely are worth it *in the long term*, but is unclear if their benefits will arise soon enough for the project to be a worthwhile investment at current interest rates.
For a little relief on this topic, here's Genesis' criminally underrated song about the building of the British railroads.
https://www.youtube.com/watch?v=rG9-7WmeSdc
highway construction should take a lot more precedence that residential or commercial construction.
Eminent domain is a thing exactly to make sure highways, railways etc can get built
Yes! But in the case of the Seattle Big Dig there actually hit a legit, unexpected problem. There were apparently some large iron structures that were included in the fill area where they dumped the dirt from the Denny regrade that were not in any city records and the drill hit on and broke. That obviously let to cost overruns and delays. I think Seattle took it well in part because everyone was expecting the Seattle Big Dig to turn in absolute money pit based on the experience in Boston so people's expectations were so low that it more led to an "I told you so" than a revolt. But the tunnel is lovely to use and the increased land for surface development, reconnection of the waterfront to the rest of the city and massive improvements in the views for much of the City made its actual cost totally worthwhile in a way I think few people deny. (Plus it won't come crashing down on large parts of the city in an earthquake like the old viaduct was set to do so that is a plus.) Ironically the toll they set on it to help cover the costs and cost overruns is actually one of the closest things to congestion pricing I have seen in the West. Granted it isn't a charge to go into town but a charge to be able to get through downtown from the north of the city to the south of the city actually probably cover more daily commutes in our weirdly shaped and decentralized city than a downtown congestion price would do.
The problem is the legislature didn't write exemptions to the various types of lawsuits NIMBY's would obviously throw in the way of rail construction.
That's a problem but it is not the problem. The problem is that it was impossible to do at the cost that was promised (and it indeed is impossible to do the most important segment, Bakersfield-LA at any reasonable cost) and they lied to voters by lowballing the cost to get it passed and now we've sunked a ton of money that could have helped deal with our state's many problems into a boondoggle.
Are you saying that it was never achievable from a materials cost perspective? Engineering challenges? Labor? I admit it's not clear to me why it would be difficult to build that segment.
Fundamentally engineering, geology, and terrain challenges. I tell the whole sorry story here. https://dilanesper.substack.com/p/people-who-draw-lines-on-maps-are
The right way to build it is, as you said, build LA-Bakersfield first, or at least the first step should have been launching the TBMs.
I'm not as convinced as you are that it's impossible to cross the mountains anywhere that is earthquake-proof (note that modern TBMs mean you're not restricted to the passes; you can tunnel right under the peaks as well, see Mont d'Ambin in the Alps), but the right approach would be to pick a tunnel route and then work out how to connect it to LA and what the right route up the Central Valley should be, rather than picking a route first and then working out how to cross the mountains, as CAHSR actually did.
Either way, neither of us are tunnelling engineers or seismologists, so I don't think there's any serious prospect of us debating the question - neither of us has the knowledge to make a serious assessment of the risks.
But, yes, CAHSR, the project as conceived, is a deceitful money-sink; I expect the eventual "solution" to be that they build a slow route (probably Grapevine) from LA to Bakersfield and then run actually fast from Bakersfield to SF, and claim that it's high-speed because the average train speed between LA and SF is still going to be 100mph or more.
You can't go up the Grapevine without massive tunneling which gets you the earthquake issue. Grapevine Canyon is a series of switchbacks with 6 percent grade.
Don’t they already have the ROW land acquired and through CEQA, and it does that weird loop above the grapevine and avoids that pathway so that politician in north LA county can be happy?
That is a problem. But it is a small, small part of the problem with California's HSR debacle.
A major cause of cost overruns in infrastructure projects in the US is the start stop start stop nature of construction caused by litigation and permitting. There are huge fixed costs to infrastructure construction and it seems that we pay those costs for every project because of the time gaps between completed and new projects.
Curious to know about some of the govt boondoggles you’ve seen in Florida - we hear so much about this in California, and somewhat Texas, but I feel there must be a lot in Florida too
Boy, I so want liberal government to succeed. And then I see the California HSR and the Kathy Hochul pratfall in New York and it pushes me toward despair. Do better, our team!
You are only allowed to wallow in liberal despair for 10 minutes a day maximum. Hope is a moral obligation. Despair is the enemy of justice because the struggle for justice requires courage, persistence, and faith and all of these spring from a reservoir of hope. But, I also would really fucking like to see our team doing better.
As a licensed professional engineer I'll tell you that very large and complicated infrastructure projects almost ALWAYS go over budget and over schedule. Humans have trouble estimating ands sensing the unknown unknowns.
true, But those cost overruns shouldn't be 10x
If they had actually built the thing for say 2x we wouldn't be complaining about it now
Whenever I had a research project due in a year, I was always confident I could meet the deadline fairly easily. The source of my confidence was that, while my schedule was currently packed which made immediate progress very difficult, that schedule would surely ease up in a few months and then I'd have plenty of time to finish the work. You won't be surprised to learn that this kind of future discounting typically led to tears down the road when said schedule was just as packed as it was at the earlier moment.
I don't know if this kind of budgeting is cynical or a form of blackmailing or just part of human cussedness to be hopelessly optimistic about future states.
Why not overestimate the budget then?
I mean, I understand- they want the bid- but there's a point behind my admittedly rhetorical question. If it was just an ordinary process of "guess the costs in good faith", shouldn't, with all the experience people have, some of the guesses come in too high instead of too low?
So what does that say about what is really going on-- good faith estimates that just missed the mark, or deliberately lowballing the costs for contracting and/or political reasons to hook the public in so they are forced to pay the real price?
So, the bid is the thing, right? There is a related phenomenon in government work (work done by government organizations on a reimbursable basis for other government organizations) constrained by budgets but without a real bidding process. It turns out that it is common to significantly overestimate the initial costs of a project and then as more information becomes available and the schedule firms up the initial estimate usually (not always) comes down. Some of the pressure to reduce the estimate admittedly comes from the "customer" who does have an appropriated budget limit. The high initial estimate is how the service providers hedge against the risk of the "unknown unknowns."
I imagine at this point it would be counterproductive to accurately estimate the time and cost involved; people are by now used to undershoots so they'd assume your project would be more costly than it is if you correctly announced its cost.
i'm sure you're right that the price presented was unrealistic, but i think it is always important to point out that a great deal of the increase in estimated total project cost is just a function of the increase in real estate values. if they are to ever build the socal portions of the project they'll need to aquire a lot of privately owned real estate and the price they'd pay is much higher now than it was 15 years ago.
The opponents predicted $90 billion in costs. And much of the land is in the middle of nowhere and not part of the boom. So no that isn't it.
most of the land "in the middle of nowhere" has already been purchased, so those costs aren't going up. but the southern california segments have not been purchased, and the value of that real estate has sky rocketed.
Right but the main reason for that non-purchase is terrain/engineering/geology issues known for over 100 years.
The plan was always build in central California and then blackmail the state for money so that it wouldn't be a white elephant!
i think the main reason they haven't been purchased is because no one has given them money to start work in those areas.
The initiative put a $9.95 billion price tag on the whole thing!
In fact they NEEDED to start there first because LA-Bakersfield was the most important need. We have plenty of passenger rail in central California but none between LA and Bakersfield. So you start there first.
Again, the plan was always to lowball the cost and then try to blackmail the public to put up whatever obscene sum would actually be needed to get over the Tehachapis.
sorry, so cal = southern california, not social.
Sorry no it's not "fraud" to spin things in your direction when engaged in a political campaign, for better or worse it's just how the game is played.
It's not fraud when a politician says "elect me and there will never be a cloudy day" because we all know he is lying.
But it is fraud when advocates- including many subject matter experts- say "approve this taxpayer funded program because it will only cost $9.95 billion and will yield $50 a trip less than 3 hour train trips between LA and San Francisco" knowing that isn't close to true.
But this just shows why California's system of "government by referenda" is pretty bad in my view. It's not "rule of the people" it's rule of the interest groups and campaign professionals who specialize in running ballot initiative campaigns. Personally I'd just change the system rather than trying to enforce rules that the Don Drapers of the political world have to be honest about everything all the time because of course they aren't going to do that, no more than Don Draper is going to admit that buying lipstick isn't going to make you happy.
California's system of government by referenda is how we got marijuana legalization. The politicians were NEVER going to touch this because they are so afraid of looking soft on drugs. It was only because there was an option to bring this to voters that we got the ball rolling.
It's a good system. If it requires that sponsors of projects be more honest about them, that's a good thing too.
In any event, even in a purely representative democracy, this sort of activity can still discredit advocates of government. Eventually, the voters may get sick of being lied to, and some projects will turn into white elephants such as freeway stubs that constantly remind voters that the folks who promised progress just stole their money instead.
It also got you three strikes and Prop 13 which are big parts of mass incarceration and why middle class families increasingly can't afford to live there anymore. Let's just say we disagree on this (full argument here https://www.bloomberg.com/view/articles/2016-07-07/california-is-cradle-of-reckless-referendums?embedded-checkout=true)
It did. But parts of three strikes were later repealed. We also reformed our auto insurance system by initiative.
I am highly protective of our system. It's great. We allow our voters to make choices. Some of those choices are bad, but we also are able to do things to circumvent politicians when politicians are acting anti-democratically. This is how things should work.
You can argue we need a higher signature requirement. That is true. But the general notion that the voters should be able to overrule politicians is sound. It's more democratic than the alternative. And if you don't like it, don't live here.
Nah it has made the state completely unaffordable for anyone who isn't upper class. My city has a 1% homelessness rate to propositions.
And if you're going to have government by proposition you're going to have dishonest referenda. Policy advocates are much more dishonest than parties.
And if that means weed never got legalized so be it. The harm of Prop 13 far, far outweighs anything positive that has come out of it.
We need a new business model for public works projects. Contractors must agree to a fixed price and not get paid until the job is completed, with penalties for delays.
Yes, the bids will be much higher in order to cover all the risks, but at least we'll know the cost up front and can make a decision if that new bridge or rail line is really worth it.
"Contractors must agree to a fixed price"
No. That contracting model is only acceptable for turnkey projects, wherein the contractor both designs and builds the new infrastructure. Otherwise, either the contract sets the minute details of the project in such stone that neither the contractor nor public officials can adapt unforeseen technical challenges; or the public officials will have the freedom to insert scope creep to the project until the contractor is guaranteed a loss. The only solution is to take the majority of the work in-house.
How will bringing the work in-house improve performance? Who will have skin in the game and suffer the consequences for cost and schedule overruns? Perhaps large, complex projects can be broken into baby steps, with a fixed price for each step, and a chance to negotiate adjustments (as well as consider new bidders) for subsequent steps.
I think you believe that public works officials are not penalized for cost overruns. I disagree with that premise; I think they lack the tools to appropriately prevent contractors from developing cost overruns through incompetence. Consequently I don't think the problem is a lack of "skin in the game"; the problem is insufficient in-house technical knowledge to break down the "large complex projects…into baby steps".
If public officials were effectively held accountable, we wouldn’t be having this discussion about why we can’t build anything.
Was it definitely a lie? Construction projects are notorious for being massively more expensive and slower to build than expected.
The conflation of externalities with direct subsidies is egregious and one of those things that exemplifies how journalists often are unconcerned with truth or knowing. They just want to sell a salient story. I lost of lot of respect when speaking with journalists on research I did, because of the questions they asked and the responses they were apparently seeking to elicit.
There is a reason why the public has lost trust in experts and journalists over the years and that is because actors in these positions of authority often abuse the trust of the public.
Don’t ascribe malice rather than incompetence - most journalists are just incredibly innumerate.
Hopefully AI makes all journalists more scientifically and economically literate. I know I’ve certainly used it to explain some things!
I think this is true, but also beside the point. I don’t think most journalists care if what they write is literally correct. They start with a “vibe,” do enough research to “confirm” the vibe, and then view their job as writing an interesting, possibly inflammatory story that persuades people of the vibe. Their failures come primarily from indifference for objective facts rather than mere negligence. In the legal world, we’d say they have “scienter,” something worse than negligence, though not always “intent.”
As a former journalist I’d say this is not only untrue but unfair.
You’re criticizing journalists for being one-sided and promoting an agenda, while many others criticize journalists for “both sidesing” every story. Which is it? Because it’s hard to see how it’s both.
I also think journalists get held to an impossibly high standard. Most people in most companies aren’t particularly good at their jobs, don’t know how to interpret data or think critically, and propose solutions to problems that benefit them personally. Should we really be surprised that the same applies sometimes to some journalists?
In general - almost all of my colleagues tried to treat their stories and their subjects fairly and tried to relay the facts accurately. Did they always succeed? No. But as I compare it to other industries, the failure rate was pretty low.
As someone who is held to standards of accuracy in writing, I can tell you that it is in fact not difficult to avoid the pitfalls that most journalists fall into. It is, however, hard to do that while also generating clicks. Objective facts rarely are interesting to a wide audience.
The failure rate is exceedingly high. I’d say 60-70% of articles I read on a subject of which I am an expert contain significant false premises on which the article relies and any objective researcher could identify. But these errors are not random-they invariably point towards making a story more interesting or compelling. That is the fundamental bias of the press.
The people criticizing both sidesing typically just want a propaganda piece that confirms their priors. 90+% of the time they shouldn't be taken seriously
My general critique of both-sides journalism is that it’s lazy and uninformative. Often it’s just summarizing the opposing press releases. But that isn’t the issue I’m referring to here. What I find funny is that multiple posters here have chosen to view the issue purely from a political/partisan lens. My problem, and I think Matt’s, runs much deeper.
Haha the good old fallacy of trust:
https://aarongertler.net/nameless-fallacy/
The Fallacy of Trust
The Fallacy of Trust occurs when a person who is an expert on foreign policy picks up a newspaper, flips to the foreign policy section, and cries out “balderdash!”
This isn’t the problem. The problem is that the same person will often read the rest of the newspaper without complaint, quietly updating their opinions bit by bit.
Meanwhile, the expert on local politics will cry out “balderdash!” in the local-politics section, but read about foreign policy without complaint.
If we assume that the newspaper is mostly wrong on both topics, then neither expert is gathering information very effectively.