Liberalism and building paired are already in the oxymoron territory, but I am intrigued. The New York Times’ town crier to its highly educated elite audience, Ezra Klein, recently wrote an article headlined, “America needs a Liberalism that Builds.” Klein would have us believe government industrial policies would be superior to markets, say, achieving the lofty goal of overcoming global warming. Adam Smith and all the human progress since “The Wealth of Nations,” be damned, mercantilism, now renamed “Industrial Strategy,” is the way to go.
Even though markets accompanied by compatible regulation have produced rising living standards wherever tried, Klein is unimpressed. Building things in the U.S. may be difficult due to regulatory and legal roadblocks, but other nations build things such as kilometers of rail much cheaper. The implication is all we need to do is follow how the governments of Germany, Japan, and Spain build railroads. Adapt the methods of their bureaucracies of handling projects to our problems, costs tumble, and we achieve our ends.
I’ll never know why Klein chose railroads to illustrate his theme, but let’s look at it closely if that’s his argument. The grandest government-sponsored h rail project in the U.S. is the California High-Speed Rail (CHSR). Approved in 2008 to connect the important population centers of Los Angeles and San Francisco with a high-speed 520-mile line, the cost has already ballooned from $33 billion to $80 billion. CHSR now says it will complete the 171-mile single-track section between Madera and Bakersfield by 2030.
The Florida East Coast Railway, a private freight line, started the Brightline high-speed passenger service in 2012 and, by 2018, completed the 70-mile service between Miami and Palm beach. The 170-mile link to Orlando will be in service next year. The entire project will cost about $1.75 billion, raised through private financing. Isn’t the contrast between CHSR and Brightline the better comparison? The private company is outdoing Klein’s government entities.Continue reading