In this episode, Dad has Greg Hurwitz and Rick Geddes on to talk about the multi-billion dollar infrastructure bill that's currently on the table for the U.S. Congress and why it's important to have a serious conversation about the details associated with infrastructure development and what obstacles there are and why they might be a good idea. This episode is brought to you by Helix Sleep, GQ, Wired, and Wired s Mattress of the Week, which can make a huge difference if you're having a hard time sleeping, and you don't know why. You take Helix's quiz and they match you to a mattress that has a 10-year warranty, and if you change your mind within 100 days, they'll pick it back up at no extra cost. Right now, Helix is offering up to $200 off all mattress orders and two free pillows for our listeners at helixsleep.co/JVPodcast for the best night's rest of your life. Take their 2-Minute Sleep Quiz and get 20% off your first purchase when you run your first order! Take their two-minute sleep quiz and you'll get $200 worth of free sheets and pillows! That's right, 20% OFF your entire purchase, plus an additional $200 in free shipping when you enter the discount code JVPodcast when you sign up for JVP Podcast. . JVP is a podcast that helps you get a discount on your first month of the month! Subscribe to JVP and get 10% off the entire month of JVP Annual Pass! Subscribe today using discount code: JVP. at anchor.fm/Dailywireplus to receive $10, plus a FREE shipping offer when you shop at JVP, use JVP at checkout, and receive a discount of $50 or more, and get an extra $5 or more when you place an ad discount when you become a JVP promo code, you get $10 or more get $25 or more during the offer. JVP will send you an ad-free version of the podcast becomes available in Apple Podcasts, and JVP becomes JVP gets $5,000, and I ll get $50,000 in the offer gets you a month, plus I ll receive $25, and they get an additional discount when I review the ad-only offer that gets me an ad? Learn more about JVP can help you rate and review the podcast?
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00:00:51.040Welcome to the JVP Podcast, Season 4, Episode 64.
00:00:58.720In this episode, Dad had Greg Hurwitz and Rick Geddes on to talk about the multi-billion dollar infrastructure bill that's currently on the table for the U.S. Congress.
00:01:09.060Rick Geddes is a professor at Cornell and a well-recognized expert in American infrastructure policy and development.
00:01:14.980He's the author of The Road to Renewal, Private Investment in U.S. Transportation Structure.
00:01:21.960Greg Hurwitz served as Dad's co-host today.
00:01:25.660Greg's a former student of Dad's at Harvard and now a best-selling scriptwriter, producer, and novelist.
00:01:31.740You might have heard of Orphan X or the Book of Henry.
00:01:34.660More recently, Greg's been involved in creating moderate political messages for the Democrat Party.
00:01:40.220That's right. He's trying to bridge the gap between the Democrats and the Republicans.
00:05:29.020I don't exactly know where I sit, and many people have many opinions about that.
00:05:33.060So, but Greg is also interested in policy development and is influential in, his views are influential on the center-left, let's put it that way.
00:05:43.300And we spent a lot of time discussing practical issues, including what might political parties concentrate on reasonably intelligently to pull the discussion back to the moderate and productive center.
00:05:55.280And we figured that infrastructure was definitely, at least in principle, one of those things that might be regarded as non-objectionable and useful by people on both sides of the political spectrum, assuming that they're not so extreme that you can't just talk to them at all.
00:06:09.820So, I invited Greg today for the same reason that I invited Dr. Geddes, is I hope to learn something about infrastructure development from someone who spent his whole life studying it.
00:06:20.120And Greg's here for exactly the same reason.
00:06:22.600And so, thank you very much, Dr. Geddes, for agreeing to talk to us today.
00:06:42.100I'm very honored to be invited to join the show and excited people are talking about infrastructure, particularly with a policy bent.
00:06:51.100I have to go way back in time, Jordan.
00:06:53.500And I wrote a paper on the U.S. Postal Service back in college at Towson State, now Towson University in Baltimore, and got interested in economics in college and attended graduate school for my master's college.
00:07:06.180That must have made you popular with the girls, eh?
00:07:13.400But I wrote my dissertation back in Chicago on the regulation of electricity companies, investor-owned electricity companies.
00:07:20.720So, I was always interested in regulation of industry and ended up sort of writing in the area of electric utility regulation and ownership, different ownership forms to deliver electricity, and circled back on the Postal Service, in fact.
00:07:36.800And, you know, I taught at Fordham in the Bronx before coming to Cornell, and my work at Fordham focused on postal policy around the world and postal regulation.
00:07:45.980And then, Jordan, in the 2004-2005 academic year, if we can go back that far, I was invited to join the Council of Economic Advisors in the White House as a senior economist, what's called a senior economist.
00:07:59.660And that year was precipitous for infrastructure policy because Congress was passing a highway reauthorization bill.
00:08:06.880And that's actually important for what just happened in Congress now.
00:08:11.440And what happens is every five or six years, Congress reauthorizes spending out of the Federal Highway Trust Fund.
00:08:18.560So, every time you buy a gallon of gasoline in the United States, 18.4 cents goes to the federal government.
00:08:25.140If you buy diesel fuel, it's 24.4 cents.
00:08:28.000And Congress just kind of stores that up in the Highway Trust Fund until it reauthorizes spending out to the states every five or six years.
00:08:37.080So, that year, 0405, was the safety loo.
00:08:40.560That was the name of the bill, the safety loo highway bill.
00:08:44.840And the executive branch was asked to weigh in on a whole set of issues related to highways, roads, bridges, tunnels.
00:08:52.000And it included things like environmental permitting, tolling of the interstate highway system or of other roads, public-private partnerships or private investment in infrastructure, which is the topic I wrote the book on, that you have.
00:09:06.760Because, you know, the executive branch is being hit with all sorts of policy issues.
00:09:12.040As a result of that, Jordan, President George W. Bush invited me to be a member of a commission that was created in the safety loo highway bill.
00:09:20.640We called ourselves Section 1909 Commission, because that was the section.
00:09:25.360It was literally called the National Surface Transportation Policy and Revenue Study Commission.
00:09:30.200Because the federal highway programs were very interesting in the United States, started by President Eisenhower back in 56, greatly increased the federal gas tax to pay for the design and construction of the U.S. interstate highway system.
00:09:45.700But by the 90s, it was largely complete.
00:09:47.920But the point was, you know, they're still collecting the gas and diesel fuel taxes.
00:09:54.580And what's the point of the program if you're, you know, basically have a complete system?
00:09:59.600So the purpose of this commission was to kind of study that question.
00:10:03.500And I got exposed to even more of these issues, Jordan, by serving on that commission.
00:10:08.820And we put out a report to Congress called Transportation for Tomorrow.
00:10:14.780I'm kind of laughing because it was put out in 2008, just as the global financial system was melting down.
00:10:21.300We never got the attention that we hoped, but we did have some impact.
00:10:25.360But, Jordan, I came to realize the importance of these issues and how, in some sense, understudied they were.
00:10:31.180And in particular, by economics departments, right?
00:10:34.600Back in my day in college, almost every economics department had a transportation economist.
00:10:50.120I mean, in Canada, it was infrastructure that delivered this country.
00:10:53.460It was a railroad that tied us together.
00:10:55.060So infrastructure, actually, is at the basis of our country.
00:10:58.440And when I go down to the States and I see that interstate highway system that was built between the 50s and the 90s, that bloody thing's a miracle.
00:11:13.600Why could it not be built today, given how crucial that piece of infrastructure is?
00:11:18.340So one of the issues that we study, one of the things that I became interested in,
00:11:24.120we actually just put out a working paper a couple of days ago through my CPIP program here at Cornell, is called NEPA.
00:11:31.740And that's the National Environmental Policy Act of 1970, which is a broad act where you have to file an environmental impact statement, an EIS,
00:11:43.180in order to design and construct a new facility, expand an old facility, do almost anything.
00:11:49.660And part of the reason why I say that, Jordan, is because the NEPA process has become much, much larger to the point where it can slow down projects routinely for a decade, right?
00:12:01.500I think the average might be five we have in our research paper.
00:12:04.720So let me push you on that, and maybe Greg can jump in here, too.
00:12:08.000So now, the Biden administration has decided to make infrastructure, renovation, and renewal one of its primary focuses.
00:12:15.740And Greg and I were both talking to a Republican congressman a while back and asked him what impediments he might see to its implementation.
00:12:25.460And he raised the same issue that you just described, which is that the red tape surrounding infrastructure renewal is now so dense that it's not obvious what can actually be done.
00:12:35.200And so this actually puts the people, say, on the center-left in somewhat of a conundrum, because on the one hand, they want to build infrastructure, not least to serve the interests of the poor and the working class.
00:12:46.280Because the rich can't take infrastructure for themselves, let's say.
00:12:51.260But if the regulatory structure is such that these projects are actually not practically implementable, well, is that a reasonable criticism that you're levying?
00:13:02.660Now, is it reasonable to place you politically on the moderate right, let's say?
00:13:08.300And how does that influence your thinking about such things?
00:13:11.960I mean, Jordan, I come from a classical liberal, libertarian, Scottish Enlightenment, neoclassical economics.
00:13:19.500I have my doctorate from Chicago, right?
00:13:22.320And sort of one of the golden years, I would say, of Chicago economics.
00:13:28.600I guess you could place me wherever you want, given that information.
00:13:36.280But yeah, I take a basic market-oriented approach.
00:13:39.620I mean, I wrote a book on increased private participation in the delivery of public services, which is a huge issue globally, right?
00:13:48.840How the private sector that has capital, that has technology, that has management expertise, that has experience around the world, can help to deliver public, what are fundamentally public goods and services.
00:14:01.240So I think it's fair to put me slightly affiliated with American Enterprise, slightly to the right of the center on this.
00:14:08.220But I do want to go back to this, Jordan, because I think it's a really interesting point that people should be aware of.
00:14:13.760So you've heard the adage that time is money, right?
00:14:17.880That is really true in infrastructure.
00:14:20.320If you delay a project by five or seven years because of the NEPA process, right, then you just increase the cost enormously.
00:14:31.100I mean, it could double the cost or something of that nature.
00:14:36.040And so what's happening now, it's actually very interesting.
00:14:39.340I think you'll find this very interesting.
00:14:40.720During the Trump administration, there were folks in the White House who suggested a new model for NEPA, and it's called the One Federal Decision, right?
00:14:52.760And that is the idea that you would have a lead federal agency.
00:14:56.400So you wouldn't have the Environmental Protection Agency, and you'd have Native American burial grounds, and you might have some other, all these different agencies that have to weigh in for project approval.
00:15:07.140So one agency would take the lead in shepherding the proposal, right, through the federal process.
00:15:17.420And that agency could actually, if the other agencies were dragging their feet, would have the power, basically, to make a decision for them.
00:15:25.840The situation now, Jordan, is one agency will hand the proposal off to another, and that will hand it off to another, and off to another.
00:15:34.240And as you can see, it slows down the process enormously.
00:15:38.100And I believe that in the bill that was signed by or voted on by the House late on Friday night, the one federal decision language is in the bill, right?
00:15:49.340But on the other hand, there's folks within the Biden administration who are trying to walk back some of the Trump-era reforms with regard to expediting the environmental impact statement process, right?
00:16:04.240So I think we all want to protect the environment.
00:16:06.400We all want to protect endangered species.
00:16:08.820We want to protect the water, the air, Native American burial grounds, you know, and so on.
00:16:13.480But there has to be some limit on how much time can be spent, you know, on these things before you either say yes or no, basically.
00:16:24.960Things are being pulled in two different directions with the bill basically saying we're going to do one federal decision, and that's going to be a big reform of the NEPA process that policy people like me love.
00:16:36.440And then there's another pull within the administration to kind of repeal some of the Trump-era reforms on this.
00:16:42.060So one of the big things we would like to see is some – it hasn't really been reformed since 1970, which is a long time ago.
00:16:52.700And there's, as you know, Jordan, an ecosystem of lawyers and consultants, et cetera, in Washington that have built up around the NEPA process, and they – you know, that whole thing slows it down.
00:17:04.320So that would be one sort of major reform that we think would expedite infrastructure delivery in the United States, you know, speed it up, and essentially do it at lower cost.
00:17:17.580And so, you know, we're hopeful that that's – when the president signs the bill, that that'll be, you know, part of it, and we'll see some changes.
00:17:26.400But in answer to your original question, Jordan, things I think are so cumbersome at this stage that you could never build the interstate highway system in the United States today the way you did in the 50s and 60s.
00:17:38.720Yeah, so the Chinese announced 150 nuclear plants today, I think, today or yesterday.
00:17:48.580Well, I was thinking, you know, one of the things Jordan and I talk about sometimes is the aim that we strive for in our mutual work is to try and get people arguing and talking about the right things, at least, right, versus how so much conversation goes.
00:18:02.480And I was really struck by even something that's as seemingly uncontroversial as infrastructure.
00:18:09.660There's very little discussion in the media, in conversations around this topic with any sophistication.
00:18:17.800Like even something like infrastructure to me has been pushed into such sort of gridlock that any discussion of regulation from the left is viewed as, you know, corporations trying to roll back stuff so they can dump toxins into oceans and make more profit.
00:18:31.140Rather than not being able to be framed and described as you're doing it, everybody has an intuitive sense of that.
00:18:37.040Anyone who's ever done a remodel or had a home project, everyone knows the cost and the expense of anything that takes longer and how onerous that is and how many different layers.
00:18:45.000And, you know, part of what the, from the messaging perspective is how do we, you know, yet again, it's another example about how the working class small businesses and the poor are being held hostage by a messaging apparatus from both sides that has sort of distilled the argument into sort of tribal warfare on either side.
00:19:06.120It seems like we can get very little sane discussion in mainstream media about the role, for instance, that regulation plays and how to strike the balance.
00:19:52.300Economists would think about it as an implicit tax that disproportionately hurts the poor.
00:19:57.160You know, it's just like almost all the time.
00:19:59.980Why disproportionately hurts the poor?
00:20:02.720Well, I mean, these, these facilities, you know, let's go back and, and, and talk about the actual facilities, you know, the, the actual infrastructure, right, that we're talking about.
00:20:13.640As I stress, it provides basic public goods and services.
00:20:17.160So mobility, getting, getting to, to school, getting to your work, you know, getting to your community activities, right?
00:20:25.220The, the, the, the, the history of infrastructure is, and this is, goes 200 years back in the U.S. Postal Service, is the history of trying to provide all communities with access, right?
00:20:37.660Or, or being sure that no communities are left out.
00:20:40.600That goes back to the horse post, right?
00:20:43.620When, when you were delivering letters and, and cards and newspapers by horse.
00:20:47.960And the, the goal in the United States was that all communities should have access to a post office, right?
00:20:54.580And, and, and the history of infrastructure in the United States, universal landline telephones.
00:21:00.440There was a farms to markets movement where we tried to pave rural roads because farmers couldn't get their, their harvest to the market, you know, in time on dirt roads that were full of mud.
00:21:12.160So there was this, this farms to markets.
00:21:14.600There was electrification during the Roosevelt year, rural electrification.
00:21:18.720So there's always this, this, and we see it now with broadband, right?
00:21:23.020Yeah, I was going to say our broadband internet access.
00:21:26.260Consistently in our polling, we go out often into the 37 congressional districts decided by five points.
00:21:33.240We really want to see what people think to cut through it.
00:21:36.060And consistently rural broadband tests through the roof as a necessity, right?
00:21:41.000It is the new, those are the new information highways, right?
00:21:43.840It's the new, it is the new infrastructure system and we see a huge demand and need for that.
00:21:49.560Well, and think of all the educational opportunities that provides as well.
00:22:16.060So do you think, so here's a proposition, twofold proposition.
00:22:20.200The most important thing that might be done to rectify absolute poverty and maybe to mitigate relative poverty would be the provision of energy as cheaply as possible.
00:22:30.480And the second most important would be the universal provision of efficient infrastructure.
00:22:43.260But I would, I would say that the energy infrastructure, the energy is part of the infrastructure, the generating distribution and transmission capacity.
00:22:54.160To people that that's a crucial, we kind of think, you know, the extension of that is we don't like to live in a society where some communities are systematically don't have these things.
00:23:17.080You know, and that's why having these things.
00:23:19.460There's this big notion of equity, right, which is kind of this amorphous term, and some of us are bothered by the lack of definition.
00:23:27.700But in infrastructure, it is used generally, I think it's this old notion of universal service, universal access, where it's equitable for all communities to have this.
00:23:38.900And of course, I consider myself to be an old-time regulatory economist, and I'm always harping on how these issues have been studied for a century or longer to provide these basic services as the technology evolves.
00:23:54.220And now, of course, with this Zoom call, we know how important broadband internet access is, and kids need to have it for school, and people need to have it for work.
00:24:05.140And so we don't want either urban pockets to be left without it, you know, or rural.
00:24:11.060So, Jordan, I don't know if I'm answering your question, but there's a certain level of power that we need.
00:24:16.560Well, the other thing that I've thought a lot about is Pareto distribution problems.
00:24:20.320And so, you know, the fact that money, for example, does tend to end up in the hands of fewer and fewer people, you have to fight very hard to not have that happen.
00:24:27.980But that doesn't seem to me to be the case with infrastructure, because, well, it can't happen that way.
00:24:34.440You can't hoard the highways, you can't hoard the electrical grid, and even if you did, it wouldn't do you any good.
00:24:39.000And so, if you are, okay, if you are actually devoted to serving those who are oppressed and excluded at the bottom of the socioeconomic and power hierarchies,
00:24:49.900then I can't think of a way to facilitate equitable distribution of valuable resources, especially energy, because energy is work.
00:24:57.400I can't think of a better way of doing that than to concentrate on infrastructure development.
00:25:01.820And so then that brings us to the next problem that's going to be a big one for this infrastructure bill is like,
00:25:06.520as pressure ramps up in relationship to climate change and the environmental concerns that go along with that,
00:25:13.360there's going to be more and more pressure on infrastructure development, like in terms of regulating and suppressing it, for that matter.
00:25:20.060And so that's a real tension on the left, I think, because the left tends to be more concerned, let's say, with broad scale environmental issues.
00:25:27.860But theoretically, also, they're concerned with the poor.
00:25:32.600And so do you have some sense of how those mutual goals might be brought into alignment with one another instead of acting in an antagonistic manner?
00:25:42.100So, George, I think you've hit on one of the most important and underappreciated issues in infrastructure policy.
00:25:48.880And I kind of regret that I didn't spend more time in my book that you have on this.
00:25:54.900But I've been studying this for 15 years now.
00:25:58.400And I would say there's been a slow revolution going on in the technology of infrastructure delivery.
00:26:13.320And the Hyperloop and things like that.
00:26:14.760But there's a whole host of other technologies that have been developed in the universities, in the labs, in the startups that stand to transform the way infrastructure delivery, infrastructure is operated and delivered in the United States.
00:26:35.980I had a kind of a little briefing of this by the folks at Carnegie Mellon recently.
00:26:41.940And it's a stoplight, right, with different colors, but it has a camera and a sensor attached to it so that the lights are not just on a rote timer.
00:26:50.920They actually change in response to the traffic that's actually at the intersection.
00:26:57.280So many drivers have had the experience of going to a railroad and there's a red light and because they're good people, they stop and wait there and there's no traffic in the other direction.
00:27:06.620And they just know that if the light knew that I was sitting there, it would turn green.
00:27:10.560What turns out, the technology has existed for a decade to sense the cars actually at the intersection and change the lights optimally in response to the traffic at the intersection.
00:27:22.560Jordan, they have it now to the point where they can sense pedestrians and include pedestrians in the changing of the light.
00:27:29.040They have it to they can tell a dog, they can tell a person in a wheelchair and they can just change the the optimize the changing of the colors to maximize the flow through the intersection.
00:27:42.020Now, stop and think for a minute how much gasoline you would say if you did that, how much fuel, how much frustration, how much time, how much pollution just had smart stoplights.
00:27:54.320Now, there's something in the bill that's a pilot program to help with that.
00:27:58.460Right. But the problem, Jordan, is not the technology.
00:28:04.340Is getting the people who own the stoplights, who might be a small town like where I am in Ithaca, where it could be a county, it could be a city.
00:28:12.700But it's highly atomized in the United States.
00:28:17.240But but getting them to overcome their risk aversion.
00:28:20.920And I understand that totally. They're risk averse to new technologies.
00:28:24.240They're afraid of it. They don't what we call headline risk.
00:28:27.340You're the mayor and you're afraid you're going to wake up tomorrow and find that there's been a giant crash because these stoplights malfunctioned.
00:28:34.000Right. But we've got to somehow overcome that risk aversion to get them to adopt these new technologies.
00:28:39.940OK, so well, so one of the things you're saying is that part of the infrastructure messaging and and I don't mean messaging in the cynical way, you know, because I would hope that the messaging is actually associated with the underlying policies.
00:28:51.340So it's a straight game. But if infrastructure development means replacing inefficient use of resources with efficient use of resources, that should be a net gain on the economic side.
00:29:03.360So for poor people, plus it should have environmental benefits.
00:29:06.160So we shouldn't be thinking about it. Exactly.
00:29:10.000So how about priorities? Like you give the highway systems in this book, for example, in the US, I think it's a D and the bridge is a C minus.
00:29:18.520And that's American Society of Civil Engineers. Right.
00:29:21.140So if if you are going to rank order infrastructure priorities in the United States, I know that's a big task, but you've thought about this for a long time.
00:29:29.820Like what's really broken? What really where's the and where's the biggest bang for the buck?
00:29:35.140So, so, yeah, let me. Wow. That is a is a is a great question.
00:29:40.640You know, the American Society of Civil Engineers has done a great job of pointing to the inadequate, the deferred maintenance right in the United States.
00:29:49.660So the bottom line is, I think the US has done a good job of designing and constructing and building out new networks to ensure that all communities are connected.
00:30:01.520Right. The interstate highway system, the state routes, the local streets, you know, in infrastructure, same thing across, you know, across sectors.
00:30:10.660But we've done a very. So we're good at building shiny new things, but we're very poor at taking care of what we have already.
00:30:19.320And I think there's political incentives. Right. If you want to be reelected, you want the ribbon cutting ceremony with the big scissors.
00:30:26.320Right. But it doesn't get you reelected if you say we put five millimeters of asphalt on that bridge over there, even though the civil engineers are telling you, you need to resurface that bridge.
00:30:37.860So there's a problem with the political incentives that have led to these trillions of dollars, you know, of deferred maintenance.
00:30:46.040And I think in the bill. So, of course, that's part of the debt. That's part of the debt, that deferred maintenance.
00:30:52.860Even that's also part of this part of that's also part of messaging failure, you know, as you're describing the stoplights.
00:30:57.900And that's like the send city stuff. Right. You can plug in like the stoplights also have so many other aspects as charging stations and different security.
00:31:06.980They can alert to gunshots like there's so much in it that's efficient.
00:31:10.960And to me, I just hear that as a, you know, obviously being somebody who's more involved with the messaging side of it.
00:31:18.520But that seems to me to get somewhere like Ithaca to adopt that has to be framed as an environmental imperative.
00:31:24.220Like, do you want to cut gasoline costs? Here's how we do it. Here's how the city is cleaner.
00:31:29.040Here's where the money will skew to other people. There's a way that that has to be packaged and sold.
00:31:33.120That's outside of the norm. Right. I think the thing that we see increasingly is that we, you know, the way that the information, the way that information moves now and polarizes and is sold.
00:31:44.360We expect politicians to also have to figure out how to be TikTok stars, that they know exactly how to sell everything in some magical fashion.
00:31:51.800And the lack of a proper messaging apparatus around some of this stuff is really costly.
00:31:58.340And people tend to forget that that's just as essential as figuring out the problems.
00:32:02.280If you can't sell them and communicate to people in real concrete terms, the ways it will affect their lives and their communities, it doesn't get adopted.
00:32:10.120Yeah. So that's also an infrastructure problem in some sense. Right. And a non-trivial one at that.
00:32:16.200So how do you make these things sexy? I mean, I made a joke about that at the beginning, you know, that these these tend to be regarded as dry discussions, but they're not.
00:32:26.220They're they're the real details of actual policy, the real details of actual politics.
00:32:30.300And what we're laying out here at the moment is a vision that something like, well, how does enhanced efficiency like why is that a problem for anyone?
00:32:37.800Well, it's more efficient. Go ahead. No, we're real quick.
00:32:41.200Also, this is where ideologies and by that I don't just mean far left and far right.
00:32:46.840I also mean, like, classically conservative and classically liberal.
00:32:50.980This is where they come to die in in a good way in the solution of a problem.
00:32:54.780Like if we can have this conversation about specifically how this makes people's lives better, maybe that's a solution that 70 percent conservative, 30 percent liberal when it comes to some application, maybe.
00:33:05.880And so what's so important about boiling them down to this and figuring out how to talk about it is a lot of the useless ideological overlay to specific problems that concretely help the working class and the poor and actually make headway for community environment.
00:33:22.040And that's also, you know, clean fields and streams. Right.
00:33:25.660We're not just talking global warming. We're talking about literal the communities that people live in, that they fish in, that small businesses are run in.
00:33:33.300You know, that's where all the rubber meets the road.
00:33:36.280Well, Greg, it might be a it might be a rule of thumb that if the discussion is occurring at a level where all that's happening is ideological argument, then the problem actually hasn't been specified clearly enough to move towards solution.
00:33:49.000Well, then you also see who's in your way. Right. Is it bureaucrats? Is it businesses that are legitimately looking to override regulation for for ill motivation?
00:34:00.300If we could, if once it gets boiled down, it also you get a very clear lay of what the strategic field looks like for pushing something through.
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00:38:20.780So, Jordan, I want to address your, just a few minutes ago, you said who could be against greater efficiency, right?
00:38:31.520And I think this, in some sense, to Greg's point, should be the ultimate bipartisan issue, right?
00:38:37.260I'm not sure, with all due respect, I'm not sure engineers are the greatest on the messaging piece of this.
00:38:44.560I love them to death, but there is this issue.
00:38:48.380So, let me give you two other examples I want to get off my chest.
00:38:51.980And, you know, the saying there ain't no such thing as a free lunch, but the closest thing to a free lunch in economics is technological adoption, right?
00:39:01.140So, one great example I think is completely underappreciated.
00:39:04.640You know, we're all concerned about climate change, and it's methane emissions at wastewater treatment plants, right?
00:39:11.820So, a lot of wastewater treatment plants, particularly in the eastern United States, are old.
00:39:16.720Ours here in Ithaca was over 100 years old, and they're open settling ponds for solid waste.
00:40:45.740And so this should be done at scale in the United States where this is where you have to have a private sector company because it's technologically challenging to install this and install the generating capacities, micro generators, to get them to work properly.
00:41:04.520But now we have taken a 100-year plant with private sector.
00:41:09.460Oh, the other thing I should say is how do you pay for this, right?
00:41:13.000If you're the mayor, everybody's cash-strapped.
00:41:26.580They knew that our wastewater treatment electric bill was going to go down.
00:41:30.320They said, just give us a share of the electric bill.
00:41:33.240We will bond against that savings, and we'll pay for the installation of the technology.
00:41:39.060Well, you've just got the mayor's ear, right?
00:41:41.840So I don't understand why we can't replicate that across the United States.
00:41:47.440There should be no open wastewater treatment-settling ponds that are 100 years old emitting methane that could be used to power the plant and power the city.
00:41:56.960So this, I don't know if it's a messaging or a, I don't know what it is.
00:42:03.660Well, who's really good at messaging are corporations, right?
00:42:08.760You can turn on the TV, look at what ExxonMobil does, right?
00:42:12.000And so it's really interesting because in a certain way, as you lay it out, if there is a for-profit aspect to this from private industry that benefits cities at no cost to get something in place that also earns cities money, it seems to me like that's a perfect union for private and public interface.
00:42:29.520And so somebody, it seems to me like the most immediate driver for that would be for the private corporation to figure out how to package and sell that to other cities.
00:42:39.140That's a bigger driver to me, I think, than trying to convince layers of bureaucracy and government why this makes sense and to adopt it through city boards or councils or however that works.
00:42:48.880Well, I would presume that's also partly why in your book, This Road to Renewal, that you also stress the utility of public-private joint ventures.
00:42:59.540Okay, so here's a couple of things we sketched out is, well, let's go for efficiency because that's going to serve us on the environmental front, but it's also going to be economically efficient.
00:43:09.320And then we could also point out, like, there's a big argument always going on ideologically in some sense between Malthusian biologists and enthusiastic economists.
00:43:19.160And the Malthusian biologists insist, well, there are limits to growth, everything has a maximal carrying capacity, we can't exceed that.
00:43:26.220And there are Malthusian catastrophes, but the economists come and say, yeah, well, wait a minute, one of the ways that we can solve that is by doing more with less.
00:43:34.320And we're really good at that, and we're getting faster and faster at being better and better at it.
00:43:38.560And I think the economists, to my way of thinking, the economists are the optimists, and I think they have the upper hand in the argument.
00:43:44.200But this is a perfect marriage of those two things in some sense, because it means that the optimal infrastructure plans please both sides.
00:43:51.960It's like, yeah, this is going to be better for the environment, plus it will make poor people wealthier.
00:43:58.440So how is that not exactly what we should be aiming for?
00:44:01.780And then, well, the messaging issue, well, that's a pretty easy message to sell, especially if it's true.
00:44:07.560And so let's go into the public-private issue a bit.
00:44:12.120Can I give, can I give, I want to give you guys a third example before we go to the public-private.
00:44:16.560Just a tech, because this, Jordan, gets directly to the point you just made, right?
00:56:46.200I'm just going to go with tax exempt muni debt.
00:56:48.740And so, it's this odd thing that has caused supposedly free enterprise America to be kind of adverse to private cooperation and infrastructure delivery.
00:57:00.640Is that why you think that it's almost like the larger forces, the foundational forces are skewed from this tax perspective?
00:57:10.340And so, for something to break through, it's got to be wildly innovative and immediately profit-driven, like the example with Johnson and the methane, right?
00:57:20.860It has to be something that's so innovative and so tip of the arrow that it can offer a solution that doesn't rely on the bigger sort of capital raise with the tax ramifications.
00:57:30.640And so, if there's stuff that's in between, if there's stuff that requires a bigger investment of capital up front, it seems like that's where it will get caught versus a situation like that, where a private company can come in hard in exchange for a forever share of a percentage of profit, which makes it worthwhile.
00:58:11.440They will have two groups coming from the same bank, from the same bank.
00:58:16.220The one group is pushing tax exempt municipal bonds, and the other group is pushing public-private partnerships.
00:58:21.960And the mayor just says, look, my interest payments, my service on the debt is going to be a lot lower with the tax exempt municipal bond group.
01:10:58.500The other thing I learned the other day is, Jordan might find this of interest, I used to think the only privately owned bridge in the United States was the Ambassador Bridge across from the U.S. to Canada, which is owned by a family and has duty-free and tolls and everything else.
01:11:13.240I recently learned from one of my board members, Bob Hellman, who invests in this, there's like seven or eight private bridges.
01:12:15.840And that's just part of this efficiency issue.
01:12:17.480You know, as the scale of my operations have grown, the only way I've been able to manage that is to make sure that I have competent people around me and then give them their fiefdom.
01:12:36.240And then I can go do something else that I can do or that I want to do.
01:12:39.480And that distribution, it's like, why wouldn't you capitalize on the willingness of private companies to bear some of the damn risk and to help you with the messaging?
01:13:14.980But what's so ridiculous about it, as with regulation, which I learned in a recent conversation how black and white my own thinking was on it, and I've been trying to research to kind of crack that open.
01:13:27.640But it removes all the benefit for the immense gray area in between, right, of all the ways that privatization can be – there can be partial, there can be split partners.
01:13:37.880There's a hundred different ways to skew deals.
01:13:39.880And I was thinking about what you're saying just in simplest terms about how this functions, and it's like when we buy solar, right?
01:13:47.420I've now put solar panels on two houses, right?
01:14:04.540And so it's like what – you know, there's concrete ways that people can kind of understand this that are in structures that are all around us all the time.
01:14:12.320And so, you know, what's of particular interest to me about the situation in Ithaca is that it's a balance between the two, right?
01:14:18.900There's aspects that seem that are privatized, and there's aspects that aren't.
01:14:22.560And, you know, creative yield structures –
01:14:25.540This gets back to – this gets back to something that we touched on earlier, which is, well, what's the proper antidote to ideological struggle and tip-for-tap strategy?
01:14:35.240Well, yeah, it looks like it's something like nuance.
01:14:38.060It's like if you – well, if you specify the problem – look, let me tell you something.
01:14:44.320For professors that were negotiating with the university for their grant application, like their initial startup grant before they got a grant, I said, look, if you want to maximize the amount of money the university is going to give you,
01:14:56.140detail out all of the equipment you need with the costs, like down to $1,000, $500, $100.
01:15:03.260Make a detailed list and get everything you want, and you will get every cent.
01:15:07.140And the reason for that is, well, how are they going to say no?
01:15:09.820It's like, you don't need this piece of $500 equipment.
01:15:27.980It's like, it could easily be that if we find ourselves in general in a conversation that's tilting in an ideological direction,
01:15:34.340what that means is we've got the level of analysis specified.
01:15:37.100You know, or we're dealing with bad faith players.
01:15:39.740But we might just have the level of analysis improperly specified.
01:15:43.420Because who's going to argue with the methane plant?
01:15:45.720You know, who's going to argue with that?
01:15:46.960Also, lack of after-action reports, meaning that, you know, you have New Orleans blowout and everybody knows about it.
01:15:53.680But if it doesn't, nobody's going to hear about it.
01:15:55.640And I think that there's a failure in messaging to prescribe the roads not taken and failures that are averted in potential expenses and costs for it.
01:16:04.460So, like, how useful would it be for somebody to say, I put this much money into reinforcing a bridge, this hurricane came, it didn't get knocked down.
01:16:12.760Here's how many people would be delayed for how long.
01:16:15.020Here's the expense that we would have.
01:16:16.520Here's what would happen to insurance premiums.
01:16:18.400And we need to figure out how to convey back to people, because I think that...
01:16:22.200Yeah, well, that's a thorny problem, because prevention is a lot less sexy than cure, right?
01:16:26.980It's really a big problem, because the thing is that most, well, most things work all the time.
01:16:32.220And so pointing to something and saying, hey, look at how that's working.
01:16:35.060It's like, well, yeah, almost everything works.
01:16:38.720But it's very difficult for people to get people excited about predictability, even though that's what everybody wants.
01:16:45.320It's the same rules that you're talking about with nuance, though, because how you get people excited is specifics, right?
01:16:51.780So here's a hurricane that came through.
01:16:53.960It was, you know, I don't know how hurricanes are rated.
01:16:56.400Here's what would have happened to the bridge.
01:16:58.220Here's what that means in concrete terms.
01:16:59.880Like, there's a way to spell a narrative that everybody can feel good about it.
01:17:03.560I mean, one of the things that we're looking at increasingly in messaging and politics is what's called, like, the good boy, good girl effect.
01:17:12.140That people are so exhausted from being told that they do anything right, right?
01:17:15.900They feel like they're killing themselves.
01:17:28.480Yeah, they're saying often instead that they're participants, they're unwitting participants in a corrupt and malevolent system that's doomed for failure.
01:17:47.080And I think that a shot of of an after action report about some innovation that got made and to detail its success gives people some role and agency in their interaction.
01:17:59.980It brings the notions of infrastructure and their city functioning around them back to them as opposed to everything.
01:18:04.100Yeah, well, and it's not like you Americans don't like success stories because you do.
01:18:08.740You know, I mean, well, one of the things that's really interesting from a Canadian perspective to go down to the U.S. is how cinematic the culture is.
01:18:45.760And it and so it doesn't seem to me to be impossible to do something like celebration of, well, this methane treatment plant, for example, and to elevate it up to to elevate it up to something worthy of genuine and deep admiration, because it really is that it is that it's like, how good is that?
01:19:03.100Yeah, let me say something about Greg's point.
01:19:06.360It's a really good point about about messaging.
01:19:08.740And again, you know, this this is I think the the disconnect between the engineering and the communications people, because the engineers will report the improvements in terms of metrics.
01:19:19.180They'll say, well, well, we get, you know, so many hundreds of cars per hour across this lane with this new facility, you know, and that that doesn't it doesn't sell, you know, but but that it's not a story.
01:19:31.860The story is the story is a single mother who can now get to work and back to her kids an hour earlier.
01:19:49.920Well, the thing there's a reason for that, too, you know, because engineers are temperamentally different from those who would communicate.
01:19:55.960So engineers are fundamentally interested in things.
01:20:17.640I mean, but like the methane and there's other thing gases.
01:20:21.840But but but the point is, is this is like the ultimate it should be the ultimate bipartisan, you know, opportunity to come together and say, look, you know, we we need we have the technology.
01:20:59.900We you know, we we you know, we get benefits from this and, you know, we need to figure out a way to help the engineers and people actually care who are in the political and the private realm that we do get benefits from this because this idea that's so cynical, you know, the right looks at government and thinks, oh, it's full of corrupt people only up for themselves.
01:21:20.140And then the left looks at businesses say, well, it's only it's all full of corrupt people only out for themselves.
01:21:41.040Like the more people I've met, the more I've been struck by the fact that there's so many good people working on both sides of an argument.
01:21:47.780And they're working for high and noble purposes and high and noble purposes exist.
01:21:58.040But in addition, you know, complementary to an academic career, which you're familiar with, it's been a joy to get involved in real infrastructure.
01:22:05.420Because these are people who actually care about whether the subways in New York work or the bus systems, you know, work or the water is clean or if wastewater treatment plants are, you know, are operational.
01:24:57.440But, you know, as I said, Jordan, at the outset, I come from this, you know, neoclassical free enterprise kind of perspective.
01:25:04.680But the longer I've been dealing with infrastructure, the more respect and admiration I have for the public people who have, you know, are largely dedicating their careers to making this stuff work.
01:25:17.280They really do have a public interest, you know, desire embedded in them, which is nice, right?
01:25:32.760And be easier, you know, and the rewards would be bigger, and there might be more security.
01:25:37.320I mean, look, when Greg and I went to Washington four years ago, and one of the things we did was host a couple of lunches, and we had relatively junior Democrat congresspeople and Republican congresspeople.
01:25:47.160Just come to lunch, because they don't get a chance to meet each other, partly because they're raising money 25 hours a week.
01:25:52.280And plus, they're up for re-election in two years.
01:26:08.180It was like, well, you know, I'm kind of a serious person, and I would really like to serve my country.
01:26:12.900And I felt that, although I had other opportunities, that this was worth a sacrifice, and I was hoping I could come to Washington and really make a difference.
01:26:19.960Like, you listen to eight people say that, and these aren't trivial people, and they're not grandstanding, because there's no audience.
01:26:25.620It's like, they're just saying what it is.
01:26:27.580And you can be cynical about that if you want, but you're a fool if you are, because that means you're cynical about the most noble ambitions of people who are making a genuine sacrifice.
01:26:36.640These are hard jobs, and so, and it's so nice to hear from you that you've been in the trenches working on these practical projects, and the consequence for you is that you've become, like, more optimistic and pleased with the characters of the people you're dealing with.
01:26:54.660There are cases where infrastructure delivery is rife with corruption, and there's Odebrecht in Brazil.
01:27:00.840You may be familiar with that scandal in South America, a big, it's a Brazilian construction company who's bribing, you know, public officials to be the winning bidder, and prime ministers went to prison.
01:27:12.160You know, so it's not, it's not some pure, it's the real world of humanity, right?
01:27:16.840It's, it's, it's not a pure thing, but I think that's the exception rather than the rule.
01:27:21.380Well, psychopaths are 3% of the population, not 97%.
01:27:25.800Yeah, and they never get above 5% before they're culled, essentially.
01:27:29.9401% to 5%, and, and the basic, the, the, the, the, the stable point of psychopathy prevalence is 3%, and so the idea that it's just malevolent power-seeking that drives hierarchical organizations is just wrong in the face of it, because otherwise there'd be way more psychopaths, and they'd be way more successful.
01:27:46.760So, so, yeah, these are exceptions, especially in highly functioning societies, and the U.S., I mean, there isn't a society that's ever been more highly functioning than the U.S., all things considered.
01:28:46.000Well, and the diversity of government and the distribution of powers, it's a complex place.
01:28:50.180And so the fact that it functions as well as it does all the time, I mean, and a good index of that, you don't think your systems are functioning well, eh?
01:28:58.220Well, have you plugged something into your outlet in your house lately?
01:29:01.680And has it, how often does that not work?
01:29:44.580So, so, you know, if you look at New York City, of course, it's different across the country, but in a lot of places, there's no unique, you know, it's a bunch of cultures thrown in together.
01:29:54.840We live, my wife and I lived at 55th and 9th Avenue in Hell's Kitchen for five years.
01:29:59.300I think there were 15 different ethnic restaurants within a short walk of our, of our unit.
01:30:08.620What upsets me probably more than anything with the way that the, the cultural conversation has gotten so tribalized is that it removes the conversations about diversity from being joyful.
01:30:24.080And there's so many ways that it's, it's such a driver of joy when, when, when, when you have friends and community and family and food and culture and music from across all of these different categories.
01:30:36.540And I'm finding people are increasingly constrained about how they even know how to talk about that is the one thing, you know, and then the other thing is, of course, not to detour us off into cultural territory.
01:30:47.680Cause I know Jordan gets really uncomfortable discussing those things publicly.
01:30:51.960But, you know, people, people also start to start to view it, that there's like one set of spokespeople from every community.
01:30:58.860Like I know people who only know woke Latinos, like how limited is your world?
01:31:03.420If the only people who, who, you know, are one particular cross-section of a community.
01:31:24.940That was one of the, the, the great joys of doing political, you know, I did a lot of political outreach and conversations ramping up to 2020, but it's like, you know, top people talk about, you know, just to use for an example, the Hispanic vote.
01:31:40.960And it's like, are we talking California versus Texas versus Cuban Americans versus Argentinian?
01:31:46.580Like there's such a range and there's so much, there's so much, like what troubles me so much is the dampening down of the discussion in ways that are joyful, because that's always what wins.
01:32:09.980Rick, priorities, like that's always difficult.
01:32:13.660What, what's really broken that should be fixed?
01:32:16.460Like first and for the biggest bang for the environment and for, and for efficiency in your estimation.
01:32:22.340Well, so, so Jordan, there's a couple of big projects that, that just must be done.
01:32:29.400The gate, you visit in New York, the gateway tunnel, about a $13 billion project.
01:32:34.280They're the rail tunnels that run under the Hudson river and they're owned by Amtrak, but New Jersey transit uses them during the peak commute.
01:32:42.320There's about one train per minute that goes through there.
01:32:45.360They are over a hundred years old, probably 110.
01:32:47.980They are in dire need of being improved of just, there's a new alignment just being almost replaced.
01:32:57.500East side access, Jordan, in, in New York is the long Island railroad coming into the city.
01:33:02.920There's, there's a huge project that needs to, to, to streamline that.
01:33:08.800There's a rail tunnel in Baltimore city where I'm from.