471. Mayor Pete and Elaine Chao Hit the Road

[0] Love it or hate it, there will never be another country in the world that is more auto -oriented than the United States.

[1] The difference between America and England, it has been said, is that Americans think 100 years is a long time, while the English think 100 miles is a long way.

[2] American drivers put on more miles than drivers in any other country, over 13 ,000 a year on average.

[3] That's nearly 30 % more than Canadians who are second.

[4] It isn't just that Americans love their cars.

[5] It's almost as if cars are America.

[6] If you've ever watched American TV, you already know this from the car commercials.

[7] Here are a couple things America got right.

[8] Cars and freedom.

[9] Other countries, they work, they stroll home, they stop by the cafe.

[10] They take August off.

[11] Off.

[12] This country can't be knocked out with one punch.

[13] We get right back up again, and when we do the world's...

[14] going to hear the roar of our engines.

[15] What is it that accounts for this bond between Americans and our cars?

[16] In a series of episodes, we've been exploring the ways in which the U .S. is an outlier among the nations of the world.

[17] As we've learned, the U .S. is the world leader in terms of individualism.

[18] In an individualistic society, a person is like an atom in a gas.

[19] It can freely float about, and life is an adventure.

[20] Life is an adventure.

[21] That would work as a slogan for one of those car ads on TV.

[22] For a hyper -individualistic country, automobile travel has a lot going for it.

[23] Control of where you're going and when and how fast.

[24] More than four million miles of open roads offering boundless possibility.

[25] For many Americans, getting behind the wheel at 16 is a full -on right of passage.

[26] I was driving in high school my parents' 1992 Buickless Saber, which was a bit of an aircraft.

[27] carrier.

[28] You may recognize that voice.

[29] From U .S. Secretary of Transportation, Pete Buttigieg.

[30] Buttigieg was the breakout star of the 2020 Democratic presidential race.

[31] Before that, he was the mayor of South Bend, Indiana.

[32] He's still just 39 years old.

[33] He is a self -proclaimed transportation nerd.

[34] So running the Department of Transportation is a thrill.

[35] I'm the Secretary of Plains, Trains, and Automobiles.

[36] And you can't have all those planes, trains, and automobiles without infrastructure.

[37] Since his confirmation in February, Buttigieg has been the front man for the Biden administration's infrastructure agenda.

[38] What I've found in my more or less daily conversations with members of the House and Senate, Democrats and Republican, is that what they all have in common is they're all from a place where there is just profound, visible, inarguable infrastructure need.

[39] I think part of what's happening in this moment is that the, The underinvestments of the past have caught up to us to the level that suddenly it is a short -term problem.

[40] The U .S. is the richest country in the world, but ranks just 12th in transportation infrastructure.

[41] Other wealthy countries continue to build spectacular bridges and dams and cities.

[42] They have ultra -modern airports and an abundance of fast trains.

[43] The U .S. seems to be stuck in pothole -fixing mode.

[44] The American Society of Civil Engineers, in its most recent report card, gave American infrastructure a C -minus.

[45] Although, as one critic points out, civil engineers may have an incentive to grade low, since any repairs will require their services.

[46] That said, the society finds that 43 % of our public roadways are in poor or mediocre condition.

[47] The U .S. Government Accountability Office finds that 14 % of our bridges are 4%.

[48] functionally obsolete.

[49] Thus, the Biden administration's push for a very, very large infrastructure package.

[50] And this is not just a mitch in the middle, half measure kind of thing.

[51] The bipartisan framework that the president announced would represent the biggest investment in public transit we've ever done as a country.

[52] The biggest investment in passenger rail since Amtrak was created in the first place.

[53] The most we've done on roads and bridges since the Eisenhower administration.

[54] Roads and Bridges, that's a political winner anywhere in America because, well, because the car, but more public transit, more passenger rail?

[55] Is that a realistic future for a country that's still fixated on the automobile?

[56] There's a time when you might have said, you know, there's something just so absolutely fundamental in our culture about the relationship between a person and his horse, that how could we ever change that?

[57] than we did.

[58] Here's what happened.

[59] Americans wanted a faster horse, so we built them a car.

[60] It's not about being anti -car.

[61] It's about making sure that the car fits in a bigger picture.

[62] So today on Freakonomics Radio, what does that picture look like?

[63] And who gets to decide how much is spent and where?

[64] It's the job of the economists to stand in the middle of the road and say, stop, let's get out our calculators.

[65] We look at the infrastructure approach taken by some of our rivals?

[66] People sometimes wonder how China is able to have these huge infrastructure projects complete it right away.

[67] And what's wrong with all those interstates anyway?

[68] They take up a lot of land.

[69] They're ugly.

[70] They are rivers of pollution.

[71] Is America driving itself crazy?

[72] This is Freakonomics Radio, the podcast that explores the hidden side of everything.

[73] Here's your host, Stephen Dubner.

[74] A lot of U .S. infrastructure is aging and in need of repair.

[75] At the same time, infrastructure spending has been declining for years.

[76] This is not a good combination.

[77] Waiting until something is falling apart can mean urgent and disruptive repairs.

[78] Traffic congestion already costs the U .S. economy an estimated $120 billion a year.

[79] Airline delays another $35 billion.

[80] This state of affairs has led Senate Republicans' and Democrats to tentatively agree to an infrastructure package that would cost around $550 billion over five years.

[81] It would go toward roads and bridges, railroads and public transit and airports, as well as electricity and broadband networks and water infrastructure, including money to remove lead pipes.

[82] This bill would still need to pass in the House where some Democrats are unhappy about cuts made during negotiations.

[83] The original proposal from the Biden administration called the American Jobs Plan cost $2 .6 trillion.

[84] It would have funded all the aforementioned infrastructure, but also things like affordable housing and home health care workers for elderly and disabled patients, and yet it was still being referred to as an infrastructure package.

[85] As one economist remarked to the New York Times, it does a bit of violence to the English language, doesn't it?

[86] We called up that economist.

[87] It's Ed Glazer at Harvard, who studies infrastructure, And we asked him for a proper definition.

[88] So I think the first thing to say is that whatever is and is not infrastructure, just because something is infrastructure does not make it good.

[89] In fact, there are a few easier ways to waste trillions of dollars than to spend it on silly infrastructure projects.

[90] Okay.

[91] But what is it?

[92] I think it is valuable to distinguish what we typically mean by infrastructure, which is projects which are fixed in place where there's a significant upfront cost and the valuation depends upon future use.

[93] So that includes the electricity grid, that includes highways, that includes trains, that can include broadband investments.

[94] But it doesn't include home health care workers.

[95] Nothing negative about home health care workers.

[96] They may well be more valuable that many things we are calling infrastructure.

[97] But let's assume that some very large number of dollars are approved by Congress to be spent on infrastructure.

[98] How exactly does that work?

[99] Here's one key thing to know about U .S. infrastructure spending in general.

[100] Most of it doesn't happen at the federal level.

[101] In 2020, for instance, the federal government spent $63 billion on infrastructure while sending $83 billion to the states.

[102] One advantage of federal funding is that the U .S. government can borrow pretty much as much money as it would like.

[103] States, meanwhile, are required to balance their budget.

[104] Still, states do spend a lot of their own money on infrastructure.

[105] All in, state spending accounts for roughly three quarters of all public infrastructure spending in the U .S. Here again is Transportation Secretary Pete Buttigieg.

[106] So the vast majority of the tens of billions of dollars that come through my department every year aren't spent on things that we go out, purchase, own, and operate.

[107] They go out in the form of grants, many of them established by formula that go to states and local bodies.

[108] Not necessarily a bad thing, even now as I'm in this role in Washington, but what it means is that we might be more like the trim rudder on a supertanker than we are literally calling the right and left turns.

[109] The reality is that the state and local governments own 98 % of highways and streets, including the entire interstate highway system.

[110] And that's Elaine Chow, Buttigieg's immediate predecessor at the Department of Transportation during the Trump administration?

[111] So the state departments of transportation need to be equal partners.

[112] And they need to be able to determine the infrastructure that best suits the needs of their state.

[113] I mean, the U .S. has 89 ,000 local governments, and they would know better than Washington what their needs are.

[114] So our decentralized system has a benefit in that it gives the local communities the infrastructure, that they want.

[115] This style of funding isn't how most countries do it.

[116] In Europe, for instance, most infrastructure development and decision -making are done at the federal level.

[117] Although, to be fair, most European countries are more like individual U .S. states in terms of size and GDP.

[118] But even bigger countries tend to manage their infrastructure more centrally, China especially.

[119] People sometimes wonder how China is able to have these huge infrastructure.

[120] projects, done, finished, completed right away.

[121] Well, it's because their system is very top down.

[122] One can say it's very efficient.

[123] China currently spends roughly 8 % of its GDP on infrastructure, more than three times the U .S. share of 2 .4%.

[124] This is partly because China is in catch -up mode.

[125] They've only had this kind of money to spend for the past decade or two.

[126] Still, their recent infrastructure efforts are astounding.

[127] Between 2011 and 2013 alone, China used more cement than the U .S. did during the entire 20th century.

[128] China now has most of the world's highest bridges, nearly half of the hundred tallest skyscrapers, thousands of miles of high -speed rail.

[129] It also built the massive three gorges dam, which diverted the Yanksy River and displaced more than a million people to create the world's biggest hydroelectric power plant.

[130] China consumes roughly a quarter of the world's energy, so it's building all sorts of power plants, wind and solar, as well as the old standby coal plants.

[131] Coal still accounts for roughly two -thirds of China's electricity.

[132] They've also built 51 nuclear reactors with 18 more under construction.

[133] The country's nuclear power has doubled since 2015, while U .S. nuclear output stands where it did in 1990.

[134] How is China able to build at this pace?

[135] There are a variety of reasons, even beyond the top -down system that Elaine Chao mentioned.

[136] Labor costs are lower than the U .S., regulations in China are much looser, and community pushback isn't so much of a thing in China, nor are individual property rights.

[137] And why is China building so much, so fast?

[138] Pete Buttigieg again.

[139] I'll say this.

[140] They're not spending these kinds of resources on infrastructure because the Chinese Communist Party is a bunch of transportation nerds like me. This is obviously about securing long -term strategic economic security and advantages.

[141] And those advantages come to countries that invest.

[142] I mean, you go back to the Romans and, you know, you build out a great infrastructure network and that makes you stronger domestically and abroad.

[143] That's why they're doing this.

[144] So your old firm, McKinsey, where you worked years ago, recently estimated that Chinese construction enterprises won roughly half of all construction projects throughout Africa, including many funded by non -Chinese sources like the World Bank.

[145] Should infrastructure building be a bigger part of U .S. export around the world?

[146] I think there's huge potential here.

[147] But first, we have to get our own house in order.

[148] I do think there's something very exciting in the potential there, and that kind of economic diplomacy could go a long way.

[149] It's obviously working for China.

[150] Getting our infrastructure house in order might involve copying bits of the Chinese playbook.

[151] One way to think about the competition with China is this.

[152] The distance from Beijing to Shanghai, which a high -speed train can do between four and five hours, that's about the same as the distance from Chicago to Atlanta.

[153] And creating that alternative, that option for Americans could open up tons of possibility for families and employers in the interior of this country.

[154] The history of if you build it, they will come in this country has been, if you build a road, they will come more than you ever imagined.

[155] And if you build transit, they don't come.

[156] That's Eric Morris.

[157] He is a professor of city and regional planning at Clemson University.

[158] He's also writing a history of the U .S. highway system.

[159] The last time we built major high -quality transit systems was mostly in the 1970s when they built Washington and Atlanta and Miami, a couple of other cities.

[160] None of those systems came anywhere near what they were predicting as far as ridership goes.

[161] Morris points out that public transit systems are essentially competing with our existing highway network, and an existing highway network is hard to beat.

[162] highways are great traffic moving pieces of infrastructure.

[163] They're super efficient.

[164] They're relatively safe.

[165] They've allowed people to move to the suburbs.

[166] Empirical evidence suggests that those interstates have contributed a dramatic amount to the U .S. economy and to U .S. well -being in many, many ways.

[167] On the other hand, detractors at the interstates are right in that they take up a lot of land.

[168] They're ugly.

[169] They are rivers of pollution.

[170] And there's this, too.

[171] Research has shown that the additional economic benefit from originally building the original understates, the economic benefit was huge, but that's dropped over time because the system is basically built out and we have what we need.

[172] Not only have the economic benefits stagnated, but adding additional lanes to ease traffic congestion around cities doesn't actually ease congestion, since it encourages even more people to drive.

[173] The bulk of the U .S. interstate system was planned by President Dwight D. Eisenhower in 1956.

[174] We were deep into the Cold War with the Soviet Union, and the highways were designed to facilitate the movement of military equipment and personnel.

[175] This was in keeping with most road building throughout history, going back to the ancient Persians and Romans.

[176] Roads to facilitate economic activity are nice, but roads to facilitate war are compulsory and more likely to receive funding.

[177] The U .S. highway system cost around half a trillion dollars in current dollars.

[178] It's estimated to have returned six times that much in economic benefits.

[179] And those highways, once built, began to shape where and how we live.

[180] Cities like Houston and Atlanta and Denver developed in the post -automobile era.

[181] And given that that was the dominant transportation technology at the time, those cities developed in a way that prioritized automobile travel, unlike, say, European cities, which are, you know, 1 ,000 or 2 ,000 years old, and developed in an area of walking in transit, and therefore they're much more walking in transit friendly today.

[182] In other words, interstates created cities that are harder to retrofit with public transit since they essentially require a car to get around.

[183] You can't just go tearing down highways and cloverleafs to make way for a light rail network, at least not without great expense and complication.

[184] And Morris points out one huge difference between today and the period when the interstates were being built.

[185] At that time, it was relatively much easier in this country to displace people and cause lots of disruption.

[186] The new planning paradigm, which largely came about in response to the interstates themselves, the pendulum has swung in the absolute opposite direction.

[187] In this country right now, it is extremely difficult to build anything.

[188] And this goes all the way down to, you know, a five -story mixed -income apartment building in a rich suburb.

[189] Or, God forbid, you try to build a homeless shelter anywhere.

[190] So you can see why infrastructure nerds everywhere might prefer a more centralized, top -down approach, like China's, where the federal government has the power and budget to move mountains.

[191] But not everyone likes that idea.

[192] There are just a lot of reasons to be somewhat skeptical about this.

[193] That, again, is the economist Ed Glazer.

[194] He's been leading a research project called the Economics of Infrastructure Investment for the National Bureau of Economic Research.

[195] We should note that this project receives funding from the U .S. Department of Transportation, which means Glazer is at least nibbling on the hand that feeds him.

[196] because he is not a fan of big, top -down spending.

[197] The federal government needed to put some planning effort into the highway system.

[198] But those infrastructure investments are relatively rare in comparison with those infrastructure investments that are really entirely within state.

[199] As Glazer sees it, when the federal government does fund local infrastructure, it tends to skew the kind of projects that get built and how the money is spent.

[200] One example, the Big Dig, which converted a highway through the center of Boston into an underground tunnel.

[201] It wound up taking nine years longer than planned and going 200 % over the original budget.

[202] The Big Dig occurred entirely within the city of Boston, right?

[203] And it was seated with federal money.

[204] The whole thing became palatable to Massachusetts taxpayers, both because the cost of the project were radically underestimated, and because we thought that the feds were going to pick up a large.

[205] amount of the tab.

[206] So I think the idea that you're going to do something because someone else is paying for it is really not a very good reason to do something.

[207] And the process of the federal government getting involved helps that to happen.

[208] Another big difference between infrastructure in the U .S. versus other countries?

[209] It is expensive.

[210] The median transit project in the U .S. costs nearly $1 billion per mile.

[211] The non -U

[212].S.

[213] average

[214] is

[215] less than

[216] one