While infrastructure investment is often needed when cities or regions are already expanding, too often it goes to declining areas that don’t require it and winds up having little long-term economic benefit. As for fighting recessions, which require rapid response, it’s dauntingly hard in today’s regulatory environment to get infrastructure projects under way quickly and wisely. Centralized federal tax funding of these projects makes inefficiencies and waste even likelier, as Washington, driven by political calculations, gives the green light to bridges to nowhere, ill-considered high-speed rail projects, and other boondoggles. America needs an infrastructure renaissance, but we won’t get it by the federal government simply writing big checks. A far better model would be for infrastructure to be managed by independent but focused local public and private entities and funded primarily by user fees, not federal tax dollars.
Alex Tabarrok calls the entire article excellent.
UPDATE: Although John Cochrane agrees with Glaeser, but he is more charitable to Summers than I would be.
“Subsidizing Big Mac consumption would be a more effective way to provide jobs for the temporarily unemployed than subsidizing airport renovation.” << Now I know where this quote comes from! (Didn't follow the link the first time, from MR)
Maintenance can, and should be, increased during recessions. And there should be in every US city & county a list of "Shovel Ready Projects" that are waiting for money, prioritized by estimated but explicit cost-benefit analyses.
There was no explicit mention of "Federal Matching Funds", which is one of the usual ways the Feds push High Speed Rail and other PC boondoggles. Still, the idea is a step towards the decentralization suggested, but the Matching Funds should have criteria pushing the decision making power to be in the local hands to specify some small range (3 or so?) of most desired projects, and the Feds explicitly noting some criteria like employment or CB ratio and accepting the best of those locally suggested.
So we should have a list of beneficial projects for every city in the US, and then just sit on them and wait for a recession?
Everyone should. A prioritized list that is periodically reviewed for the most important and valuable tasks to execute as resources become available is common sense. This does not mean do nothing until the next recession.
Glaeser’s comment presumes that all infrastructure projects result in congestible goods for which user fees fully cover all the benefits of using the goods and that users’ private benefits equal social benefits. Many infrastructure and other projects result in public goods that are not (entirely) congestible, i.e. for which social benefits exceed private benefits, and/or where charging user fees is highly impractical.
We have one of those “independent but focused local public”(entities) in Massachusetts running public transportation. It has produced some real innovations, mostly in the areas of corruption, massive cost overruns and incompetent management.
I can say with some confidence that they are not the answer.