Economy Industry Uncategorized

Infrastructure then and now: why our projects are so complex, delayed, and expensive

Consider the Chrysler Building on Manhattan’s east side. With 77 floors and

standing 1047 feet high, it was the world’s tallest building when it was completed in 1930. Designed by architect William van Alen for Walter P. Chrysler, it is widely considered the best example of the Art Deco style. It remains a jewel in the Manhattan skyline, especially at night when its spire is illuminated by special lighting systems. Established as a National Historic Landmark in 1976, in 2007 it was ranked ninth among favorite buildings by the American Institute of Architects. An ironic note: as of 2008 it became 90% owned by the Abu Dhabi Investment Fund.

[Figure:  Photograph by David Shankbone, in Chrysler Building, Wikipedia, 2016.]

The efficiency of the construction of the Chrysler Building is worth noting. Construction began on September 19, 1928 and was completed on May 27, 1930, a little over 20 months, without

loss of a single worker. Both it and The Empire State Building involved major technical

challenges and required close coordination with city authorities, but were completed in less

than two years and remain objects of pride in New York City.

Besides the ability to build monumental constructions quickly, the effectiveness of urban

infrastructure maintenance prior to mid-century is illustrated by the fact that the cost of a

subway or bus ride in New York City remained a nickel between 1904 and 1944, during which

time the subways were systematically extended (Markowitz 2003). The magnificent Chrysler

and Empire State buildings in New York City could be constructed efficiently before 1932 in

part because there was a unitary permitting pathway through city authorities. These offices

were generally occupied by managers with engineering expertise. The engineering profession

had a high status in the U.S. from the 19th Century through mid-twentieth century [see

chapter on engineering in (Manheim 2009). Engineers’ training included business and finance as well as rigorous science in order in order to enable them to prepare cost estimates and integrate construction projects into societal operations. Engineers were known for their esprit and pride in their profession. They served in manufacturing and construction but were also

sought after in administrative and management functions in cities.

A new system came into being in the 1970s. The U.S. reached a peak of

productivity and also pollution in the 1960s. After a national environmental crisis

in 1969 manufacturing and industry were perceived as the primary sources of

risk to the environment and public health. In addition to a series of

groundbreaking federal environmental laws in the 1970s (Manheim, 2009),

multiple local permitting authorities were considered desirable to provide

constraints on the power of economic forces.

The downside of the well-meaning transformations has been displayed since the

1980s with a steam tunnel explosion in Manhattan, the collapse of the I 35 bridge

in Minneapolis and Boston’s Big Dig. First planned in 1982, the Big Dig

was conceived and pushed by Governor Michael Dukasis’s brilliant Secretary of

Transportation, Fred Salvucci, who had two engineering degrees from MIT and a

passion to solve Boston’s horrific traffic impasses.

However, the Big Dig required nine years just to gain local, state, and federal permits, and

was not completed until 2007, with its estimated ultimate cost of $22 billion

representing a 3.6-fold cost overrun from initial estimates. It involved tunnel leaks

and a collapse, causing death of a motorist, and the massive scandals involving fraud

And waste, including some $450 million awarded by courts in restitution funds.

Much blame was placed on the construction coalition of the Bechtel Corporation

with Parsons-Brinkerhoff. However, when one examines the proliferation of private

and public interests that had to be placated or bribed, the endless delays incurred

by new demands by influential constituencies, and the high-level politics involved

in securing federal funding, it seems clear that Bechtel’s design and construction

operations were severely constrained by politics.

The in-depth research report on the Big Dig by Nicole Gelinas (Gelinas 2007)

noted rules involving overtime for police officers required to watch over all

construction. Union workers, minority groups and women were promised quotas

for jobs. Mitigation of impacts promised by the state eventually accounted for a

third of the cost e.g. “North End apartments were outfitted with air conditioning,

soundproof windows, and firm mattresses as residents settled in for a decade of

construction”. More than $1 billion was needed to upgrade a bridge that business

leaders, residents, and the nearby city of Cambridge considered ugly.

Environmentalists won promise to preserve three quarters of the land made

available by demolishing the former artery, and an island in Boston Harbor was

converted from a former waste disposal area to a beachfront park. Archeologists

were paid to catalog artifacts back to colonial days, and an aggressive rodent

control project was launched. In short, the Big Dig became a milch cow for

stakeholders that had permitting authority or influence.

Local residents felt assured they would pay for the cost with “ten cent dollars”

because both Massachusetts and the Congress were dominated by Democrats

ready to tap the federal government for funding. Majority leader and future

Speaker of the House of Representative Thomas “Tip” O’Neill had inserted

“placeholder funds” for the Big Dig into a blueprint for completion of the Interstate

Highway System in 1976. In 1987 President Reagan vetoed a highway bill that

contained the Big Dig’s first major funding, but O’Neill and Ted Kennedy garnered

enough political support to override Reagan’s veto. They did this by approving

many other states’ goodies.

Next, let’s consider the more recent extension of Washington DC’s Metro system.

A superior tunnel proposal to Dulles Airport in Fairfax County was sidelined in

favor of a cheaper aboveground system in order to gain federal subsidies. Only

after the decision was made did information about potential cost savings using a

Spanish tunnel boring machine come to light.The DC-area project is now well over budget

and behind schedule. Had it been followed efficiently, the costs of the tunnel option might

have been no greater than the present operations while leaving room for greater use of

valuable land in Tyson’s Corner and other affected areas of Fairfax County Virginia.

Projects or outlays funded through Boston’s Big Dig project may have been

desirable considered independently. But they were not included in the original

plans and cost estimates. The fragmented permitting system that took shape in

the wake of the environmental regulatory revolution of the 1970s, soon led to

slowing down or paralysis of infrastructural development throughout the U.S.

This illustrates the problem potentially introduced by the lure of federal

funding. Federal support is obviously desirable and can potentially

stimulate needed local development. However, in practice it opens the

pathway to decision to a widened and more complicated political process

including the potential of influence peddling. That pathway almost

invariably increases the cost of projects.

The U.S. is now faced with a national infrastructure crisis recognized by both

parties and which will potentially cost $ trillions. The pathway from the Chrysler

building to the Big Dig needs to be revisited as the nation plans overdue

upgrading of infrastructure.


Gelinas, N. (2007). Lessons of Boston’s Big Dig. City Journal, available from

Manheim, Frank T. (2009). The Conflict Over Environmental Regulation In the

United States: Origins, Outcomes, and Comparisons with the EU; Springer

Publishers, 321 p.

Markowitz, Michael (2003, April 28, 2003). New York City Subway Token, 1953-2003.

available from


American history Civil War Economy Environmental policy Industry Journalism Policy and Politics Politics Science and education Uncategorized

The Coronavirus signals need for reform of U.S. policies for approval of vaccines and advanced cures

I sent a message similar to this essay to Robyn Dixon, author of an article on Russian science and vaccine development in the Washington Post yesterday, February 9. 2021. The Dixon article cited scientist and journalist, Irina Yakutenko, saying that “you should do everything according to the protocols. It takes a long, long time. It takes a lot of money”. That has been true for U.S. policies that have required ten years to release new vaccines*. But the “miraculous” speed of vaccine development in 2020 tells us that those medical policies are grievously outdated and need to change. I copied this message to Senators Tim Kaine and Mark Warner, encouraging them to explore reforms with Senate colleagues and NIH Director Francis Collins. Republicans would likely agree about the importance of reform.

The length of time needed for vaccine development is due to the extreme rigor of U.S requirements for them and other critical cures. This in turn is attributable to concern to minimize adverse effects. The positive potential of a new vaccine can be confirmed in a dozen cases, but to rule out 1:1000 adverse effects may require years and trials with 6000 persons. The FDA operates in the world’s most litigious nation and is risk-averse. We saw what happened in 2020 when excess cautions were swept aside because of the emergency created by the coronavirus. The speed of the approval was startling for our system, but other nations produced vaccines in the same time frame. Sixty-three coronavirus vaccines have been reported in clinical development. Because of the U.S.’s overwhelming dominance in research funding and the rigor and reputation of the National Institute of Health, the sponsor of federally supported trials, our protocols are widely adopted in Germany and other EU nations.

A new vaccine can cost $500 million to $2 billion. This leads to exorbitant treatment costs and a lack of attention to rarer diseases that could be cured. An example is my wife, Lucy, who has a rare “SCA 8” ataxia that could be readily cured by gene editing – but it can’t get attention.

A sleeper factor also holds back treatment in America. The Washington Post article mentions scientific publication as being desirable for Russian medical development. To the extent that they report new knowledge and advances, scientific publications play critical roles.  But the U.S. suffers from a flood of excess clinical publications. Reports offer many promising new treatments “for the future” while there is a dearth of new treatment opportunities today. The reason is that it is more advantageous for medical researchers to apply for research funding and get their names in print or in the news for promising developments than to take the risks of moving to formal treatment. The latter receives little public recognition while it incurs major risks for lawsuits over new procedures. Risk adverseness operates on clinics as well as clinicians.

In 2016 I became personally familiar with a pioneering Austrian heart surgeon who saved the life of an American composer who had a heart attack while attending a concert in Vienna. Dr. Werner Mohl** developed a procedure for restoring heart tissue damaged in heart attacks. The American would probably have died in the U.S. because the procedure would not have been authorized until clinical trials proved its efficacy.

*Vaccines, 5th Ed., Philadelphia, Saunders 2008.


American history Economy Environmental policy Industry

America’s Paradox: Low Taxes on Corporations — and Higher Taxes on the Execs Who Run Them Could Stimulate U.S. Manufacturing

U.S. progressives call for higher corporate and personal taxes. Conservatives want no tax increases. Given that the Biden “green” plan at its core requires a robust American manufacturing sector, we need a more nuanced tax scenario.

The Biden campaign proposal to increase the nation’s corporate tax rate to 28 percent would leave that rate below pre-Trump corporate tax levels but still put the United States above most European rates and leave American manufacturing at a competitive disadvantage.

Would federal policies that mandate the purchase of U.S.- made products offset this disadvantage? Mandates work mainly for subsidized activities. These tend to involve insider contracts rather than promote entrepreneurship. Germany has become an international manufacturing powerhouse — with large foreign exchange surpluses but industrial wage and benefit levels nearly double what U.S. corporations provide — without such mandates. Germany has a corporate tax rate of 15 percent, plus a 5 percent “solidarity” assessment.

On personal taxes we have counterintuitive reasons for increasing progressivity in personal income taxes beyond Biden’s 39.6 percent. The first reason looks back to the 1970s when the United States suffered disproportionate deindustrialization. We hemorrhaged products and industries where we had traditionally excelled. Other European nations didn’t abandon traditional and new industries. Finland produces those beautiful cruise liners. Italy retains its shoe and clothing industries and leads in popular granite table tops and other stoneware. Sweden’s IKEA is the world’s leading home furnishings company, and Volvo ranks as the second biggest truck maker after Daimler. Sweden also shares with Denmark the distinction of having the world’s highest personal tax rates on high incomes. In the United States, we have one of the lowest.

The subsequent Reagan administration’s relegitimization of business may have been timely. But the Reagan reduction of top personal taxes from 70 to 28 percent led to executive pay becoming linked to corporate profits. This stimulated exponential increases in executive compensation (as well as lawyers’ and others’ pay) , and those increases, in turn, encouraged corporate executives to pursue short-term profits over long-term goals.

No U.S. top executive pursued short-term profits with more zest and celebrity than  General Electric’s CEO, Jack Welch, who would retire in 2001 with a record severance of $457 million. The culture Welch installed at GE created bubble growth and an ultimate crash for the historic manufacturing company.

In 2014 GE contracted to sell the last major U.S. suite of household appliances — its appliance division — to Sweden’s Electrolux, a move designed to gain cash for more profitable investments. Such investments earlier included high-finance and real estate ventures that brought GE profits along with a deemphasis on making products and meeting U.S. technological needs. GE’s German counterpart, Siemens, took a different course. It continued its traditional long-term strategies and today rates as a major global player across the technological spectrum, as well as a key partner in Germany’s proactive climate-change policies.

The learning I take from all this: America’s astoundingly high top incomes have a negative effect on our national productivity. Nor do top earners stimulate productivity. They buy expensive real estate like Bill Gates’ $147 million primary residence. They purchase foreign properties and luxury goods, art objects and Lear Jets, expensive security and financial services. They invest for personal income security and growth, but as Jack Welch demonstrated, investments for the highest possible returns do not necessarily serve national needs.

The incomes of our top earners have an additional negative impact. They grow our nation’s unsupportable inequality. Among advanced nations, we have the greatest disparity between rich and poorBefore 1970 the lowest income quintiles in the United States saw the fastest growth. In a post-war America where top-bracket personal tax rates never dipped below 70 percent, blue-collar breadwinners could support families on one income. Since 1970 incomes in our lowest quintile income have remained nearly flat in inflation-adjusted terms, with our bottom 50 percent owning a mere 1 percent of the nation’s wealth. Older families, the St. Louis Federal Reserve Bank reports, have 12 times the wealth of younger families.

These extremes have triggered record public support for more radical political policies, with disaffection concentrated among younger voters. We will have no economic and political stability in the United States until we correct these imbalances.

Economy Environmental policy Industry

The real story under the controversy over offshore drilling

On January 4 2018 Interior Secretary Zinke announced a plan to open up 90% of the U.S.’s offshore Exclusive Economic Zone, equivalent to more than three quarters of the land area of the United States to commercial recovery of oil and gas. The report ( stated that current moratoria put 94% of the this area under moratoria. Florida was to be excluded from the proposed open areas.

The Interior announcement set off heated opposition from environmentalists and governors of many states. Lena Moffitt, senior director of the Sierra Club’s Our Wild America campaign, said Monday in an email. “This debacle has further highlighted Donald Trump and his administration’s incompetence and failure to take the health, safety, and economic well-being of coastal communities seriously”

As a long-time researcher on offshore environmental policy I suggest that current objections to offshore drilling have less to do with real environmental hazards than with a unique US ideological conflict that emerged in the 1980s. Democrats became the party of environment and Republicans became the party of industry. Opponents to drilling declare that drilling will devastate the coastal environment and economy and throw every possible argument against it, justified or not. Industry and its conservative supporters are no angels either. They long ago abandoned public debate in favor of lobbying and behind the scenes networking on short-range goals.

Compare the 94% of U.S. under offshore moratorium up to the recent Interior Department action with Norway, an international environmental leader. Norway leases all potentially productive offshore areas except off the Lofoten Islands, north of the Arctic Circle, where there are cod spawning grounds. Its offshore oil industry coexists with Norway’s important fishing industry. Norway’s huge fund from petroleum revenues now covers the national pension system.

U.S. Geological Survey assessments show that potential hydrocarbon resources off Maryland are in the Mesozoic Taylorsville basin off Virginia and southern Maryland. They are primarily natural gas, not oil. Had Virginia and Maryland leased their offshore areas years ago and dedicated revenue from lease sales to renewable energy projects like offshore wind turbines and carbon burial they could have been national environmental leaders, even if no commercial production resulted (see state offshore sectors in figure from the Bureau of Ocean Energy Management (BOEM)

If the U.S. had not become embroiled in our battle-to-the-death conflict over natural resource policy it would now probably be a world leader against global climate change instead of a black sheep – with nearly the lowest proportion of renewable energy to total energy consumption among advanced nations. Whereas 3200 offshore wind turbines operate in European waters our regulatory and ideological impasses mean that we recently only got our first offshore wind farm off Block Island in 2016. Is it time to crawl out of our ideological caves and start acting rationally?