Mayor Pete and Elaine Chao Hit the Road (Ep. 471)
While other countries seem to build spectacular bridges, dams, and even entire cities with ease, the U.S. is stuck in pothole-fixing mode. We speak with an array of transportation nerds — including the secretary of transportation and his immediate predecessor — to see if a massive federal infrastructure package can put America back in the driver’s seat.
Listen and subscribe to our podcast at Apple Podcasts, Stitcher, Spotify, or elsewhere. Below is a transcript of the episode, edited for readability. For more information on the people and ideas in the episode, see the links at the bottom of this post.
* * *
Eric MORRIS: Love it or hate it, there will never be another country in the world that is more auto-oriented than the United States.
“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.” American drivers put on more miles than drivers in any other country: over 13,000 a year on average. That’s nearly 30 percent more than Canadians, who are second. It isn’t just that Americans love their cars; it’s almost as if cars are America. If you’ve ever watched American T.V., you already know this, from the car commercials:
DODGE AD: Here are a couple of things America got right: cars and freedom.
CADILLAC AD: Other countries they work, they stroll home, they stop by the cafe; they take August off. Off.
CLINT EASTWOOD: This country can’t be knocked out with one punch. We get right back up again, and when we do the world’s gonna hear the roar of our engines.
What is it that accounts for this bond between Americans and our cars? 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. As we’ve learned, the U.S. is the world leader in terms of individualism.
Gert Jan HOFSTEDE: In an individualistic society, a person is like an atom in a gas. It can freely float about. And life is an adventure.
“Life is an adventure” — that would work as a slogan for one of those car ads on T.V. For a hyper-individualistic country, automobile travel has a lot going for it: control of where you’re going, and when, and how fast; more than 4 million miles of open roads, offering boundless possibility. For many Americans, getting behind the wheel at 16 is a full-on rite of passage.
Pete BUTTIGIEG: I was driving in high school my parents’ 1992 Buick LeSabre, which was a bit of an aircraft carrier.
You may recognize that voice.
BUTTIGIEG: I’m U.S. Secretary of Transportation Pete Buttigieg.
Buttigieg was the breakout star of the 2020 Democratic presidential race. Before that, he was the mayor of South Bend, Ind. He’s still just 39 years old. He is a self-proclaimed transportation nerd, so running the Department of Transportation is a thrill.
BUTTIGIEG: I’m the Secretary of “Planes, Trains, and Automobiles.”
And you can’t have all those planes, trains, and automobiles without infrastructure. Since his confirmation in February, Buttigieg has been the front man for the Biden administration’s infrastructure agenda.
BUTTIGIEG: What I found in my more or less daily conversations with members of the House and Senate, Democrats and Republican, is what they all have in common is they’re all from a place where there is just profound, visible, inarguable infrastructure need. I think part of what’s happening in this moment is that the underinvestments of the past have caught up to us, to the level that, suddenly, it is a short-term problem.
The U.S. is the richest country in the world but ranks just 12th in transportation infrastructure. Other wealthy countries continue to build spectacular bridges and dams and cities; they have ultra-modern airports and an abundance of fast trains. The U.S. seems to be stuck in pothole-fixing mode. The American Society of Civil Engineers, in its most recent report card, gave American infrastructure a C-minus — although, as one critic points out, civil engineers may have an incentive to grade low, since any repairs will require their services. That said, the Society finds that 43 percent of our public roadways are in poor or mediocre condition. The U.S. Government Accountability Office finds that 14 percent of our bridges are “functionally obsolete.” Thus the Biden administration’s push for a very, very large infrastructure package.
BUTTIGIEG: And this is not just a meet-you-in-the-middle, half-measure kind of thing. The bipartisan framework that the president announced would represent the biggest investment in public transit we’ve ever done as a country. The biggest investment in passenger rail since Amtrak was created in the first place. The most we’ve done on roads and bridges since the Eisenhower administration.
Roads and bridges — that’s a political winner anywhere in America. Because — well, because the car. But more public transit? More passenger rail? Is that a realistic future for a country that’s still fixated on the automobile?
BUTTIGIEG: There was 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. How could you ever change that?” And then we did!
FORD AD: Here’s what happened: Americans wanted a faster horse. So, we built them a car.
BUTTIGIEG: It’s not about being anti-car. It’s about making sure that the car fits in a bigger picture.
So, today on Freakonomics Radio: What does that picture look like? And who gets to decide how much is spent and where?
Ed GLAESER: It’s the job of the economist to stand in the middle of the road and say, “Stop, let’s get out our calculators.”
We look at the infrastructure approach taken by some of our rivals.
Elaine CHAO: People sometimes wonder how China is able to have these huge infrastructure projects completed right away?
And: what’s wrong with all those interstates, anyway?
MORRIS: They take up a lot of land. They’re ugly. They are rivers of pollution.
Is America driving itself crazy?
* * *
A lot of U.S. infrastructure is aging and in need of repair; at the same time, infrastructure spending has been declining for years. This is not a good combination. Waiting until something is falling apart can mean urgent and disruptive repairs. Traffic congestion already costs the U.S. economy an estimated $120 billion a year; airline delays, another $35 billion. 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. 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.
This bill would still need to pass in the House, where some Democrats are unhappy about cuts made during negotiations. The original proposal from the Biden administration, called the American Jobs Plan, cost $2.6 trillion. It would have funded all the aforementioned infrastructure but also things like affordable housing and home healthcare workers for elderly and disabled patients. And yet it was still being referred to as “an infrastructure package.” As one economist remarked to The New York Times: “It does a bit of violence to the English language, doesn’t it?” We called up that economist — it’s Ed Glaeser, at Harvard, who studies infrastructure — and we asked him for a proper definition.
GLAESER: So I think the first thing to say is that whatever is, is not infrastructure, just because something is infrastructure does not make it good. In fact, there are few easier ways to waste trillions of dollars than to spend it on silly infrastructure projects.
Okay, but what is it?
GLAESER: 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. So that includes the electricity grid, that includes highways, that includes trains, that can include broadband investments. But it doesn’t include home healthcare workers. Nothing negative about home healthcare workers. They may well be more valuable than many things we are calling infrastructure.
But let’s assume that some very large number of dollars are approved by Congress to be spent on infrastructure. How, exactly, does that work? Here’s one key thing to know about U.S. infrastructure spending in general: most of it doesn’t happen at the federal level. In 2020, for instance, the federal government spent $63 billion on infrastructure, while sending $83 billion to the states. One advantage of federal funding is that the U.S. government can borrow pretty much as much money as it would like; states, meanwhile, are required to balance their budgets. Still, states do spend a lot of their own money on infrastructure. 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:
BUTTIGIEG: 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. They go out in the form of grants, many of them established by formula, that go to states and local bodies. 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.
CHAO: The reality is that the state and local governments own 98 percent of highways and streets, including the entire interstate highway system.
And that’s Elaine Chao, Buttigieg’s immediate predecessor at the Department of Transportation, during the Trump Administration.
CHAO: So the state Departments of Transportation need to be equal partners and they need to be able to determine the infrastructure that best suits the needs of their state. I mean, the U.S. has 89,000 local governments, and they would know better than Washington what their needs are. So our decentralized system has a benefit in that it gives the local communities the infrastructure that they want.
This style of funding isn’t how most countries do it. In Europe, for instance, most infrastructure development and decision-making are done at the federal level. Although, to be fair, most European countries are more like individual U.S. states in terms of size and G.D.P. But even bigger countries tend to manage their infrastructure more centrally. China, especially.
CHAO: People sometimes wonder how China is able to have these huge infrastructure projects done, finished, completed right away? Well, it’s because their system is very top-down. One can say it’s very efficient.
China currently spends roughly 8 percent of its G.D.P. on infrastructure, more than three times the U.S. share of 2.4 percent. This is partly because China is in catchup mode; they’ve only had this kind of money to spend for the past decade or two. Still, their recent infrastructure efforts are astounding. Between 2011 and 2013 alone, China used more cement “than the U.S. did during the entire 20th century.” China now has most of the world’s highest bridges, nearly half of the 100 tallest skyscrapers, thousands of miles of high-speed rail. It also built the massive Three Gorges Dam, which diverted the Yangtze River and displaced more than a million people to create the world’s biggest hydroelectric power plant.
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. Coal still accounts for roughly two-thirds of China’s electricity. They’ve also built 51 nuclear reactors, with 18 more under construction; the country’s nuclear power has doubled since 2015, while U.S. nuclear output stands where it did in 1990. How is China able to build at this pace? There are a variety of reasons, even beyond the top-down system that Elaine Chao mentioned. 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. And why is China building so much so fast? Pete Buttigieg again:
BUTTIGIEG: I’ll say this: 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. And those advantages come to countries that invest. 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. That’s why they’re doing this.
DUBNER: 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. Should infrastructure building be a bigger part of U.S. export around the world?
BUTTIGIEG: I think there’s huge potential here but first, we have to get our own house in order? I do think there’s something very exciting in the potential there, and that kind of economic diplomacy could go a long way. It’s obviously working for China.
Getting our infrastructure house in order might involve copying bits of the Chinese playbook.
BUTTIGIEG: One way to think about the competition with China is this: the distance from Beijing to Shanghai, which a high-speed train can do in between four and five hours, that’s about the same as the distance from Chicago to Atlanta. And creating that alternative, that option for Americans, could open up tons of possibility for families and employers in the interior of this country.
MORRIS: 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. And if you build transit, they don’t come.”
That’s Eric Morris. He’s a professor of city and regional planning at Clemson University. He’s also writing a history of the U.S. highway system.
MORRIS: 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. None of those systems came anywhere near what they were predicting as far as ridership goes.
Morris points out that public-transit systems are essentially competing with our existing highway network. And an existing highway network is hard to beat.
MORRIS: Highways are great traffic-moving pieces of infrastructure. They’re super-efficient. They’re relatively safe. They’ve allowed people to move to the suburbs. 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.
On the other hand:
MORRIS: Detractors of the interstates are right in that they take up a lot of land. They’re ugly. They are rivers of pollution.
And there’s this, too:
MORRIS: Research has shown that the additional economic benefit from originally building the original interstates, the economic benefit was huge. But that’s dropped over time because the system is basically built out and we have what we need.
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. The bulk of the U.S. interstate system was planned by President Dwight D. Eisenhower in 1956. 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. This was in keeping with most road-building throughout history, going back to the ancient Persians and Romans. Roads to facilitate economic activity are nice; but roads to facilitate war are compulsory, and more likely to receive funding. The U.S. highway system cost around half a trillion dollars in current dollars; it’s estimated to have returned six times that much in economic benefits. And those highways, once built, began to shape where and how we live.
MORRIS: Cities like Houston and Atlanta and Denver developed in the post-automobile era. 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 1,000 or 2,000 years old and developed in an era of walking and transit, and therefore, they’re much more walking-and transit-friendly today.
In other words, interstates created cities that are harder to retrofit with public transit, since they essentially require a car to get around. 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. And Morris points out one huge difference between today and the period when the interstates were being built.
MORRIS: At that time it was relatively much easier in this country to displace people and to cause lots of disruption. The new planning paradigm — which largely came about in response to the interstates themselves — the pendulum has swung in the absolute opposite direction. In this country right now, it is extremely difficult to build anything. And this goes all the way down to a five-story, mixed-income apartment building in a rich suburb. Or God forbid you try to build a homeless shelter anywhere.
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. But not everyone likes that idea.
GLAESER: There are just a lot of reasons to be somewhat skeptical about this.
That, again, is the economist Ed Glaeser. He’s been leading a research project called the Economics of Infrastructure Investment for the National Bureau of Economic Research. We should note that this project receives funding from the U.S. Department of Transportation, which means Glaeser is at least nibbling on the hand that feeds him. Because he is not a fan of big, top-down spending:
GLAESER: The federal government needed to put some planning effort into the highway system. But those infrastructure investments are relatively rare in comparison with those infrastructure investments that are really entirely within state.
As Glaeser 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. One example: the Big Dig, which converted a highway through the center of Boston into an underground tunnel. It wound up taking nine years longer than planned and going 200 percent over the original budget.
GLAESER: The Big Dig occurred entirely within the city of Boston, right? And it was seeded with federal money. The whole thing became palatable to Massachusetts taxpayers both because the costs of the project were radically underestimated and because we thought that the feds were going to pick up a large amount of the tab. 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. And the process of the federal government getting involved helps that to happen.
Another big difference between infrastructure in the U.S. versus other countries: it is expensive. The median transit project in the U.S. costs nearly $1 billion per mile; the non-U.S. average is less than one-third of that. Why is the U.S. so expensive? Labor costs are high; so is the cost of procuring land, ensuring worker safety — and, increasingly, addressing environmental concerns.
GLAESER: If you compare the straightness of roads in the ’50s with the straightness of roads by the ’70s, they’ve gotten a lot more crooked, presumably because they’re not trying to run through things.
Things like animal habitats or historic properties. One other source of runaway costs, Glaeser says, is that Americans are an outlier in a certain important practice.
GLAESER: We are quite special for a wealthy, highly-developed country for our willingness to completely forego cost-benefit analysis. I mean the sort of classic economic approach to infrastructure would be, “Well, let’s go project by project and calculate the net present value for all these projects. And let’s do the ones that are over our threshold and not do the ones that are below our threshold.” And that would be how we would calculate what we want to spend. So I think you need to ask yourself what are you getting for that money? I mean, you remember when a quarter-trillion dollars used to be real money?
DUBNER: It was one year ago.
GLAESER: Just a year ago, right? It was just before the P.P.P. came along. So I think, absolutely, we should be asking about that.
We do ask about that. We also look at other ways that America might up its infrastructure game — and the reasons we might want to do that.
BUTTIGIEG: I think most Americans would think, “Wait a minute, we should be No. 1.”
In the meantime, I am very excited to announce the latest addition to the Freakonomics Radio Network. It’s called Freakonomics, M.D., and it’s hosted by Bapu Jena, a physician and economist at Harvard. You may have heard the pilot episode we played for you not long ago. Your response was overwhelmingly positive, so we’ve gone ahead and launched the show, which is essentially the Freakonomics of Medicine. Go right now to your favorite podcast app and get it — again, it’s called Freakonomics, M.D. And tell us what you think! We’re at firstname.lastname@example.org. We’ll be right back.
* * *
As we record this, the Biden Administration’s infrastructure plan is making its way through Congress. The bill would set aside $550 billion for new infrastructure and upgrades to existing infrastructure.
GLAESER: So it’s hard not to have awe at Biden’s energy on this. He is thinking big and in some sense that’s exciting.
That, again, is the infrastructure-minded economist Ed Glaeser.
GLAESER: I think it’s important that we figure out ways to put cost-benefit analysis into the traditional infrastructure aspects of this.
Because — well, that’s what economists do: weigh the costs against the benefits. Politicians don’t typically play that game.
GLAESER: To stand in the middle of the road and say, “Stop, let’s get out our calculators. Let’s try and calculate what this costs and what these benefits are. I know it sounds great, but let’s figure out whether or not this actually makes sense.”
So, calculator at the ready, what does Glaeser think of the Biden plan to spend $66 billion on passenger rail?
GLAESER: It’s very hard to make low-density passenger rail make any sense in this country. I’m not saying that there aren’t potentially relatively high-net present value things that you could do with the Acela line.
The Acela line — or what most of us call “Acela” — that’s the Amtrak route that runs from Boston through New York to Washington, D.C.
GLAESER: Those rails are really heavily used. And you can imagine that they would yield returns. The lower-density rail transportation, it’s just very hard to get that to work. And indeed, it goes against one of the triumphs of American transportation policy over the past 50 years, which is the deregulation of rail in the 1970s. And what that enabled was our rail companies to move out of moving people, at which rail is really not very efficient, and to moving goods, which rail is great at doing. Many Americans don’t realize that America moves a much larger share of its goods by rail than Europe does. That, in fact, in many ways we are a rail-intensive country. We just aren’t intensive in moving people by rail.
What if, in this battle between cars and trains, there was a third option? An option Glaeser calls the forgotten child of American transportation? It’s the lowly bus — lowly to everyone except economists, apparently.
GLAESER: You know, economists have done this for decades in the space of rail, where there’s an old joke that 40 years of economics at Harvard can be boiled down to four words: bus, good, train, bad. When it came to advising countries in the developing world that really couldn’t cover the cost of large heavy rail, economists have suggested, “Well, why don’t you do something in between? Why don’t you have big buses that run on dedicated lanes that put a lot of people on.” Much cheaper, much more flexible because in fact, you can run things other than the buses on this. And I think this is a model that the U.S. should take more seriously, especially in a world of autonomous vehicles. One of the problems of rail is that it’s remarkably fixed. You pretty much just run trains on it. Whereas lots of things can run on a road. And so it’s one thing to think about, do we need a train between, let’s say, Chicago and Milwaukee? Or would we be better off with a dedicated lane that only runs autonomous buses and autonomous cars? And lets them run 150 miles an hour.
CHAO: Long-distance rail has never been a money-earner.
That, again, is former Transportation Secretary Elaine Chao.
CHAO: In fact, it’s always lost money. And the federal government has always had to subsidize passenger rail. The only route that is profitable is what’s called the Northeast Corridor, from Washington to Boston. For long-distance rail, there’s a per-head subsidy of over $125. And that’s a big burden to place on the American taxpayer.
BUTTIGIEG: Infrastructure as a rule is not generally a profit center. That’s the point.
And that’s Pete Buttigieg, the current transportation secretary.
BUTTIGIEG: The entire point of having a federal policy to create rail, or to support rail, is that it’s not necessarily going to turn a profit on its own. It’s a money-earner societally, at large. The country as a whole, the economy as a whole, is better off.
DUBNER: So, one story I heard you tell a while back — or it was more of a sales pitch, I guess. You said: “When it comes to rail, why should Texas be inferior to China?” And you said, “I’m going to keep putting it that way to see if it resonates.” Has it resonated in Texas?
BUTTIGIEG: Remarkably, yes. There’s actually a project underway to connect Dallas and Houston by high-speed rail. So, I’m going to continue to press the idea that it’s not just in the Northeast Corridor that we ought to have good rail. We ought to have it everywhere. And, yeah, I’m going to appeal a little bit to that American competitive instinct. Because if somebody in China or, famously, Japan, but also Morocco, or Turkey, or Italy, can count on a faster and more reliable train service than the U.S., I think most Americans would think, “Wait a minute, we should be No. 1.”
It’s worth noting that China doesn’t seem to think about passenger rail as a profit center, either. Only one-sixth of the high-speed rail lines they’ve been building are “able to cover their operating and debt costs.” A few months ago, China’s State Council released new guidelines that suggest cutting back spending on high-speed rail. But what about the jobs created from huge infrastructure projects? Isn’t that alone a reason to celebrate the big Biden spending package? Ed Glaeser says: not really. The first question you have to ask is how many new jobs are actually being created?
GLAESER: If you’re moving people from unemployed status, where they’re receiving other federal benefits, to employed status, where they’re paying taxes, then that particular transition does have a benefit. But all the people who would have had jobs anyway — it doesn’t make any difference. And typically, you need a lot of infrastructure spending to generate jobs. Much infrastructure is very different than our images of New Deal projects, where you have thousands of unskilled men working with picks by the side of the road. This is not how you build a dam in 21st– century America. There are a lot of machines, there’s a lot of capital, there’s a lot of high-end engineering skill. And those people are unlikely to be unemployed in any event, because they have really valuable skills. And so you’re taking them off of a private project and putting them on to a public project.
There’s also the fact that building a new piece of infrastructure in the U.S. often requires a long runway of permits, environmental-impact reports, lawsuits, and other delays.
GLAESER: And so by the time you’ve gotten around to setting up your new infrastructure project, you’re out of this recession and in the midst of the next boom. And so it’s very hard to get the timing right.
If Glaeser is starting to sound like an infrastructure killjoy — he can’t really help it; he’s an economist. What kind of infrastructure investment does Glaeser like? One of his favorite examples goes back to the early 19th century. That’s when the Erie Canal was built in upstate New York, connecting the Great Lakes to the Atlantic Ocean in New York City. It was funded primarily by state-issued bonds that were paid back through tolls.
GLAESER: Erie is like the north star of America’s infrastructure investments. It pays for itself within a couple of years. It’s just a fantastically high-return investment. And the important thing to keep in mind is that in this time period — in 1816, say — it cost as much to ship goods 30 miles over land in the United States as it did to ship them across the entire Atlantic Ocean. And so the investments that lowered those costs had incredibly high returns.
Glaeser is particularly fond of infrastructure that’s paid for, at least in part, by the very people who use it. Consider roads:
GLAESER: I basically have no problem with people driving as long as they — as long as I — bear the social costs of my actions, which includes paying for the congestion and carbon that I create. And so to get there, you’ve really got to embrace a different form of paying for things. Part of the problem is we have all this tradition of free infrastructure, which is really a 20th-century thing. We really decided that it was just too inconvenient to toll all the roads. And that was probably true in 1940. But going back on that now — you can slap a price on some new road and people will accept it, but you can’t go back and price roads that have been free for decades.
Traditionally, U.S. roads have been funded in large part by a gasoline tax.
MORRIS: Initially, taxing gasoline was extremely popular because it seemed like a fair way to do it.
Eric Morris again, from Clemson.
MORRIS: The amount of fuel you consume is roughly proportional to how much you drive and how big your vehicle is, with big vehicles inflicting disproportionate road damage. And so it seemed like a very fair way to do it. And as a result, the federal government adopted a fuel tax and eventually, in the 1950s, raised that fuel tax in order to fund the interstate system.
But a good idea can become less good over time. The gas tax raised a lot of money when cars used a lot more gas. In the early 1970s, for instance, the average car got just over 10 miles per gallon of gas. In 2019, that number was up to 25. That’s good for the household budget, good for the environment — but bad for funding road maintenance. Today, the annual gap between gas-tax collections and infrastructure needs is about $13 billion. With the Biden administration pushing for higher fuel efficiency — an average of 51 miles a gallon by 2026 — the funding gap could keep growing. This couldn’t come at a worse time for America’s highways.
MORRIS: Highways are only built to last a certain amount of time. Obviously, you can extend their life by slapping a new coat of asphalt on them, but at a certain point, the entire structure of the road is breaking down, and you need to go all the way down to the foundations and basically rebuild it from the ground up. And our interstates were built in the 1960s, mostly — ’50s through ’70s — and they have reached a point where reconstruction is going to be necessary.
There’s one obvious solution here: increase the gas tax! The U.S. gas tax is less than 20 cents a gallon; it hasn’t been raised since 1993, and it’s not indexed to inflation. In the European Union, the minimum gas tax is around $1.50 a gallon, often much higher.
MORRIS: Here, we’re using the general fund to subsidize transportation. And in those countries, transportation subsidizes the general fund.
GLAESER: There are many reasons why the European gas tax is more sensible.
Ed Glaeser again.
GLAESER: First of all, it can pay for the highway, so you don’t have the redistribution from non-drivers to drivers that you currently have. Secondly, it induces people to internalize some of the environmental damage that they’re doing.
Given the U.S. relationship with the automobile, it’s never politically popular to make driving more expensive. Neither party has shown much interest in raising the gas tax. Republicans tend to dislike raising taxes generally; Democrats worry it will disproportionately affect low-income drivers. Then there’s the fact that we’re increasingly buying electric vehicles. If your car doesn’t use gas, you’re not going to pay any gas tax. That loss, however, comes with a potentially huge gain. Pete Buttigieg again:
BUTTIGIEG: Transportation is the single biggest sector of the economy emitting greenhouse gases, which means every transportation policy is a climate policy, whether we call it that or not.
DUBNER: Let’s talk about electric cars for a bit. Obviously, this administration is in favor of more of them, and is geared toward that with charging stations and other measures. So, talk to me for a minute about how a widespread conversion to electric cars would — I don’t want to say put strain on the electric grid, necessarily, but certainly increase the demand. And as you mentioned, the bulk of carbon emissions come from transportation directly, but you could see in a relatively short time that the bulk would be coming from power generation for transportation. So what’s your thinking on how to thread that needle?
BUTTIGIEG: Well, there’s no question that it’s more than just getting somebody an electric car. We’ve got to have the grid be ready, and of course, electric vehicles are only as clean as the energy that goes into them. But, right off the bat, there’s an efficiency gain. Let me borrow an example from natural gas. It is actually more efficient to have an electric car that is powered entirely by natural gas than to burn the same natural gas in the engine of a car. And it can only get cleaner as you mix toward cleaner generation sources. But this illustrates the complexity of it, right? If you are in a place where the electric power is mostly coal-generated, but also cheaper, then you’re going to have longer to pay back for the consumer, and less environmental benefit than if you’ve got a garage with a south-facing roof and you got solar panel right up there, and that’s where your power comes from.
DUBNER: How do you feel about nuclear power having essentially been sidelined in this country 40-ish years ago, in favor of coal and gas, which has added so much pollution to the environment? So, if you’re thinking about increasing electric capacity for electric travel, is nuclear something that you want in the arsenal?
BUTTIGIEG: I think we have always been forced to choose between different downsides of different energy sources. And the downsides of nuclear are pretty obvious. But I think 40 years ago, the downsides of nuclear were very obvious and the downsides of anything carbon-generating were a little more theoretical. Maybe a little less certain.
DUBNER: When you say “the downsides of nuclear are obvious” — I hear what you’re saying, but on the other hand, if you look at the data of actual damage and death globally from nuclear power, it’s a drop in the bucket, whereas more people die from coal-mining accidents alone — forget about the externalities — every year than have died, I think, in the history of nuclear power generation. So doesn’t that seem worth another big look?
BUTTIGIEG: I mean, it depends how you assess the risks, right? I remember hearing an anecdote about, I think it was a local judge who was confronted with a zoning case involving the construction of the Large Hadron Collider or something like that. And had to assess there being a tiny — I mean, absolutely miniscule, but non-zero — chance that when they activated it, it would create a black hole and swallow up the universe. And that’s just to take the most extreme example of a perplexing risk decision.
The infrastructure agreement that’s making its way through Congress sets aside $73 billion for improvements to the power grid. But a lot of Biden’s earlier plans to increase clean energy have been sidelined for now, destined for a separate bill — much to the dismay of progressive Democrats. Even so, Biden’s retooled infrastructure plan had a hard time getting Republican support. Why? One big objection was simply the price tag.
CHAO: There’s been so much government spending in the last year. And of that, there’s still a lot of monies that have not been fully distributed.
Elaine Chao again.
CHAO: The states are awash in money because they still have monies from the CARES Act, dating from March 2020, that they haven’t used. Now, what this administration will say is this money is allocated. Yes, they’re allocated, but that doesn’t mean that they’re going to be spent. And so, we need to repurpose the monies that are unused from the March 11th, 2021 bill by this administration to use for infrastructure funding and for financing.
Such financing has, in fact, become a feature of the bipartisan infrastructure package: a little over $200 of the $550 billion will now come from money that was already sent to states as Covid relief. Chao says that Republicans and Democrats also have different views of the private sector’s role in public infrastructure.
CHAO: This is a real point of difference between the left and the right. There was a lot of distrust in the private sector by the Democrats, and they just didn’t think that allowing private interest to come into public infrastructure would yield a good result, which I disagree with. Australia has a lot of roads and bridges that are built by public-private partnerships, as do parts of Europe as well. We have it here in America, but we’re just not that comfortable, nor is that concept as widely spread.
BUTTIGIEG: I think that’s an oversimplification.
Pete Buttigieg again, Elaine Chao’s Democratic successor.
BUTTIGIEG: It’s true that in our party and our coalition, there’s a lot of suspicion of some of these private models. And not without reason. If these are used as an end run around environmental standards or labor standards, or if all you’re doing is outsourcing the political will to raise tolls and fees on ordinary people — something that elected officials would be punished for but a company can get away with — then we’ve got to step back and ask if we’re really doing the right thing. But let me also say this: There are very advanced private structures used in countries that I don’t think anybody would say are bad at labor and environmental standards, like in Europe, that seem to suggest that there is more that can be done. We’re not reflexively against them. We’re just careful.
GLAESER: There are certainly private roads — for example, Chile has been a world leader in this.
Ed Glaeser again.
GLAESER: Many of the early ones were very big successes. And part of the advantages of this public-private partnership structure is you have a stronger incentive to maintain the roads if you’re competing for customers. You can really see it in the data. The private roads are just much, much smoother than the public roads. So that’s a nice model that I think works very well. But it’s also true that public-private partnerships can go horribly awry because you have a highly incentivized private company that is always going to be trying to reconfigure the rules in order to benefit itself. And so you really need a strong government like in Chile to actually oversee these public-private partnerships and to get it right.
DUBNER: It sounds so hard to get it right.
GLAESER: Yes, which is what makes it fun.
Aside from the financing of infrastructure, aside from the political and environmental and quality-of-life issues, there’s one more big cost to consider. This is especially relevant as the U.S. and Pete Buttigieg wrestle with just how car-crazy the U.S. is going to remain.
BUTTIGIEG: You and I and everyone listening can think of a few people we know who have been killed in crashes. I think that is not unlike the way a few generations ago, maybe, it would have been just commonplace and acceptable that you knew some people who just didn’t make it through smallpox. In a country where you got upwards of 35,000 people dying every year in car crashes, as though we were in a war, we have to step back and say, “Is that really inevitable?” And the answer increasingly appears to be, no. I’m actually reminded of the gun violence statistics sometimes, when I see just how stark a difference there is between the traffic fatalities that we accept in the U.S., and what you would see in a lot of other parts of the developed world.
Is it true, as Buttigieg says, that the U.S. is such an outlier when it comes to car-crash deaths? Yes and — well, mostly yes, but there are some factors to consider. The rate of crash deaths has been declining in the U.S., but more slowly than in other developed countries. When you look at deaths per million miles traveled, the standard metric, the U.S. ranks fifth-highest among developed countries according to the most recent available data, beating out only Japan, Spain, Slovenia, and Belgium. The two biggest culprits in the U.S. seem to be drunk driving and failure to use seat belts. We’ve been talking in this series about how American culture is just different from other countries’; one difference is that the U.S. is probably the most individualistic country on earth. Driving drunk and not using a seat belt — those are individual choices, with consequences that show up quite clearly in the car-crash data. It’s worth noting that globally, more than 1.3 million people die each year in car crashes — so compared to that, and considering how much driving we Americans do, our roughly 35,000 deaths a year is not so bad. And that number has fallen a lot over the past few decades: in 1972, 56,000 people died in U.S. car crashes, with many fewer miles driven than today. Still, as Pete Buttigieg points out, these are numbers most people just don’t think about.
BUTTIGIEG: Again, I think this is a function of the choices that we make, the assumptions that we have, the idea that car crashes are just going to happen. We can outgrow this, and we should.
DUBNER: So, last year, because of the pandemic, Americans drove fewer miles, not surprisingly. About 13 percent less than 2019 in 2020. And yet traffic fatalities rose by more than 7 percent. So, adjusting for miles, that’s a huge rise. Can you tell us what you know about that?
BUTTIGIEG: We’re doing a lot of analysis on this right now. And there’s some good work going on academically, too. Some early hypotheses include one having to do with speed, so the idea that there’s more room on the freeway.
DUBNER: So empty roads let you fly, let you go faster.
BUTTIGIEG: Empty roads, faster cars, the crashes that happen are more dangerous. But when you parse the data, it’s proving to be pretty nuanced and complex. Some is that the kinds of trips that were favored, or perhaps inevitable, in the pandemic environment, are different in a way that somehow makes them systematically more likely to lead to a fatality.
DUBNER: Meaning people are driving unfamiliar and maybe longer routes because they’re not flying?
BUTTIGIEG: For example. And so these are the kinds of things that we really need to dig in on. We could make it a national project, and I think we should, to end this. I know it’s almost too obvious to pick a Scandinavian example, but I’m just going to do it: Oslo got through a year with virtually zero fatalities. I think there was one in a car, and zero pedestrian and cyclist fatalities. And that was in a city of about 600,000 people.
What Buttigieg is talking about in Norway is a multinational project called Vision Zero, which started in Sweden. The idea is that for a road-traffic system to be truly successful, it should produce zero deaths. New York City has adopted the Vision Zero plan, but it hasn’t been working out very well. In fact, New York is on pace to record more deaths this year of motorists, pedestrians, and cyclists than in the several years since Vision Zero was adopted. The mayor’s explanation is that Covid-19 drove a lot of New Yorkers out of public transportation and back into cars. So, does a Vision Zero require fewer cars? Maybe. Does it require more and better technologies? Maybe that too. But it may also require something that, as we’ve been learning in this series, is incredibly hard to produce: a change in culture.
BUTTIGIEG: We need to make sure that the human being is at the center of our transportation policy. And so the car belongs in the picture, but revolving around the human being. The human being needs to have more options to walk safely, bike safely, whatever your — wheelchair, motorcycle, bicycle, car, transit. We’ve got to make sure that this is human-centered. That’s big. And that’s a shift.
Let us know what you think about this shift. We’re at email@example.com. Also, remember to check out our newest podcast, Freakonomics, M.D.
* * *
Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Zack Lapinski. Our staff also includes Alison Craiglow, Greg Rippin, Joel Meyer, Tricia Bobeda, Mary Diduch, Brent Katz, Emma Tyrrell, Lyric Bowditch, Ryan Kelley, Jasmin Klinger, and Jacob Clemente. Our theme song is “Mr. Fortune,” by the Hitchhikers; the rest of the music this week was composed by Luis Guerra. You can follow Freakonomics Radio on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.
Here’s where you can learn more about the people and ideas in this episode:
- Eric Morris, associate professor of regional planning at Clemson University.
- Pete Buttigieg, U.S. secretary of transportation.
- Elaine Chao, former secretary of transportation.
- Edward Glaeser, professor of economics at Harvard University.
- “The $1 Trillion Bipartisan Infrastructure Bill Is In. Next Up: Amendments And Votes,” by Claudia Grisales (NPR, 2021).
- “Biden’s $2.3 trillion plan spurs a fight over what ‘infrastructure’ really means,” by Jim Tankersley and Jeanna Smialek (The New York Times, 2021).
- “Chinese firms — and African labor — are building Africa’s infrastructure,” by Frangton Chiyemura (Washington Post, 2021).
- “Here’s how U.S. infrastructure compares to the rest of the world,” by Ian Duncan (Washington Post, 2021).
- “2020 Fatality Data Show Increased Traffic Fatalities During Pandemic,” by the Department of Transporation (NHTSA, 2021).
- “Despite Pledges to Cut Emissions, China Goes on a Coal Spree,” by Michael Standaert (Yale Environment 360, 2021).
- “Key details of the Senate’s bipartisan infrastructure plan,” by Kevin Freking (Associated Press, 2021).
- “Myth buster: Electric vehicles will overload the power grid,” by Virta (2021).
- “China’s high-speed railways plunge from high profits into a debt trap,” by Dhaval Desai (Observer Research Foundation, 2021).
- “Bipartisan Infrastructure Deal Omits Big Climate Measures,” by Coral Davenport and Lisa Friedman (The New York Times, 2021).
- “NYC Traffic Deaths Break Record In 2021: Study,” by Matt Troutman, (Patch, 2021).
- “What the U.S. Can Learn From China’s Infatuation With Infrastructure,” by James Areddy (Wall Street Journal, 2021).
- “The State of U.S. Infrastructure,” by James McBride and Anshu Siripurapu (Council on Foreign Relations, 2021).
- “Economic Analysis and Infrastructure Investment,” by Edward L. Glaeser and James M. Poterba (National Bureau of Economic Research, 2020).
- “Oslo got pedestrian and cyclist deaths down to zero. Here’s how,” by William Ralston. (WIRED, 2020).
- “Amtrak’s Inefficient Routes: Quantifying Their Net Cost,” by Brian Sumali (Business Review Berkeley, 2020).
- “China’s plan to cut coal and boost green growth,” by Sarah O’Meara (Nature, 2020).
- “Shifting into an era of repair: US infrastructure spending trends,” by Joseph W. Kane and Adie Tomer (Brookings Institute, 2019).
- “France’s Fuel-Tax Protests Expose the Limits of Macron’s Mandate,” by Rachel Donadio (The Atlantic, 2018).
- “It’s Been 25 Years Since The Federal Gas Tax Went Up,” by David Schaper (NPR, 2018).
- “Trends in Public Transportation Ridership: Implications for Federal Policy,” by William J. Mallett (Congressional Research Service, 2018).
- “Why Americans First Started Paying a Separate Tax on Gas,” by Olivia Waxman (TIME, 2017).
- “Who Owns U.S. Infrastructure?” by Chris Edwards (CATO Institute, 2017).
- “Larry Summers v. Edward Glaeser: Two Harvard economists debate increased infrastructure investments,” by Anna Malinovskaya and David Wessel (Brookings Institution, 2017).
- “Righting China’s Property Rights,” by Shang-Jin Wei (Columbia Business School, 2016).
- “U.S. is much worse than other rich countries at preventing road deaths,” by Michael Laris (Washington Post, 2016).
- “Nuclear Power Prevents More Deaths Than It Causes,” by Mark Schrope (Chemical and Engineering News, 2013).
- “U.S. and European Freight Railways: The Differences That Matter,” by Francisco Manuel Bastos Andrade Furtado (Journal of the Transportation Research Forum, 2013).
- “Driving to 54.5 MPG: The History of Fuel Economy,” by Tom Swanson (Pew Trusts, 2011).
- “The Fundamental Law of Road Congestion: Evidence from US Cities,” by Gilles Duranton and Matthew A. Turner (American Economic Association, 2011).
- “Chilean Experience in Regulation of Roads PublicPrivate Partnerships (PPP),” by Patricio Mansilla (Asia-Pacific Economic Cooperation, 2008).
- “Ike’s Interstates at 50: Anniversary of the Highway System Recalls Eisenhower’s Role as Catalyst,” by David A. Pfeiffer (Prologue Magazine, 2006).
- “China’s Three Gorges Dam, by the Numbers,” by Brian Handwerk (National Geographic, 2006).
- “A Man, a Plan, a Canal: Erie!” by Daniel Gross (Slate, 2005).
- “40 Years of the US Interstate Highway System: An Analysis, The Best Investment A Nation Ever Made,” by Wendell Cox and Jean Love (The Public Purpose, 1996).
- “The U.S. Is Just Different — So Let’s Stop Pretending We’re Not (Ep. 469),” by Freakonomics Radio (2021).
- “The Pros and Cons of America’s (Extreme) Individualism (Ep. 470),” by Freakonomics Radio (2021).