Bubbles and Economic Potential

[briansd1]

markmax33, how about one? The Interstate Freeway System.

Republicans are in love with freeways and want more, don’t they?

[Allan from Fallbrook]

[quote=pri_dk][quote=Allan from Fallbrook]Pri: Except that I NEVER said a thing about ROI on infrastructure projects. I was making the point that, while the money is undoubtedly well spent, the existing public works system is COMPLETELY INCAPABLE of taking that sort of money in right now and putting it to beneficial use.[/quote]

I’m confused by the above.

Are ‘beneficial use’ and ROI different? Isn’t return a measure of ‘benefit?’ (And how is something that is ‘well spent’ not ‘beneficial?’)

ROI is just a basic, objective mathematical estimate as to whether an endeavor is ‘worth it’ relative to the costs. Of course there are always assumptions and estimates that go into those calculations, but that’s true with any nontrivial financial decision.

It comes down to this: Do the math. If the ROI meets the threshold (and there are no alternatives with better ROI), then it’s a good course of action.

Allan, you seem to be suggesting we are in a state where no public project will have a positive, or acceptable ROI. (Or else you are using some other, unstated, method to evaluate merit.)[/quote]

Pri: Ah, time to bandy semantics, eh? Yes, pri, in this case “beneficial use” and “ROI” are completely and distinctly different.

In this case, “beneficial use” refers to the best possible deployment of public funds for public use and in keeping with the existing system for letting projects (which is wholly unrelated to making the ROI case for deploying those self-same funds).

My argument, which has NOT changed one iota, is that the existing public works systems is not geared to absorb the amount of money that ARRA spat its way (AGAIN, pri, refer to Obama’s “shovel-ready” comment) and thus deploy that same money effectively. THAT is completely different from ascertaining whether said money will return an acceptable ROI.

You, however, were caught flat-footed and wrong-footed because you failed to read what I wrote (or you read it and failed to understand it). In true pri fashion, you then attempted to turn the argument into something else entirely and began playing games with the words.

Do NOT put words in my mouth and do not try to establish intent where there is none. You tried this shit with Dave and he took you to the woodshed. Focus on what the words really mean, pri, and quit playing games. Like I said previously, I ain’t engaging in this nonsensical bullshit with you.

[Allan from Fallbrook]

[quote=briansd1]markmax33, how about one? The Interstate Freeway System.

Republicans are in love with freeways and want more, don’t they?[/quote]

Brian: You want to become well versed in public works projects? Compare Eisenhower’s Interstate Freeway program costs (per mile) with the present costs of freeway/roadway construction (also on a per mile basis). After adjusting for inflation, tell me where all of those additional costs come from. Bloated prevailing wage requirements? Compliance with “diversity” requirements? Use of an archaic, outdated project and program management system? All of the above?

Take it one step further. Compare the construction program used for the Golden Gate Bridge (1934 – 1936) with the retrofit program used for the Bay Bridge (following the 1989 Loma Prieta earthquake). Are you aware that we’re 20+ years down the road and that retrofit is still not complete? How many billions have gone down that hole?

But you’re perfectly content to insist that we can throw tens or even hundreds of billions at public works projects and they’re magically gonna get built overnight. Uh, okay.

[Anonymous]

[quote=Allan from Fallbrook]But you’re perfectly content to insist that we can throw tens or even hundreds of billions at public works projects and they’re magically gonna get built overnight. Uh, okay.[/quote]

And who is the one putting words in people’s mouths?

Brian never said anything of the sort. He never “insist[ed] that we can throw tens or even hundreds of billions at public works projects.”

All he said were a few general comments about infrastructure needs and the potential benefits of infrastructure projects – some basic macroeconomic ideas.

He never mentioned ARRA, or Obama, or “shovel-ready” – YOU brought all of this partisan political shit into the conversation.

You read what you want to read Allan, not what’s actually there.

[Anonymous]

Wow Allan, what’s the deal?

You’ve got a number of long posts here with a lot of name calling, criticism of Brian (and me), a bunch of negative personal references toward Krugman and Obama (and you even threw in Biden.)

Read the whole thread. Notice that your are the only one on this thread bringing up names in every one of your posts. Like I said earlier, this is an economics discussion about debt and GDP. I don’t know why you can’t keep it that way.

No mention of any specific politicians or political agendas until you showed up.

Everyone else is talking about ideas. You can’t help but drag it down into cheap talk about people.

[quote]You tried this shit with Dave and he took you to the woodshed.[/quote]

I don’t know what thread you are reading, but Dave were having a civil conversation about the economy (perhaps still are) until you interjected with your cheap pundit-style gossip and personal attacks on Brian (WTF is with that anyway?)

Look for the post where Dave says “My mistake.” or perhaps “I agree with this 100%” or the one with “A good question.”

There was a pretty good dialog going there about an interesting subject.

So can you write a post on ANY topic without referencing politicians (almost always in the negative, and almost always Obama)?

[scaredyclassic]

you know what this country needs? some really cool bike paths. If I were in charge, there would be a nice cross-country path, no, make that two, a northern crossing and a southern crossing, there would be a complex system paralleling freeways, we would have all kinds of big bicycle projects going. I am certain that the nation would be significantly better off when i was done. And it won’t even cost that much.

it would be awesome.

[briansd1]

[quote=Allan from Fallbrook] Bloated prevailing wage requirements? Compliance with “diversity” requirements? Use of an archaic, outdated project and program management system? All of the above?

Take it one step further. Compare the construction program used for the Golden Gate Bridge (1934 – 1936) with the retrofit program used for the Bay Bridge (following the 1989 Loma Prieta earthquake). Are you aware that we’re 20+ years down the road and that retrofit is still not complete? How many billions have gone down that hole?
[/quote]

A little earlier you said:

NO, the public works system does NOT need to be reformed

All is fine, so what now?

Are you saying NO CAN DO? That America can’t muster the wherewithal to build and rebuild the infrastructure we desperately need to remain competitive?

I like Krugman’s message of: “Let’s find solutions. We need not let economic orthodoxy keep us from finding work for the unemployed and keep up from building our country.”

[Allan from Fallbrook]

[quote=pri_dk][quote=Allan from Fallbrook]But you’re perfectly content to insist that we can throw tens or even hundreds of billions at public works projects and they’re magically gonna get built overnight. Uh, okay.[/quote]

And who is the one putting words in people’s mouths?

Brian never said anything of the sort. He never “insist[ed] that we can throw tens or even hundreds of billions at public works projects.”

All he said were a few general comments about infrastructure needs and the potential benefits of infrastructure projects – some basic macroeconomic ideas.

He never mentioned ARRA, or Obama, or “shovel-ready” – YOU brought all of this partisan political shit into the conversation.

You read what you want to read Allan, not what’s actually there.[/quote]

Pri: It’s interesting how you become suddenly obtuse and confused when the facts don’t fit your worldview.

My referencing Obama’s “shovel-ready” comment wasn’t partisan in the slightest: IT WAS TO MAKE A POINT. That point, you ask? Responding to Brian’s comment about Krugman’s stance on infrastructure, the stimulus package (which contained ARRA) and how those projects help the greater good. My point was that the existing public works system was nowhere near prepared for the influx of money that ARRA threw it’s way.

You misread my comment to mean something about ROI (it didn’t, but, hey, that’s besides the point, right?) and Brian took it to mean that I was somehow un-American and didn’t believe in our can-do spirit.

The reference to both Biden and Obama was a continued point (because you and Brian didn’t want to acknowledge it) that this administration lacked a fundamental understanding on how the public works system functioned and ruefully had to admit that their plan didn’t work. Partisan? Absolutely not. I would’ve bagged on a GOP president, had he/she been in power.

So, pri, spare me the “above the fray” BS. You have a nasty habit of making things personal (just ask CA Renter), intentionally misrepresenting what they actually mean, or attempting to change the flow of the discussion when you get caught out (just ask Dave, who gave you a justly deserved schooling).

Man, I would have loved to seen one of your op orders back in the day. They must have been doozies.

[Anonymous]

Allan,

Every one of your posts in this thread mentions Obama (except the one that just mentions Krugman, the ‘shill for the left’.) Nobody else is talking about Obama here. Just you. You take just about every subject, no matter how abstract, and make it about Obama.

[quote]You have a nasty habit of making things personal (just ask CA Renter)[/quote]

You mean the person who told me I have no right to live and vote in CA because I wasn’t born here? Um, OK.

I post a lot here. Notice that I never ask what anybody does for a living, how old anyone is, where they are from, where they went to school, etc. I make a very deliberate effort to keep ‘personal’ details out of it. I criticize ideas and arguments, not people. Some cannot see that distinction. That’s their problem, not mine.

If we want to ask someone about personal attacks, we should asking Brian. Mocking him because he likes French culture? WTF?

[quote]Just ask Dave, who gave you a justly deserved schooling[/quote]

Sure, up until the part that he said “my mistake.”

But this “Dave beat you” thing you are reiterating is just childish. Especially since you clearly didn’t even read the conversation.

It’s a discussion, not a contest. And you certainly aren’t the judge or scorekeeper.

[quote=Allan from Fallbrook]Man, I would have loved to seen one of your op orders back in the day. They must have been doozies.[/quote]

Wow, what was that about making things personal?

Remember when you sent me a PM and asked that we leave our military past out of these debates? I agreed.

How ’bout holding up your end of the agreement?

[davelj]

[quote=Allan from Fallbrook]Yeah, Krugman is “cool” because he can operate in an academic vacuum and never once have to truly deal with the real world and how things get built. Just wave a magic wand and we have… Infrastructure! Do a little research and fully understand the process before opining, because you clearly have no idea what you’re talking about.[/quote]

Which gets to the larger problem that… most academics and politicians have precious little real world experience in anything… and yet they influence hundreds of billions of dollars of “investment”. I don’t, however, know what the alternative is. But it would be nice if occasionally someone raised their hand and said, “I don’t understand any of this”. I ain’t gonna hold my breath…

[Anonymous]

[quote=davelj]Which gets to the larger problem that… most academics and politicians have precious little real world experience in anything… and yet they influence hundreds of billions of dollars of “investment”.[/quote]

True for most academics, I suppose (by definition).

Politicians tend to be a mixed bag of professionals. (My congressman is a very successful businessman.)

But all of this has been true for over 200 years, and our country has done pretty well.

So if it is a problem, it’s not one that has much effect on the outcome. Plus, like you said, there really are no alternatives.

[sdduuuude]

[quote=pri_dk]Not all debt is “bad,” and using debt to finance the right investments can actually lead to a better long-term outcome than not using debt.[/quote]

Right, but if you borrow against a depreciating asset, that is a “bad” investment unless the investment grows faster than interest plus the asset reduction. Borrowing against a house in a growing bubble in order to buy consumer goods that don’t return any thing on their investment is bad debt, decidedly increases GDP in the short term and sets up for a matching reduction in GDP later.

Nobody really gives a crap about the absolute value of GDP, which is why you never see anyone report it and why pretty much everyone but you knew davelj meant growth. Theoretically, GDP growth has to keep up with population growth to keep the quality of life constant.

[Anonymous]

[quote=sdduuuude]Nobody really gives a crap about the absolute value of GDP[/quote]

Except those who are claiming that our economy “is a zero sum game.” They are claiming that the absolute number should be zero if it were measured properly.

(And I’m not saying Dave ever made this claim, and please be sure to double-check you understanding of what “zero-sum” means before responding about this particular point. Let’s not go down that path again…)

People also give a crap about how GDP is measured, which is actually what the OP article was about.

I agree that the absolute value of GDP isn’t particularly useful, but people use GDP in many other ways other than just the growth numbers.

For example, this guy:

http://www.pcasd.com/united_states_headed_for_its_own_debt_crisis

[briansd1]

[quote=pri_dk]
People also give a crap about how GDP is measured, which is actually what the OP article was about.
[/quote]

Or course Krugman is right on that subject.

The other thing I would add is that there’s a compounding effect to growth. I’m not sure people who argue “let everything crash” realize it, but 2% growth, two years in a row is better than a 10% crash, followed by 10% gain.

Unfortunately for them, the people who are still hanging on to houses bought at the peak are finding out.

[Author]

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