Project Propaganda
Source: Wikimedia
About a decade ago, I was sitting in a project meeting with a bunch of city and county officials. We had been going over the project for months, holding public conversations, trying to find a way through what was a rather contentious set of issues. On that day, one of the project team was arriving with a handout that was going to be used in Washington DC and at the state capitol to advocate for funding. None of us had seen the handout and there was some apprehension as we waited.
When the moment arrived, we were all stunned. In huge font on the front of the handout was the statement "8:1 Benefit to Cost Ratio." This project -- which was really expensive as well as somewhat ludicrous, most of us understood -- was going to create eight times the benefits than it cost? A good friend of mine at the meeting -- someone who supported the project -- made a statement along the lines of, I'm not sure where this number came from, but I'll take it.
Last month I provided some context to a Paul Krugman article calling on the federal government to borrow money for a big investment in infrastructure ("What clearly makes us richer"). There was a subtle nuance in Krugman's words that I want to unfold today. Here's what he wrote in his column Time to Borrow:
So investing more in infrastructure would clearly make us richer. Meanwhile, the federal government can borrow at incredibly low interest rates: 10-year, inflation-protected bonds yielded just 0.09 percent on Friday.
Put these two facts together — big needs for public investment, and very low interest rates — and it suggests not just that we should be borrowing to invest, but that this investment might well pay for itself even in purely fiscal terms.
Focus on the modifier in that last sentence. ....even in purely fiscal terms. Let me rephrase his sentence to highlight the nuance.
.....it suggests not just that we should be borrowing to invest, but that this type of investment, which would normally have a social payback but not a fiscal payback, is so good that it might actually be a lucrative financial investment too.
Of course, in that August post I demonstrated that -- even using Krugman's numbers -- there would be no positive fiscal payback to his strategy. Still, what is the difference between a social payback and a fiscal payback? I covered this in a video I put together back in 2013.
When that 8:1 benefit to cost ratio was presented for the ludicrous project I was working on, that was eight dollars of social value for every one dollar of real money spent. In a world where there is no constraint on money -- a world which Krugman and others of similar mindset believe we inhabit -- that's a good project. In a world where infrastructure investments are actually supposed to build wealth -- financial productivity that will allow us to repair and replace that infrastructure when it is someday needed -- we have to be more discerning.
Still, I want to focus on one aspect of that social value because, in a nation where we are quite sophisticated in the lies we tell ourselves, this is prime propaganda. That aspect is time saved, the most common and largest factor used in these analyses. I've documented how this is done for projects as well as how organizations like the American Society of Civil Engineers use it to create their propaganda papers. Here's how it works.
Let's say we have a congested stretch of roadway. We're going to add another lane in each direction. We estimate that this will allow traffic to flow more smoothly and, through that stretch of roadway, save the typical driver 30 seconds a day. That doesn't seem like much, but take 30 seconds and multiply it by 50,000 cars per day and then multiply that by 365 days per year and then multiply that by 50 years for the full project life and then multiply that by $30/hr in salary and benefits of the typical employee and, all of a sudden, that half a minute is worth nearly $10 million in social value.
“This calculation never takes into account traffic delays due to construction. You know, those five and ten minute stretches over the entire summer where you just sit there. Those are never considered.”
Here's how you know this is total propaganda and not a real effort to discern the true costs or benefits of a project: This calculation never takes into account traffic delays due to construction. You know, those five and ten minute stretches over the entire summer where you just sit there. Those are never considered.
Guess what else is never considered? Traffic signals for one. Interchanges and other accesses for another. We use the propaganda math to justify improvements that theoretically speed up traffic, but we never apply the same mathematical formulas to projects that slow down traffic.
When you hear a politician, economist or project engineer touting the payback in infrastructure spending, they are either ignorant or are feeding you cheap propaganda. Either way, we need to demand better.
The high returning investments today look nothing like the stuff we are funding. We've been so obsessed with the mechanisms of doing large projects that we've ignored all the small little details that are crying out for attention. Really high returning things like planting trees, painting crosswalks, putting out benches and building bike lanes. And I don't mean high returning in a social sense -- although they might be that too -- but high returning in a financial sense. Our cities need a generation or more of fine-grained investment, not the coarse stuff we get with our orderly but dumb approach.
In many ways, we could do so much better if we actually had so much less. In an election season where every politician seems to be promising much more when it comes to infrastructure, let's reject the propaganda and demand a Strong Towns approach.
Charles Marohn—known as “Chuck” to friends and colleagues—is the founder and president of Strong Towns. He is a land use planner and civil engineer with decades of experience. He holds a bachelor’s degree in civil engineering and a Master of Urban and Regional Planning, both from the University of Minnesota.
Marohn is the author of Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity (Wiley, 2019) and Confessions of a Recovering Engineer: Transportation for a Strong Town (Wiley 2021). He hosts the Strong Towns Podcast and is a primary writer for Strong Towns’ web content. He has presented Strong Towns concepts in hundreds of cities and towns across North America.