among donald trump <u+2019>s few unambiguous campaign themes was to make public works great again, and washington is gearing up for a big financing bill for highways, bridges, tunnels, airports, pipelines and more next year. the trump team has shown some creative thinking so far, and they<u+2019>ll need more for this exercise to get better results than political boondoggles as usual. improving on the status quo starts with recognizing a few realities about what transportation can and can<u+2019>t deliver. one promising sign is that mr. trump<u+2019>s advisers favor tax incentives for private development more than another burst of government spending akin to the 2009 stimulus. only about 5% to 7% of that $840 billion went to <u+201c>shovel ready<u+201d> projects, which turned out to be not so shovel ready and point up one reality: the u.s. economy isn<u+2019>t growing at merely 2% because of potholes or airports that mr. trump says befit a <u+201c>third world country.<u+201d> the prime illustration is japan, which since the 1980s has tried to build its way out of stagnation. the country now boasts perhaps the world<u+2019>s most spectacular suspension bridges, maglev trains, elevated highways and man-made islands, but the cost was trillions of yen of debt (now 230% of gdp) and no better growth. nor could a monorail save detroit. projects make economic sense only to the extent they clear rigorous cost-benefit tests. the trump plan will offer some discipline because it is designed to move private capital off the sidelines, and investors, unlike politicians, expect a decent return. in an october white paper, trump economist peter navarro and investor wilbur ross detail what they call <u+201c>a huge infrastructure gap,<u+201d> which they attribute to a lack of <u+201c>innovative financing options.<u+201d> they think they can unleash about $1 trillion in the capital markets with a tax credit equal to 82% of private equity investment, much as states and cities encourage real-estate development. democrats are denouncing this idea as <u+201c>privatization,<u+201d> which is their word for bad things. this is frivolous. public works funded by government through bonds or appropriations are already farmed out to for-profit civil engineering firms and other contractors. another reality is that modern roads and bridges aren<u+2019>t the best jobs program. the great depression image of crews with picks and shovels isn<u+2019>t how america builds now; projects today require small numbers of skilled workers who can operate technologically advanced construction equipment. they aren<u+2019>t among the jobless. despite keening about <u+201c>crumbling<u+201d> roads and bridges, u.s. public spending trends don<u+2019>t suggest an infrastructure gap. the congressional budget office reports that real spending in 2015 was about 9% lower than its 2003 peak, and at 2.4% as a share of gdp it is off the post-1956 historical average of 2.6%. this is not a crisis, and congress last year passed a five-year $305 billion highway bill that will lift spending starting this year. the cbo also reports that nominal spending on infrastructure increased by 44% over the last decade, but these dollars buy less because of rising prices for materials like asphalt and cement<u+2014>and regulatory delays. the navarro-ross paper underlines the <u+201c>endless studies, government reviews and litigation<u+201d> that delay or dismantle useful projects, and mr. trump<u+2019>s plan will be most successful if he pairs it with streamlined permitting and approval. the u.s. built the empire state building in 410 days. boston<u+2019>s big dig took 25 years. perhaps some quality projects can<u+2019>t be funded through private investment, and direct spending may be the political price of democratic buy-in for tax-reform votes. priorities could include adding a runway or two to new york<u+2019>s la guardia airport, building another tunnel under the hudson river, improving northern california<u+2019>s drinking water supply or dredging charleston harbor for deep-water vessels. there<u+2019>s more technology in an iphone than the u.s. air-traffic control system. but like the pentagon budget, the white house will have to put up with a lot of waste to achieve these goals. a national transportation program is inevitably industrial policy and a form of redistribution. either the most densely populated places where infrastructure is most needed get shortchanged, or taxpayers in low-population states cross-subsidize the coasts. better, and fairer, to leverage user fees like tolls so the people who benefit pay. a final reality is that politically mediated investments often have little accountability. economically helpful tasks like deferred maintenance, the electrical grid and wastewater treatment aren<u+2019>t sexy. mr. trump would do well to avoid president obama <u+2019>s mistake of adding high-speed rail to the stimulus as a vanity project. without oversight, you blow $4 billion on the most expensive train station in history ( santiago calatrava <u+2019>s stegosaurus skeleton at ground zero in manhattan). as a businessman, mr. trump prided himself on finishing his towers ahead of schedule and under budget. more details will emerge in the coming weeks, but let<u+2019>s hope he can apply the same work ethic to america<u+2019>s roads and bridges.
trump trains, trump air, trump roads . . . - wsj
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