I try to reread 3 books ever 10 years or so: To Kill a Mockingbird, Lucky Jim, and The Adventures of Huckleberry Finn. This summer, the second book I read (I’ve posted about the first one here, here, and here) was Huck Finn.
I enjoyed it as always and my two favorite passages are (1) where runaway slave Jim expresses his sorrow to Huck about punishing his daughter because he didn’t know her failure to react was due to her being deaf, and (2) spoiler ahead: where Huck figures out that Jim is human.
But each time I read it, Tom Sawyer grates on me. For those who don’t know (spoiler ahead), Tom recruits Huck to set up an elaborate scheme to help Jim escape, a scheme in which each detail adds to complexity and reduces the probability that the escape will work.
Don Boudreaux posted the other day about a fantastic John Oliver episode in which Oliver took on multi-millionaire televangelists who persuade people to give up their hard-earned money so that they can buy private jets and mansions. This reminded Don of politicians who promise prosperity to people who will vote for them and send them donations.
I had a similar ah-hah moment, although a more specific one, when I was reading of Tom Sawyer’s elaborate schemes. I thought of Jerry Brown and his persistence, in spite of large state budget deficits, in funding high speed rail in central California, aka, the railroad from nowhere to nowhere. It’s an elaborate high-cost scheme for moving people within California when there are so many better options including buses, cars, and airplanes.
READER COMMENTS
ThomasH
Aug 21 2015 at 4:19pm
The decision about high-speed rail in California should turn on the net present value of the future benefits. Deficits should have nothing to do with it.
David R. Henderson
Aug 21 2015 at 5:00pm
@ThomasH,
Good point. And the NPV is well below 0.
Emerich
Aug 21 2015 at 6:19pm
I loved Lucky Jim when I read it 25 years ago and your post inspires me to re-read it. Thanks.
Harold Cockerill
Aug 21 2015 at 6:24pm
All that counts is the NPV to politicians currently in office. What it ends up costing society isn’t their concern.
Jesse
Aug 21 2015 at 7:33pm
I once ran into a cousin who owed me a significant amount of money – at a casino. I recall thinking his gambling (a negative NPV venture) was worse than my gambling.
He never did pay me back. I suppose it is a matter of speculation whether there is any relationship between chronic debt and a propensity to engage in negative value enterprises. (For the record I rarely gamble, but I hear he often does.)
MG
Aug 22 2015 at 6:28am
To a pol, there is really no need for “N” in NPV. The bulk of the costs are “construction jobs”.
ThomasH
Aug 22 2015 at 8:30am
@MG
This points to a larger macro-political problem: the tendency to use “jobs” created/destroyed as an indications of benefits and costs.
I think the correct way to talk about jobs in in a microeconomic decision turns on whether there is a difference between the market price and the opportunity cost of the labor input. This might be relevant in the decision to shorten library hours during a recession, but probably is not in deciding on construction of the XL pipeline or building a new wind farm.
Thomas Sewell
Aug 22 2015 at 11:24am
If your political power base is largely predicated on crony capitalism and patronage, you need large State-funded public works projects with some thin veneer of public benefit in order to properly steer contracts and union jobs and reward your political friends/allies appropriately.
It just happens the veneer is much thinner than usual on the CA high speed rail project, but that’s the cover, not the actual reason for the project.
One of the blind spots of some libertarian/conservatives is that we tend to see others as ourselves, interested in the overall benefit, even while decrying those in government who are not. That makes it tougher to recognize the realities behind many government actions up-front, where any experienced politician/bureaucrat from Chicago would have immediately understood the dynamics of say, Solyndra. Of course, they also would have admired it, not found anything wrong with it, so you have to take what you can get. 🙂
Mark Bahner
Aug 23 2015 at 12:34am
It’s extremely difficult to do any NPV analysis for high-speed rail given the coming revolution in transportation.
For example, it’s virtually certain that within 20 years, one will be able to ride in a fully autonomous (computer-driven) car or bus from LA to SF. But the big question is, what will be their average speed? Probably over 70 mph, but certainly potentially over 100 mph.
Then, perhaps 20+ years out, there is the possibility of fully autonomous VTOL passenger aircraft. Those would not necessarily need to fly out of established airports, and would very likely have speeds in excess of even high-speed rail.
Any NPV analysis that does not consider the coming revolution that will be caused by fully autonomous vehicles will not be worth very much. (I have seen no evidence that any analysis of the economics of California high-speed rail has considered future changes related to fully autonomous vehicles. If anyone has such evidence, I’d be interested to read it.) But at the same time, the outcomes of the computer-driven vehicle revolution will themselves be difficult to predict (e.g. the speed of the vehicles on highways, and the potential for autonomous VTOL passenger aircraft).
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