December 16, 2020

AN OPPORTUNITY TO BE HERBERT HOOVER:

Buttigieg May Finally Give the U.S. Its Infrastructure Day: As transportation secretary, the former McKinsey consultant's cost-cutting and networking skills are just what the job needs. (Noah Smith, December 16, 2020, Bloomberg)

There are many different theories explaining why the price for construction has risen so dramatically, including land-use policies that allow landowners to block construction, and inefficiency and corruption in the contracting process. In actuality, it's probably a combination of factors, encouraged by decades of complacency. Because no one can identify a specific cause, it's not the kind of thing that the president can wave his hands and fix, even with the help of Congress.

That's where Buttigieg comes in. He spent several years working as a McKinsey & Co. consultant. During that time, he consulted for various federal government agencies. Now, you may have a problem with McKinsey's ethics, but you have to admit they know their stuff when it comes to cost-cutting. Buttigieg is therefore uniquely qualified to get to the bottom of U.S. infrastructure costs.

The key would be to assemble a panel of experts, tasked with identifying, quantifying and proposing solutions to the various cost problems in the U.S. system over the next four years. This is a long-term effort, and probably wouldn't pay off during Biden's first term in office. But if successful, a McKinsey-like cost-cutting push would make it easier for both states and the federal government to spend on fixing roads and building new trains in the future, because they'd be getting much more bang for the buck. And that in turn would help the U.S. go from a transit laughingstock back to a respectable advanced country.

A second big thing Transportation Secretary Buttigieg can do, even without Congress, is to help speed the U.S. toward its zero-carbon future. One important piece of the energy transition lies firmly within the purview of the Department of Transportation:  the shift to electric vehicles.

EVs are finally becoming competitive with internal combustion engines in terms of both cost and range. That alone will increase adoption, but things will go much faster if the government acts to boost the number of charging stations. There's a chicken-and-egg problem here -- the more places there are available for charging, the easier it is to drive your electric car around, and the more electric cars are being driven around, the more profitable it is to run a charging station.

So instead of waiting for the free market to build this network up slowly, the government needs to act to speed the process along. Also, the government can set standards to make sure all electric-vehicle companies use compatible chargers, just as gas pumps currently work with any make and model.

One would rather he go govern somewhere if he wants to be president.
Posted by at December 16, 2020 5:14 PM

  

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