Saturday, February 28, 2004

When the six-year cycle of the federal transportation bill's re-authorization coincides with the four-year election cycle, bad things are bound to happen. The bidding war between House and Senate versions of the bill was covered on last evening's Jim Lehrer news. Pious pronouncements about all of the jobs that would be created were even countered by an interviewee who reminded the audience that higher gas taxes divert spending and destroy at least as many jobs as the bill's advocates claim.

Over 200 years ago, Frederic Bastiat ridiculed the porkmeisters of his day by proposing a "negative railroad." When they proposed adding stops to the proposed Paris-Madrid train to "create jobs", he suggested many more stops to augment the effect. In fact, make it nothing but stops; the train would never get anywhere but think of all the jobs.

Ready to deflect piercing jokes about how politicians can create jobs ("outlaw all farm machinery", "break more car windows", etc.) are all sorts of specious stories and stats provided by some of the biggest lobbies in Washington. A way to really "get the money out of politics" would be to get politics out of transportation.

Perhaps another relevant dynamic involves selective memory and what people remember from their economics classes way back when. Wasn't there talk about public spending being a good thing that "brought us out of the depression?" Many people who would smile at Bastiat's joke can always reach for this chestnut.

All economies have inevitable ups and downs. Investors are just human and predict the future imperfectly. Robert Higgs has demonstrated that the depression of the 1930s was lengthened and deepened by New Deal policies.