Wednesday, February 21, 2007


Our first MBA president is also the first to take congestion pricing seriously (see WSJ report, excerpted below). I guess that it's safe to say that this stuff is not taught in most of our law schools. In polite company, any talk of trade-offs and pricing is still deemed to be exotic and sinister. But of all the tough problems that confront any president, this one is the true no-brainer.

Imagine if all the candidates for high office ...
.... internalized economic thinking and could, thereby, devote more time and effort to all the other really difficult stuff (war, peace, clash of civilizations, etc.).

John Lennon might even set it to song if he were still around.

Bush Plays Traffic Cop in Budget Request
President Suggests 'Congestion' Tolls To Ease Rush Hour

Feb. 5, 2007

WASHINGTON -- With much of his domestic agenda stalled by Congress, President Bush is embracing a new cause he is hoping will cross party lines and leave him with an end-of-term accomplishment: easing rush-hour traffic.

In his annual budget blueprint to be unveiled today, Mr. Bush intends to showcase a highway "congestion initiative," according to White House documents, with grants for state and local governments to experiment with anti-jam strategies.

In a surprise that could foreshadow how Mr. Bush might reach out to Democrats -- and disappoint conservatives -- for the rest of his term, the centerpiece of the traffic plan involves an initiative that some critics say amounts to a tax, a plan depicted by administration officials as "congestion pricing." The administration will award $130 million in grants starting this spring to help cities and states build electronic toll systems that would charge drivers fees for traveling in and out of big cities during peak traffic times. The money also could go to other congestion strategies such as expanded telecommuting, but administration officials make it clear they think congestion pricing is the most powerful tool they have. The White House will seek an additional $175 million for congestion initiatives in next year's budget.

Beyond automobile traffic, the administration will also introduce legislation soon that could seek to impose a form of "congestion pricing" on airline travel, likely through user fees on airlines. The idea is to spread flights more evenly.