Everyone that has turned on the news or flipped open a newspaper since the beginning of the bailout frenzy, has heard that the incoming Obama administration is calling for massive public works programs to stimulate the economy. Think WPA ’09. President-elect Obama is talking about spending nearly one-trillion, with a “t”, dollars on infrastructure building, revitalizing, and maintenance. The idea behind spending borrowed money on public works to help curb an economic recession is not a new one. Franklin Delano Roosevelt’s creation of the Work Projects Administration (WPA) is the most noted occurrence of the practice. There have been many arguments as to whether or not it actually worked. However, one thing that nobody debates, at least not with any credibility, is the quality and efficiency of the work done by the WPA. Universally, that work has been hailed as sloppy, shoddy, over budget, and slow in progression. Despite this, Democrats and Liberals have touted the FDR initiatives like Billy Mays in an OxiClean commercial; and it appears that Barack Obama, who is no exception, is looking for a repeat.
The theory behind the initiative looks great in two dimension, however; in the three dimensional world, when one looks back at the original WPA they discover that its cost to benefit ratio is unfavorable. The primary reason for this is that over the years, projects completed by the WPA have had to be constantly revisited for repairs or had to be rebuilt outright; mostly due to poor craftsmanship. For instance: A plumber installs piping in your house but doesn’t properly seal the pipe fittings. After a few days of constant water pressure you have more leaks than Rod Blagojevich. Those leaks cause water damage to your floors, walls, and furniture. Now you have to hire another plumber, a contractor, and buy new furniture. Your costs just multiplied.
In the interest of efficiency and cost for benefit, the best route for public works, should the Obama economic plan move forward, is the private sector. Instead of creating another bureaucratic money pit, the projects can be bid out to private companies. There are numerous benefits to utilizing the private sector. I won’t list them all in detail but here are a few:
- There is no initial start-up cost, whereas, a new WPA would be costly to establish.
- More jobs will be created or kept through the private sector.
- Job growth and security would be spread across multiple professions and firms as opposed to only construction workers and government jobs.
- Bidding by private companies will help ensure that tax payers get more bang for their buck. Bidding also helps prevent the abuse that can occur with the exclusive use of a single supplier or workforce (see UAW).
- The private sector is vastly more efficient than government bureaucracies.
- More projects can be completed due to the decrease in project costs.
- Increased investments into a multitude of contract awarded companies. This, in turn, creates more wealth and job opportunities.
While this list is not completely comprehensive, it does highlight some of the immediate benefits to the tax payer. A prime example of these benefits is the St. Anthony Falls Bridge in Minnesota. The bridge collapsed on August 1, 2007 and was reopened to traffic on September 18, 2008, under budget and ahead of schedule. Personally, I think that the way in which the rebuild contract was designed (with incentives and disincentives) should serve as a template for future public works. If the Obama administration is serious about pushing a public works program to the forefront of their economic recovery plan, then I submit that they should use the St. Anthony Falls Bridge project as a model for the program.