Tag Archives: incentives

Penny Wise…

Investigators looking into those raging, destructive fires in California a couple of months ago have determined that the fires were caused by power lines that came into contact with each other during high winds.

According to Engineering News Record (I know–you have a copy on your coffee table, don’t you?),

The resulting arc ignited dry brush on Dec. 4, 2017 , starting the blaze in Ventura and Santa Barbara counties that resulted in two deaths and blackened more than 440 square miles (1,139 square kilometers), according to the investigation headed by the Ventura County Fire Department .

The arc “deposited hot, burning or molten material onto the ground, in a receptive fuel bed, causing the fire,” said a statement accompanying the investigative report.

Investigators said the Thomas fire first began as two separate blazes started about 15 minutes apart that joined together. They determined Southern California Edison was responsible for both ignitions…

The fire destroyed more than 1,000 structures before it was contained 40 days after it began near the city of Santa Paula . A firefighter and a civilian were killed.

If the damage from the fire itself wasn’t destructive enough,

A month after the blaze started, a downpour on the burn scar unleashed a massive debris flow that killed 21 people and destroyed or damaged hundreds of homes in the seaside community of Montecito . Two people have not been found.

Here’s my complaint. (Okay, my diatribe.)  The ravages of the fire–the destruction of homes, the deaths, the dislocations– could have been avoided had the power lines been buried. And it isn’t just California, and it isn’t just the enormous amount of damage done every year by downed or otherwise unsafe power lines–there’s also an aesthetic issue, at least in cities, where poles and lines clutter the sky.

The immediate response to this complaint is always the same: burying power lines is too expensive. That response is typical of America’s approach to infrastructure generally, which can be perfectly summed up by the old adage “penny wise and pound foolish.”

Over the long term, buried power lines will require less maintenance and will cause far less damage. (Southern California Edison is now in bankruptcy, thanks to the fires.)

It’s the same story with other infrastructure. Streets that are properly paved and repaired last longer and require less annual attention. (Indianapolis’ third-world streets are the result of many years of “fixing” recurring potholes with haphazard and ungainly patches and the application of paper-thin asphalt coatings to untouched, steadily deteriorating street beds.)

There’s an old saying that “long term” to a politician means “until the next election.” The political system’s incentives are all perverse: spend as little as you can (pretend it’s the result of “efficiency”); whatever you do, don’t raise taxes; do the repairs that you absolutely must as cheaply as you possibly can, and let the next guy worry about it.

The problem is, when we don’t do it right–we have to do it over. And over.

Diminished Expectations, Diminished Performance

I haven’t been particularly kind to several of our elected officials lately. Believe it or not, I take no satisfaction in criticizing the failures and foibles of those who’ve been elected to manage the affairs of the republic. Ultimately, after all, the fault lies with the voters who elected them.

We the People don’t have very high standards. We seem to regard these empty suits as “good enough for government work.” In short, the low esteem with which we view our governing institutions has become a self-fulfilling prophecy.

Let’s be brutally frank. Why would people who are moderately competent, let alone “the best and brightest,” want to work with the likes of Ted Cruz, Rand Paul, Michelle Bachmann, Louis Gohmert or literally dozens like them? How can we expect capable management of agencies charged with oversight of complex and interrelated public functions when the politicians to whom those managers must report have absolutely no idea how government and the economy actually work?

We recently heard elected officials insist that an American default on the debt would be “no big deal.” We’ve heard characterizations of the Affordable Care Act and HIPPA that have betrayed total ignorance of the provisions of both laws. We’ve heard assertions of constitutionality and unconstitutionality untethered from even the most tortured reading of our constituent documents.

There’s nothing wrong with policy debates. Indeed, such disputes can be very productive—but only if the debate is grounded in reality, only if it addresses genuine issues and employs credible information.

When aggressive ignorance is a political virtue and professionalism, knowledge and expertise are vices, we shouldn’t be surprised by a deficit in competent public management.

In the jargon of economics, we get the behaviors we incentivize.