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Larry Schweikart and Burton Folsom: Obama's False History of Public Investment
Wall Street Journal ^ | August 5, 2013 | Larry Schweikart and Burton W. Folsom Jr.

Posted on 08/06/2013 2:29:30 PM PDT by neverdem

Entrepreneurs built our roads, rails and canals far better than government did.

For almost five years now, President Obama has been making the argument that government "investments" in infrastructure are crucial to economic recovery. "Now we used to have the best infrastructure in the world here in America," the president lamented in 2011. "So how can we now sit back and let China build the best railroads? And let Europe build the best highways? And have Singapore build a nicer airport?"

In his recent economic speeches in Illinois, Missouri, Florida and Tennessee, the president again made a pitch for government spending for transportation and "putting people back to work rebuilding America's infrastructure." Create the infrastructure, in other words, and the jobs will come.

History says it doesn't work like that. Henry Ford and dozens of other auto makers put a car in almost every garage decades before the National Interstate and Defense Highways Act in 1956. The success of the car created a demand for roads. The government didn't build highways, and then Ford decided to create the Model T. Instead, the highways came as a byproduct of the entrepreneurial genius of Ford and others.

Moreover, the makers of autos, tires and headlights began building roads privately long before any state or the federal government got involved. The Lincoln Highway, the first transcontinental highway for cars, pieced together from new and existing roads in 1913, was conceived and partly built by entrepreneurs—Henry Joy of Packard Motor Car Co., Frank Seiberling of Goodyear and Carl Fisher, a maker of headlights and founder of the Indy 500.

Railroads are another example of the infrastructure-follows-entrepreneurship rule. Before the 1860s, almost all railroads were privately financed and built. One exception was in Michigan, where the state tried to build two railroads but lost money...

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Culture/Society; Editorial; Politics/Elections; US: Florida; US: Illinois; US: Missouri; US: Tennessee
KEYWORDS: burtonwfolsomjr; florida; illinois; infrastructure; larryschweikart; missouri; obama; tennessee

1 posted on 08/06/2013 2:29:30 PM PDT by neverdem
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To: LS

Bump!


2 posted on 08/06/2013 2:30:03 PM PDT by neverdem (Register pressure cookers! /s)
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To: neverdem; LS

Good job, Larry.


3 posted on 08/06/2013 2:43:32 PM PDT by stephenjohnbanker (The only people in the world who fear Obama are American citizens. KILL THE BILL!)
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To: neverdem

Are there any public transportation schemes in America that actually make more money than they are subsidized?


4 posted on 08/06/2013 2:56:10 PM PDT by TurboZamboni (Marx smelled bad & lived with his parents most his life.)
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To: TurboZamboni

“Public investment” is a term that is retarted sir

Besides roads, if that, I cannot think of a single thing that government can do better than the private sector.


5 posted on 08/06/2013 2:57:23 PM PDT by GeronL
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To: neverdem

I totally agree with the articles premise


6 posted on 08/06/2013 2:57:51 PM PDT by GeronL
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To: neverdem

A great editorial. Filled with pesky facts sure to irritate Bambots...


7 posted on 08/06/2013 3:06:51 PM PDT by karnage
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To: neverdem; LS

Thanks for posting, neverdem. HOORAY Larry!


8 posted on 08/06/2013 3:07:24 PM PDT by PGalt
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To: neverdem; LS

bttt


9 posted on 08/06/2013 3:29:30 PM PDT by Liberty Valance (Keep a simple manner for a happy life :o)
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To: karnage
A great editorial. Filled with pesky facts sure to irritate Bambots...

I second that. Marxists always have an extremely difficult time with causes and effects.

10 posted on 08/06/2013 3:31:12 PM PDT by Standing Wolf
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To: neverdem; LS

Bravo!


11 posted on 08/06/2013 3:35:50 PM PDT by MileHi ( "It's coming down to patriots vs the politicians." - ovrtaxt)
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To: GeronL

I live in a bumper community in the Houston area.. My town, Sugar Land, Fort Bend County, sits on the boarder of Houston,Harris County.. The dividing line is a highway that serves as the community boundary line..

The road work that happens on each line tells the entire story of Liberal vs Conservative policies.. Houston and Harris is totally Democrat and union controlled, and Sugar Land, Fort Bend, is completely Republican, and nonunion..

Whenever there is road improvement on the Houston side, it takes years, the polar opposite of our side, they work around the clock, because the contract is monitored by a COMPLETION AGREEMENT, meaning the work isn’t funded until the work and progress meets a construction standard which is pre-agreed upon..

Not only are we using the finished project earlier, but the costs are completely different, I need not tell you which costs are a joke, and which are fair..


12 posted on 08/06/2013 4:23:02 PM PDT by carlo3b (Speechless in Sugar Land)
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To: TurboZamboni

The canals, most of them, made about 4%. Don’t know if you want to call them “subsidized,” but they had state bond guarantees.


13 posted on 08/06/2013 4:24:29 PM PDT by LS ('Castles made of sand, fall in the sea . . . eventually.' Hendrix)
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To: carlo3b

I remember something about the aftermath of the San Fran earthquake... one highway was rebuilt differently. The contractor was to be paid more the sooner it was rebuilt.

It was done in record time.


14 posted on 08/06/2013 4:24:34 PM PDT by GeronL
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To: neverdem

later


15 posted on 08/06/2013 4:26:00 PM PDT by wjcsux ("In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell)
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To: GeronL
There was a time when all roads were privately built---"turnpikes" they were called. But the problem was that people found backwoods paths through to the road miles down where they didn't have to pay to "turn the pike." These were called "shunpikes." The concept of private roads was good, and would have been profitable, but the builders couldn't prevent a form of "piracy" or free rider usage.

Today, we have the technology to do so (if you don't pay your bill, a scanner would shut your car off), but that would result in lawsuits and would not be practical in today's legal climate.

16 posted on 08/06/2013 4:27:00 PM PDT by LS ('Castles made of sand, fall in the sea . . . eventually.' Hendrix)
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To: LS

If they didn’t use the road, then they shouldn’t pay. You should not be able to force people to use your road instead of walking through the woods (by definition not your road)


17 posted on 08/06/2013 4:37:39 PM PDT by GeronL
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To: TurboZamboni

In the age of the railroad there were 3 competing to be the first to become an intercontinental rail. 2 of them used government subsidies and grants and the power to take land, one of them did not. The northernmost.

It was still profitable until the government began passing laws favorable to the other two. While the other two tried to build a more direct and straight across line across the country, the northernmost of them built local spurs and lines to cities and towns where railways were needed most. This gave them revenue to use building more rail, although it meandered more than the subsidized lines.


18 posted on 08/06/2013 4:40:42 PM PDT by GeronL
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To: GeronL

Until I read your reply, I didn’t remember that, but it happens every day down here.. It’s remarkable, everyone sees it and comments about it, but don’t do much to change anything except vote the same idiots back, including Shella Jackson Lee.. go figger.. :)


19 posted on 08/06/2013 4:55:55 PM PDT by carlo3b (Speechless in Sugar Land)
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To: GeronL
If they didn’t use the road, then they shouldn’t pay.

That has a name, Shunpiking. It also has a website.

20 posted on 08/06/2013 5:08:42 PM PDT by upchuck (To the faceless, jack-booted government bureaucrat who just scanned this post: SCREW YOU!)
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To: upchuck

I mean those who did not use the road at all, not just the ones who went around the toll collectors.


21 posted on 08/06/2013 5:11:00 PM PDT by GeronL
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To: GeronL

I wasn’t clear; they would walk through the woods only far enough to get around the turnpike then get on the road.


22 posted on 08/06/2013 5:34:21 PM PDT by LS ('Castles made of sand, fall in the sea . . . eventually.' Hendrix)
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To: LS

That I would agree with, the Pike needed to hire an enforcer. :p


23 posted on 08/06/2013 5:41:57 PM PDT by GeronL
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To: neverdem

I seriously doubt obama has ever driven a car down any highway.


24 posted on 08/06/2013 5:44:56 PM PDT by VerySadAmerican (If you vote for evil because you can't see evil, you ARE evil!)
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To: neverdem; LS
Most Americans take for granted that when something big needs to be built, the government--Federal more likely than state--will do it.

This is a result of 80+ years of government projects that, while often amazing and fascinating and even wonderful in the minds of the susceptible, took money out of the productive (ie., private) sector and used it for whatever the politicians thought would be most appropriate . . to win votes. As Bastiat might have remarked, it's an example of the seen versus the unseen; we only see what was accomplished, not what might have been done had the same resources been directed elsewhere, as dictated by the market.

It will take a massive educational campaign if we are ever to reawaken the public to the advantages of having private enterprise instead of government bureaucrats and politicians planning, financing, constructing and operating--for profit--such things as hydro power plants, railroads, highways, airports and even space exploration.

I can't locate the exact quote, but Henry Ford once suggested, in jest, a solution to the road congestion that accompanied the great number of cars he and other automakers were producing for the public: Let the government take over building the automobiles while private enterprise builds the roads.

A man well ahead of his time . .

25 posted on 08/06/2013 6:07:39 PM PDT by logician2u
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To: neverdem

“Investment” is a CODEWORD for “Spending”

Just like all other slick democrat catchphrases:

“affirmative action” = “state-sanctioned racism against Whites”

“diversity” = codeword for “non-whites”


26 posted on 08/06/2013 7:59:35 PM PDT by AlanGreenSpam (Obama: The First 'American IDOL' President - sponsored by Chicago NeoCom Thugs)
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To: GeronL
I mean those who did not use the road at all, not just the ones who went around the toll collectors.

Shunpiking is not using the road at all. Check out the website. Note the route the fellow uses here. Excerpt:

One thing he glosses over: the tunnels from NYC to New Jersey are not free. Granted, they only charge one way, but, coming or going, he'll have to pay.
27 posted on 08/06/2013 9:17:12 PM PDT by upchuck (To the faceless, jack-booted government bureaucrat who just scanned this post: SCREW YOU!)
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To: upchuck

The idea that everyone going from A to B owes you money even if they did not use your road is crazy.


28 posted on 08/06/2013 9:21:45 PM PDT by GeronL
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To: neverdem
Larry Schweikart and Burton Folsom: Obama's False History of Public Investment

So?

What difference does it make?

He IS the President now; and WON'T be the President in '16.

We need to STOP or slow down anything ELSE he tries to do; while attempting to REVERSE stuff he's already done!

29 posted on 08/07/2013 4:55:13 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: neverdem
One exception was in Michigan, where the state tried to build two railroads but lost money...

In Indiana, it was a canal that did us in.


(We've seem to have FORGOTTEN that little lesson from history!)

30 posted on 08/07/2013 4:57:05 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: LS
Don’t know if you want to call them “subsidized,” but they had state bond guarantees.

Heads up; Detroit!

31 posted on 08/07/2013 5:01:51 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: neverdem; LS
Wonderful article, Larry!! Really excellent. I saw it in print yesterday, and toyed with the idea of posting excerpts from it. But neverdem did it, fine job.
Slightly off topic, BO Plenty is as wrong about “you didn’t build that” as he is about Trayvon Martin. There we have a thug who was caught in school, and legally should have been in juvenile detention, but the school didn’t want to punish “too many” thugs with the superficial characteristic of looking "like Obama’s imaginary son.” And the result is that Zimmerman was mugged, and Martin was killed. This administration responds by insisting even louder that “too many blacks are being punished.”

32 posted on 08/07/2013 10:06:19 AM PDT by conservatism_IS_compassion (“Liberalism” is a conspiracy against the public by wire-service journalism.)
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