2020 Vision

BOSTON, July 2020: Back in 2000, few could have imagined that America could go so completely down the drain in less than 20 years. But from today’s vantage point in the summer of 2020, the evidence is unmistakable.

Real GDP has fallen by roughly half since 2010. The unemployment rate is estimated to be around 20 percent, but estimates are all we have since Washington stopped releasing numbers following a 2014 scandal about the published rate’s integrity.

Large segments of the Interstate Highway System have been mothballed for lack of money to fix worn­ out bridges, tripling travel times for most commuters and quadrupling them for freight. Transportation costs have skyrocketed.

Consumers are screaming about endless inflation. Most have been forced to dramatically cut back on purchases, which has led to bankruptcy for even more companies. Their laid-off employees – regular family wage earners- have been added to the ranks of the jobless.

Americans largely ceased relying on the federal government after its pervasive klutziness and inability to agree on a deal to raise the national debt ceiling triggered a series of major defaults in 2011.

After Congress foolishly insisted on linking the purely technical issue of raising the debt limit to unimaginably complex policy issues about what programs to cut and whose taxes to raise, they couldn’t come to an agreement with then-President Obama. The Treasury was forced to stop making debt payments, which crippled the nation’s borrowing capability.

The feds had to slash spending to levels that could be covered by current revenues, which continued to decline since less federal spending meant less economic activity. This death spiral necessitated even more cuts.

Thanks to its incompetence, the federal government lost functional control over the states, which began to fragment and soon ceased to be united in any meaningful way.

Some jurisdictions have been able to exploit national fragmentation. California and New York City, for example, have won U.N. recognition as “Independent Sovereign Political Entities” where no foreign governments (including the one in Washington) are allowed to collect taxes. These jurisdictions  are free to move aggressively around the world doing profitable business with nations whose citizens still live prosperous lives.

As Rhett Butler told Scarlett O’Hara in “Gone with the Wind”: “There are as many fortunes to be made from the decline of a society as from the rise of one.”

Could it have been different? It’s certainly tempting to think about the long list of might have beens that could have saved the America we once enjoyed and believed in.

The one feasible way to restore American prosperity by dealing with deficit and debt problems would have been for the federal government to take measures to grow the economy, like making huge capital investments in transportation and other infrastructure assets that produce large economic bangs for the buck.

In 2009, for example, President Obama began talking up a federal program to give America the kind of high-speed inter-city rail network Europe already had and China was building to boost competitiveness by speeding people, jobs and goods to markets less expensively.

But Washington’s knee-jerk assumption was that such a program could only gain the necessary political support by allocating its capital spending as widely as possible. Rather than concentrating it in a few key corridors that generate most of the nation’s economic activity, they tried to give a little to everybody .  The economy unraveled before any of it was completed.

Obama’s subsequent program amounted to a series of glitzy PowerPoint presentations that made audiences yawn. And the waves of economic activity that could have washed over the nation as a result of upgrading transportation infrastructure in those key urban corridors never materialized.

Instead, America withdrew into its self-flagellating austerity kick and watched its economy shrink and jobs disappear. The citizens of a once-proud nation lost all faith in it, and that was the point of no return.

originally published: July 27, 2011

Drive time redefined

An otherwise typical California town we’ll call Santa Rosita is horne to one of the nation’s most unusual movie theaters. Until a few years ago, the Bijou was no different from any other small-town theater. It was trying to survive on modest ticket sales as the area’s last outpost of a vaguely Art Deco Hollywood culture that has largely disappeared.

But things changed when the elderly owner died and his widow announced she was going to sell out to a local real estate developer who planned to convert the Bijou into a combination private gym and office building.

That was before the prospect of losing its only traditional movie theater created a groundswell of dismay throughout town. It reached the point that the municipal government was pressured into buying the Bijou from the widow to keep it open.

In a burst of civic enthusiasm, the town government proceeded to eliminate admission charges. Henceforth, the mayor proclaimed, the Bijou would be free to everyone “just like a city park or swimming pool.” Needless to say, this free movie policy led to a considerable change in the Bijou’s attendance patterns. Virtually no one goes to the movies on weekday afternoons anymore. Even on weekday evenings, it rarely has more than a handful of customers.

But on weekends when local schools and most businesses are closed, things change dramatically. The Bijou is full of people, with many more lining up outside.

When the Bijou shows an especially popular film, the line begins forming well in advance of the noontime opening. Santa Rosita’s police department even has to assign several of its all-too-few police officers to control the crowds.

This seems like a ridiculous way to operate a movie theater. Theaters everywhere else charge admission. To maximize box office revenue, they even charge higher prices when demand is highest. This tends to spread out demand by encouraging some moviegoers to attend on weekdays, when tickets are cheaper.

But the Bijou has no tickets. Access to its seats is free, in the sense of not charging an admission fee. But it’s not free if you factor in the hours moviegoers have to wait for seats on weekends when everyone wants to see free movies.

Ridiculous as this sounds, it is exactly how most American highways operate. Access is free to motorists regardless of time of day or day of the week, despite the fact that we pay for access to every other transportation mode.

Free, that is, in the sense of not charging motorists for each mile they travel. Like the Bijou, it’s hardly free if you factor in the time motorists spend traveling that mile during periods when bumper-to-bumper traffic reduces average speeds to about 10 mph.

Until fairly recently, the logistical problems of charging motorists directly for highway use made the idea impractical. Fortunately, new technology is eliminating that excuse.

Vehicles can now be equipped with simple electronic gizmos that respond to radio signals from roadside transceivers. This enables the road’s central computer to identify the vehicle, measure the distance it travels and charge the owner’s computerized account appropriately according to whatever per-mile rate  is in effect when the trip is made.

The rate can vary depending on the type of vehicle (more for heavy trucks that wear out pavement faster, less for compact cars), time of day, (more during rush hours, less when demand is low), the amount of pollution each vehicle generates, or even actual demand at the time of travel.

Thanks to the miracle of modern technology, we can now price access to highways just like we price access to movie seats (except at the Bijou). At the same time, this technology might just provide a fair, user-funded way to pay for much-needed upgrades to tired transportation infrastructure that limits the nation’s economic growth. 

originally published: July 9, 2011