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.

[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...

[GeronL]

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

[LS]

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

[GeronL]

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

[VerySadAmerican]

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

[logician2u]

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 . .

[AlanGreenSpam]

“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”

[upchuck]

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:

For example, I frequently have to drive between New York City and Philadelphia. There are several ways to do this, but only one is both toll-free and reasonably direct: taking either the Lincoln Tunnel or the Holland Tunnel (preferably the latter because it shortens the distance a bit) from Manhattan to New Jersey, taking U.S. Route 1 to Lawrenceville, New Jersey, and then picking up I-95 to avoid the toll bridge over the Delaware River. There are other routes that would save me time, such as taking the Verrazano Bridge to Staten Island, then taking the Goethals Bridge to the New Jersey Turnpike. But the tolls along those routes would add at least $20.00 - $30.00 to the cost of my trip. I'd rather spend that money on a decent meal than give it to the government.

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.

[GeronL]

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

[Elsie]

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!

[Elsie]

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!)

[Elsie]

Don’t know if you want to call them “subsidized,” but they had state bond guarantees.

Heads up; Detroit!

[conservatism_IS_compassion]

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.”