Since the proposed highway would require no local match, one can certainly understand the attraction of a gigantic public works project like this one, especially during these recessionary times. If it ever comes to fruition decades from now (assuming that there aren’t revolutionary technology developments in the transportation industry like travel pods), it would temporarily pump hundreds of millions in construction monies into the area and create hundreds of jobs, though many of the jobs would be filled by non-resident workers for outside contractors. Once the highway opened, it would have a marginal impact on local employment. You’d see some rearranging of the economic geography with retail establishments clustering closer to highway exits. You’d see more residential sprawl. For an investment of $1 billion or so, the affected counties might experience a net impact of a few hundred permanent jobs, mostly in low paying service and retail trade sectors.

Another economic development dead end

Why? New highways and expanded highways have their largest economic impacts where existing capacity bottlenecks and agglomeration economies exist. But, let’s face it: Route 220, which runs in the direction of the proposed corridor is not experiencing any bottlenecks. It’s a lightly traveled thoroughfare. When you get past Rawlings, MD, you can often drive for miles without encountering an oncoming car. Thus, a new highway would have very small total user benefits. That’s why Wilbur Smith Associates found that similar highways built in lightly populated areas as part of the Appalachian Highway System have a negative ROI. We’ve known these things for decades. Former ARC Executive Director, Ralph Widner, who oversaw the planning and construction of much of the ARC highway system acknowledged the mistake years later in a pensive 1990 article in Economic Development Quarterly in which he faulted the ARC for placing too little emphasis on developing human resources.

When the numbers don’t add up, expect the proponents to reach elsewhere for support. They’ll tout the improved highway safety and potential for reduced accidents (without acknowledging the increased pollutants and deleterious effects on, for example, asthmatics). They’ll assert that it will improve national defense, citizen evacuation, and police mobilization (without acknowledging that it improves criminal and terrorist movement and is associated with increased crime as well). They’ll hold aloft a few advocacy studies with poor research designs purporting to show how the areas will thrive economically as a result of the new asphalt. They’ll argue that the Marcellus shale discovery changes the entire economic rationale.

Who are the biggest losers in this economic development equation? First, the local public who fall for yet another economic development whopper, and lose valuable time in developing worthwhile economic development projects created through publicly engaged planning which focuses on the area’s assets, including human and natural resources. Second, everything else. The proposed corridor would cut through another fairly intact forest area, inducing a pattern of fragmentation that will render an entire swath of wilderness reaching several miles in each direction useless as an environmental asset, devastating ecological services, and destroying biodiversity.

A terrible thing to waste

Ezekial 38:20 warned us of what a wrathful god could do:

So that the fishes of the sea, and the fowls of the heaven, and the beasts of the field, and all creeping things that creep upon the earth, and all the men that are upon the face of the earth, shall shake at my presence, and the mountains shall be thrown down, and the steep places shall fall, and every wall shall fall to the ground.

Turns out that we are quite capable of doing ourselves in without any heavenly ire.

Unfashionably late and overhyped, again.

Bottom line. Not only is there light at the end of the tunnel, but we’re emerging from the tunnel. However, it’s going to take some time to adapt to the sunlight after nineteen months in the cave.

And, for accuracy’s sake, we should remember that it’s a panel of experts at the National Bureau of Economic Research that calls the troughs and peaks of business cycles, not Newsweek or anybody else. They use a dashboard of economic indicators and gut judgment. So, a few consecutive quarters of robust Gross Domestic Product growth followed by anemic growth and continued job losses do not mean that the recession is over. Consequently, it may be years before any “official” declaration is made, if a declaration is warranted.

The two states have followed two different public policy paths: California based on a higher tax, higher public service, higher land use regulation, and high tech model and Texas on a low-tax, low public service, no land use regulation, and natural resource (energy and agriculture) model. Both states, however, have experienced high rates of immigration, mainly from Latin America. The article predicts that the current California situation, which has cyclical, structural, and demographic roots will spread to Texas and the rest of the nation.

How bad are things in California? Well, so bad that even free-market guru Arthur Laffer has decamped from cosmopolitan Malibu to backwoods Tennessee. He attributed his move not to the usual Tiebout sorting but to some universal truisms revealed from spurious correlations of tax rates and economic welfare evidently computed on the back of a napkin.

All in all, the article reminds me of a recent Pat Buchanan jeremiad, the difference being that The Economist predictably applauds the transformation of America into a facsimile of their wonderworld of a newly amalgamated Houston and LA.

Pat says 'Don't Mex with Texas'

Well they should. The country may become a vast wasteland of people, sprawling asphalt, and hot summer nights. But, from The Economist’s vantage point change and calamity represent opportunity. Yep, thar’s gold in them thar hills.