Alex Tabarrok argues that the calls to build our way out of the economic crisis by massive investment in roads and bridges is misguided.
Even more valuable than transportation infrastructure would be greater investment in electricity infrastructure, a smart grid. Consider that in 2003 a massive, widespread, power outage threw 50 million people in the Northeastern states and Ontario, Canada out of power – disrupting lives and the economy. Why did this happen? Because of a failure to “trim trees” in Eastlake, Ohio – now that’s a dumb grid. And remember that only a few years earlier, the most innovative, high-tech industries in the world were shut down by blackouts caused by our primitive electricity grid. Overall, blackouts cost the U.S. on the order of $100 billion a year.
The smart gird is a not one idea but many technologies such as real-time pricing (smart meters), superconductive smart cable, and plug-n-play architecture that combine to produce a grid that is decentralized, self-healing, robust, and smart for both producers and consumers. Decentralized power, for example, makes it easier to isolate problems, “route” power to different areas, and maintain robustness in the face of falling trees and other problems. Plug and play architecture means that new technologies such as electric cars can be automatically used as both consumers and producers (via storage) of electricity, as needed, on the fly. Plug-n-play, the open-source of electricity infrastructure, will also open the field of electricity generation and storage to far greater innovation than is possible now.
While I question whether it makes sense to spend massive amounts of money averting infrequent, short-lived power outages, I agree that improving our power infrastructure makes sense. Even aside from high-tech, gee whiz things like Alex links above, simply burying our residential power cables — while a massive undertaking — would be quite beneficial. And, certainly, removing the barriers to electric cars and the like sounds like a worthwhile investment.
As one of Alex’ commentators notes, though, much of this “build our way out of it” idea is predicated on the false assumption that we’ve got a massive 1940’s style workforce sitting idle. In reality, the vast majority of the unemployed and underemployed are service economy and office workers. While paying them for a couple of years or so of construction work would help keep them afloat, it’s not exactly preparing them for a brighter future.
