Changing Attitudes about Government Infrastructure?
A recent comment on the blog posts reminded me of this discussion of a community on the beach that was populated by mostly retired executives from Chicago, Cleveland, Toronto, Louisville, Indianapolis and Detroit. This was the 1970s and 1980s. The community was wealthy, and had very low taxes. It’s water and sewer rates were similarly low, while the community was starting to grow fairly quickly. The mayor was on of these retired CEOs. He was asked what helped his community be so successful. His answer was simple: they had a vision for the community that they all agreed on – a retiree utopia of beach, golf and dining. They wanted to hire the best and brightest younger people to manage their community, hoping they would bring with them new ideas to improve efficiency. They were willing to pay people at the 25th percentile to bring them to an out-of-the-way community, where medians and yards were heavily landscaped, where beach access was granted to all, where taxes remained low and housing values continued to rise, with the expectation that the community would continue to prosper. Their experience had taught them to hire the best and brightest to increase their productivity and introduce new ideas. By all measures, the strategy was successful.
But all good things come to an end. By the mid 1990s, most of these old CEO had departed, replaced by newer people. While many were also executives, there were more of them, and their focus was changing. They were retiring from companies where profits were far more short-term and the politics were different. They did not have the same experience in hiring people, and they did not see the need to pay higher salaries to attract employees. Unlike the prior generation, they wanted their kids close-by, which meant that there needed to be lower cost housing because most of their children were not making CEO salaries. This also meant more services, and higher costs. Cost control because the them, and cuts to government, to keep the low taxes low, became the norm. So where were all those “best and brightest” hired 10-15 years earlier? Gone. When the attack on government workers started, who was the first to leave? Those who were easiest to employ elsewhere of course, which does not help the professionalism of government. It’s like another community where the Mayor said that the town was needed to provide employment for the otherwise unemployable! Really?
This attitude does not help our industry at a time when reinvestment needs are in the hundreds of billions of dollars in the US alone. Public investment has been billions because government was the solution for many needs of society, because it could not cost effectively or fairly be delivered by the private sector. It’s like owning a multi-billion house and deciding not to fix the roof! The leak can only get worse and delay the (much higher) cost of repairs to the next person. So what about our infrastructure? Who pays those costs?
And of course thisis all true….