transportation, water and education infrastructure projects. this panel focussed on public investments that could be made during the early years of the trump administration. it's about an hour. we're a little behind schedule so i'm going to talk fast. i'm really pleased that what we wanted to do was bring together people who have done work in the area of infrastructure to talk about where there is evidence, where there is not evidence, where the things that government does makes sense and where things don't make sense. physical infrastructure is a rather broad term and so we have a panel that is one part water and three parts transportation. senior research associate at the stanford woods institute for the environment, director of urban

policy at water in the west. matthew turner is professor of economics at brown who has written a bit about transportation. dan wilson is at federal reserve bank in san francisco and speaks only for himself and not for janet yellen or anybody else at the fed. and cliff linsen is our colleague here. i have asked each to say pretend we had a president of the united states who has a short attention span. and pretend that he ran for office saying i want to spend a lot more money on infrastructure. pretend for a moment that this tax credit thing was something thought up and will never resurface again, what would you tell him about how to wisely spend the money? i asked each to give us the seven or eight minute spiel that they would give in the oval office and then we will have interaction.

it is putting a lot of pressure on time to ask them to keep to that thing but make you do it. maybe i can start with you because we haven't talked about water at all. there has been a bit of focus on water lately both the supply of and also the pipes to which it is delivered. >> so our nation is social and economic well being depends on access to clean water but unfortunately water is a hidden infrastructure partly because people don't know where the water is coming from and where it goes. the connection is i open the tap and water comes out. they don't have a good understanding of what it takes for water provider to bring water to you and what it takes to clean it up and put it back to the environment. this disconnect has led to lack of interest and enthusiasm to invest in the water section as a

whole. so when it comes to water we talk about some interest in investing in new infrastructure or replacing the pipes but the numbers that are on the table are very insignificant compared to what we need to be done. a lot of the water infrastructure is 40 years or older. they are aging and they are reaching to the end of their lifetime. so we talk about investment. we talk about the money that is on the table which is insignificant compared to what they need. then we need to be smart in the way we invest in the money mpt when it comes to smart investments i think one thing that had been being promoted a lot is doing asset management, trying to focus on the fact that the infrastructure that we have we have to be i think larry mentioned something very

important. we generally are very reactive to fix water challenges, water problems, the pipe breaks everybody tries to fix it rather than being proactive and understanding what challenges are, where the infrastructure needs and try to invest in those challenges or red zones situations. asset management is a great example for that. a lot of the cities can use this kind of system to evaluate their assets, to see how the systems are working, where is the smart investment within this set of assets that they have. i can give you a very good example because sanitation district, they were having a lot of sanitary overflow issues. they were told that they have to fix this challenge. they went to the users and said we want to raise the rates to

pay for the fix that we need to do to meet the environmental regulations. people did not vote for that rate increase. they went back and tried to rethink. they bought a company and worked with him and did evaluation of the system, asset management and then they identified what are the red zones? what are the break points that if they don't fix they will have a main break in the system and they ended up doing a better job of fixing some of those. they went back to the public afterwards and public was willing to pay for some of the investments that they have made because it was a smart investment. so that is a very good example of doing asset management. when you go beyond that i think one of the things we are a little bit behind is that the spectrum is shifting and having

a paradigm shift. we are as a government not necessarily sort of reaching that point yet. like 20 years ago energy sector was there. they had the crisis and dealt with it and tried to change the way they manage energy, change the way the policies have been set. we are sort of going through the same shift with water. drought in california has been an issue, access to clean water and reliable water supplies have been a critical issue for some of these communities. when you go back to flint, michigan, the same situation. you have water quality challenge which is again bringing water off to the public interest. so there have been issues going on that people started getting more interested. what it takes to bring clean water to them. taking advantage of the opportunity so we need to think about how we can be smarter and

use data to manage our system more effectively. there are smart meters using the existing data, the amount of water they use, how they respond to price change and climates and trying to understand if the demand for water is changing. using this data to become smarter in the way we manage our water system and then using that information to see what kind of infrastructure do we really need in the future. right now a lot of the water utilities think about big infrastructure and big dam, big pipeline and bring water from one location to the next. maybe the next generation 21st century water system does not

require another dam. many need to think more locally. maybe we can replace some of our infrastructure with doing some projects such as recycling, reuse, green infrastructure, another great example. it sort of has this broad umbrella because when you think about west coast which has water scarcity issues, green infrastructure can help enhance water supply issues that we have. it captures storm water and rain water without getting polluted and uses it for future. when you think about east coast d.c. is a great example of using green infrastructure to deal with water quality issues. there are solutions that are for both sides of the coast and in the middle and sort of addresses that issue. one last thing i would like for everyone to think about is the fact that when you think about

water we have put it in different buckets. we have organizations that have water supply, bring water to you. we have organizations that do wastewater treatment. they collect the water. we have organizations that flood. these are all different silos that we have created. this fragmentation has caused a lot of inefficiencies in the system. this is all one water. the same water that we need to deal with floods we can actually be better in taking that water, storing it and reusing it so when it comes to going back to some of the local solutions that we can use is capturing rain and flood water and reusing it. and then you go back to recycling and demand for water and how that is going to impact and how we can use that base

water stream? it is in the second silo and how we can connect that to our water supply which is very important. >> if the president said sounds good but i have been hearing talk about user fees should we finance the pipes in flint, michigan, the flood recycling on the west coast by charging more for water at the place at which it is used or should i take advantage of the low interest rates that larry talked about and have a giant national federal water infrastructure project like eisenhower? >> i think both user fees are very important. we are having this conversation in california on some of the user fees. the reality is when you talk about water we are not covering the cost of investment that we need to make for the future. this is a very important issue which is for every dollar of revenue we have to invest $4 for

capital investment to uptake and future investment for water infrastructure. we are not necessarily paying the amount that we have to for the water infrastructure that we have. and goes back to the public knowledge. public awareness is very important. there is a lot of resistance to our user fees. as you sort of raise public awareness, try to make them understand the reality is think about how much you are paying for your water bill. people are willing to pay $100 for their cell phones. every family member in the household has a cell phone and every bill is about that much money. how much are you pay frg your water? in my house single family home four family members about $100 for both water and wastewater. that's nothing compared to what we -- what advantages the water

brings to you which is about health, well being, daily needs. we don't think about it. the reality is if the water doesn't come out of the tap you don't value it. i think the quick closing remark is in the energy sector we had the same thing. when you start in california we have blackouts and brown outs people realize i need this electricity to survive daily. people are much more willing to think about what are the next options that we need to have user fees. we did have user fees in california which that user fee actually -- user fees are good if you can't show transparency in the way you are using that. if you can say i take this user fee and invest it in x, y and z and collect data. and the same thing for water. we had this public goods chart. we had the user fees they were supposed to be invested in

energy efficiency, innovative energy infrastructure such as renewable energy and low income communities which you can help them to pay for some of the high costs of their electricity rates. that really has a big impact in our energy efficiency efforts in california which has been significant in understanding where our demand is going to be in the future. demand management is the cheapest and least expensive way of dealing with future needs that we have for infrastructure. and those fees actually went to some of these energy utilities to invest. >> thank you very much. let's turn to transportation. >> thank you. i have a friend who is a fish biologist. he thinks fish are important. i think transportation infrastructure is really important.

but so before i start, let me try to give you perspective on this. imagine taking all of the stuff that you buy in a year or that the government buys on your behalf and stacking it in a pile and then stacking the money that you use to pay for that next to it. the stack of money would be gdp. if you think of assigning those dollars to the factors that made your pile of stuff, about half of the pile would go to labor. about half of it would be wages. you think about assigning a fraction of the pile that goes to trucks and boats and trains it would be about five percent. you can bring that five percent up to 10 or 15 if you start thinking about commuting costs and time people spend in their cars. it is sort of like the self help books say. the important thing is people, not things. with that said, how do we think about how important

transportation is? the problem with thinking about transportation as being a small sector is that we wonder as larry said if we reduce the cost of things can we somehow match up jobs and people and tools and buildings so we can make more from less so the world works better and we are all richer? that process is hard to observe and we should think about examples. i think ed's point that we want to be very careful about thinking which projects we fund is right because not every transportation project will have the magic effect. so examples, the detroit example is classic. st. louis, the example of the public transit in detroit is the classic example of this. in st. louis they turn the stop lights off at 6:00 on week days because nobody is using those roads. the problem in those places is that they have more infrastructure than we need. if we put more there it will not let people do things better.

it's just going to be more of something that is not used. another example, this is something you see in the paper. let's build infrastructure to create economic growth. how might that work? consider, i want to think about another example. improving the i-95 corridor. we will add a lane and it will mean you can drive ten minutes faster. probably cost $10 billion, maybe 20. let's think about how that might create economic growth. how could that create economic growth? suppose there is some company which as a consequence of that reduction in time to new york chooses to locate in providence instead of somewhere else? what that tells us is that company doesn't care where it locates. if that company is viable only because it can get to new york in two hours and 50 minutes instead of three hours that means they had some other thing

they can do that was almost exactly as good. spending that to get to new york in ten minutes indoesn't give us a lot of magic where we can combine people and tasks a lot better. now, if you look at the data on these kinds of things it is really easy to find examples where that improvement in road connections from new york to providence will cause some business that would otherwise have located in north carolina to locate in providence. that's not creating economic growth. that's just changing where production happens. when you look at transportation projects the first effect that you should think of is not that it is creating economic growth but shifting it around. now, if we think of transportation projects that way and we want to apply careful cost benefit analysis what should we do?

so first everything that has been said about maintenance is absolutely right. maintenance is really good because it means you are fixing stuff that gets used. right away you're devoting resources to things that are valuable. we have this reveal preference test. lots of people want to use this stuff so it is wearing out. what else can we do? the other thing we can do, if adding transportation infrastructure to a place shifts people and economic activity to that place where do we want people? we want people in the places that they want to go or where they are rich. instead of building roads in places that are empty where no one wants to be or places where they are poor, build them in seattle and san francisco. if you live in seattle statistically identical workers make almost as much money as that same worker in southern texas. this is a heavy lift

politically. this is the opposite. the stated intention of the stimulus infrastructure package was to build things in depressed places. don't do that. build in places that are booming. because you expand capacity of those places to house people and people will go there. and we are not banking on the magic of this thing that is very hard to see and that i'm convinced is small that infrastructure lets us combine things better and make more from less. we are banking on the fact that we know some places are better at making stuff than others. let's get people living in places that are good at giving people nice lives. little things besides that. don't build light rail if it needs a subsidy. build buses. every time i think of providence it is a little town and it is

out of the way and not very important. they wanted to spend $100 million to build a small light rail system. if you do the math on that on the basis of the projected ridership by the people who want to get paid to build the thing the taxpayer was paying between $7 and $10 per rider after they collected the fares for every single person who got on the train. there is just no way to make that make sense. buses are the way to go. so train bad, bus good. congestion pricing is also something that we all like that. last thing is the seas are rising. we have 40 or 50 years before it gets to be a crisis. but if we fight that most of the time we will lose. yes, holland does it and we will

be able to do it but most of the time we will lose the battle against rising tides. the good thing is we have 40 or 50 years to plan. 40 or 50 years is a long time in the life of a building. if we plan an orderly retreat it won't be a disaster. if we stand and fight i think i know how that is where we end up under water. another thing we think about is we want to build our infrastructure so that we can manage an orderly retreat from something we predict will happen on the coast. >> where is providence on the spectrum? shore front property or under water? >> providence is subject to periodic hurricanes and is only above water because of a massive sea wall. >> another reason not to spend money on light rail. >> that's right. the light rail system would surely be under water in 50 years. another good reason. first thing i would tell the president is just to repeat to

what you mentioned before that everything i am about to say and everything i say today is my own views and not the views of the federal reserve bank of san francisco or federal reserve system. i would start by asking what do we mean when we are going to get the highest return on infrastructure spending, what do we mean by the return? what kind of return? are we talking about return in terms of gdp or something more harder to measure like public safety or some other type of longer run benefit. so i'm going to focus my remarks on the macro economic returns. and so here the horizon we are talking about is really important. if we are trying to think of infrastructure spending as some kind of stimulus policy and

trying to -- a question you asked trying to think of this as something that could stimulate the economy in the near term i think think the economic resears not very optimistic on that especially in the current economic environment. and so i think the case for a longer run positive strong return to gdp or employment from infrastructure spending is stronger, and i'll come back to that. but in terms of why the short run impact i think would be likely to be quite low, there's three reasons. so first, theoretical research of the last five, ten years has pretty consistently come to the conclusion that the short-run economic multiplier, so the bang

for the buck, and any kind of government spending, would be expected to be much lower in expansions than in recessions. so this is basically because when you have massive spending, it crowds out sector activity and when you have an expansion, you're already at capacity restraint so that crowd-out effect will be bigger. so the theory is clear that multiplier will be low in expansions on government spending in general. the papers that i've done and work that i've done with mothers, the empirical work i've done and specifically to infrastructure spending, also suggests that it is low in expansions. this is the short-run bang for the buck. so i did a paper a few years ago

with a colleague of mine, former colleague of mine, for the mber macro conference and we were looking at the dynamic path of gdp and employment in response to shocks, to infrastructure spending. so we were looking specifically at the experience of states and how states get different amounts of federal funding from for highways from the federal government. we want to exploit the variations and say when you get more, do you get more, do you get more in terms of gdp or employment in the near term and over the longer term. what we found was that on average, you get a shock to federal highway grant to funding for projects. it led to an increase in state gdp the first two years of that shock. then it faded away, then the second round effect like six to

eight years later. so i'll come back to that kind of second round effect in a minute but in terms of the near-term effect -- so we found that that was there on average. but when we looked at whether that effect was different depending on whether the state was in a recession or expansion we found the effect was entirely from recessions. so if you're in an expansion we found no effect on gdp or employment in the fear term from this shocked infrastructure spending. again, that's a side from the longer run benefit or medium run benefit that we did find. so the third reason you might expect the short-run multiplier bang for the buck to be small from infrastructure spending is at least if you're thinking about employment, infrastructure, modern transportation projects, tend to

be not very labor intensive. so research i've done and also bork i' work i've seen from others, including the jio, the cost of labor in major transportation projects is small. so these tend not to be very useful as a jobs stimulus at least in the short run. now i mentioned that we found that there was a bigger impact say six to eight years after some initial fundinging increase and infrastructure spending. so that effect, that kind of down the road effect was quite sizeable. and didn't seem to matter whether it was sort of what the state of the economy was when the funding started. so there's a sort of stronger case to be made for infrastructure spending having longer run, medium run benefits.

and those benefits, that true for employment and gdp. because those benefits are a supply side shock. what happens is, in terms of kind of the macro economic theory, the thinking is that you have long time to build lags with infrastructure spending. so you have a lot of spending happening over many years but there's no per activity benefit to the private sector until many years later, say on average six to eight years for the typical kind of transportation project. so when the public capital comes on-line, investing in this for several years and then finally you have new bridge, new highway, whatever, that's when you have the productivity increase and the private sector is more productive because you have this improvement and so that, that's certainly there,

and i would say if that's the goal, if you're trying to get a higher return in terms of these longer run or medium run economic benefits, then i think there's a strong case to be made. an then so lastly, i would just say in terms of the, if we're thinking about, we're going to do infrastructure spending so if someone says we are doing infrastructure spending no matter what, just tell me where is the highest returns, i guess one thing i would say is that putting the money through state and local governments to me seems like the appropriate way to go because, and some other research i did, whether state and local governments actually spend the money they get from the federal government on transportation, on transportation. so there's been concerns, concerns in the 2009 stimulus act, that money the federal

government was sending to state and local governments for transportation wouldn't be spent on transportation. that it would be used to pay down debt and used to fund tax cuts and tax increases and be spent on other things. so what we found again, the paper i did with sevan la duke, that the states did spend money on transportation and in fact it led to complimentaries, and they get dollars in transportation grants from the government, and they ended up spending more than a dollar off the years on transportation. so states maintain the lists of projects that they would like to essentially wish lists. so they are well positioned to spend that money that they get and it seems that impeerically they do spend that money on transportation. >> so why should i believe that federal government is incapable ranking transportation projects in order of their value

long-term returns? somehow state and local governments are enlightened and will not be influenced by politics and will do the stuff where it's better? >> i would say that traditionally we have in our highway bills, we've paid for the nation's roads through federal highway grants to states. so that system has been in place since the interstate highway system. so because of that system, states are maintaining these lists and try to identify projects they would like to work on and as they get funding they work on those projects. so it is just that i think we have an existing exist em in place to efficiently spend that money. so having the federal government choose projects -- >> you have confidence in the state and local government making efficient choices? >> as much confidence as the federal government make in those choices. >> fair enough. >> cliff, your turn. >> donald trump called. >> okay. so i would mention five considerations to think about

tralgz ever tralgz pob tau transportation infrastructure. and i will be constructed to say this is a good thing that we ought to spend money on. okay, so the first one, and i'll make dense communication since we have covered these, i will make it fast. first one is cost benefit. that's critical, in my world. i want benefits to exceed costs. this is a problem in infrastructure, the system is not designed to do that. as we know money is jlcated by formula. so the federal money goes in but is obviously not necessarily going to those areas in the country that will generate the highest run return. everybody gets in on it and there is no cost consideration that goes there.un return. everybody gets in on it and there is no cost consideration that goes there.n return. everybody gets in on it and there is no cost consideration that goes there. return. everybody gets in on it and there is no cost consideration that goes there.return. everybody gets in on it and there is no cost consideration

that goes there. once you get inside the state it is better because the npos are going that the and it doesn't go to the state that gets the highest return, everybody gets in on it. so you have those constraints immediately built into the system. okay? and add on other regulations on capital labor and really, you're not going to expect the way the whole thing is designed that you will get many projects where benefits exceed costs. that said, second consideration is that the thing has to be politically appealing and popular. this is a politically pervasive system and if i'm going to suggest a project, someone has to say, what do i get out of it? and that's pretty much how it all works and point to projects that get completed as eposed op to good things that help get you elected because you can say, this is what i've done for you. and he this is a real hey good project that generates benefits. third consideration is technology. a critical part in infrastructure in this country is it is not up-to-date with

technology. many things could be done. off the shelf technologies. engineers are chomping at the bit saying, do this, do this, it will make it so much better. it is not done because we have status quo bias. we do this and we won't change how we do it. i want to come up with something that's technologically new. didn't have to be super advanced but it has to be something we haven't done before because of a technologically high component to it. here is something we can do that takes advantage of technology. by the way, after you see how cool this is, you mention a few other things. fourth consideration which has been mentioned a lot is pricing in investment. again the system is not designed to be efficient but in a very, very distortion airy way, investment is not done based on benefit cost analysis and that sk skews where money goes.airy way investment is not done based on benefit cost analysis and that skews where money goes.y way, investment is not done based on benefit cost analysis and that

skews where money goes.y way, investment is not done based on benefit cost analysis and that skews where money goes.ty way, investment is not done based on benefit cost analysis and that skews where money goes.y way, investment is not done based on benefit cost analysis and that skews where money goes.ry way, investment is not done based on benefit cost analysis and that skews where money goes. so you're not using the best capacity. i want something that has the importance of pricing and investment and creating so many of the distortions that we have now. quick footnote now. i want to talk a little bit about the macro and micro. there's the impression that there should be some sort of conflict or at least there is a conflict. there shouldn't be. all right. all the micro concerns about efficiency cost analysis and so on and so forth, they should reinforce and be consistent with the macro perspective on how we pursue infrastu pursue infrastructure. suppose i have a given amount of money and i want to increase employment. what should i do? sub subsidize output? subsidize capital? or subsidize labor. you are writing things down, taking derivatives, trying to get input demands and see for

what parameter values is it going to be that for the given amount of money i get more employment with subsidies to labor, subsidies to capital, subsidies to output. whether the answer is, the distortions that we have in capital, okay, are going to really hurt the capital infrastructure subsidies for trying to solve this mac troe problem. my point is, if the macro and micro consisted then micro will perform better and that's how we sell and improve employment through capital sub diization. but now, given how we do things, it'll be the worst. final thing, privatization. when i mention the word privatization, i don mean public/private partnerships. i don like them. i mean competition. this is what this is all about. you want good results you want private entities to compete. not in partnership with government. they get together, that not competition.

so i want to think about way to expose privatization. so those are my considerations. what's my project? i want two more minutes. >> okay. >> just kidding. >> 2:47 left. don't waste it with one-liners. >> okay. my project is, heated runways at major airports along the east coast and the midwest. heated runways. and since i'm spending money, lets heat up the tarmacs in terminal areas too. what are these things? you think about them. exactly what i say. you've heard of heated drive ways. certain people heat their drive ways. snow comes down and there is no snow accumulation on these things. green bay packers football stadium, they have a heated field. they aren't playing in the ice bowl any more. heated runways are exactly the same thing.

you see a snow forecast coming. you crank the thing on. coils underneath. there will not be a single millimeter of snow accumulation. if it hit, it will melt. so you're not going to have two feet of snow accumulating or one foot or all you need in this part of the world, three inches, that will met things up. now why does this do it? benefit cost. the delay savings are enormous in this, right? when you have delays, they turned into cancellations. so cost you as a traveler starts multiplying through because you have to get your next flight. that can be hours or sometimes days. these are wealthy people. high value with time. you can just see things toting up. cost to airlines. remember their planes are stuck there. capital isn't moving anywhere. isn't where it should be on the west coast. you put all this together and you trade that off with up-front capital cost which aren't that

much. politically, totally a winner. who is opposed to this. technology, not the coolest thing in the world because as i said, all you know are 1%, all the 1 percenters have heated drive ways. we could have done this decades ago. but this is still something new. what is our problem with runways? wood-based landing sheets. beyonce, jay-z, they come in to see the outgoing president. ceos come in to see the new president. they are in private planes. they play nothing. we as commercial people have to pay a lot more. that puts a lot of pressure that you're heated runway will draft but the pricing in drafting are are adding to the problem. finally, last but not least, punch line who wito the whole t prief pri privatization. the president says, this seems like an obvious idea, why don't airport do this?

what incentive do they have to do something like this? seriously. why would a public sector airport, which certainly is not in the business of maximizing economic welfare, you can blame the way the system is set up. you can blame the kind of managers that they have. they aren't going to say we want it put these things in and save travellers time. it is going to cost us money and what do we get for it? right? landing fees are regulating. they get their landing fees. financially they are not that much bet her off and they will say, we will get our money anyway. right? krt private sector. suppose we privatize hartford, connecticut. providence, rhode island. new hampshire. right? you don't think one of those airports would say, let's nut heated runway and charge people for it. just think of the benefit they

would get from doing something like that. i have no doubt if we privatized our airports initially as the market works, someone would experiment with these things. they realize, yes, people realize the value of heated runway. we will charge them for it, there are ways to work this thing out and lo and behold others will say, we better do this too because it is killing us financially because people will come and use these guys there. the only reason not to consider this is if we truly have global warming and we won't have snow any more. but mr. president, i don't think this is a chinese hoax. thank you. >> thank you. [ applause ] >> i'm going to ask you to respond to something that's been said a couple of times. which is, let's not waste a lot of money on flint, michigan because basically those people would be more productive if they move to seattle. is that something that -- how do

i square that with you telling me with have lead water pipes all over the country and we should charge user fees all over the country and even in cities where we are losing population. >> first of all, it is hard to move a community from one location to another. unless you really have jobs ready for them. and can move them there. if you don't have skills, you can't move from one place to another. or so that's definitely is not going to work. but think about it this way. you have community really in need. and have you communities that are capable of covering the cost of the services they need to get. and there is enough option to try to kind of take federal money maybe to invest in the communities that really do not have the means to deal with their water infrastructure challenges. and not necessarily spend as

much money to the community that do have this kind of capacity.i that do have this kind of capacity.ey that do have this kind of capacity.sy that do have this kind of capacity. that do have this kind of capacity. they can deal with their challenges. this may not be a popular statement and i'm not an economist but from a special perspective that might be way to go. one thing i want to mention, though, is one -- these systems that we have if place, they have fixed costs associated with them. maintenance and operation is a fixed cost. even if you don't use a drop of water, that maintenance then operation system has to go on. so it is important to remember that the economics that is used to price water, it is the opposite of what we really need. for every drop of water you play

a dollar. well that's not right. but for every gallon you pay 40 cents. you stop using that gallon, the person operating that water infrastructure still needs to pay for that system. so connecting the revenue to the amount of water people use is just doesn't work that way. one thing that energy sector did, and we are really talking about a law right now in the water sector about it, and sort of restructuring the rates process. rey recoupling. >> so you say we should pay for water the way we pay for electricity. >> yes. >> so you would tell the president, cities may abandon this but socially that's a bad idea and you're willing to subsidize flint and let people in san francisco pay more for their water. and secondly if pricing energy

is less than ideal, pricing water is even further from the idea. >> right. can i actually add something. >> please. >> we talk about infrastructure and transportation this whole time and something i want to mention is you want to build new roads, bridges, runway, think about water while you are doing it. be smart in the way you invest your dollars. if you think about collecting some of the storm water that lands on that runway, that has heated system, you can -- >> perfect. >> then you can have two -- >> if we have a purr grower gri can move it to san francisco. >> if any of you want to weigh in on transportation, i want to go to the audience, we don't have much time. anything to add, matt or dan? you like heated runways? >> sounds good to me. we don't need them in san francisco. >> yeah, do you. of course you do. you need people to come to san francisco. >> in other words, what cliff is telling you, if we get a half an

inch of snow tonight in washington you may not get back it san francisco so you should be willing to pay for that. okay a question very far in the back there. britney, please. >> hi, tracy gordon. the previous panel and this one to some extent have punted on the subject of politics. inst infrastructure is very important. i have two pet ideas to put forward to the panel and i wonder how you would react to them. the concept that mayors don't run on intrastructure, i don't understand. if you think of the sky scrapers above infrastructure in chonhon they should say great, and homeowners should be choming at the bit to award them at the ballot box. i don't understand why there isn't much disclosure and maybe

federal government could lean on state and local government to do that. a rule that came out a couple years ago state and local government were opposed to and perhaps the federal government could have coordinating to a that. and the second thing, veto power. have you fragmentation to get approvals not just from local boards of concerned citizens can which i think is sort of the tenor of the comment earlier but counties and cities and special district that overlap. so why can't the federal government require local governments to kind of get all their ducks in a rebefore awarding say to funds or other diskri discretionary money. >> thank you. over here. >> britney, why don't you come over here on this side. >> hi. steven hendrickson. so it seems like the theme from this panel and discussion earlier is that we need a big increase in infrastructure

investment but the reasons that it's publicly popular aren't actually good reasons to invest in infrastructure and the real important long-term reasons aren't necessarily that important to the public. so going back to david's premise of forming the president-elect on, how do sell a large investment, is it to do what government cares about in good government sort of way? or educate the public on why we need long-term strategic investments that for some reason don't seem the pothole argument doesn't seem to resonate with people the way that jobs and sort of jump-start the gdp do. >> i think we will talk more about that later. there is a gentleman here. and britney, the guy in the back. >> retired government, the situation like at lake meade, it has been becoming critical in the fact that water level

dropped to the point where not only is the question of sufficient water supply for the area but also to power electricity generation. it has never been as low as it's been. recent rains occurred but i don't know how effected lake meade is. is it converted to convert it to a sister and put a giant roof over it or portions of it and the evaporation rate would be greatly decreased and water supply would be more constant. >> okay, the guy in the back. >> just on the -- >> your name, please. >> charles lane, washington post. >> one thing no one on either panel is yet to discuss, though i'm sure they have thoughts on it, is the federal infrastructure bank. and given all the questions that have been raised about the efficiency of financing and choosing projects, if anyone has a thought on that bb, i would b curious. >> a response about leveraging what the public believes, is just a warning, that when you tell the public something the

create a lot of jobs, and it doesn't, nafta, you end up with long-term costs. so that's just my two cents. infrastructure bank, anyone? >> can i just follow up on that? >> yeah. >> i think that addresses the first two questions about the politics of it and the timing. this is what i was saying before, the short run effects seem to be small so it is going to be damaging in terms of the long run politics to try to sell infrastructure as near term stimulus. i think that get to these, some of these like tracy's questions about politics that a mayor or governor or trying to sell government on an infrastructure plan now. the political economy problem is that the benefits may not come for many years in the future and that person is out of office by

that point. so they have to be very, you know, so maybe this get to the second question that you need to educate the public of what is the point of this? what is the benefit of this? to be able to sell them on something where the person selling them is not necessarily in office to take credit when the benefits happen. >> it seems to me the deferred maintenance thing is a really frustrating one. all of us who live in washington, d.c. are very aware the cost of the deferred maintenance in the washington metro doesn't lead any of us to want to give more money to the washington metro and nobody ever was willing to pay for an escalator that didn't break. it is hard to explain to people the values of that. it does take extraordinary leadership and relatively short term. >> i think the guiding principle is one that both ed and larry spoke to.

i think it is important to connect the cost of services with the price. i see people not getting -- you want people to pay to use things, something that reflects the cost of providing the service and to the extent that you make funny meks in ims complicated and not trance parent, it makes it harder to not happen. so i think the rule is to make mechanisms transparent and as people propose institutions and funding mechanisms that are broke with that those are things you should look at with suspicious. it makes it harder to untangle what people are willing to pay for a service whaen and what it actually costs. >> okay, now i'm concerned that people missed the point. i listed basic considerations to justify a project that are all met. hardly anything like this. and my punch line was, there is

no way the public secretary wto ever do anything like this. there is no way i will say we should increase infrastructure spending, not in this political system. that's the whole point. this system is so inefficient and so riddled with status quo bias, everywhere you go along the line, that it is not serious to think about reforming this in an efficient way. this is not an accident. this is built up for decade. and they are very powerful interests along the lines as well as just status quo bias to do it. now something like infrastructure bank, this is the kind of thing that is thrown out. what about this, what about that? what problem are you trying to solve as owe foesd whpposed to m do you continue to feed into. the infrastructure bank is more of the same. we won't improve efficiency in this thing. in terms of where the resources are allocated or how operations are run in terms of pricing them

better or how new technology is put in. none of that will happen. this is what we are dealing with. fortunately and this now is back a month ago when we had a program on, autonomous vehicles, the private sector is coming through with innovations that are going to improve the performance of the infrastructure. and the process they really may expose the vast inefficiencies of the public sector and things he that they could have done but haven't done, but we will see. but fortunately, that is where things are moving. and that is where we will see improvement improvement. but we will nef sver see them iy lifetime. these things are not addressing the fundamental problem. >> can i add something? >> yes. last word but short. >> you know, we have -- a couple years ago last year we started

having this -- which is supposed to work for water sector. and the lowest margin for the communities to get access to this money was $5 million. there are a lot of innovative water projects out there. such as recycling and reuse. or this storm water project. green infrastructure that they never fit the $5 million limit. so you never even get to that threshold ever to be able to access this. it doesn't matter if you say infrastructure bank, green bank, anything you put out. you need to be more forward looki looking in the way these are set up. we need to think about, what is it that we need in the future and how do we set up these financial systems or mechanisms that address 21st century problem rather than trying to solve a 20th century problem which we don't have as much any more or even want to do any more of that. >> i think one things that comes

through your presentation says that we should be careful that we are solving, we have solutions to the problem we have. if we have trouble raising money, that's something the federal government does well. if we have trouble having highest return projects, that's something the public sector doesn't do well. if we have a shortage of jobs we know micro economic policy could do something about it. the infrastructure probably won't have a short term return. if there is something that comes through, as you said, make sure that solution you have fits the problem at hand. with that, i'm going to dismiss this panel and invite my colleague, lee shaner, up here to move us to private investment. i mean, human capital investment. both private and public. encourage you to stay for that. if you stay for that, you get a free lunch. [ applause ]

♪ ♪ ♪ the presidential inauguration of donald trump is friday. c-span will have live coverage of all the day's events and ceremonies. watch live on c-span and c-span.org and listen live on the free c-span radio app. this weekend on american history tv on c-span 3, saturday night at 9:00 eastern, santa clara university professor nancy unger looks at the role of gay bars in history. >> many closeted gays go to their first gay bar. for example, san francisco's

black cat. and in these bars they find out that they're not the only ones. that there are lots of people who are atypical sexually. and when the war is over, they don't want to return to their small towns and their small town closets. many settle instead in the cities where they first experienced some self acceptance. >> then at 10:30, government policy makers and officials talk about the 1991 nunn-lager act establishing the process of storing, dismantling chemical weapons. >> what we found with the russians the nuclear complex was not an inheritance from hell. to them, it was the means for the revival of a great russia. >> sunday evening at 6:00 on american artifacts, fdr presidential library arcivist

and christina kovack on their efforts to preserve ten of franklin d. roosevelt's most important speeches. >> we chose them on significance, frequency of how often they are requested and quality of footage as well. >> i see a third of the nation still ill -- >> the gill university professor gill troy looks at u.s./israeli relationes from presidents harry truman too barack obama. >> i told the house of representative i would commit political suicide if i didn't support the state of israel. is the audience partition pags part of the program? who said it? next slide, jimmy carter in 1977. fooled you. >> for our complete american history tv schedule go to c-span.org.

>> kristin butcher recently talked about her research on the anti-poverty research programs on children and families who receive them. her remarks are followed by a discussion on impact of families with university of california irvine economics professor greg duncan. this is hosted by the brookings institution. it is 45 minutes. >> now we will turn to a different kind of vichbtment. investment. most people think