matthew turner, let's turn to transportation. >> thank you. i have a friend who is a fish biologist. he thinks fish are important. i'm a transportation economist. 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 5%. you with bring that 5% 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

matthew turner is a professor of economics at brown who has written quite a bit about transportation. dan wilson is at the federal reserve bank of san francisco. and cliff is a colleague at brookings. pretend we had a resident of the united states who has a short attention span. pretend, that he ran for office saying i want to spend a lot more money on infrastructure. pretend that maybe this tax credit thing was something that peter navarro thought up and would never resurface. what would you tell them about how we want to wisely spend the money and based on what evidence? i have asked that each of them give us a seven or eight minute spiel that they would give in the oval office. we will have some interaction. maybe i can start with you because we have not talked about water. quite a bit of focus on water lately. the supply of but also the pipes. it depends on access to clean water. water is a hidden infrastructure partly because people don't know where the water is coming from and going to the connection is i cut on the water and it comes out. they don't have an understanding of wha

matthew turner will hopefully say something about the fund macmullan law on terrific traffic. vehicle miles traveled increased one for one with highway miles built. if you build it, they will drive it. unless you actually use price toss ration, you just get more and more drivers on the space. i should push slightly back about there are cases in which transportation yields things that look like conglomerations. there are also cases where you nd up de--glomeratting things. point number four, not only does infrastructure need to be paired with better incentives. it needs to be paired with the right institutions. i want to also make myself a persona non-grada in the port authority in new jersey on this. just giving money to the port authority is foolish. it does the opposite of what we want to do, which is get meaningful institutional reform. it means breaking it up. it was a poster child for good government. it no longer is. it may well be the right answer to privatize some of those airports. the privatized heathrow example is working better than the public example in new york. p

matthew turner will hopefully say something but the fundamental highwa highway trafd a wonderful paper he wrote which showed vehicle miles traveled increase roughly one for one with highway miles built. if you build it they will drive it. unless you use prices to ration, you just get more and more drivers on this space. i should push slightly back about the iraqis of which transportation fuels things look like conglomeration. there are cases as in the case of the highway system which you end up -- each new highway that cuts through multiperson for reduces the cities population by the 18%. point number four, not only does infrastructure need to be paired with better incentives. it needs to be paired with the right institution. i want to also make myself a persona non grata in the port authority of new york and new jersey on this and i believe strongly just giving money to the port authority is foolish. and that it doesn't opposite of what want to do which is to get meaningful institutional reform and i think almost sure the case it means breaking up this behemoth. it was a poster child

matthew turner, will hopefully say something about the fundamental law of highway traffic, a wonderful paper he wrote, which shows that vehicle miles traveled increase roughly one for one with highway miles built. if you build it, they will drive it. okay? and there is, you know, unless you actually use prices to ration, you just get more and more drivers on the space. i should push slightly back about there are cases in which transportation yields things had that look like agglomeration and also cases in the case of the highway system in which you end up de-aglomerating. each new highway that cut through a metropolitan area after world war ii reduced congestion. not only does it need to be paired with better incentives, it needs to be paired with the right institutions. so i, you know, i want to also make myself a persona non grata in the port authority of new york and new jersey on this. i believe strongly just giving money to the port authority is foolish. in fact, it does the opposite of what we want to do which is to get meaningful institutional reform and i think almost surely in

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