We Can't Build 'em Like That Anymore

Government greed is killing our society.

We've written about our government's inability to carry out any project to achieve any sort of sensible goal.  Mr. Obama's administration couldn't connect the dots about the panty bomber and they couldn't connect the dots about the terrorists who were planning to attack our embassies all across the Middle East.  When the attacks occurred, the spastics in the White House initially blamed a video which had been on You Tube for months.  It took days for them to admit that it was, indeed, a terrorist attack, just as Mr. Romney said from the beginning.

We Can't Build, Either

Our incompetence extends to infrastructure.  We wasted billions on the Boston Big Dig and it took nearly 50 years and countless billions to start the Second Avenue subway in New York City.

The folks at Forbes don't put all their material on the web where it's easy to find.  In the issue of Oct 8, 2012, p 30, they crunched some numbers and showed just how badly we've lost our ability to build anything much:


GiftCarnegie HallNY Public LibraryStanford UniversitySmithsonian Institution
BenefactorAndrew CarnegieTilden, Astor, LenoxLeland StanfordJames Smithson
Cost$1.1 million$29 million$39 million$ .5 million
Original cost in 2012 $$25 million$711 million$381 million$11 million
Est. 2012 total cost $515 million$1.6 billion$4.5 billion$8.7 billion
Est. 2012 Cost to build $370 million$360 millionHuge$2.6 billion

Although Leland Stanford's original gift included buildings as well as land, Forbes wasn't able to estimate the cost of rebuilding the university.  The Smithsonian Institution has become a federal facility and is subject to unusually expensive construction practices imposed by the US Government.

That leaves two other building projects which both happened to fall in New York City.  What happened to building costs there is indicative of the substantial cost explosion in building projects all across our land.

The cost of putting up a building can be divided into the cost of materials plus the cost of labor.  Materials costs have gone up roughly in line with inflation.  That is, to buy the materials needed to repeat the construction of Carnegie Hall would cost roughly 25 times as much as the cost of the materials for the original, because today's dollar is worth 1/25 what it was when Andrew ruled over U.S. Steel.

Why, then, would it cost nearly 370 times as much to repeat the construction of the Hall?  The answer's simple - construction unions and bureaucracies have increased the cost of construction far, far faster than inflation.

The Cost of Bureaucracy

We've discussed the costs which bureaucracies impose on infrastructure projects.  In a story "City tightens its regulation and inspection of cranes," the International Herald Tribute reports:

New York City ordered broad changes on Tuesday to the way it inspects and regulates tower cranes, in the wake of a crane collapse that killed seven people on the East Side of Manhattan.

The Buildings Department said a city inspector will now have to be present every time a crane is erected, jumped or dismantled.

The accident turned out to have been caused by a faulty weld during a crane repair.  It was never made quite clear just how having the building inspector standing around would prevent a crane failure due to a faulty weld, but the inspectors are out there, spinning their meters and raising costs.

This new regulation has been added for no reason and will add nothing to safety, but it will never, ever, go away.

The Cost of Unions

Bureaucracies have contributed mightily to construction costs, but private sector unions have contributed as well.  USA Today explained a major reason why construction costs have gone up so rapidly.  It's not that construction workers are overpaid, it's that union contracts build in so much waste:

Egregious — but contractually authorized — waste can occur even on the most socially significant jobs, such as the rebuilding at the World Trade Center site in downtown New York. Take the operating engineers. The eight tower cranes plying the huge site are operated by licensed engineers who are members of Locals 14 and 15. The Local 14 contract requires that a so-called master mechanic be on hand to make repairs whenever three tower cranes or five pieces of heavy equipment are in use. That made sense long ago, when master macs actually worked on the equipment. But today's advanced machinery is repaired by the crane owner or the manufacturer — not by the union. Master macs have virtually nothing to do.

Nonetheless, the master mac is paid his $135,000 base annual salary — a minor cost, however, compared with his guaranteed overtime. Ground Zero's rigorous rebuilding schedule of 12-16 hours a day for six days a week pumps the master mac's annual take up to roughly $405,000 a year, says a study by the Real Estate Board of New York. Benefits, pension payments and insurance can produce an additional $300,000 — for a total of $700,000. REBNY estimates that the three master mechanics at Ground Zero will cost an unnecessary $6.3 million through 2013.

There you have it.  Three union workers who have nothing to do cost $6.3 million during the reconstruction of the World Trade Center.  We've had liberals complaining about bankers' greed and the greed of businessmen, but where are the complaints about the greed of union workers who're protected by cushy contracts?  Liberals won't complain about that sort of greed because the unions pay them off in campaign contributions.

Greed is part of human nature.  Businessmen are greedy, politicians are greedy, union members are greedy, and, yes, you and I are greedy, too.  The difference is that government and union greed can use the power of law to extract money for nothing; to satiate your and my greed, we have to work hard to persuade someone else to freely give us the money we want in exchange for something they find useful.

Our grossly inflated costs have made it nearly impossible to construct much-needed infrastructure.  Our pension costs are running away and we can't improve economic efficiency to cover the costs.

Unless a significant number of American back off from greed a bit and start to consider their overall contribution to society, we'll go down in flames like the Greeks.

Will Offensicht is a staff writer for Scragged.com and an internationally published author by a different name.  Read other Scragged.com articles by Will Offensicht or other articles on Bureaucracy.
Reader Comments

We are all Greeks in varying degrees. This won't change because of the innate greed built into our psyche. With this observation things look hopeless when one tries to consider how to allow capitalism to work which wrings out greed because of economic pressure and not because we as individuals decide to stop being greedy on our own.

The Davis-Bacon act of I think 1934 is as much to do with the problem of needless excess costs as anything we have today. This act was a racist act passed by the progressives, liberals, democrats or whatever name they want to hide behind to obscure their agenda. It was an act to keep blacks from working in places like New York City and other "progressive and caring" northern unions. The blacks during the depression wanted work like everyone else and they would work for less thus keeping the white worker out of work. The white worker didn't want to lower his paycheck so he sought relief from his union. The union pushed the elected officials to pass laws so that all federal jobs paid the same regardless of where the work was done. As a result of this there is no incentive for a contractor to lower labor costs which mushrooms throughout the economy. The union leaders have done a snow job on their workers by not explaining to them that purchasing power is where real raises come from and not seniority merit raises. All a raise does is cause inflation and the raise is negated. Simple as that but that won't do for the unions. This coupled with useless jobs like the aforementioned master mechanics cost every single person in this country. As I have written in the past the only way to solve this dilemma long term is through education starting in the first grade about capitalism and why it lifts more people out of poverty and to greater heights than any other system mankind has ever know. The garbage dumps are full of pst societies based on democracies, socialism, communism, fascism, divine rule, and any other that you want to name. None have even approached the success of capitalism.

So with this thought concerning greed and how to conquer it the process is laid out in simple terms before our very eyes. The question is do we want for our reach to far exceed our grasp?

October 18, 2012 11:24 AM


December 3, 2012 4:24 PM
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