Bridge Comes to San Francisco With a Made-in-China Label – NY Times
SHANGHAI — Talk about outsourcing.
At a sprawling manufacturing complex here, hundreds of Chinese laborers are now completing work on the San Francisco-Oakland Bay Bridge.
Next month, the last four of more than two dozen giant steel modules — each with a roadbed segment about half the size of a football field — will be loaded onto a huge ship and transported 6,500 miles to Oakland. There, they will be assembled to fit into the eastern span of the new Bay Bridge.
Furthermore, the U.S. is at full employment and only 936K (as of Ocotober 2016) of the labor force is employed in heavy construction and civil engineering. You can’t take an unemployed banker and have him/her build a bridge or hospital. This is not like the WPA and CCC during the great depression where the unemployed built campgounds, for example.
If implemented, expect big inflation in a few years. The markets are already beginning to price it in with the collapse of the global bond markets and huge rally in the dollar.
The U.S. will thus have to rely heavily on immigrant labor and foreign firms for its $1 trillion infrastructure build out. Exactly the opposite of what Trump has campaigned on. Ironic, no?
Finally, many construction jobs will be automated in 10 years anyway and most, if not all new, jobs will be in software and coding. We have been writing, no, warning about this for years.
The brave new world of robots and lost jobs
A look at the numbers suggests that the country is having the wrong economic debate this year. Employment security won’t come from renegotiating trade deals, as Donald Trump said in a speech Monday in Detroit, or rebuilding infrastructure, as Hillary Clinton argued in Warren, Mich., on Thursday. These are palliatives.
The deeper problem facing the United States is how to provide meaningful work and good wages for the tens of millions of truck drivers, accountants, factory workers and office clerks whose jobs will disappear in coming years because of robots, driverless vehicles and “machine learning” systems. – David Ignatius, Wash Post, Aug 11, 2016
The Japanese spent the U.S. equivalent of almost $20 trillion of infrastructure build from 1991 to 2009, building bridges to nowhere and got them nothing — well maybe staved off a greater depression — but a debt of over 200 percent of GDP and are now on the verge of blowing up.
Japan’s Big-Works Stimulus Is Lesson
Moreover, it matters what gets built: Japan spent too much on increasingly wasteful roads and bridges, and not enough in areas like education and social services, which studies show deliver more bang for the buck than infrastructure spending.
“It is not enough just to hire workers to dig holes and then fill them in again,” said Toshihiro Ihori, an economics professor at the University of Tokyo. “One lesson from Japan is that public works get the best results when they create something useful for the future.”
In total, Japan spent $6.3 trillion on construction-related public investment between 1991 and September of last year, according to the Cabinet Office. The spending peaked in 1995 and remained high until the early 2000s, when it was cut amid growing concerns about ballooning budget deficits. More recently, the governing Liberal Democratic Party has increased spending again to revive the economy and the party’s own flagging popularity.
It’s about time we start to think outside the box, don’t you think?