Tag Archives: hidden costs

Hidden Costs

The discussions on two threads, “Protectionism and the Detroit Bailout” and “Do-Over,” have made me think about the hidden costs of transportation.

Of course, the hidden costs of transportation matter a great deal. For instance, the hidden costs of gasoline and natural gas allow thugs like Hugo Chavez to destroy the civil society of Venezuela, and reckless men like Vladimir Putin to invade his country’s neighbors.

Hidden costs come in terms of infrastructure investments. For, so instance, the Dwight D. Eisenhower National System of Interstate and Defense Highways is essentially a subsidy on the price of gas, because it makes gasoline for cars much more useful than it otherwise would be. Similarly, a Detroit bailout would also subsidize consumption of gasoline, by taking capital that would otherwise be invested elsewhere, and using it to build SUVs like the Cadillac Escale and the Hummer.

However, things don’t need to be this way. Instead of building infrasturcture and supporting bailouts which empower destructive men like Hugo Chavez and Vladimir Putin, we could build a better fuel infrastructure. We could turn the hidden costs to be on the side of the good guys.

Projects like…

… point the way forward. Now, there are policy choices to be made. Should for instance, we encourage electric cars which use no gasoline, or hybrids that can scale faster? Likewise, to what extent should America lead alone, and what extent should the move off fossil fuels come from global cooperation?

Future threats are not from massive coordinated nuclear strikes that made the interstate highway system necessary, or even resource wars between rising countries.

Washington has an unusual amount of power during this crisis, during this inflection point in our economic history. Let’s hope that Barack Obama proves himself to be a forward-looking President, and helps move us off of oil and natural gas.