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One unpleasant surprise after another, from the top down.
*The age of the residential stock is at its highest level in 40 years, despite the mammoth building boom of the 2000s.
*The age of the government capital has steadily risen over the past 40 years, suggesting great underinvestment in public infrastructure.
*The age of the private nonresidential capital stock has risen more or less steadily since the early 1980s, with a slight dip in the New Economy boom of the 1990s.
Mandel has another chart:
It’s kind of an odd and surprising picture. The sectors which got younger were mining, farming, and transportation. The information sector, which was supposed to be leading the economy, had the biggest rise in average age. That’s because we just weren’t investing enough in information technology over this stretch to make up for the aging of the old physical infrastructure.
As revealed in the comments on Mandel's blog, computers average only one and a half years old, so Mandel assumes the higher-aged equipment age must be elsewhere in the Information industry. But commenter mrdon (not me) objected further:
I am not sure that “increasing age” is always indicative of a “failure to keep up”. For example, over the years the average age of our automobile fleet has increased because cars last longer (are useful longer) than they used to be. Growth in residential capital stock is a function of replacing residences which are no longer useful and of meeting the needs of an increasing population. It is pretty clear right now that people’s real residential needs are being more or less fully met.
I grew up in a 200 year-old house, and people still live there. Older buildings, if well-built and well-maintained, are not something you need to replace. Mrdon makes a good point about looking closer at statistics, but doesn't challenge the central point.
And it can be argued that we are not keeping up with our infrastructure, but the average age of that infrastructure reflects many things — not just the adequacy of replacing things that wear out. The author seems to be inferring by measuring the age of existing capital stocks that everything that wears out must be replaced with something similar. An innovative society can use its creativity to replace the function of existing things (when the need for replacement arises) with new things which cost less in real terms than the original item. Any time a capital asset is replaced by something which is more durable and/or more versatile, it will create the appearance of aging without affecting the functionality of the asset. ...
We are clearly not building more durable buildings, though. Over my 30 year career, I have seen less costly metal studs supplant concrete block as backup walls, and less costly artificial stucco and vinyl siding supplant brick or wood as veneers. Manufacturer's reps swear these are better solutions, but I think the primary driver is lower investment cost.
As I noted above, Paul Krugman also references the top chart for a brief comment in Build We Won't:
It’s been obvious for a while that America, once the nation of heroic infrastructure, has become the place that can’t build stuff — the place whose greatest city continues to rely on a century-old tunnel under the Hudson, and can’t muster the political will to build another.
Among the 140+ comments to Krugman's blog, melancholy aeon notes:
The problem with this issue, Dr., is that most Americans don't travel. They don't leave the USA except perhaps to Mexico or the Caribbean. As a result, they don't understand how far behind we are. They just don't understand what Europe really looks like outside of the medieval tourist areas, or how the major cities in Asia and the Middle East have modernized to surpass us. The pictures in their minds are from 4 decades ago. And the lack of strong foreign news and foreign coverage helps keep them in the dark to the fact that we have become a Third World country, infrastructure-wise.
Commenter bob h agrees with aeon:
After weeks riding the subways in Tokyo- clean, modern, signs flashing all the station info you need, on time, descending into the NYC subways was a shock. The NYC subways are a fifth-world disgrace.
Commenter Vera piles on:
I've been working outside the country for five years. Our shabbiness is shocking. The new suburban communities look like something out of "Pleasantville," but scratch beneath the surface and you'll find toxic drywall from China. Cities are kept alive only to be bilked by someone packaging the latest permutation of a financial derivative.
Canadian investors were betting that Americans would botch health care reform, so the smart money was on the stocks of health insurance corporations and physicians management groups, or the new and improved HMO.
Why build anything when you can just siphon money out of services that people need? No wonder doctors are abandoning medicine to become investment bankers. Why bother building a society? In this culture anyone who wants to serve is treated like a sucker.
Commenter mickeyrad stops the buck at Obama:
We have a Third World infrastructure. Our water systems are decrepit; our sewer systems are antiquated; our highways and bridges are falling apart; we can't even maintain buildings and structures built by previous generations.
In Washington, DC, the water system is poisoning the inhabitants. The sewer system waste water flows untreated into the Potomac during storms. Forget about building a green power grid or any modern infrastructure - we can't even fix what we have.
Obama the "brilliant" spends a few billion on infrastructure, but gives rich people hundreds of billions of dollars in tax "cuts" - in reality, tax deferrals to future generations. Obama is doing his best to outdo GW Bush to become the worst president since Buchanan. So far, Obama is succeeding in that goal.
Commenter J. Brad Hicks chides the boomers:
I'll tell you what's happened. What's happened is that the Greatest Generation raised a generation of ungrateful whiners. Between 1850 and 1950, a hundred years' worth of Americans sweated blood and spent all their treasure so that we could live in a decent country, so we could live in something other than a third world slum. And all they asked of each generation that followed them was: maintain what we built. And for 100 years, that bargain was kept. But as soon as the Baby Boomers got old enough to run for office, they ran for office, both parties, on a platform of "nuh-uh! don' wanna!" and they're refused to pay for maintenance.
Ask anyone who's tried to deal with municipal transit, or even (increasingly) repair costs on the roads and bridges: there is no city, county, or state in the country that's willing to pay taxes just to maintain what their grandparents were so proud to have built for them; if they're going to pay 1 penny more in taxes, they insist that they get something brand new out of it. "Nobody ever got their picture in the paper for cutting the ribbon on a filled-in pothole," but somehow every generation, from 1850 to 1980, got the potholes filled. Since then, it's been a steady downhill slide towards decadence and, what? eventually? When will it stop? When we become a total third-world banana republic? Or will we keep refusing to maintain our roads, our bridges, our power plants and power lines, our water and sewer treatment systems, until we slide all the way back to barbarism?
America: your great grandparents and grandparents paid good money and broke their backs on top of that so you could have nice things. And if they saw now what you've done with them, they'd be ashamed of you; you don't care enough to take even minimal care of the inheritance they left you.
So Dig We Must, but I have a feeling that by the time we get around to it, we'll be using ordinary shovels.