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Steve Pearlstein Is Snowed In and Fed Up

February 10th, 2010 . by economistmom

snowplow-in-front-of-capitol

In today’s Washington Post (not that I received it on my doorstep this morning, but just that I read online), Steve Pearlstein has an entertaining little rant about how ill-prepared the DC area is to handle this kind of snow:

Here’s a little thought experiment:

You’re sitting at home for the third straight day, unable to get to work because of the snow. Your kids are on the fourth day of a snow vacation that is likely to last through the end of the week. How much would you have been willing to pay to guarantee that the streets and sidewalks were clear and things could have run pretty much as normal? $10? $25? $50?

Or imagine that you own a business with 50 employees that is closed for three days because of the snow, but you still have to pay $30,000 in salaries for work they didn’t do. What would you have been willing to pay to have things running normally this week? $1,000? $2,500? $5,000?

My guess is that, given the benefit of hindsight and several days of house arrest, “snow insurance” sounds tempting…

Steve then argues that it would be reasonable for local policymakers to consider raising revenues (i.e., taxes or fees) to pay for this more adequate “snow insurance”–but the only reason that’s a fantasy is because of the “broken politics” that makes it so hard to raise taxes for any reason:

Republicans would immediate call it “the biggest tax increase in history” and declare unequivocally that it would send the economy into a tailspin while radically expanding the government. Chambers of commerce would issue news releases warning that the tax would particularly hurt small-business owners, who as we all know create every new job and would now be forced to cut their payrolls or close their doors. Virginia’s House of Delegates would move immediately to kill the proposal, thereby dooming consideration by all the other jurisdictions.

It is a measure of the dysfunction of our political system that we can no longer rationally debate whether it is penny-wise and pound-foolish not to spend a little more to try to keep the Capital of the Free World from grinding to a halt every time a snowflake descends from the heavens.

I realize there are lots of problems that cannot be solved just by throwing money at them, but snow removal is not one of them. We have the know-how, we have the technology and we have the money and economic self-interest to do it right. What we don’t seem to have is the leadership or political will.

Steve then goes on to do a “back-of-the envelope” calculation of how costly these lost days of work and school have been to this region, as evidence that government has not spent enough money on their snow-removal capabilities.

Yes, I agree with Steve that our local governments are ill-prepared to deal with these kinds of snowstorms.  Growing up in the Great Lakes region, I know that there are other parts of the country that do it much better and faster.

But we in DC are ill-prepared for this kind of snow, not so much because of our bad politics (I think politics over the rest of the country are just as bad, no?)–but because this kind of snow is such a low-probability event here.  Here’s a chart from a WashingtonPost.com weather blog (weather-blogger Matt Rogers)–as of before today’s blizzard which is supposed to add maybe a foot more!–showing the rarity of 2′+ snow seasons here in DC:

dcwinter09-10

Matt puts this in perspective:

With the impending storm for tomorrow and Wednesday, we have a legitimate chance for an all-time (since records have been kept in the late 1800s) seasonal snow record.

Our big weekend storm surged Reagan National Airport’s seasonal total to 45″ with the balance of February and March yet to go. This places our current winter in position number three for the snowiest winters on record, behind 1995-96 (46″) and the big one, 1898-99 (54.4″). Of course, that all-time record was set at a more downtown location (M Street), so some may argue the higher elevation and location away from the Potomac was an easier accomplishment. But in my mind, that makes this potential record season all the more notable.

The chart above tracks seasonal totals since the 1990-91 snow season. Just look at that volatility. Get this: our 45″ this season is more than the last four winters COMBINED (which was only 35.5″).

An economist would say we’ve got to make decisions about public infrastructure and contracted services from a cost-benefit perspective, which has to be evaluated under conditions of uncertainty–weighing expected marginal costs against expected marginal benefits.  Of course, from an “ex post” perspective (after the snow has fallen–e.g., Steve’s current view), it looks like local policymakers got it all wrong and spent way too little on snow-removal equipment and services.  But from an “ex ante” perspective (before the snow has fallen or any even long-term weather forecasts have been made, maybe with the exception of the farmer’s almanac) I can’t imagine that any cost-benefit analysis would suggest it makes sense for the DC area to gear up for the kind of major snowfall we’ve experienced this week–in terms of purchasing equipment or advance contracting for services or otherwise committing to spending their budgets on something they might not ever use.

Instead, what such low-probability-but-bad-outcome events suggest is the need for local governments to have adequate “rainy-day” (ok, “snowy-day”) funds in place, in order to be prepared for what this snowfall really is (in this part of the country): an unanticipated emergency.  That’s where the “broken politics” messes things up, because Steve is right: we can’t seem to raise taxes for any reason, especially if it is to be better prepared for the future–be it a big snowstorm or even our kids’ standard of living.

***UPDATE (5 pm):  We just broke the all-time record for the snowiest season in the DC area!  Here’s a new graphic from the WashingtonPost.com weather gang below.

record-snowfall-washingtonpost-021010

9 Responses to “Steve Pearlstein Is Snowed In and Fed Up”

  1. comment number 1 by: SteveinCH

    Diane,

    I think you and Steve miss the two larger points. First, given the way we tax, we wouldn’t actually charge everyone $5 or $10 or $25, we’d charge half the population $50 and the rest $0 because that’s more fair. Second, and more importantly, we can’t have a rainy day fund because politicians would spend the money on something else instead.

    Fundamentally, politicians will spend every dollar they can trying to provide something that someone might want today. A low frequency insurance policy would never survive the political process on the spending side.

  2. comment number 2 by: Joe Cordes

    Diane:

    Exactly. Indeed thanks for this…it will make for a great example in the Benefit/Cost analysis class.

  3. comment number 3 by: AMTbuff

    Do local union rules prevent cities from importing snow removal services from towns in or near Canada? In other words, add rent vs. buy to the decision process. Renting would seem to be more cost-effective, also benefiting the towns who provide the service.

  4. comment number 4 by: Richard K. Green

    This is quite correct. Of course, because I live in California, it is easy for me to say that it is correct.

  5. comment number 5 by: Brooks

    I’m reminded of a couple of things.

    One is the irrationality of “The One Percent Doctrine” if my (admittedly superficial) understanding of it is correct: that our anti-terrorism policy, decisions and actions to combat the risk of large scale terrorist attacks is that we should treat any and every possible threat of even an extremely low probability as if it were a certainty. Hardly a rational approach to deploying finite resources and balancing conflicting objectives even within the same category.

    The other thing I’m reminded of is that episode of The Simpsons in which a very rare (or first-time ever) event occurs: a bear wanders into town. Homer gets a mob together to march down to the mayor’s office and demand “Bear Patrols” — vehicles and personnel to constantly patrol the streets to contain this supposed outbreak of bear invasions. The mayor (ever the panderer) complies. But then Homer gets notice in the mail of a new “Bear Patrol Tax” to pay for the patrols. Homer organizes an angry mob to march down to the mayor’s office to protest this tax, with Homer demanding “Let the bears pay the bear tax!”

  6. comment number 6 by: Brooks

    A third thing I’m reminded of is something I think Stalin supposedly said when he heard that, during our depression, some U.S. cities were keeping snow plows in the garages and hiring hundreds of men with shovels to remove snow from the streets. If my memory serves (memory from history class, not from personal experience — I ain’t that old, no matter what my girlfriend says), Stalin, apparently enjoying that tough time under capitalism, supposedly remarked snarkily, “Why not let them all use spoons and employ thousands”.

    Few would suggest we do something so inefficient just to make work for Americans, yet many characterize offshore (i.e., overseas) outsourcing as downright evil, even though the dynamic is essentially the same as if they were displaced by technology (Americans losing their current jobs because a more efficient means was found), but with the benefit of people who are poorer and more desperate for work gaining income. Which is why I posted “My Question for Lou Dobbs” a couple of years ago http://swordscrossed.org/node/1662

  7. comment number 7 by: Brooks

    FYI All — http://budget.senate.gov/democratic/hearingstate.html (video of past hearings can be viewed — see “Watch the Hearing” links on the right)

  8. comment number 8 by: Brooks

    Actually, I meant to link to http://budget.senate.gov/republican/NewHearings&Testi.htm

  9. comment number 9 by: Brooks

    Oh, and if anyone watches the video from February 9, how ridiculous is Senator Session’s interruption of a serious discussion at 63:05 of the video?! How is it that a U.S. senator is not embarrassed by such conduct?