We’re Getting Worse at Building Things

It may surprise those stalwart supporters of my blog, admittedly few in number, but I admit making regular pilgrimages to the Temple Mount of the Adorable faith – the pages of the New York Times. Having read the newspaper for years, I know it to be a work of extraordinary craftsmanship, yet strangely beguiled, maddened even, by fantasies of a worker’s paradise now woke. I think it was William Shakespeare who said, “Though this be madness, yet there is method in it.”

Yes the Times is possessed by madness, but a madness infecting my country’s leadership, the people who shape the future for my children and grandchildren. As there remains little left for me in this life but to ease my descendants’ passage in it, it drives me to learn what I can of that peculiar madness in order to do my best by them.

And so it was, amid the flotsam and jetsam of college dorm room bull sessions dominating the Op-ed page of the Times, I saw an interesting piece a few days past. One of its regular contributors, Ezra Klein, had a thoughtful piece on something other than the newspaper’s commonplace concerns, the various taxonomies of victimhood and virtue signaling.

Just coming up on that birthday marking the onset of maturity (40), Mr. Klein is a model Adorable, a Californian checking all the boxes of the woke. A commentator on the nexus between politics and economics, President Biden’s staff reputedly follows him avidly on social media.

Mr. Klein’s piece, “The Story Construction Tells About America’s Economy Is Disturbing”, explores the steady decline of construction productivity in the United States since 1970. As always, Mark Twain’s dictum on the relationship between liars and statistics should be observed, but the numbers are stark and Mr. Klein explains them well.

Since 1970, overall labor productivity in the United States has increased 300%, while manufacturing productivity has tripled that average, increasing 900% over that time. But while  construction productivity had risen sharply before 1970, since then in contrast to the rest of industry it has actually fallen. Despite our technological prowess, our advances in engineering and design, equipment and prefabrication, etc. we are not as good at building things today as we were in 1970. As Klein puts it:

“You’d think we could build much more, much faster, for less money, than in the past. But we can’t. Or at least, we don’t.”

Mercifully, Mr. Klein digs into the reasons for this decline thoughtfully, without flogging the usual hobby horses of Adorable America. Of course given his background, he has a very different perspective on construction and declining productivity than someone like myself, but that differing perspective is why I read the Times.

There is method to the Adorable madness and it is insightful. As Terry Goodkind memorably put it, “When your world is crazy, it doesn’t pay to be sane”.

As it happens, my own experience with construction productivity is personal, beginning right around that pivotal inflection point, 1970. In anticipation of any jokes to be made about the nation’s decline in productivity coinciding with my own arrival on the scene, I take refuge in David Hume’s wise insight – “correlation is not causation”. But truth be known, while back in the day I talked a good game about productivity, the results left much to be desired.

In reading of the decline in construction productivity beginning in 1970, the Presidency of Richard Nixon and the date of Dec. 2, 1970 immediately came to mind. As it happens, I am old enough to remember good old Tricky Dick. Donald Trump was not the first Republican President to be universally despised and denigrated by the great and good. But then as is often the case in politics, irony abounds. Even though vilified by liberal America, Richard Nixon probably did more than any other President to advance the agendas of the great and good.

Under the stewardship of Nixon, the Environmental Protection Agency (EPA) came into being on Dec. 2, 1970. One might see it as the camel’s nose into the tent. The EPA became an organization of extraordinarily broad power and scope, but it was only the first born in a large and boisterous family. At the risk of teetering on the edges of blasphemy, one might paraphrase the Apostle Paul’s words in the 8^th Chapter of the Book of Romans –

“And we know that in all things our Government works for the good of those who love bureaucracy, who have been called for that purpose. For those the Government foreknew, it also predestined to be conformed to the image of the EPA, that it might be the firstborn among many brothers and sisters.”

The first ten years of my career, spent in Southern California, were in large part in the service of work necessitated and to a greater or lesser extent controlled by one of those EPA siblings, the South Coast Air Quality Management District (SCAQMD). As has been said many times, “the future happens first in California”. Created in 1976, the SCAQMD was one of the first of the EPA’s sisters and brothers. I remember the old-timers among my co-workers back then grumbling at the “paper work, red tape and general nonsense” they now had to deal with.

The EPA along with its sisters and brothers, the regulatory state, changed the construction game completely. Before the arrival of the regulatory state, construction was a straightforward effort to produce the Owner’s desired facility of the desired quality in the least time for the least money. However with the arrival of the metastatic regulatory state, that once straight line became something resembling a UPS route through a stoplight infested neighborhood given over to blind alleys and one-way streets. So much for productivity.

Over the years of my career, I had a love/hate relationship with the regulatory state. There is something about the engineer that just wants to get on with the work and build something. The delays and roundabout methodologies along with the dependencies on various “officials, consultants and stakeholders” that come along with the regulatory state invite irritation, nay, the overwhelming need to go and hit something.

As an example, I remember our pipeline construction contractor put on “standby” for over a month because a hawk’s nest had been found along the pipeline route. The fact that the pipeline route closely paralleled a well-used dirt bike/ATV trail had no bearing on the matter. While raptor nests in busy urban areas testify to the resilience of their reproductive lives, it is an article of faith in the regulatory state that pipeline construction is the ultimate buzz kill for the shyly blushing raptor female.  As we were building the pipeline in question on a “hard money” basis, it was definitely a “hate” the EPA time.

On the other hand, we employed in a profitable manner numberless archeologists and biologists to “survey” pipeline routes for “endangered species” and “archeological remains”. Practically everything I ever worked on was touched by the regulatory state in a way requiring more hours, more work and of course more money for the same outputs. The burdens imposed by the regulatory state at no time increased output or in any way increased productivity.

Due to the irresolution and uncertainty that was a given with the regulatory state, work prior to actual construction was often on a “risk free time & materials” basis. Thus the only loser is the owner and unfortunately, the economy. While the regulatory state is a carbuncle on the posterior of the “can do” engineer seeking to build something, there is no question that the engineering/construction profession, in all of its manifestations, is well compensated for that pain in the a**.

Before all the right thinking folks reading this screed begin to rage over the fumbling bumbling regulatory state, let’s remember how we got there. There were signs and portents prefiguring this awaited one. In many ways, the progressive left saw the EPA as the Jews of ancient Israel had seen their Messiah, as the awaited one that would usher in the utopian promised land.

Back in the late 1960’s the McCarthy/McGovern wing of the Democratic Party, known at the time as the New Left, orchestrated a barrage of protests and media coverage featuring pictures of orphaned kittens that would be familiar today. All this was in an effort to bring about their promised Messiah, the iron hand of a righteous government. But in 1970, Congress was the home of adults rather than performance artists and media influencers, hesitant to put such raw power in the hands of agenda pursuing bureaucratic careerists.

But then a river in Ohio caught fire. An oil slick on the Cuyahoga River in Cleveland caught fire and became a media sensation. In point of fact, the river had caught on fire a dozen times before, it being something of a regular occurrence, with this particular fire being smaller than most. But this time, the national media ran with it. Walter Cronkite talked about it, Time Magazine wrote about it and it became a cause celebre. Just as with George Floyd, the Cuyahoga river spark lit a thousand fires, carefully nurtured by the media of the day.

On April 22, the State of Nebraska had celebrated an innocuous holiday called Arbor Day since 1885. A state of treeless plains had put in place a holiday celebrating spring and at the same time encouraging its citizens to plant trees. Like many well-intentioned ideas, it was hijacked by humorless zealots and renamed Earth Day in 1970.

Taking a break from protesting the Vietnam War, 20 million people reportedly took to the streets protesting on that first Earth Day in 1970 – or enjoying the spring sunshine or just engaging in that old standby of Baby Boomer protest marches – picking up hippie chicks and doing some dope. But no matter their reasons, it was the final straw and two months later on July 9^th Tricky Dick signed an Executive Order named Reorganization Plan No. 3.

Governmental mendacity in messaging did not begin with the Affordable Care Act or the Inflation Reduction Act, nor is it used exclusively by Democrats. The Nixonian Reorganization Plan No. 3 created the EPA. Congress saw the writing on the wall and rapidly took a knee. The Clean Air Act and The Clean Water Act followed in quick succession. These two bills gave the EPA its claws and its teeth, as well as a remit to remake America.

Again, let’s remember the EPA was created because rivers in Ohio were burning, the air in Los Angeles was thick enough to chew, lakes in the Northeast were acidic enough to eat metal. The EPA and its great family solved those problems, but the ironclad 1^st Law of Bureaucracy’s states:

“No one’s career is advanced or budget increased by declaring a problem solved.”

Nobody ever accused the Baby Boom Generation of letting their ideals get in the way of career advancement. The regulatory state has been enhancing careers and being awarded increased budgets since 1970. It has been, and continues to be, a growth industry.

Whether one supports its existence and its present reach is of little note. Construction must be pragmatic, else a career ladder in retail coffee service beckons. Constructors in America have learned to live with the regulatory state even though taking every chance to complain.

In fact, I think another quote from William Shakespeare might well capture the true picture of the construction industry:

“The lady (construction) doth protest too much, methinks”

It was the Danish prince Hamlet’s mother who made that observation, and like her we see a construction industry posturing about the evils of regulation in an unbelievable manner. As my own experience back in the day proved, while the delays, procedure laden trivia and circular reasoning frustrate my desire to just get on and build it, they do increase profits.

In fact, once I learned the steps of the regulatory dance – all of that foofaraw protected me from competition. After all, in the great dance between the regulatory state, the constructor and the owner, the only one who really cares about productivity is the owner. It doesn’t take a rocket scientist to understand; the more complicated the dance, the harder it is to learn the steps.

Whether one thinks the regulatory state an unalloyed good or a thicket in need of Round-Up, it is the major reason for the decline in construction productivity. Everything costs more than it might, takes longer than it should and stifles competition. But rivers no longer burn in Ohio, Los Angeles has breathable air and the trout have returned to the lakes of the Northeast.

Mr. Klein does a good job of talking through this trade-off. It is where we are in 2023. He does not bear my scars earned along the way, nor my career triumphs – nor I his. We look at the costs paid and the gains made through different lenses and assess different values, but we are in broad agreement as to why construction lags the broader economy so badly.

The regulatory state exists, but like any living thing it has an ecosystem and Mr. Klein, like myself, winds up there. But one can not really understand the true extent of that drag on our economy’s well being unless one understands the ecosystem within which the owner, constructor and regulatory state live.

An ecosystem is according to the National Geographic a bubble of life, plants, animals, soil and climate. I think it to be an apt metaphor for the construction industry. There is a financial environment allowing for the construction of the things necessary to meet the needs of the people in an economy; developers/owners, constructors/engineers, service providers, manufacturers and regulators each pursuing their interests within this bubble.

But every ecosystem is prone to parasites. Economists have a term for parasites in an economy. That term is “rent seeking”. “Rent seeking” refers to using one’s position for economic gain without providing any benefit for that gain. The Encyclopedia Britannica provides a particularly apt definition; “competition for politically protected transfers of wealth”.

While the “Green Economy” is something new in the world, an ecosystem consisting only of parasites, the construction industry is infested with parasites as well. Every construction project, whether backyard storage shed, downtown apartment building or Amazon warehouse, has a host of “interested parties” along with the owner and the constructor whose needs must be met. Most of these “interested parties” cloak their insatiable grasping of “economic gain” under the virtuous cloak of “non-profit in the public interest”.

Mr. Klein doesn’t use the term – “rent seeking”, even though he devotes a substantial part of his essay to its description as well as admitting it to be the chief cause of the “puzzling” lack of productivity in construction. I believe he would call the use of terms such as “rent seeking” or parasite as “hate speech”.

Instead of parasites, Mr. Klein refers to “groups capable of collective action”, calling them a “gift of affluence” even though admitting that “this gift comes with costs”. One can hardly fault him for the use of euphemisms, considering his pedigree as an Adorable Californian. But a degenerate Deplorable such as myself prefers the words of the immortal songstress, Bobby Gentry – “Euphemism is a euphemism for lying”.

But one does not read the Times to rage against the machine but to educate one’s self in the methods in the madness, even as one appreciates the extraordinary craftsmanship of the paper and its writers. Even as he stumbles about the weed choked ecosystem of our present-day construction industry, Mr. Klein sees it clearly. For instance, this nugget from his piece:

“In the cities where I’ve covered politics closely, developers are fixtures in the local political scene. They have to be.”

Gee whiz – you think? Mr. Klein ends his essay with a thought stating the obvious while evading its logic:

“So how do we get construction productivity rising again? I have no idea. . . . many of the problems America faces – from decarbonization to affordable housing – would be a lot easier to solve if we were getting better at building, rather than worse.”

Alas, perhaps one might follow Mr. Klein’s logic to its logical conclusion. To regain the level of construction productivity that would allow for solving America’s problems, we must lose the “gift of affluence” and become poor once more.