Why is America falling apart? Ask Ayn Rand
Collapsing bridges, flooded subways, trapped miners: our recent disasters recall a novel from a half century ago. Fortune’s Adam Lashinsky explores the nation’s ‘Atlas Shrugged’ moment.
By Adam Lashinsky, Fortune senior writer
August 14 2007: 6:16 AM EDT
As for the political leadership, infrastructure spending is one of those rare instances where President Bush’s take is spot-on correct, though his words likely won’t be heeded because he is so unpopular and divisive. (The immigration debate, where the president has been pragmatic and right from the beginning, also comes to mind.) Asked if gasoline taxes should be raised to pay for infrastructure improvements, the president chastised Congress for favoring attention-getting new projects over boring maintenance needs.
He’s right. Liberals like Chuck Schumer agree. “Routine but important things like maintenance always get shortchanged because it’s nice for somebody to cut a ribbon for a new structure,” Schumer recently told the New York Times.
Today’s Randians, of course, have an answer to our woes: Privatize everything. No way a bridge falls if a profit-seeking company, properly incentivized, had been charged with maintaining it, goes the argument. That, however, is dangerous thinking. There are certain things the market just can’t be trusted to handle. Imagine that bridge-maintenance company having to cut expenses this quarter by delaying work for just a few days. Imagine how the CEO might feel if the stock would drop if he couldn’t make the quarter.
Of course, the CEO of the bridge maintenance company might delay maintenance for a profit. But, I’ll bet a dollar that the insurance company and the Board of Directors, and their insurance companies, will be all over his ass!
If there is a one thing that insurance companies know, it that collecting premiums is much more profitable than paying claims.
And, auditors usually report directly to the Audit Committee of the BoD. All they have to do is whisper that there is a problem and everyone is running around like their shorts are on fire to solve it.
So, I’d suggest that we would all be far safer if the gooferment got out of planning, operating, and maintaining anything.
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