Friday, June 12, 2015

Tunneling New Jersey: Chris Christie edition

Never mind the bridge.Chris Christie, still governor and always presidential never-be, should be tarred and feathered for canceling the tunnel project. Bloomberg points out what his petulant posturing cost the people of New Jersey.
Now look at what happened in New Jersey, the third-richest state based on median income, after it rejected a chance to improve its transportation infrastructure. In 2010, the federal government offered New Jersey $3 billion to build a rail tunnel to double commuter capacity to New York City. It would have relieved pressure on the overburdened existing tunnel, built in 1910 and damaged in 2012 by Hurricane Sandy.
Governor Chris Christie, predicting cost overruns in a rare period of disinflation and exceptionally low borrowing costs, canceled the project. The new tunnel would have created at least 200,000 jobs, and would have generated $9 billion in business revenue and $1.5 billion in federal, state and local tax revenue during nine years of construction, according to a March 2012 report by the U.S. Government Accountability Office.
Since cancellation, New Jersey's economic performance has lagged. Adjusted for inflation, its median household income declined 12.2 percent, compared with an average drop of 3.9 percent for the U.S. New Jersey is among only 12 states with deteriorating economic health defined by jobs, mortgage delinquency, personal income, home prices, tax income and stock performance, according to data compiled by Bloomberg. The same data shows Michigan and California, where infrastructure has been a priority, as leaders in job growth. By the same measures, New Jersey is No. 6 from the bottom.
There are always many reasons for weak economic performance. In New Jersey, transportation is vital. The state sends almost half a million people out of state for jobs, the most in the nation. The majority go to New York.
It should come as no surprise, then, that the state has lost the confidence of investors. While Colorado provided an 8.9 percent return since 2010, beating the national average of 4.95 percent, New Jersey's equivalent bonds gained 1.01 percent, the worst performance after Puerto Rico and Arkansas, according to the BofA Merrill Lynch U.S. Transportation Municipal Securities Index.
By the way, according to Wikipedia, "tunneling" is a kind of fraud:
ia colloquial term for a specific kind of financial fraud. It is defined as "the transfer of assets and profits out of firms for the benefit of those who control them".
In Christie's case, tunnel canceling seems to be a variant of that fraud.

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