Thursday, July 17th, 2014

Germany Also Having Big Problems Building Infrastructure

Der Spiegel had an interesting article this week called “Angry Germans: Big Projects Face Growing Resistance.” The article (linked version is English) talks about how it is increasingly difficult to get infrastructure projects built in Germany.

Wherever ambitious construction ventures loom on the horizon in Germany — from the cities to the countryside, from the coastlines in the north to the Black Forest in the south — opponents are taking to the streets…. As the public’s enthusiasm for constant innovation has lessened, so has the appeal of these sorts of projects, and, as a result, they now inevitably come accompanied by picketers. Germany’s graying society, it seems, is so cozy and settled that it resists anything threatening to upset the status quo. In the process, it has lost sight of the bigger picture.

There are a lot of key points in this article that immediately raised parallels to the United States, where infrastructure projects are also under increasing siege. In fact, some of this reminded me of elements of the Tea Party movement. The protestors are uninterested in compromise. They are devoted, full time activists who are unrelentingly opposed to the projects in question:

[Hartmut] Binner’s form of protest has a radical undercurrent: Well-informed, confrontational and devoid of respect for authority, he is typical of the new grassroots activism spreading across Germany.
….
Binner’s entire life revolves around the campaign. He monitors the routes of departing and landing planes. He plays his self-designed noise simulator on market squares. He kicks off his court appearances by singing the Bavarian national anthem. “If you want to be heard as a member of the public, you need to push the envelope,” he shrugs.

These days, he sees grassroots protests, activism and political responsibility from a different perspective. “The typical protesters are gray-haired, know-it-alls and very networked,” [Freiburg Mayor Dieter Salomon] says. “But they’re not remotely interested in consensus-building, political processes and pluralism.”

Grassroots groups have become so livid, intransigent and single-minded that even the most respected politician in the country, Angela Merkel, is feeling their sting. In early May, hundreds of furious residents had gathered in central Ingolstadt to protest against the construction of a power line from Bad Lauchstädt in Sachsen-Anhalt to Meitingen in Bavaria.

This certainly reminds me of the no-compromises view of the Tea Party. Also, a number of early American Tea Party activists were unemployed, and thus able to basically be full time activists. Even the singing of national anthem has echoes of the Tea Party and their tricorn hats. I don’t want to claim there’s a philosophical or other link between the Tea Partiers and Germany, however.

Not everything lines up with the Tea Party, however. In Germany it seems to be disproportionately retirees who are the most engaged and militant:

Germany’s graying society, it seems, is so cozy and settled that it resists anything threatening to upset the status quo. In the process, it has lost sight of the bigger picture.

Many of the protestors are pensioners with no vested interest in Germany’s future. “It’s striking that the leader of the protests against the Munich runway is a 75-year-old and not someone in the middle of his working life,” [Munich Airport CEO Michael Kerkloh] points out.

Salomon’s nemesis is Gerlinde Schrempp, a determined and argumentative 67-year-old retired teacher with attitude to spare. She’s the leader of the Freiburg Lebenswert movement, which translates roughly to “make Freiburg worth living in. The movement just got elected on to the district council and is first and foremost opposed to any new building in the city.

There’s a stereotype out there of the average Republican voter as an old white guy. But the average Tea Party activist I’ve seen tends to be working age. I look at this one a bit differently. We need to see these types of controversies against the substrate of an aging population. Aging populations are not noted for dynamism, and older people’s self-interest is better served by starving investment for the future in order to save money and avoid uncomfortable change in the present. As a country whose population is projected to decline into the future thanks to this demographic inversion, we are seeing in Germany what’s likely a preview of coming attractions elsewhere around the world.

Indeed, I’m reminded of what one analyst friend of mine in Indiana has said about the property tax caps there. He sees the push to cap property taxes as driven by an aging population in a stagnant state. Old people generally aren’t earning a lot of taxable income nor are they buying huge amounts of stuff, so they are disproportionately less affected by income and sales tax hikes, whereas they often own homes and are hit hard by property taxes. Thus property tax caps serve as another income transfer mechanism from young to old, holding revenue constant. They are in part an artifact of an aging society. Disinvestment in infrastructure can be seen in the same light.

But there’s another part of this that shines a light on yet another group of opponents, namely the intelligentsia.

The term “Wutbürger” (“enraged citizen”) was coined during the Stuttgart 21 fiasco to describe people like Hartmut Binner, and much has been written about them since. They often aren’t the “common man.” According to the Göttingen Institute for Democracy Studies, they tend to be highly educated people with steady incomes and white collar jobs. And while protests movements of the past were often steered by sociologists, today their leaders are more likely to stem from the technical professions, the researchers found.

When we look at opposition to infrastructure in the United States, at least certain types of infrastructure, we see a similar profile of people (though not necessarily technical) behind it. It’s the leftist intelligentsia that oppose the Keystone Pipeline, suburban highway projects, fracking, and many other types of things, often with a militant unwillingness to compromise similar to the Tea Party.

As with Germany, this opposition is enabled by environmental reviews and public participation laws that, while they serve important public purposes, make it easy to delay projects for years through repeated objections and scorched earth litigation. Traditionally environmental lawsuits were associated with the left, but conservatives have started saying, why not us too? Hence litigation against San Francisco’s regional plan. The Hollywood densification plan was recently overturned by lawsuits, and lawsuits have plagued California’s proposed high speed rail line as well.

Whatever the project, it’s sure that somebody on the left and/or the right hates it, and thus will do everything in their power to kill it, which probably means years of delays and untold millions in increased costs.

Also as with the United States, German governments have shot themselves in the foot with a series of financial debacles:

Political and bureaucratic bodies are partly to blame for their own diminished authority. Every major venture seems to entail spiraling costs. Berlin’s new airport was supposed to cost €1.7 billion, a price tag that has shot up to well over €5 billion. Meanwhile, the €187 million earmarked for the Elbphilharmonie concert hall under construction in Hamburg is expected to exceed €865 million by the time the project is completed. Albig is well aware how bad this looks. “People see us as financially incompetent,” he says.

Until politicians can convince the public they have a handle on this, the taxpayer will remain rightly skeptical of many major megaprojects. This is doubly true since it’s very clear, as has been documented by folks like Oxford professor Bent Flyvbjerg, that in many of these cases the politicians were simply lying all along about the real costs.

I’m not sure what all the takeaways are, but there are clearly many forces operating on a global basis to inhibit the development of infrastructure in the West.

19 Comments
Topics: Demographic Analysis, Strategic Planning, Transportation

19 Responses to “Germany Also Having Big Problems Building Infrastructure”

  1. John Morris says:

    “When we look at opposition to infrastructure in the United States, at least certain types of infrastructure”

    Opposition is not always or even often opposed to “all infrastructure spending”.

    What is happening in many areas is people are now more aggressive about making choices. “Infrastructure” and “investment” are used as magic words- implying that all projects are good. As we know now, many – if not most centrally planned projects subtract value.

    Please stop using the term in a childish, simplistic way.

  2. John Morris says:

    Better to say that there is more opposition to large, government planned or crony capitalist projects.

    Notice how almost no “developed country” wanted to host a Winter Olympics.

    Hopefully new market driven private models will start to fill in the gaps. Beware off unions, politicians and contractors selling “investments”.

  3. Derek Rutherford says:

    What is with the gratuitous insults of the Tea Party? I don’t associate Tea Party-ists with being particularly anti-infrastructure spending, not associated with Germany nor with senior lobbies.

    Germany has a combination of a very powerful environmental lobby (with broader popular support than in the US) and an aging and shrinking population. There is a reflexive anti-development mentality there that can only be compared to CA and New England in the US, and this has been true for decades – I lived there in the 80s and it was true then. This article, while definitely accurate, is not about anything new. And I find the Tea Party digs bizarre.

  4. Alon Levy says:

    I don’t think the opposition in Germany is as ideologically conservative as in the US. At least in the case of Stuttgart21, the opposition primarily came from the Green Party.

    And Derek, the opposition to rail spending in the US largely comes from the populist right, in the form of giving back federal grants (even for decent projects, like Florida HSR) and canceling studies for future projects. The same is true of Switzerland; I do not know whether a similar pattern holds for Germany, but think it does not.

  5. Derek Rutherford says:

    @Alon, Tea Party-ists are against large state spending on passenger rails when (1) the cost estimates are guaranteed to be underestimates, (2) there will be ongoing subsidies required to maintain the service and (3) the service is highly unlikely to accomplish its purported goals. The CA HSR rail project fits all of these criteria. This is not blind resistance to passenger rails; rather this is people who expect their tax money to be spent prudently, and want to minimize long-term liabilities, such as open-ended subsidy requirements. After all, our government is doing a bad enough job already and funding such things (examples: Detroit/Chicago/IL/RI pension problems, let along Medicare/Social Security).

    As a counter-example, I am not aware of any Tea Party-ist protest against the TX HSR proposal (http://texascentral.com/), which (at least at this stage) does not have the same problems.

    Having said that, I agree with your comment that the opposition in Germany is mostly from the environmental left.

  6. AIM says:

    “Tea Party-ists are against large state spending on passenger rails when (1) the cost estimates are guaranteed to be underestimates, (2) there will be ongoing subsidies required to maintain the service and (3) the service is highly unlikely to accomplish its purported goals. ”

    You may believe that but the reality is that among many Tea Partiers, there’s a reflexive opposition to spending on rail no matter how well justified. I challenge you to show us one example of where a Tea Party group has supported a rail project. I agree that there’s not a blanket opposition to infrastructure spending. In fact, one of the prominent Tea Partiers in the Michigan State Senate has crowed about how he recently funneled millions of highway dollars to his community to encourage more sprawl development. Pork barrel spending at its finest.

  7. Gerhard E. says:

    Many–elderly or not–have grown wise to the fact that ‘consensus’ politics and psuedo-pluralism (which includes pre-emptively co-opting activists and non-profits) have been abused in cynical strategies by giant neoliberal projects (often public-private partnerships in which the private sector has much more to gain). By this trickery, resistance to their [often highly-subsized] project is diffused and distracted and, as a bonus, they [usually] get CSR points…not to mention great ROIs.

    Forget Goldman Sachs, neoliberal global capitalism is the “great vampire squid wrapped around the face of humanity,…”. Thomas Piketty’s recent work confirms that neoliberalism (or libertarianism) is a guaranteed path to ever increasing inequality.

    Many are growing wise to this soaring inequality and the complicity of the OECD and similar organizations regarding urban development. Miguel Robles-Durán has a great article on this, “The Haunting Presence of Urban Vampires”.

  8. Mathew says:

    It’s always interesting to see European contemporary politics through the frame of a North American outlook… I would have to agree that the Tea Party comparisons really do not make sense.

    German citizens, often led by the very same people involved in the protests mentioned about are actually passionate about urban planning and development and finding new ways to do things.

    What they don’t like however is having unthinking, unconsensual development thrust upon them, without real engaged public discussion and debate. What we are seeing above is a backlash against a real or perceived lack of participation within usual channels of public consultation around development issues. This has been a trend across Europe over the last few years. Here in the UK and in Southern Europe fake, hard to engage with consultation is probably at it’s worst.

  9. @Mathew, I find it hard to believe there was a lack of consultation on these projects. And it’s clear that the opposition, whether driven by ideology or not, is intransigent against projects. It’s raw opposition.

  10. I follow a few Tea Party blogs. They are opposed to pretty much everything except the most basic services. Their opposition is clearly not limited to high speed rail either. Here in suburban Indianapolis, Tea Party affiliated groups tried to get bike lanes written out of the transportation plan. You should do some research into the anti-Agenda 21 crowd.

  11. Rod Stevens says:

    I get the argument of mismatched maturities, that seniors will not live long enough to see the benefits, but that’s always been an issue with things like school taxes, in which most claim “I paid before”. I’m wondering if there aren’t two other factors at work, one universal, the other unique to Germany.

    The first issue is whether this isn’t simply another form of questioning leadership at a time when the world is changing and many current leaders don’t know how to deal with that. We’re seeing that all over the U.S.

    The second question is whether Germans are tiring of paying the cost of reunification, for which much of the money has yielded little in the east. Is public decision making in Germany less inclusive than it is here? If so, maybe these seniors are simply saying “enough”, that they are tired of business as usual. They no longer have jobs that would be threatened by the social stigma of doing so.

  12. Quimbob says:

    Dunno how it applies to infrastructure but the nationalist, nativist movement is growing in America & Europe alike. England’s UKIP, Greece’s Golden Dawn, Hungary’s Jobbik, Bulgaria’s Attack, the Sweden Democrats, France’s National Front all made gains in the latest EU parliamentary elections.
    The Tease fit right in.

  13. Robert Munson says:

    Thanks to Rod for getting this discussion back on-topic… albeit mostly subtext in Aaron’s stimulating piece. At least for me, the question is: “What is the deal?”

    Isn’t that what this spate of protesting is really voicing?
    Looking beyond ideology, stridency and frustration, we need to answer this question.
    In the U.S., the welfare state’s social contract was breached and never replaced starting three decades ago. I see a direct correlation between this breach and the welfare state’s ability to build infrastructure.

    Since we lack a sense of fair play, infrastructure becomes an opportunity for special interests while taxpayers and transit riders got less for their money.
    After three decades of politicians’ lies, lousy deals and bureaucratic bungles (that include giving heavy weight to the minority of complainers), every project gets unnecessary resistance from a few protesters. This negative cycle now has progress in irons.

    Into this toxic politics comes Aaron’s suggestion that another strategic problem has emerged: the aging society is holding on to what it has. I presume this also is because no new, sustainable deal has been proposed.

    With climate change on our doorstep, our means of generating infrastructure is poorly prepared.

    Popularly in the musical “Hair”, we Boomers promised an “Age of Aquarius.” Instead, Reaganomics moved into the void and, now, we all suffer from today’s irrelevant, corrupted debate.

    Every piece of infrastructure must be sold as a deal with the public and for the future. Until we remake the debate and restructure government so it can make sustainable policies, protests of the few will be the rule.

    Thanks Aaron and Rod. It’s all clearer to me now.

  14. Alon Levy says:

    Derek, Texas Central is not a government project. Florida HSR was, and all the projections said it would not need state subsidies… except that Scott listened to Wendell Cox’s lies.

  15. Alon Levy says:

    Re Germany, again I’m familiar mainly with Stuttgart21, but the issues there included,

    – Enormous costs in absolute numbers, and a large overrun from the initially promised cost,
    – A justification that seemed to be mainly about lines on a map: Stuttgart lay in the middle of an east-west axis from Paris to Bratislava, one that is too long to be a coherent passenger rail corridor in the first place, and
    – Substantial impacts to central Stuttgart, including takings and demolitions of buildings.

    Ad point 1, Germany probably has the highest rail construction costs in Continental Europe, and possibly the highest in a country without a British legal or political tradition. Only the Netherlands and Japan can compete for that title, and I believe Germany is worse in both the average case and the worst case. I don’t know to what extent Europeans know that Southern Europe (especially Spain) is better at this than Northern Europe, but people in Germany know that Switzerland is better; the Greens got Swiss consultants to help them develop an alternative plan to Stuttgart21.

    (I also want to clarify that Stuttgart21 is being built anyway: the Green-led state government held a referendum on canceling the project, as promised, but a majority supported continuing the project, even in Stuttgart itself, and the state government said it would accept the voters’ decision.)

  16. Derek Rutherford says:

    @Alon, that the Texas Central is not (currently) government funded or managed proves exactly my point: Tea Party-ists are not reflexively anti-rail projects; they are reflexively anti-government boondoggle.

    Allow me to note a few facts:

    #1- When America had great passenger rails, they were privately funded and profitably run. Today we have Amtrak – ’nuff said.

    #2- America today has the world’s best freight railroads. They are still privately owned and profitably run.

    So, if our objective was to have great passenger rails, why would we entrust the system to a government bureaucracy? Texas Central has the potential (no proof yet, but I have hopes) to demonstrate how that might be done.

    As a more specific example, our rail construction costs are too high (for evidence, see http://pedestrianobservations.wordpress.com/2012/09/25/relative-costs-of-transit-construction/ and http://keephoustonhouston.wordpress.com/2013/06/22/the-interurban-option-prereqs/).

    Why don’t urbanists lead a charge for more transparent and lower cost rail construction? It would serve as proof that the project wasn’t owned by well-connected lawyers and special interest lobbyists (as Tea Party-ists reflexively assume) and certainly defang some of the opposition. Shouldn’t urbanists care passionately about making these projects economically and financially sustainable?

    All-too-many of the supporters of these projects (such as CA HSR) are oblivious to the costs and assume that there will always be an unlimited supply of subsidies in perpetuity, and this motivates a lot of quite legitimate opposition.

  17. EngineerScotty says:

    Here in Portland, at least, there is rather motivated opposition to pretty much any transit project, much (though not all) of a transparently racist nature. Suburban media is full of references to the “crime train”, as though the local boyz n the hood routinely use public transit to go pillage otherwise safe middle-class neighborhoods.

    Such attitudes long predate the Tea Party (consider why Georgetown has no DC Metro stop), but the Tea Party is often hostile to any transportation infrastructure besides roads and highways.

  18. Brian M says:

    The “private” railroads did involve substantial government support, including eminent domain, free land, etc.

    Today, these “private” railroads demand the right to secretly transport toxic goo across cities and states without telling anyone.

    I would also note that Tea Party advocates certainly have zero problems with the biggest subsidies roads and highways and private automobile use.

  19. Alon Levy says:

    Derek, rest assured I know about comparative construction costs. Check again the byline in the first link you attached. I can also tell you that they have nothing to do with the issue of operating subsidies, or of operating costs. When I looked at operating expenses for local and regional transit in the New York and Paris areas, New York turned out to be about 20-25% more expensive per rider; this is while the construction costs are an order of magnitude apart.

    Whoever convinced you CAHSR would require operating subsidies either lied to you, or was convinced by another liar. HSR lines with painful cost overruns make money, because once the line exists, the cost of maintaining it and running trains is low. The only question is whether operating profits are enough to pay off the original construction cost; in California they won’t be unless drastic cuts in the capital costs are possible, but nobody ever claimed they would. Any attempt to account for operating costs and compare them with normal first-world fares will show a wide gap in favor of revenues, and the various frills California thinks it needs (10 employees per 400-meter train, vs. 4 on Shinkansen) aren’t enough to make a difference between operating profit and loss. The documents I’ve seen that argue operating subsidies will be necessary do not even try to do any accounting of operating costs. Instead, they just repeat the line that only Tokyo-Osaka and Paris-Lyon make money, which anyone who’s interested in looking at a variety of intercity rail operators’ profit and loss statements can know is false (see links in paragraph 2 here).

    My problem with right-wing populism is that it attaches the word boondoggle to any government project, without even checking its merit. Hence, Wendell Cox and Robert Poole lied about the costs and revenues of Florida HSR, and based on Poole’s advice, Rick Scott canceled the project. In California, we see something similar. Unlike the case of urban subways, the construction costs per unit of what’s being built are reasonable, and the problems come entirely from scope creep and questionable route choices. The bids for the Central Valley segments have come in within budget and are marginally higher than the European average of at-grade HSR. The problem is entirely that the chosen alignments involve gratuitous tunnels and bridges. But the people you see begging for route changes to the cheaper and better Altamont and Grapevine/Tejon options are not the ones launching lawsuits; they’re supporters of HSR (built by the state, as all existing HSR lines were) who think it’s being taken the wrong way. Clem Tillier is not Morris Brown.

    And there lies the difference between Germany and the US. The Stuttgart21 opponents, or the opponents of Munich’s second S-Bahn tunnel, propose rail-based alternatives that address capacity needs, and draw on Swiss examples of doing more with less. US rail opponents have no alternative except more roads, or sometimes BRT, an awkward fit in a country with first-world wages that does less with less.

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