Part 2 – Blackmail
I know that sounds extreme, but it happens all of the time in (and to) government. The media never really calls it blackmail, but that is what it is. How many times have you heard a politician say that we need to do something (raise taxes, bail out some company, sell a senate seat) or things will get worse? That is blackmail.
A recent local example involves the construction of a subway line in Pittsburgh. Yes Pittsburgh has a subway!
It is one of the most unbelievable pieces of pork. Our local politicians directed tax dollars to construct the addition of a 1.2 mile subway expansion under the Allegheny River to connect the North Shore with Downtown Pittsburgh. The aptly named North Shore Connector was started a year or so ago by the Port Authority of Allegheny County. It is hard to remember exactly how long they have been working on it, as there have been so many delays.
It is actually kind of a joke and not many Pittsburgh residents understand why this is being built. There are many commuters park their cars on the North Shore and walk across a bridge to their jobs downtown. It was not that long ago that this bridge was improved to be friendlier to pedestrian traffic. It makes sense to discourage folks from walking.
Recently the Port Authority of Allegheny County encountered a CRISIS. Not their usual crisis of declining ridership, escalating costs, and red ink all over their books. This crisis was regarding their subway project. It seems that they will need an additional $117.8 million to complete the project. This is on top of the original price of $435 million. If you do a little math, that will be nearly $90,000 per foot.
Here comes the blackmail.
The Port Authority will have to shut down the project unless it gets the extra money. And the cost to shut down the project is a mere $21 million. Most likely the blackmail will work as it usually does. Arguments will be made that it is too big to fail; we have spent too much money already.
I have seen this kind of “pressure” (in case you think blackmail is too strong a term) work first hand. When I first graduated from college, I worked at an engineering firm designing a portion of a new state highway. We had several cost overruns during the project and the state finally told the owners that there would be no more money.
Here came the blackmail.
The owners of the firm shut down the project. Unless more money was forthcoming no more work would be done. Many of my colleagues were furloughed that Friday. It was great for morale to watch them be called to the front office one by one. I survived the first cut as I was working on other projects, but faced the same fate a less than a month later.
In this case, the government agency was being blackmailed. My bosses were much better at poker than our client and after two months, additional funding was forthcoming. I was brought back to work, but was fortunate to have found another job while off and only had to stay there a few more months. Believe it or not, the road was built without me and I use it often.
The jury is still out on the North Shore Connector, but I have a few predictions:
- The additional money will be found and the project will continue.
- There will be at least two more cost overruns, though each will be less than the $117 current deficit.
- The subway will open with much fanfare and many politicians will help cut the ribbon. The ten pair of scissors will cost the taxpayers $500.00.
- Ridership will be limited to Pittsburgh Steelers games and for concerts (that amounts to around 12 times per year).