Investing is tricky enough without politicians throwing in another X factor.
Robert Higgs explains how regime uncertainty exacerbated the Great Depression and, in a recent SF Chronicle piece, Bob Poole points out how it's now having the same impact on traffic congestion:
- Instead of following Utah and other states that enacted legislation to attract private investors, the California measure allows only four pilot projects and requires legislative approval for each project.
Florida tried that approach. It passed a public-private partnership law in 1991, but for 13 years, not a single project got done. Why? The risk was too great. Would you have team of engineers and finance people spend months and tens of millions of dollars preparing a highway design and working out the finances, only to risk having the state legislature reject the plan on a whim? Of course not. Florida saw the light and removed the legislative approval step, requiring only normal state Department of Transportation approval.
Read the whole piece here.