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Notes -
Why is transit in the US so expensive?
The starting point for this video is an upcoming report on why transit, most notably subways, cost so much more in American than in other developed countries. However, the discussion covers much more than just transit, and discusses how cost disease effects pretty much all public works projects, from roads to sewage. While there are many individual pieces that contribute to inflated prices (outside consultants, unions, red tape, bureaucrats, etc.), they don't really like this explanation. As Chuck points out shortly after 31:00, each of the 2 major political sides can point to a few of these issues to fuel their particular narrative. But, he says, they're incomplete, and miss the real underlying causes. If I were to summarize their description, it seems like the question is mostly one of attitude:
No one cares about cost. People will say they do, but their actions say otherwise. Voters don't, especially with the ability to borrow from the future by issuing bonds. Which means politicians don't, because why would they? And the appointed heads of agencies don't consider it their responsibility to account for cost; they treat cost as fixed and let the legislature decide how to pay for it. Possible sub-point: We treat a lot of these projects as jobs programs and so end up hiring more people than necessary.
There's an underlying assumption everywhere that everything has to be the best, no matter what. Roads in rural areas, that in other countries would be very narrow and winding, are in the US flat, smooth, paved asphalt with 2 lanes in each direction. We don't treat money as a constraint, we just decide we want a thing and then go and get it without regard for the future. Of course, this attitude depends on what one is used to. Boomers, especially, are not used to having these sorts of constraints; Millennials also feel a certain sense of entitlement, but at least have more experience with these constraints. (The latter sentence seems to be more or less speculation, they don't cite any research here).
The conclusion is that nothing will really get fixed until it accumulates to the point of a major economic recession or depression, at which point we'll be forced to actually do something, but not until after we have wasted enormous amounts of time, effort, and resources on poorly planned public projects. Or, if we collectively decide to actually care about these things before then.
Addendum, entirely my own opinion: One reform that I would like to try is to make lawsuits default to "loser pays." Almost every other developed country requires the losing side in a lawsuit to pay for the other side's legal fees. I think it's generally well known that lawsuits are often a tool used to bully people into complying by making that cheaper than defending the lawsuit. Meritless lawsuits are still very expensive to defend, and almost every story I read about cost inflation seems to mention lawsuits at some point. Suing over a missed period in an environmental impact review as is common in CA, or suing because a building would be taller than surrounding "historic" buildings like in Miami, or for minor procedural limitations like with Austin's CodeNext, or Cambridge suing Boston because of "visual impact" of a bridge redesign during the Bid Dig, is very common. I think this happens in medicine, too: Malpractice insurance isn't cheap, but probably far more expensive is the vast amount of extra tests done for reasons of "CYA." Loser pays would discourage lawsuits that are likely to fail, but costly to defend.
(The only thing preventing me from declaring this the Solution to All Cost Disease is that I haven't seen a lot of discussion of lawsuits in educational cost disease. However, one might also think about the attitudes described above in both of those contexts: Do we insist on expensive and impressive-looking inputs, regardless of cost or efficacy? Are we highly insensitive to price? Is it considered unethical to reject the "best" solution because it's costly? Do bears shit in the woods? etc.)
But also, I think you can see similar attitudes reflect in the people filing those lawsuits, or otherwise being obstructionist (such as county officials who drove up the price of CA's HSR by demanding it take circuitous routes). They would rather tank an entire project to benefit millions of people, than not get their pound of flesh or deal with a minor inconvenience of something changing or having their property appreciate in value slightly less quickly. Even as a libertarian who's usually very suspect of "people being selfish ruin everything" style arguments, it seems like borderline narcissism or sociopathy.
Loser pays doesn’t seem realistic at all. It works if Exxon is suing BP over a contract dispute. How does it work if local non-profit is suing big local developer? Just set up a non-profit with limited assets to do the actual lawsuit so that the non-profit is bankrupt if they lose. Or for medical malpractice most Americans have like a month of savings. You think losers paying?
And loser pay sets up a different issue. Suppose small oil producer and by small I mean they have $100 million in assets has a contract with Exxon. Exxon wants out of that contract and let’s say the legalize is in debate and Exxon has a 70% chance of losing. Ok so Exxon tells the other firm their spending $100 million defending the case. Now it’s a bet the company case for the smaller but well capitalized firm. Sure you can have a second arbitration on some reasonable costs standard. A real world example of this would be Epic Games (very rich) suing Apple (no limits on money) on the App Store. Expert witness and lawyers in the case are even without trying to drive up costs from loser pays are in the tens of millions. Realistically under loser pays Epic would no doubt try to fund a similar case with a similarly harmed company with far lower assets that is easy to bankrupt. And if that case wins Epic then sues under that precedent. You would basically create an entirely new legal profession - setting up firms that have standing and no assets to sue larger firms.
For nuisance lawsuits loser pays would change nothing. Bankrupt people don’t care about loser pay since they won’t pay. Wealthier clients who are less likely to be nuisance lawsuits would have to pay lawyers more to set up conduits for their lawsuits.
As I pointed out in the comment, almost every other rich country has this. In spite of this, you and @Amadan seem to think it's pretty much impossible. Have you checked what those other countries do in response to the situations you describe? For example, you write:
The link I posted mentioned caps on recoverable fees--did you not even look at it?
Yeah, every other country has a much different legal system and culture than the US. The question is which is the cart and which is the horse WRT fee shifting.
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I only see a Wikipedia article what are you talking about on caps.
And caps wouldn’t solve the issues I’m talking about. If your suing city of development just create a new entity with no assets. If you lose the entity goes bankrupt. If you win then you also get an extra bonus of your legal fees paid. This would seem to drive up costs for the person being sued.
Theoretically I guess you could require someone to be able to afford insurance to sue. But then someone Poor would basically lose the ability to sue if they could find an insurer at a costs they can afford. Anyone can find a cheap lawyer to represent them like legal aid but they couldn’t afford to post collateral or pay an insurance premium to sue.
Instead of throwing heat and assuming your right maybe you haven’t fully thought this out.
The second link in the post. The sentence "I think it's generally well known that lawsuits are often a tool used to bully people ..." links to https://www.manhattan-institute.org/html/greater-justice-lower-cost-how-loser-pays-rule-would-improve-american-legal-system-5891.html
You mentioned multiple hypotheticals; I responded to one. I even quoted it.
Now you're just projecting. I think you just posted the first objection that came to mind without considering any ways it could be overcome? What do you think happens in the countries where this is the rule, and someone tries what you suggested? Do you have any idea, or did you just assume there is no solution? Do you think everyone in every other country is so stupid that they've never thought of it before?
Your comment reminds me of this xkcd--playing tricks with fake companies is something that you can already do. Sometimes it gets around the law and sometimes it doesn't, but it's not like suing any company is currently pointless because they all have 0 assets and are actually owned by Cayman Island shell companies. If it were trivial to set up fake companies for legal purposes, why don't companies currently all do that?
They do. It sometimes even backfires on them when they try to shift business assets from one sub-entity to another, and I have to tell them that some municipal permit they rely upon to keep running their business is nontransferrable (e.g., some tobacco retailer licenses, entertainment permits, game-machine tags, or other, equally-obscure approvals)
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You never addressed any my points in detail. Sure caps on recoverable fees - which I myself said was a solution - but the actual cap matters. Low and it’s meaningless. High and it makes it too risky to challenge 50-50 cases for many litigants.
Companies DO set up different entities to carve out risks. It’s not hard. What’s your solution?
“double the cost in Germany and more than three times the cost in France or the United Kingdom.”
There lead isn’t even that promising. These countries have lower gdp per capita. So a lot of this is just those countries being poorer. About 70% of US gdp. After adjusting for this Germany 1.4 x US and UK/France are 2. Also have socialized medicine and I believe limits on damages which no doubt accounts for a lot of the differences. So where’s the benefit you haven’t even proven
there systems are cheaper (unless you ban medical damages).
How much of the rest can be solved by just limiting damages like say the $1 billion assigned to Alex Jones.
Also an argument that is rest of the world does things in way X and US does things Y is on its face a bad argument. We are massively wealthier than those countries. Shouldn’t they consider in business doing things our way on most things.
Which isn't real anyway, because he doesn't have $1bn to pay. Getting a judgment is one thing; getting actual recovery is another.
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Your points prove too much, namely that any such system should instantly become full of shell companies filing free lawsuits against their competitors. Every other country's legal system has not immediately become overwhelmed by these 0-risk lawsuits, so clearly there is something you're missing. I'm not going to address every one of infinitely many hypothetical situations. TBH, these sorts of schemes seem like they have plenty of trivial solutions which you can probably come up with if you gave it an honest thought, rather than just deciding this idea is bad and then writing any argument that supports one side.
Obviously no system is perfect, but we know for a fact that the American system is very abusable so simply saying "the other system might have this hypothetical problem" isn't convincing.
You can't just take random numbers and multiply them together. The ratio given was already a percent of GDP, so why is this a valid comparison?
Your post has a lot of spelling and grammar errors throughout, most of which I can still parse, but this paragraph isn't even comprehensible.
Fair I missed the percent of gdp.
But again you are failing to address ANY point I am making. You just claim their are solutions. To me this indicates a poorly thought out position. And just an opinion that this sounds good without having any detailed understanding of your position.
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Can you address /u/what_a_maroon ‘s argument, who points out that almost every single country other than US has loser-pays rule? If it works for them, why wouldn’t it work here?
He asked him to prove an affirmative claim.
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Do we know it works everywhere else? I don't know what the litigation environment in other countries is like, but expecting we should all accept that "everyone else does it differently" means "everyone else does it better" is a stretch. Do you think perhaps people in those countries might have opinions about how well their system works that are not universally positive?
Also, it's easy to see how an argument like "everyone else does it differently and it works better" would be rejected for issues like health care and gun control, so why shouldn't we assume that the U.S. is sufficiently different with regard to this issue as well?
These are not the same things.
Gun politics: Many people outside US love guns, fight for more expansive gun rights and dream about American style gun freedoms.
The other: No one outside US advocates for American style health care or American style legal system in their country. No one.
But that’s not really a fair comparison. Our legal system isn’t about improving the legal system necessarily but trying to improve transacting or liability. Yes, lawsuits might be expensive but that doesn’t mean the legal system has failed.
So looking at just the input cost (the direct cost of a legal system) doesn’t mean the output (what Bastiat might call the unseen) isn’t worth it.
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I've read Canadian mainstream newspapers favorably comparing the American system (pre-Obamacare) to the Canadian.
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He never addressed my points I can’t argue with a ghost.
Also an argument that is “rest of world does things differently” is a horrible argument. Americas the richer country and the presumption should therefore begin with America does it better . No doubt not always true but by itself everyone else does it differently isn’t a good argument since Americas uniquely rich.
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