Friday, February 27, 2009

Oakland Interstate 580 Collapse Video: Government Could Not Have Fixed This Problem

On April 29, 2007, a bridge on Interstate 580 in Oakland, California collapsed after one of its supports was hit by a fuel tanker truck. Under the "give me a call and we'll take care of it" form of government that Barack Obama seems intent on creating, this bridge would still not be repaired. It's good that the only thing government did in the case of the I-580 was to let out the rebuild contract. The free market, awarded a contract by CalTrans, was left to work by itself, and the bridge was rebuilt in 17 days.

I attended a computer conference this past week, during one session of which Dr. Moshe Rubenstein (click here for one of his excellent books), emeritus

The new bridge opened 17 days after the old bridge collapsed. A socialistic government, such as the one envisioned by Barack Obama, could never hope to accomplish such a monumental task.

professor from UCLA, told the story of the rebuild of the I-580 bridge in Oakland, California in a stunning feat of free-market creativity.

In the case of the I-580 rebuild, government (CalTrans) did what it does best--find the best bid and get out of the way. It determined to give 50 days for the winning bid to complete the job. There would be a $200,000 penalty per day for completion after the 50-day limit, but there would be a $200,000 bonus for every day the project was completed sooner than 50 days. That made it so that the job could net the winning bidder a $5 million bonus.



The winning bidder went into action on April 29, 2007, the very day the bridge collapsed, which was 8 days before the government entity met to award the bid. By the time the bid was awarded on May 7th, the winning bidder already had his plan in place. His bid: $867,075. Here's how the government succeeded:
Caltrans officials were able to expedite the normally lengthy road repair process after Gov. Arnold Schwarzenegger declared an emergency for the site. The move gave Caltrans the power to cut through red tape.
And here's how the free market succeeded. Because the free market has not yet been completely destroyed by well-meaning socialist overlords, the winning bidder knew that there still existed steel fabricators and welders in Pennsylvania and Arizona who had achieved excellence in their craft. He called these people and was able to have new steal beams and girders begin arriving on-site about 10 days after the accident.

The new bridge opened 17 days after the old bridge collapsed. The winning bidder achieved his $5 million bonus, and completed the rebuild even 8 days sooner than bonuses would have encouraged. This is the genius of morality in a free market. A socialistic government, such as the one envisioned by Barack Obama, could never hope to accomplish such a monumental task.




2 comments:

  1. This is a great story. I really liked Dr Rubinstein's analysis too, where he talks about the really key elements to getting something done - the most important being - build real relationships with good people and treat them the way everyone deserves to be treated, have faith and move forward with confidence.

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  2. I would never have guessed that even the free market could react that fast and effectively.

    ReplyDelete

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