A postcard in my mailbox this morning from Stan Hart, inmate #800054, at Iowa State Penitentiary:

“Is there a chance of stopping the great giveaway ‘stimulus’ plan? Isn’t the fact that none of those ‘shovel-ready’ projects are currently funded mean that they are neither necessary nor essential?”

Great point Stan. State and local investment spending is at high levels, and many governments have so much extra money that they have been wasting billions of dollars on sports stadiums and convention centers. How could it be that “the highways are crumbing” as stimulus supporters claim?

The answer is that policymakers misallocate investment. They always have, and they always will, because governments are nonmarket institutions. That’s why the hope for a more rational infrastructure policy comes from privatizing highways, airports, and other facilities.