John Arnold on Why It's So Hard To Build Things in America

Tracy Alloway (0:02)

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Joe Weisenthal (0:19)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:24)

And I'm Tracy Alloway.

Joe Weisenthal (0:26)

Tracy, we're recording this on June 6th.

And yesterday, we got the news of New York City Governor Kathy Hochul permanently putting a pause on a proposed congestion tax, people driving into the city of Manhattan from the outer boroughs or other states. And I have to say, reading about the whole thing, it kind of depresses me.

Tracy Alloway (0:48)

It's crazy that story. I'm sorry, but Joe saw me kind of going off on this in an internal chat room yesterday when the news kind of filtered out. But regardless of where you sit on the congestion pricing debate, I think we can all agree that a last minute U-turn after years and years and years of public consultation on this matter, after the installation of the machines that were supposed to take photos of everyone's license plate and actually get the fees, that this is not an ideal outcome to actually cancel the plans two weeks before they were supposed to go into effect.

Joe Weisenthal (1:27)

Yeah, look, I'm a neutral journalist at a mainstream publication. So I have no opinions on policy ever. It is not my job. But it does seem to me that there's something wrong. If you spend like probably $100 million in studies and you talk about something for 16 years and you have all these things and then it's like, at the end, it's like, nah.

And it's like, how do we build anything in this country?

Tracy Alloway (1:53)

It's just surreal. Sorry, the more I think about it, the more I just like start laughing and then kind of crying as well. It's just, it's crazy.

Joe Weisenthal (2:01)

But of course, this comes up all the time in so many episodes we do, whether it's around housing or whether it's about electrification or whether it's about installing offshore wind.

Whatever it is, it seems like there is a major problem in this country about how long it takes to plan things, how long it takes to get permits for things, the cost of construction. The crazy thing with the congestion tax, it wasn't even like a construction thing. It's literally just tolls. It's not like they had to build some new bridges and demolish tens of thousands of houses.

Tracy Alloway (2:31)

Well, they still spend a lot of money on it, but yes, I take the point. It's not like they were building a new highway that would go through some neighborhoods or something like that.

Joe Weisenthal (2:39)

Right, right. It's all so crazy to me. Anyway, I do think this recurring question of why is it so hard to build stuff or just actually take any decisive policy towards anything seems like a real problem.

Tracy Alloway (2:52)

Oh, absolutely. And even though this particular issue, I think we can all agree was very contentious. There are people who feel strongly on both sides. There are other things that I think have more collective public support and maybe certainly bipartisan support.

So I think most of Americans, most politicians would agree, for instance, that housing supply is kind of a bipartisan issue now. But even on something like that, where everyone kind of agrees like, yes, this is a problem. We need more supply. We need places for people to actually live.

There are all these questions about how you actually decide where to put those houses. And then even more controversially, how do you fund that? Like, what does support for real estate, residential real estate actually look like? Where does the financing come from? How do you structure that? Is it the form of subsidies? Is it the form of incentives? Is it public-private partnerships?

It just seems like there are so many points in the process at which you can kind of like get stuck.

Joe Weisenthal (3:56)

So many, so many. Anyway, I'm really excited because we do have the perfect guest today. We're going to be speaking with someone who is extremely interested in this topic and sort of puts his money where his mouth is, spends a lot of money researching and trying to think up solutions to some of these things. We're going to be speaking with John Arnold. He's the co-chair of Arnold Ventures. Prior to that, he was a famed energy trader, made his fortune at Centaurus Energy. Prior to that, I learned he was the recipient of the single biggest cash bonus when he was a trader at Enron, where he was not accused of any wrongdoing. Bunch of people there obviously were.