 Mississippi. Jackson, Mississippi, as many of you might know, Jackson, Mississippi is the capital, shockingly, is the capital of Mississippi. Mississippi is the poorest state in the Union. It has GDP per capita significantly lower than the median or the average in the United States, average or median. Mississippi is lower. The only, territory, the only part of the United States with a GDP per capita lower than Mississippi is my home, my home, Puerto Rico, unfortunately. So yes. So Mississippi's poor. Jackson, in spite of being the capital, is particularly poor part of Mississippi, a particularly poor city of Mississippi. Jackson itself is about 150,000 people. It was, at its peak, 200,000. And, you know, 200,000 people. And it's gone down, so the population has shrunk by about 25% from its peak in 1980. So down to, down to 150,000. That is common with, with a lot of cities that have been abandoned. Basically what has happened in Jackson, Mississippi is white middle class, upper middle class have all left the city. They moved to the suburbs. The suburbs have, they're incorporated as cities, independent cities. The suburbs of Jackson, Mississippi are actually thriving and, and quite successful. There is, you know, it's, it's quite, there's a huge contrast. Jackson, Mississippi is, is unbelievably poor and the suburbs are quite wealthy and doing quite well. You'll notice there's no water crisis in the suburbs of Jackson, Mississippi. Jackson, Mississippi today has gone from about 50, 50, white and black to about 80% black as the whites have left middle class primarily as an issue of income and have left, have left the, the city. But it is still the capital of Mississippi. So where are we? So what's being happening in, in the city of, of Jackson for years now, the current crisis that you're watching on television right now in Ravel is just one of a series of crises that have been going on for, for probably well over 10 years where the water basically has not been drinkable in Jackson, Mississippi for a long time. It now just, there is no water because the, the treatment plant has been shut down because of flooding. But the treatment plant in the winter of 2021, that is a year ago was shut down because of, because of cold, cold in Mississippi. Can you imagine that? It was shut down because of cold. It's shut down not that infrequently. The piping under the ground in Jackson, Mississippi is close to 100 years old. But what's interesting is, pipes in all over the United States are over 100 years old. And indeed, there was some argument to be made that we're very, very close generally in the US to water crises all over the US, particularly in the older parts, in the parts that were built a long, long time ago. Of course, the suburbs have, have newer piping, newer facilities, newer water treatment plants. But all the cities where the infrastructure was built decades and decades and decades ago, maybe over a century ago, they're real issues. They're really sure across the entire United States in terms of water. Simon, thank you. Really appreciate, really appreciate the support. So what you have is, is a system that is crumbling. Another feature of Jackson, Mississippi, of the water system in Jackson, Mississippi. Now, like everywhere, water is provided to all of us, not by private companies. It's, there's no competition. Nobody's quite figured out a model. At least I don't know of any city in the United States just figure out a model on how to create competitive water. Although some cities do have private water supplies. They all have some kind of monopolistic power and therefore are protected by government and therefore prices also determined often by government. But it's all government. So one of things to note about Jackson, but also about Flint, Michigan, about Detroit, about all these other cities that are having water problems. This is clearly a failure of government. This doesn't have to happen. This is just a question of money in the end and, and to a large extent, as we'll see an issue of price, it's, it's expensive to keep up the water systems. It's expensive to replace them. It's expensive to update them. This is not, it's not easy to dig up the streets and replace pipes. It's not easy to build water treatment pipes. They are water treatment facilities that can cost tens, if not hundreds of millions of dollars. But it's interesting that government, which is responsible for this government, which is often sitting on hundreds of millions of dollars of taxpayer money. Don't keep up with this. Don't update these things. Don't. Because nobody seems to care when the system breaks down. It usually breaks. It breaks down. People move out. The people who are left are poor and have very little political clout because that's what ultimately determines who gets the investment and who doesn't get the investment. The political clout, not any economic principles. And what you see is a complete breakdown of government, a complete breakdown of government services. And then nobody writes about government failures. Nobody writes about the fact that government has failed. Every little supposed pretend market failure. You get big headlines. You get newspaper articles. You get stories upon stories upon stories about the victims of capitalism. But as government fails again and again and again and again and again, this time in Jackson, Mississippi, previously in Flint and in other places, you get racism is blamed for it. And you know, it could be racism. But it's interesting that it's much more likely that racism is to blame for something like this. When the government is delivering it, then racism to be blamed for a failure in the marketplace because the marketplace doesn't care about the color of your skin. Doesn't care about your socioeconomic background. It cares about whether you can pay your bills or not. Government cares about whether you vote who you vote for, color of your skin, maybe socioeconomics. It is government where you see the manifestation of racism, not nowhere near as much in the private sector. My guess is that there's a lot more breakage in Mississippi in government provided services than in services that are provided by the private sector in a competitive market. There's a lot more breakage that might be legitimately there's Mississippi after all, blamed on racism in the public sector and the government sector than they would be in the private sector. The government sector, sorry, the government sector is a sector that is based on pressure groups. It's based on groups. It's based on who can pound the table loudest, who can allocate resources, taking from other people for one's own benefit. And therefore, it's bound to be influenced by all kinds of issues unrelated to economics. Now, one of the issues with Jackson is, and I think this is true of many water districts around the country, is that in Jackson Mississippi, the water company basically provides Jackson with water. It doesn't seem like it's a very diversified business. It doesn't have other clients. Its clients are the residents of Jackson. And it turns out that in the United States, generally 90% of all the money spent on water infrastructure spent on fixing water mains, spent on delivering water to you, clean water to you doesn't come from taxes. It actually comes from the amount of money we pay for water, which is the way it should be. So in that sense, this is good. But it's also a problem in the sense that politicians who have to approve increases in water rates don't do it because it's unpopular. When the water is flowing, when the water is fine to drink, nobody has an incentive to go to the politicians says, Yes, raise the rates on my water so we can build an infrastructure for the 21st century. It doesn't happen. Politicians would have to raise water rates, people would complain, they'd have to explain we're investing in the future, people would go to hold the future, I want my water now and it's too expensive. Of course, people don't think long term, or at least politicians don't assume that we can think long term. Because the funny thing is that in Jackson, Mississippi right now, water rates might be relatively low. Of course, there's no water coming out of the pipe. But instead of paying higher rates for water, let's say, many families are paying $50 to $100 a month in bottled water to drink and they've been doing this for years because even when running water was running through the pipes in Jackson, Mississippi, as in Flint, as in other places, they were told to boil the water before drinking, not to trust it, right, close their nose as they shower. How disgusting is that? But that's life in many American cities today. The infrastructure is crumbling and then we're not willing to raise prices so that we can gain the revenue to invest in improving price, improving services. Because while investment in water is based, quote, on market on the amount of money you pay for water, the water prices are political issue that ultimately determined by the regulatory agency that runs the water system. So, you know, you think it would be easier to raise water prices with the explanation of this investment than it would be to raise taxes. But it's not partially because you get your water bill, you can see how much you're paying in water, it's right there in front of you. And if that keeps going up, you're going to complain. Now, Jackson, Mississippi has a added complication to this. And that is, they don't bill many of their citizens for water. Their building system has been broken for 10 years. So for 10 years, they've been billing people the wrong amount. They've been billing people some, some people they've been billing huge astronomical amounts, other people they don't bill at all. They haven't collected from a lot of people. The building system is completely broke. So revenues are broke. Years ago, they hired Siemens, a German company to fix their billing system. It turns out that was a fiasco. Now, I don't know why I was a fiasco. I haven't researched why the deal with Siemens was such a fiasco. But it's a massive fiasco. The billing system is worse than it used to be. And indeed, the city of Jackson sued the sued Siemens and won and got a massive settlement from Siemens. But this is Siemens were talking about a German company that is very good at what they do. I wonder why they had such a hard time implementing a simple billing system and metering system in Jackson, Mississippi, maybe it has to do with officials in Jackson, Mississippi, not so much with it. But you know, they won the lawsuit. So I don't know who knows who knows. But it is pretty weird. Yes. If you run a water company, government run water company, and you can't bill your customers. And yet you have to probably them with water. Then it isn't shocking that you've got real problems and you're under investing in the system, and you're not building and updating and constructing water treatment plants and new piping and all of that and the thing all breaks down and shuts down. It's just not surprising when you don't have enough money, because you're not billing your customers. And if you consider the fact that residents of Jackson, Mississippi are paying 50 to 100 bucks in bottled water, this kind of bottled water, then you could tell them quite a bit. If on condition that you actually provide them with quality water that they can drink, save them the bottled water. But this is why we need a creative way in which to create competition in a delivery of water to the home. And you know, we should allow for competitive piping, we should allow for people under those conditions to rip up the streets and lay new pipes, we should allow potentially from different for different entities that produce water to use the existing piping to deliver it and to take responsibility over the piping that they use. I'm sure the economists out there who figured out ways in which we could create create a private competitive system to deliver water. And it would be nice to see some cities out there, maybe compete, or not compete, maybe experiment with such delivery systems to see how they work and how they function. But what we're seeing in Mississippi right now is is a real government failure. If I went Detroit or in Baltimore, even New York City, Boston, and many other oldest cities where the piping is over 100 years old. You know, Jacksonville, Florida has had real problems. And I'm sure many of the cities in the Midwest, I'd be worried. I'd be worried. There's no question that this is the kind of infrastructure that American cities are not investing in. This is the kind of infrastructure where there's very little incentive to invest in. The pipes are buried, buried, and therefore they're buried from our minds. And we complain when rates go up, and we complain when we don't have water, and almost nobody sees the connection between the two. But if you underprice something, what happens when you underprice something? You get shitty quality. You can't provide high quality at low prices. All right. So for example, I'll just give you an example from from Jackson. In 2016, they found that the collection, right? You know, they were they were $26 million shortfall from what they expected to collect because of the modern building system. You can do a lot of repairs with $26 million. But if you can't have a building system, government can't even create a building system that works if they can't figure out who to bill and how much to bill and collect, you get societal breakdown. You get societal breakdown. The thing is with government failure is when government failure affects us all, it's not just the customers of a particular entity. It's everybody within that particularly geographic area. And that's where you get breakdown of law and order. That's where you get increase in violence. That's where you get a breakdown of civilization. It is interesting to ask how cities in Europe cope with old infrastructure. And my guess is that Europe, because it centralizes everything, it just allocates, it runs everything through taxes and allocates just ever increasing. See, Europe is just more efficient at redistribution of wealth and it using government resources. We are just unbelievably inefficient because we try to have these mixtures and we try to localize everything. And sometimes from the perspective of welfare state, that doesn't work as well. Of course, from the perspective of true freedom, none of these systems work very well as compared to what the alternative would be. But it would be interesting, I have to research a little bit and find out what Europe does and how it manages. And maybe there's a water issue in Europe as well, but I don't think so. Just some of the numbers, nearly 16,000 residents, customers in Jackson owe more than $100 and are more than 90 days past you. Jackson, water customers owe a total of $90.3 million. So you just see from the numbers just don't add up. It's just constantly, there's a massive shortfall in the amount of dollars because there's no relationship between the quality of the service you get and the price you pay. What happens to these people? I mean, is water really shut down? Does the government really keep track of these things? Can it? Does it have the ability? So prices are too low. They're too low because the prices are said by politicians ultimately, not by a marketplace. Higher prices in Jackson, Mississippi would be difficult because Jackson is so poor. But other poor places manage somehow and the breaking of the water system is worse than having to pay more in water. The breakage of the water system actually results in poor people having to spend more money on water elsewhere. Prices matter. Incentives matter. Institutions matter. And what we're seeing is another example of government failure. And there are lots of them. So once in a while, I'll point them out because everybody else points out all the other failures. And of course, all the discussion in Jackson, Mississippi right now is about racism. All the discussion in Mississippi right now is about poverty. There's almost no discussion in Mississippi right now about prices, about investment. The only assumption is the state should bail them out. The state should put in money. So we should redistribute money from from richer parts of Mississippi to Jackson, Mississippi. There's no discussion of raising prices, improving building system of actually fixing a broken system, a broken economic system. It's easy to blame the racists in. And for all I know they are in in the state house, it's easy to blame rich white people in the suburbs. It's much more difficult to talk about the fact that the residents, the poor residents of Jackson, Mississippi are just going to have to pay higher prices if they want to get reliable water supply. Thank you for listening or watching the Iran Book Show. If you'd like to support the show, we make it as easy as possible for you to trade with me. You get value from listening. You get value from watching. Show your appreciation. You can do that by going to IranBookShow.com slash support by going to Patreon, subscribe star locals and just making a appropriate contribution on any one of those any one of those channels. 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