The Insolvent Investor

Investing and economics – it isn’t easy.

How Obama can help the environment, stimulate the economy and rebuild our infrastructure: Roundabouts

Posted by Warren on November 13, 2008

It’s 10:45 on a Tuesday morning, and I’m late for a meeting in Palo Alto, California. To make matters worse, I just miss a traffic light and am sitting at the corner of Page Mill Road and Foothill Expressway, just off of the 280.  My thoughts? OMFG, I can’t believe I’m wasting my time sitting at this traffic light! I wait for what seems like five minutes (okay, maybe two minutes) while absolutely no cars pass through the green light. Rows of cars line up at the red light behind me, waiting for the signal to turn and end the infernal wait.

Let’s think about why this traffic light might not be ideal:

(1) Since there are no cars driving through the green light, it is a particularly inefficient use of time for all the people waiting at the red light. Even if there were cars coming, it could still waste time if the flux of cars going through the green light is less than the flux that might be going through the light in the other direction. The value of this wasted time could be measured by using the rate at which these people are compensated in their work (perhaps discounted by some factor since they may not actually work more just because they have more free time). I haven’t done the math, but my guess is if you add up all this wasted time in a year from sitting at traffic lights and multiply by, say 25%, the average wage of an American worker, you would end up with a number well into the billions of US dollars.

(2) My car is wasting gas because it is idling and because I must accelerate after having stopped.

(3) Lights require energy and money to operate and maintain.

(4) Traffic lights are dangerous; 45% of crashes in America occur at intersections.


Fortunately, there is a solution to the waste and my frustration – the Roundabout. First introduced in the US in 1905, roundabouts are hardly new technology. However, recent studies have shown that they are more cost effective, environmentally friendly, and safer, compared to traffic lights. Europe has been using roundabouts to great success. Roundabouts are much more gas-friendly because they do not require as much starting and stopping or idling as traffic lights. Roundabouts save money and electricity because there are no lights to build, power and maintain. And, perhaps most importantly, studies have shown roundabouts results in about 80% fewer accidents than traffic lights, so are also safer.

It would seem the only real issue with roundabouts in the US is the cost of changing over our old traffic light system in favor of new roundabouts. But it’s this type of large capital outlay which could simulate job creation and our economy. So Mr. Obama, I implore you: revitalize our country and build out roundabouts!


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