It's not about abundant capital - it's actually easier for American cities to leverage the bond market to raise capital now than it was in the 19th century. The bigger issue is labor and regulation. The people working to raise Chicago were frequently immigrants, either from other countries or from farms, working long hours, with little pay, and with questionable safety standards. Thanks to regulation and labor organization, workers on civil engineering projects are much less likely to fall off a building or have one collapse on them, and can afford to live much more comfortably. But that means it's much more expensive and difficult to undertake a large project.

Same goes for regulation. Notice that the whole reason Chicago needed to be raised was so they could drain run-off. So where do they drain it into? The Chicago River and Lake Michigan, which became toxic cesspools until very recently. And those shop owners didn't have much of a say while they were hoisted into the air. Regulation and democratic involvement are really annoying when you want a large capital project to go through, but they're really important to you when that large capital project is something that's being done to you.

There's even more capital these days, it's just locked in securities and traded on exchanges instead of directly invested in enterprises.

It's common knowledge in the financial world that returns are expected to be very low in the near future. With that and the recession both financiers and economists (real economists, not random op-ed writers) are aware that the market and macro situation for government projects is ideal.

But it so happens that government projects today are very often financial disasters, particularly when backed by bonds or tax increases. There's no law of the market that says this should happen either, but it seems to be a feature of ossified political systems.

In times of rapid economic change, the risk of doing nothing is often far worse than a grand project that is merely less than fully successful. Chicago feared it would become a big flat toilet, for many good reasons.

When things work pretty well, it can be more difficult to allocated resources for bigger projects, I suppose.

Singapore does that kind of timing pretty well.

Interesting to note, many economists in no small measure blame the recent financial crisis on the global cpital glut chasing returns. If you create an innovative instruments for financial capital to support physical capital (in this case US housing stock) you too can create a bubble.