Public Infrastructure

(originally published at Zocalo Public Square)

The American economy can produce decent jobs. We know this to be true because it has happened before. Getting back to a decent-jobs economy will require a commitment on the part of policymakers to creating many more middle-skill, middle-wage jobs. While there are important reasons to support the incomes of those at the bottom of the wage distribution, we will not improve the lives of working families without improving and increasing job opportunities in the middle.

The economic environment in America today is more dire than most of us have ever known. We are in the midst of an unemployment emergency, in essence a jobless recovery: notwithstanding recent marginal upticks in official U.S. jobs numbers, there will be no fundamental improvement in the unemployment picture unless major new national economic strategy initiatives are taken. Who will step up to drive them forward?

Gas is above $3 a gallon; we're involved in two military campaigns in the Middle East; a quarter of our bridges are either structurally deficient or functionally obsolete; and there is little bipartisan cooperation on controlling greenhouse gases, energy policy, or funding the 2011 transportation bill. Everyone wants to change something about America's energy policy, but it's been largely static for 30 years.

In the Fall of 2008 as financial markets were tumbling around the world, legendary investor Warren Buffet equated the bursting of the housing and credit bubble to an economic Pearl Harbor, one that could plunge the economy into a painful and prolonged downturn reminiscent of the 1930s.  Thanks in part to the lessons that were learned from the Great Depression, American and European policymakers won the immediate battle of preventing the economy from sinking into another Depression.  But they have not yet won the war to regain prosperity.  Not only do the U.S.

Under-investing in infrastructure carries costs for households, businesses, and the government by increasing maintenance, wasting time, and allocating resources inefficiently.  These costs reduce efficiency and impede economic growth.
 
Quantifying Efficiency Loss

The opening theme of the 2011 State of the Union address, and the theme that the President has carried forward since then, was his insistence that the nation has at long last emerged from economic crisis.  He said: “Two years after the worst recession most of us have ever known, the stock market has come roaring back.  Corporate profits are up.  The economy is growing again.  And after two years of job losses, we’ve added private-sector jobs for 12 straight months -- more than 1 million in all.”

With enactment of the Stafford Act in 1974 and the creation of the Federal Emergency Management Agency in 1979, the federal government developed an apparatus to plan for and respond to natural disasters.

…We are remaking the American landscape with the largest new investment in our nation's infrastructure since Eisenhower built an Interstate Highway System in the 1950s. Because of this investment, nearly 400,000 men and women will go to work rebuilding our crumbling roads and bridges, repairing our faulty dams and levees, bringing critical broadband connections to businesses and homes in nearly every community in America, upgrading mass transit, building high-speed rail lines that will improve travel and commerce throughout our nation.

In his State of the Union address January 25, 2011, President Barack Obama mentioned the word “manufacturing” just once. This was the only time in his three such speeches to Congress that he has uttered the “M” word. The president’s failure to acknowledge, even in passing, a sector of the economy that accounts for 11 percent of America’s GDP is a metaphor for his administration’s disdain for manufacturing as an important contributor to the nation’s future wellbeing.