We need a second New Deal.
The boom which occurred in the US after the Second World War, the one that launched suburbia and the golden age of young GIs raising families, where CEOs were corporate stewards working hand in hand with the government to ensure everyone had a pension and could retire at 65 (which subject Robert Reich writes extensively and eloquently upon in his book Supercapitalism), occurred in large part because of the investment in national infrastructure which had occurred in the previous 10 years and in the few years following the war. The TVA, AAA, etc and much later (under Eisenhower), the National Highway System provided a strong substrate on which capitalism was to catalyze the development the world’s most sophisticated electrical grids, telephone systems and strongest economy. Additionally, the manufacturing infrastructure (for tanks, tires and guns) was quickly converted into factories for automobiles and durable goods.
Reviewing the infrastructure of the US today, our roads cannot handle the traffic volume. Something like $105b annually is lost in productivity to traffic. Air traffic delays cost the US $41b annually.
Since 1982, the U.S. population has grown almost 19 percent, the number of registered motor vehicles has increased 36 percent and vehicle miles traveled has ballooned 72 percent. Over the past 20 years, however, we’ve added less than five percent to road capacity and even less than that to public transit. – American Road and Transportation Builders Association
The US used to spend 10% of GDP on infrastructure. Today, we spend less than 1%.
Internet and Mobile
Even our internet broadband penetration is only 17th best in the world.
Every house in Japan has fiber to the home, with the average connection at 50Mbps. The mobile phone infrastructure supports streaming video and the average mobile phone transaction is $80. Clearly, when a country has an infrastructure that supports data and ecommerce transactions at this velocity, there is a petri dish ripe for innovation. An infrastructure of this magnitude, with similar penetration, coupled with American ingenuity and capitalism (our export of highest value) would surely be a driving force for the economy in this millennium.
Power and Water
Aside from the technology investment, the US needs to invest in its energy infrastructure. Whether it is developing an intelligent grid where solar panels on homes contribute excess power the the common pool or the development of wind farms in North Dakota and Texas or the creation of a set of nuclear power plans (France generates 80% of its power this way), we need to move forward. Importing more than 60% of our oil from foreign countries has required us to foray and actively participate in the Middle East, to maintain our national security which like the supply of oil, is an unsustainable policy.
The same is true of our water infrastructure. 30% of the water piped to NYC from the Catskills, is lost during transport because of leaks in the water mains. The EPA estimates that without greater than present investment in the water infrastructure than current rates, in 20 years we will have to invest more than $224b to maintain the clean and potable water system. With water likely becoming the next scarce resource over which wars will be fought, it’s increasingly important, as a matter of National Security) that we identify, cultivate and maintain our water stores in a more intelligent way than we developed our appetite for oil.
That’s why I’m voting for Obama. I’m a fan of small government when things are going well; but I think it’s time for an inward focus in the next 4-8 years with significant direct domestic investment, funded by debt, in order to provide a growth platform for the US. I believe our decrepit infrastructure and our lack of investment to improve it (aside from a terrible monetary policy), are the main causes for the recession that we’re currently in. It’s time to invest again in the future of this country in a very significant way.