Rebuilding our economic backbone

By Ed Rendell
February 11, 2013

We’re getting beat by Estonia.

Not that there’s anything wrong with the tiny state on the Baltic Sea. But the nation that built the Hoover Dam, pioneered the Interstate Highway System and created the best aviation system in the world, is rapidly sliding toward the bottom of the list when it comes to infrastructure.

Infrastructure is the economic backbone of any modern society. Without a reliable, functioning system, things we take for granted would fall apart: roads and bridges, schools, public and private transportation, the energy grid that powers our lives, the water we drink. But today the United States no longer leads the world in infrastructure competitiveness. Countries like the Netherlands, South Korea and Singapore now rank in the top 10, according to the World Economic Forum, while the United States, once No. 1, has fallen to 14.

If this does not concern you, it should.

Building America’s Future, a national and bipartisan coalition of state and local elected officials that I co-chair with New York Mayor Michael Bloomberg and former California Governor Arnold Schwarzenegger, recently updated Falling Apart and Falling Behind, a comprehensive report on the state of America’s infrastructure.

What’s the bottom line? Our legacy of advancement and innovation – the very things that made the United States an economic superpower – is at risk. Global competitors are racing ahead. They’re doing it by making smart, long-term investments in modern networks, such as rail, ports and electrical grids, to meet the demands of the global economy.

A case in point is the investment in port infrastructure made by our competitors in anticipation of larger vessels becoming the norm once the newly widened Panama Canal is completed. Since 2000, China has invested more than $5 trillion in its ports. Brazil has invested more than $250 billion since 2008.

The result? China now has six of the world’s busiest ports and the U.S. has none of the top 10. Shanghai’s port now moves more container traffic in a year than the top eight U.S. ports combined. Brazil’s investment has gone into its Acu Superport, larger than the island of Manhattan, with state-of-the-art highway, pipeline and conveyor-belt capacity to ease the transfer of raw materials onto ships heading to China.

And the United States? The World Economic Forum ranks us 19th in the quality of our port infrastructure, behind such countries as Iceland, Denmark and – yes – Estonia.

Our roads are not much better – with expensive consequences for every American. Americans spent 4.8 billion hours sitting in traffic in 2010, wasting 1.9 billion gallons of fuel at a cost of $101 billion. Since 1980, the number of cars and trucks on U.S. highways has increased by 104 percent, but the miles of new highway lanes have grown by only 4 percent.

The growing congestion of our railway system, moreover, plagues our freight corridors, choking economic growth and development throughout every region of our country. In Chicago, home to our nation’s largest rail center, congestion is so bad that it takes a freight train longer to get through the city limits than it does to reach Los Angeles.

This and other freight corridors are clogged and inadequate to support growth. As a result, the World Economic Forum ranks the U.S. No. 18 in rail system quality – behind Finland and Malaysia.

To regain our status as a world leader, we must develop a national infrastructure strategy for the next decade. Working together, Washington must:

  • Produce a 10-year critical infrastructure plan that makes significant new investments;
  • Pass a long-term transportation bill;
  • Target federal dollars toward economically strategic freight gateways and corridors;
  • Refocus investment on projects of national significance.

It is time to create a National Infrastructure Bank that would leverage financing from the federal, state, local and private sectors. This could provide funding for critical projects that cross jurisdictions and affect multiple sectors such as roads, water and energy.

Our nation’s leaders must think big and act boldly. Policy must be based on economics, not politics. Rebuilding and modernizing U.S. infrastructure must be a priority if we want to remain economically competitive with the rest of the world. When we do so, we will give a significant boost to our economy and create tens of thousands of well-paying jobs.

We can either make smart, strategic investments or we can sit back and watch the world pass us by.

PHOTO: Overview of Hoover Dam from the helicopter pad, south of the power plant, view north – Hoover Dam, Spanning Colorado River, Boulder City, Clark County, Nevada. LIBRARY OF CONGRESS

 

 

17 comments

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Great article. Well said.

Immigration Act of 1924 greatly affected the labor environment for the construction of the Hoover Dam, which was dedicated in 1935.

The Immigration Act of 1924 sharply reduced the number of immigrants allowed into the US. Back then, the American Congress still represented the interests of the American middle class, instead of foreigners. Americans still stuck together back then. That’s how the Hoover Dam was built, by an America that cared about its own working class.

The infrastructure must be for our own benefit as an entire people, rich and poor. Too often projects are designed to benefit wealthy stakeholders, or American-based multinational companies who are busily selling out America for higher profits. Who can blame them? Their corporate charters dictate that, after all.

If we’re going to build infrastructure by importing foreign labor to keep driving the American labor wage rate down to starvation levels, and enrich the wealthy, then it’ll will simply hasten the downfall of the American middle class.

In whose interest will the infrastructure be built? Will it be built to facilitate multinational corporations from outside the US exploiting America for wealthy plutocrats from Russia?

Immigration is destroying the American middle class.

Great article, well written. But don’t forget that the world is a jungle, and nobody but nobody is protecting the American worker anymore.

Posted by AdamSmith | Report as abusive

You state “Our nation’s leaders must think big and act boldly. Policy must be based on economics, not politics”, a statement with which I agree wholeheartedly.

That would mean we would have to do a complete reversal of the many decades of job outsourcing (i.e. manufacturing jobs) that have been lost as a result of supposedly free trade, loose banking regulations, and tax policies that benefit only the wealthy.

Let me know when you have that accomplished, and I will agree with the rest of your statement.

“Rebuilding and modernizing U.S. infrastructure must be a priority if we want to remain economically competitive with the rest of the world. When we do so, we will give a significant boost to our economy and create tens of thousands of well-paying jobs.”

Otherwise, there is no point to your article whatsoever.

A collapsed economy does not need infrastructure, and we are about to collapse due to present government policies.

Soon we will have other things than infrastructure concerns to occuply our time — like how to find adequate food and shelter on a daily basis.

Posted by PseudoTurtle | Report as abusive

It is ironic that one would write an article stating that policy must be based on economics and not politics but yet under the honorable governor’s reign in Pennsylvania decisions were made on politics. Take the Nature Inn at Bald Eagle State Park that was built even though high ranking staff were against it and proved it would not be profitable in black in white. The bond used to build the Inn will never be recouped and it is questionable if operational costs can be covered… all in the name of politics. State Park infrastructure was compromised while funds were being diverted elsewhere in the name of politics and now the current administration

Posted by geo17078 | Report as abusive

It is ironic that one would write an article stating that policy must be based on economics and not politics but yet under the honorable governor’s reign in Pennsylvania decisions were made on politics. Take the Nature Inn at Bald Eagle State Park that was built even though high ranking staff were against it and proved it would not be profitable in black in white. The bond used to build the Inn will never be recouped and it is questionable if operational costs can be covered… all in the name of politics. State Park infrastructure was compromised while funds were being diverted elsewhere in the name of politics and now the current administration

Posted by geo17078 | Report as abusive

It isn’t just the politicians, but the people themselves. A friend of mine maintains that the American people are no longer capable of coming together as a society for any meaningful purpose; that the glue that has traditionally held us together to make changes for the greater good is gone. So far, the evidence overwhelmingly supports that claim.

Posted by thinkb4its2late | Report as abusive

And I thought the stimulus package was going to address infrastructure….nope!

Posted by jaham | Report as abusive

Until we change our ways a bit, I think an infrastructure bank would only look good for a very short while, probably not even two election cycles. It would be full of corruption as public money is being doled out in some form and all Banksters and MBA’s would be cruising to prove that their new swimming pool is an infrastructure benefit to the country.

First we must address the fundamental ways our economics works. As long as corporate America is told to continue doing business in the same way, the Infrastructure will certainly continue to get worse. “Capital” cares not for “labor” and has convinced “labor” to hate Government instead of it. As long as this remains the common thinking, we will continue to decline overall.

Posted by tmc | Report as abusive

“Thinking Boldly” to me is not trying to solve new problems with old tools. It is thinking of new tools to solve those problems. I think the Governor has pointed out the issues quite well, but I see no bold statements as to how to fix any of it. Just more “pork” bills and “refocusing”. The history of our government shows that when it “refocuses”, what actually comes into focus is not what we were looking at.

“Our nation’s leaders must think big and act boldly. Policy must be based on economics, not politics. ”

This governor IS one of our nations leaders, yet offered standard political answers to the problem.

Posted by tmc | Report as abusive

Why don’t we get all the able-bodied people our government pays to sitting home and watch TV to get busy on our infrastructure? A few reasons.

Even their kids are so fat the military doesn’t want them. They don’t belong to a union (yet), so they can’t be thus employed (Davis-Bacon). And they are so “set in their ways” that they believe that they will never have to do honest work in exchange for the money that comes to them each month. “Their man” is in the White House, and I’m afraid they may be right.

Our Congress has increasingly and repeatedly betrays American citizens by diverting the tax money that should have been prioritized for construction and maintenance of our infrastructure. So we must tolerate failing water and sewer systems, potholes inadequate highways and more and more toll roads so ever-increasing giveaways to prolific indolents can continue uninterrupted.

It’s more and more obvious that what is “good for our politicians” (votes) is NOT “good for the country and it’s taxpaying producers.

Posted by OneOfTheSheep | Report as abusive

Yes, infrastructure in this country has fallen behind. The problem is that it is too late – this should have been done during an era of prosperity – but, as a society, we decided that we preferred to use that prosperity for massive entitlement programs instead – we had to choose between building roads and bridges or paying everyone’s (inflated) medical bills. We chose.

Posted by SayHey | Report as abusive

we would rather invest in destruction and war. I bet we are #1 in that.

Posted by rikfre | Report as abusive

If only this government of ours could actually direct money to real infrastructure improvements and not have it grossly diluted by political cronyism to finance yet more benefits for AFSCME and SEIU. Now their pension funds are so underwater they will need another bailout of massive proportions.

Posted by Caldreamin | Report as abusive

Great…who’s going to pay for this? Do you think we can borrow some more cash from China to pay for this? Or, are they nearing the point where they cut up our national credit card? When our national credit card is chopped up by the “bond masters of the universe”, what then Ed? If this spending spree results in an inevitable credit downgrade and significant rise in our national, state, and local borrowing costs that end up collapsing our economy, will we be able to say this out-of-touch plan was George Bush’s fault?

Posted by sarkozyrocks | Report as abusive

We’re broke!! Where’s the money gonna come from?

And also, since when does the government build all of our roads and bridges? It should be the private sector, you big leftist dummies!!

I’m sick of these keynesian leftist journalists. He probably thought the housing market was doing just fine in 2007…

Posted by AJ876 | Report as abusive

How to pay for the infrastructure of America? Here is how:

Pay for the infrastructure with a solid estate tax, not a meaningless, watered-down, imaginary estate tax of today. Why? Consider Einsteins words.

Albert Einstein said that it’s impossible for any human to contribute more to society than they gain from society.

He said the great libraries that scientists like him utilize are filled with knowledge written by people long dead.

He said the streets we travel on, and the greatest buildings of our cities were all built by the sweat and labor of men now long dead. All these things every human benefits by today, and yet others did the labor, the work and the sacrifice.

Now, TAKE Einstein’s words, and look at financial wealth.

The vast majority of the wealthy people in the US did not earn their wealth. The wealth was passed to them by parents doling it out to them, or by inheritance. That is a fact of life that is easy to verify. How?

If one examines the property tax roll in any county in any state in America, the data clearly tells the same story: 95% of the wealthy people in America obtained their wealth from parents or by inheritance. They did NOT earn it themselves.

The sad part is, it is that 95% of the wealthy, who are NOT self made, that despise the poor and accuse the poor as being lazy, and chant that the poor are poor because they have a bad attitude.

The rich brat, a true, wasteful parasite on society who travels to Aspen, spending money lavishly, diverts our attention by pointing his finger at a poor man who spends nothing, and accuses the poor man of being a parasite on society! What will heaven say about that?

In this forum, I can only guess that it is that 95% of the wealthy – the spoiled kids who inherited money from parents, those 95% of the wealthy who are NOT self made men – who probably complain most loudly about taxes.

And they hire lobbyists and tax attorneys to minimize the estate tax.

What does America need to re-build its infrastructure?

America needs to re-instate its former estate tax, and make it a simple, powerful estate tax, of 100% of anything over $500,000. Period. Yes, a 100% estate tax.

That way, the spoiled inheritance-money wealthy, living their ritzy glitzy lives, can finally see what it feels like to be a SELF-MADE man, instead of a spoiled rich, wasteful leech, parasite on society.

Posted by AdamSmith | Report as abusive

@AdamSmith: policy premised purely on jealousy and envy is not very admirable. While you do not define “wealthy”, the 95% figure is wildly overstated – especially if 500K is your definition.

Posted by SayHey | Report as abusive

I think adjusting our tax structure as @AdamSmith just mentioned has merit. I don’t agree with the 95% figure either though. I think that has changed in this new age. Old families have far less power now than they used to. As another author on Reuters talks about, there is a new generation of wealthy coming out of the high tech industries. The trend may not last that long, but I think it has diluted the old power bases noticeably for now.

Posted by tmc | Report as abusive