Donal's picture

    Small Government = Rotting Infrastructure?

    Our bridges are collapsing, but the Infrastructurist notes that other countries are investing in their infrastructure, even in the face of austerity:

    Britain Cuts Spending While Investing in Infrastructure

    Late last month British Prime Minister David Cameron announced plans to severely slash government spending—only to follow up by calling for billions of dollars to be spent on the country’s “first ever national infrastructure plan.” (pdf)

    Cameron hopes to improve energy, transport, digital, and water infrastructure over the next five years to the tune of $315 billion in public and private funding partnerships. The federal government will get things going by pitching in $47 billion for transportation in the next four years alone, “even in these constrained times,” Cameron said.

     

    Cameron doesn't mince words about the role of government:

     

    First let me tell you what I won’t do.
    I won’t engage in some sterile debate between laissez faire and hands-on government.
    The question isn’t ‘should government be involved?’ because it is involved.

    ... business confidence doesn’t just come from financial and human assets.
    It comes from physical assets too – from our infrastructure.
    For too long, we have postponed difficult decisions on this – and it shows.
    Congestion on our roads cost our economy £20 billion a year.
    In one year alone, there were fourteen million minutes of delay to rail journeys in our country, costing £1 billion in terms of time lost to passengers.

    Other countries understand the importance of modern infrastructure to economic growth.
    China is building tens of thousands of miles of roads, a new network of intercity railway lines and a dozen or so nuclear power plants.
    While they’ve been moving forwards, we’ve been standing still.


    Obama proposed a similar program for the United States - the National Infrastructure Bank. He initially had cautious bipartisan support, but at the Daily Beast, Peter Beinart anticipates that Keynesian investment in infrastructure will be a casualty of the Tea Party/cut taxes/small government movement:

     

    Last Night's Big Loser

    The best case scenario is gridlock: Obama blocks large-scale cuts as his 2009 stimulus money peters out, which means America goes from stimulus to no stimulus. The worst-case scenario is that in trying to balance the budget, Republicans force the White House into substantial cuts, which means America goes from stimulus to anti-stimulus. That’s the same move Franklin Roosevelt made in 1937, which according to many economists prolonged the depression for several years.
    ...
    Historians may also look back at 2010 as the first post-9/11 election in which fears of China loomed larger than fears of Al Qaeda. Given that China has stimulated its way out of recession and is set to pour even more government money into infrastructure, leaving America further behind, I doubt it will be the last. In his Senate victory speech, Republican megastar Marco Rubio announced that “America is the single greatest nation in all of human history. A place without equal in the history of all mankind” because “almost every other place in the world…what you were going to be when you grow up was determined for you.” Almost every other place in the world? From China to India to Brazil, hundreds of millions of people are rising economically in ways their parents could scarcely have imagined, in part because their governments are investing in infrastructure in the way the United States did in the late nineteenth century. The American dream of upward mobility is alive and well, just not in America. And rather than looking at what those other countries are doing right, the Republicans have taken refuge in an anti-government ideology premised on the lunatic notion that America is the only truly free and successful country in the world.

     

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    Comments

    We don't need no infrastructure spending and your picture proves it, Donal.  There's a perfectly nice bridge right by the collapsed one.  People just need to not pull onto the collapsed bridge.  Whatever happened to personal responsibility?


    It's even worse than your worst-case scenario, Donal.  A lot of the "stimulus" got soaked up by the anti-stimulus of state budgets ... the federal stimulus cash went to helping states and municipalities stave off spending cuts. Now that weak-tea stimulus is gone, the economy is still (predictably) in the crapper, and the states are going to stick to their pro-recessionary spending cuts.

    Any hope of the states doing the right thing is ruled out by the fact that 1) most of the states have balanced budget amendments and 2) the Republicans just picked up a pile of governorships and state legislative majorities on their "fix the economy by slashing spending" platform. So we're going to see how the Hoover strategy works out.


    Well I got mine who cares about the rest of ya! Wink I just got a brand new Willis Avenue bridge to go back and forth between the Btronx and Manhattan toll-free (crossing my fingers the latter stays that way.) They just finished the pavement on the widened lanes last week and boy is it nice driving on it compared to what I had been driving on for a decade! I have no idea who paid for it, whether Federal taxpayers, New York taxpayers, MTA tolls from other bridges (as I said, it is still a toll-free secret that only locals know about)--but whoever did, thank you!


    It sure would be nice if they'd build a 'chunnel' from Manhattan to East Stroudsberg, PA, thereby giving the finger to NJ and NJ Governor Christi.


    Good point and post.  That is a good example of the disjuncture between the philosophical conservatism and operational liberalism of the American electorate.  People see collapsed bridges or unsafe roads and their thought isn't "oh well, I guess I just have to accept that as the price of small government."  Instead it's "where the hell is the government?"

    Another example of this occurred to me when I read your 10/29 blog on Daniel Larison http://dagblog.com/politics/walking-eunomia-and-tea-party-blues-7338

    [from the first excerpt] Ultimately, I see concentrations of wealth and power as the real enemies of conservatism as I understand it, and I see a lot of conservatives and Republicans aligning themselves with both in the service of getting themselves back into power, so I can’t say that I see that as conservative success.

    Larison was saying that true conservatives--traditional conservatives that is, as opposed to movement conservatives--see concentrations of wealth and power, in the private as well as the public sectors as their animating concern.  Movement conservatives can see only the harms that can come about with a government that they see as too powerful (leaving aside Terri Schiavo, anti-choice, constitutional amendments defining marriage and other right-wing social issues requiring a highly intrusive government).  They don't seem to see downsides in having large private economic actors too dominant.

    The distinction between movement conservatism and traditional conservativism was also made by Sam Tanenhaus in his lively, short book The Death of Conservatism.  He sees the former as revanchist and destructive and the latter as desirable and necessary.  With that I agree. 

    From another part of the political spectrum there was Louis Brandeis, who identified as a Progressive.  He saw concentrations of wealth and power as the real enemies of a decent society. 

    So there should be shared ground there across supposed ideological divides.  Larison, had he been alive at the time of Brandeis and Teddy Roosevelt, would have agreed on the need for antitrust activity, for reasons he would have defined as conservative and Brandeis as progressive.

    In the case of the big banks, philosophical conservatism would imply support for a weak government that lets them continue to wreak havoc (it won't be long from now if we don't act, says Stiglitz, and he's one who's been right about an awful lot of things) on the rest of us. 

    Again, I think this is an issue where, if you talk about this issue publicly in terms a lot of ordinary people can understand, the way FDR did, they become operationally liberal.  

    You explain to them that the result of getting the government out and deregulating and allowing banks that are too big to fail to continue is the status quo that led to the most recent disaster--big banks do whatever they want, they take reckless gambles with other peoples' money, the profit is privatized, and the taxpayers have to clean up the mess when things blow up.  

    The alternative is a government independent enough of the special interests and empowered by the people it is supposed to serve minimizing the risks through regulation, and breaking up the too big to fail banks to protect the taxpayers and the health of our and the global economy. 

    Neither Bush nor Obama has ever had the kind of a down-to-earth, plain language, "fireside" chat with the American public to explain any of this. 

    So of course the public has no idea which end is up or what their government is trying to do on all of this.  Meanwhile the public keeps hearing about big bank CEOs keeping their obscene bonuses--the bonuses they the taxpayers paid for, to people who screwed up and damn near brought the economy down!  So is it any wonder they don't feel the federal government has their best interests at heart, and doesn't share their values about rewarding productive effort instead of perfidy?

     


    Yes, it does look like the Keynes avenue for developing future infrastructure and institutions will be blocked by wrecked vehicles for the coming sessions of legislation. Nero has freshened his drink and is settling in for another round of tunes.

    If the idea of stimulus has fallen so far from grace, maybe this is the time to challenge the idea that tax cuts stimulate the economy merely by money not going to the government. The theory is that that these untaxed funds are invested in enterprises that create jobs and consumer buying power. Instead of praying for the caress of the invisible hand, we could tax corporate profits that are not reinvested: http://wallstreetpit.com/31998-should-we-tax-excess-corporate-profits

    A similar quid quo pro is worked out in many municipalities all the time when tax breaks are given for a specific injection of cash into the general economy. But those are all one by one deals that are sometimes beneficial and sometimes not. By using the index of re-investment the supply-siders get a chance to prove their case and pay up when they lose.


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