When people talk about federal infrastructure spending (as Paul Krugman does in many of his columns), I’m always struck by how backwards-thinking their views are.
Imagine if in 1936 FDR had announced major WPA initiatives of restoring telegraph lines and refurbishing the Erie Canal. People would have thought he’d gone mad. And yet the pleas to restore 20th century infrastructure are treated as serious policy prescriptions.
Here are my questions.
- Do you think that the federal interstate system will be as important over the period of the next 50 years as it was over the last 50?
- What infrastructure do you think will be most important over the period of the next 50 years?
While I think there’s an argument to be made that we should be restoring sewer systems, from a ways and means standpoint you’re really calling for no strings block grants to be made available to the states. Given the states’ present fiscal situations does that sound like a prudent course of action? Or would any foreseeable amount of money spent that way simply disappear into the maw of the professional class without run-on economic effects?
In the investment world water and power gen/distribution are hot. Not our expertise, but I have to imagine information is as well.
Given that, moving bits, water and electrical potential (along with concentrated populations) doesn’t scream goods moving roads and bridges.
I think we ought to acknowledge, though, that transgender bathroom retrofits could provide a nice pop to the signage and plumbing trade. So we got that goin’ for us.
Indeed, lets remember what some one had to say about shovel ready projects.
Off-Topic, but here is a link from a few days ago. Apparently, David Stockman has been paying attention to what I have been saying. Now that I have Ronald Reagan’s OMB Director onboard, I expect the rest of the Republicans and conservatives to fall in line.
The Case For A Super Glass-Steagall
I would create something similar to the FDIC for the various government pension funds. The FDIC is self-supported by the banks, and when bad banks go under, the good banks pay for it. The government will backstop the FDIC with loans, but the loans must be repaid by the member banks through increased fees.
Theoretically, this should provide incentive for the pension funds and the participants to ensure the funds are solvent, but the keyword is theoretically.
Nah, the PBGC doesn’t work that way (even though it’s supposed to) so why should a new agency to insure public pension programs?
And Stockman is far too optimistic. The only thing we can do to stop politicians from rescuing banks because they’re too big to fail is to keep banks from becoming too big to fail.
The old G-S was a primary reason the commercial financial system was stable. The investment side was the wild west, but that was known by those playing there. There was an imperfect firewall between Wall Street and Main Street. It was an imperfect compromise.
Regulated institutions would have access to the Fed window, but they would be limited in scope of activities. Unregulated institutions could do whatever they wanted to do, but they would not have access to the Fed window. At some point enough Bernie Madoffs would cause people to take notice, but if not, the taxpayers would not be on the hook.
The FDIC is a protection for the depositors. Access to the Fed window is the what is the big loss. The Fed is like a Colombian cocaine producer. If you are a drug dealer, you want to be connected to him for your drug supply. Otherwise, there are numerous middlemen, and your product is being cut multiple times. With a firewall between you and the Colombian drug producer, you can never get too big.
We went from something that was working to something that is not working, and this has been hailed as progress. There will never be a bureaucrat able to craft a regulation that will allow a Wall Street fox operate in the Main Street hen house and protect the hens at the same time.