On Sunday, Wired’s online edition ran a piece entitled Note to Next President: Modern-Day WPA [Work Progress Administration] Will Save the Economy.
“(Congress) should invest in the more than 3,000 ready-to-go highway projects that could be under contract within the next 30 to 90 days,” says John Horsley, executive director of the American Association of State Highway and Transportation Officials. “Funding these ready to go projects offers Congress a tremendous opportunity to put Americans to work and help cash-strapped states repair and replace our crumbling infrastructure.”
History shows us the time to act is now.
The state of America’s infrastructure — roads, bridges, drinking water, even schools and transit systems — couldn’t be much worse. A report card issued three years ago by the American Society of Civil Engineersgives it all a D. The society says we’ve got to spend about $1.6 trillion just to bring things up to a B-.
Of course, this is ridiculous. Let’s set aside for a moment the article’s shameful reliance on the word of transportation lobbyists and recall that the very thing they propose is a throwback to discredited demand-side, Keynesian economics. Not to knock Mr. Keynes, who by any account was a brilliant man, but he also built a brand on economic policies that have been proven absolutely wrong. Indeed, although Wired article’s author seeks to bolster the argument for a massive infrastructure work program by grafting it to FDR’s Works Progress Administration, which was a taxpayer-funded Federal job scheme, there is no mention of the fact that programs like these actually prolonged the Great Depression. Yes, jobs are good and infrastructure investment is good, but to pour billions (furthering a rapidly-ballooning deficit) into economically inefficient job schemes will not rescue the economy, but will depress growth in critical areas.
Let’s be clear: I’m not against infrastructure investment per se. In fact, I think the government would be wise to do a top-to-bottom review of this country’s transportation infrastructure strategy (or lack thereof) and make strategic investments to correct current problems and avert future ones. At the same time, funding for such a program should not be driven by job considerations (a recipe for sabatoging the economy) and should not be drawn entirely from a Federal pot. In fact, a longstanding problem with our current transportation regime is that it’s inherently unsustainable as the further development of roadways encourages population disaggregation, diffuse utility networks, and negative environmental and fiscal externalities. And to force-feed that public policy nightmare will only cement (no pun intended) the necessity for later large-scale infrastructure improvements down the road (again, NPI). Color me paranoid, but that sure does seem to be a tidy deal for certain interest groups.
Naturally, economic growth is often driven by effective infrastructure – mostly a function of governments around the world trying to outdo one another through such investments – but it is nowhere close to being a panacea, and even less so in an information-driven economy. These investments themselves do not produce growth, but might supplement an area’s chances to attract or incubate such enterprise that would. That’s right, folks, it’s business that generates growth. Fin.
This article is pretty much a propaganda piece meant to take advantage of people’s fears and uncertainty to drive a massive, taxpayer-funded capital investments that is not only probably unnecessary (in the scope they describe), but economically deleterious and unmoderated givrn the destructive effects of an exponentially-expanding roadway-infrastructure network. This kind of thing seems to be popping up everywhere these days; with the media’s shrill comparisons of the current economic crisis to the Great Depression, the opportunists are sniffing around to use the fragile climate to push through their carefully disguised agenda for rent-seeking and entitlement-gerrymandering.
