Thursday, December 18, 2008


The president elect has promised a huge outlay of funds on infrastructure projects, which are sorely needed, but it is important to ensure that the right infrastructure is selected for funding, and that is the topic of this article by Joel Kotkin.

An excerpt.

“It's the new buzzword: infrastructure.

“President-elect Barack Obama has promised billions in infrastructure spending as part of a public works program bigger than any since the interstate highway system was built in the 1950s. Though it was greeted with hosannas, his proposal is only tapping into a clamor for such spending that's been rising ever since Hurricane Katrina hit New Orleans in 2005 and a major bridge collapsed in Minneapolis last year. With the economy now officially in recession, the rage for new brick and mortar is reaching a fever pitch.

“But before we commit hundreds of billions to new construction projects, we should focus on just what kind of infrastructure investment we should – and shouldn't – be making. More important, we should think beyond temporary stimulus and make-work jobs and about investments that will propel the economy well into this century.

“After all, it's not that we stopped spending on infrastructure over the past decade. It's that mostly, we haven't spent on the right things.

“New York City, for example, has wasted billions on its bloated bureaucracy and on constructing new sports stadiums and other ephemera deemed necessary to maintain Mayor Michael Bloomberg's "luxury city." Meanwhile, many of its subway and rail lines have deteriorated. Over the decades, brownouts and blackouts, caused in part by underinvestment in energy infrastructure, have become common during periods of high energy use in the summer.

“Similarly, California Gov. Arnold Schwarzenegger has extolled the Golden State as "the cutting-edge state . . . a model not just for 21st-century American society but the world." Yet California's once envied water-delivery systems, roadways, airports and schools are in serious disrepair. Many even more hard-pressed communities – Cleveland, Pittsburgh, Philadelphia, Baltimore and New Orleans – have similarly wasted limited treasure on spectacular new convention centers, sports arenas, arts and entertainment facilities and hotels while allowing schools, roads, ports and other critical sinews of economic life to fray.

“Convention centers and other tourist attractions create reasonably high-paying construction jobs in the short term, but over time, they create an economy dominated by lower-wage service jobs. Take New Orleans. It was once one of the nation's great industrial and commercial centers. But then the city turned its back for decades on its diverse economic base and invested not in levees, port development and basic infrastructure but in the arts, culture and tourism. The tourism and convention business surged, but the result was a low-wage economy. Nearly 40 percent of New Orleans households, or twice the national average, earned less than $20,000 a year in 2000.

“Other places have followed a similar trajectory of folly, heavily subsidizing luxury condominiums, restaurants and other amenities to help lure the so-called creative class. Michigan Gov. Jennifer Granholm's 2003 plan to turn her state around focused on creating "cool cities" aimed at attracting hip, educated workers to Detroit and other failing urban centers. Instead of sparking an economic revival, Granholm has presided over a mass exodus of younger workers who can't find jobs in her state.”