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Obama's Jobs Agenda: An Infrastructure Bank that Robs You
Obama's Jobs Agenda: An Infrastructure Bank that Robs You
September 07, 2011
Originally published in Forbes
I stopped by our bank Friday to get something notorized, and, damn, they were all out of free Jolly Ranchers.
For a moment, I’d forgotten just what a bank is and is not. Seems I’m not alone, with an American president expected by some to propose a national “infrastructure bank” at his Thursday address to Congress on jobs.
“We’ve got the potential to create an infrastructure bank that could put construction workers to work right now, rebuilding our roads and our bridges and our vital infrastructure all across the country,” President Obama recently said.
Expensive union labor to be required, no doubt.
Infrastructutre banking is appropriate if we’re talking about the high turns at a NASCAR superspeedway; but even those should be privately funded.
Stimulus is a bit of a dirty word now, deservedly so. Still, “investment” in un-shovel-ready, politically favored projects while leaving 19th Century infrastructure and antitrust regulation intact is primitive jobs policy.
Adding to what in reality is an anti-jobs agenda are 21st century anti-infrastructure abominations like net neutrality proposals on communications networks, and green energy handouts.
The speech time would be infinitely better spent cataloging the ways government interferes with private infrastructure, and how to quit doing that. We’ll talk about how.
Normally, America urges developing nations to reject government-steering philosphies for enterprises like growing wheat, making shoes or for microchip fabrication. But we fall all apart and accept government oversight of advanced commerce, networks and construction as normal.
It’s as if the recent debate over Fannie andFreddie, and the wreckage fostered by government sponsored enterprises hadn’t even happened.
It’s bad enough to tolerate a politician talking about a jobs package in the first place. Government has its hands completely full tending to the knitting of allowing those who do assemble job packages to proceed without interference.
At the very least, recovery requires that policymakers not tee up un-removable enterprises to generate the economic distortions of tomorrow.
But the infrastructure bank gets considerable Republican applause, like endorsements from former Sen. Chuck Hagel and retiring Sen. Kay Bailey Hutchison.
The idea that our economy depends on a proposed $10 billion federal start-up infusion is astounding. Nor will the result likely be an actual bank, in the sense of sustainably lending money that gets profitably paid back, as the Reason Foundation’s Bob Poole noted.
I don’t think we can overstate the importance of not buying into the federal bank notion; it goes to the very core of what capitalism even is. The capital markets already are our “infrastructure bank.” Our GDP, in spite of it all, is $14 trillion; Of the top 100 global firms ranked by market capitalization, the smallest at the moment is $60 billion (Kraft Foods).
Government money is a trap, with labor and environmental strings attached. It promises to crowd out, reduce and degrade American infrastructure.
America does desperately need “infrastructure wealth”; we need it just as we need financial wealth, real estate wealth, manufacturing and service wealth, and health-care wealth. But like all wealth creation, the root is enterprise and property rights.
Corporations already conduct projects of astounding national and regional significance. As society becomes wealthier, infrastructure creation becomes easier, not harder. The America of 100 years ago that built overlapping tangled infrastructure with a paltry developing-world GDP can build today’s, if allowed to. Energy infrastructure, communications infrastructure, electricity infrastructure–all would benefit far more from a sustained deregulation and liberalization campaign than spending.
Instead, government artificially restrains private infrastructure with mandates like net neutrality and cybersecurity proposals, bans in the name of environmental protection, and antitrust blockage. A jobs agenda requires removing these accumulated barriers and banning new ones.
The path to infrastructure wealth–-and jobs and customer benefits besides—is to remove the impediments to private infrastructure and go home and watch a movie or something.
Here are a few ways:
- Freeze antitrust regulation such as action against the AT&T and T-Mobile merger, and against Google. These are inherently anti-infrastructure and undermine large scale competitive shareholder responses that expand our GDP.
- Avoid regulation of “cybersecurity” and “critical infrastructure” and such notions as a government “kill switch” for the latter.
- Stop wasting precious resources on inferior “renewable” energy investments. No fuel is “greener” in the proper sense of using fewer overall resources than petroleum based gasoline.
- Declare “net neutrality” off the table; clarify that proprietary networks and investments will not be expropriated or regulated, that there will be no forced sharing (and as noted, no antitrust interference with tomorrow’s large-scale voluntary agreements and alliances).
- Liberalize airwaves and secondary markets for spectrum sales such that wireless infrastructure wealth is created apart from regulators.
- Encourage states to remove exclusive franchises that make it illegal for firms to compete with incumbent electric companies.
- Liberalize network and infrastructure industry regulation generally; Our great infrastructure firms are artificially segregated into regulatory silos (telephone, electricity, water, sewer, cable, railroad, airline, air traffic control). They could collaborate on new power lines, fiber to the home, roads, bridges, airports, satellite systems, toll roads and more to bring capitalism and infrastructure wealth creation to an unprecedented level.
America doesn’t need Jolly Ranchers from the Infrastructure Bank.