As a result of the economic crisis, there is a broad consensus in favor of large-scale public investment in infrastructure in the U.S., both as part of a temporary stimulus program and to promote long-term modernization of America’s transportation, energy, telecom and water utility grids. But this momentary consensus masks the continuing disagreement on whether the U.S. government can legitimately promote American industries, and, if so, which industries. This is a problem for infrastructure policy, because different national infrastructures correspond to different national economic strategies. read more »
This morning the Senate Finance Committee approved the nomination for treasury secretary of Timothy F. Geithner, head of the Federal Reserve Bank of New York. Geithner is a Wall Street darling, but taxpayers may have a different take. Senator Jim Bunning (R-KY) reminded us at the Senate confirmation Hearing January 20 that Geithner was part of every bailout and every failed policy put forth by the current Treasury secretary. After you read this, you should begin to see why I’m so opposed to Geithner’s appointment – I don’t want the fox any closer to the hen house than he already is. read more »
President Barack Obama has rightly spoken positively about the American Dream, how it is becoming more expensive and how it needs to be reclaimed. But to do this, he may have to disregard many of those who have been among his strongest supporters and the dense urban centers which have been his strongest bastion of support. read more »
The election of Barack Obama signaled the beginning of a "civic" realignment, produced by the political emergence of America's most recent civic generation, Millennials (born 1982-2003). Civic generations, like the Millennials, react against the efforts of divided idealist generations, like the Baby Boomers (born 1946-1964) to advance their own moral causes. read more »
When presented with complex ideas about complicated events, the human tendency is to think in terms of Jungian archetypes: good guys and bad guys, heroes and villains. The more complicated the events, the more the human mind seeks to limit the number of variables it considers in unison in order to make sense of what it sees. The result is a tendency to describe events in the simplest black and white terms, ignoring the spectrum of colors in between.
This principle can be seen in the current explanation of the financial crisis. read more »
The recent call by the porn industry – a big employer where I live, in the San Fernando Valley – for a $5 billion bailout elicited outrage in other places. Around here, it sparked something more akin to nervous laughter. Yet lending a helping hand to Pornopolis is far from the most absurd approach being discussed to stimulate the economy.
Some influentials close to the administration may even find the porn industry a bit too tangible for their tastes. After all, the pornsters make a product that sells internationally, appeals to the masses and employs a lot of people whose skills are, well, more practical than ideational. read more »
For the last quarter century there has been a growing tendency among policy makers and corporate executives to downplay, and even ignore, the primary importance of the ‘real,’ or tangible, economy. It is now widely believed that the primary engine of wealth creation is the manipulation of symbols and images — ‘the new economy’ of the ‘information/creative age’ — as opposed to the manufacture of tangible products and services. read more »
The most anticipated tourist attraction in the city where I live, The Golden Gate Bridge, is a testament to the lasting utility of a well executed infrastructure project. The world’s most famous suspension bridge still serves as the critical artery connecting San Francisco to the bedroom communities of Marin County to the north, where much of the city’s workforce resides. Remarkably, this marvel of engineering was completed in the late 1930s – a time when the U.S. was coming out of the Great Depression.
The New Deal brought about an expansion of infrastructure that should inspire us. Yet nearly 70 years after its completion, the sobering reality remains: it’s difficult to imagine a project of that moxie being constructed today. read more »
Our economy is going to get better some day, step by step. But it’s bad right now, with a full recovery likely a matter of years rather than months away. Public officials should plan accordingly, keeping in mind how the vicious cycle of a bad economy turns typical decision making on its head. read more »
China has an interesting urban development strategy. The government bypasses those areas that it considers backward and plagued by poverty and entrenched political corruption. Instead, the investment goes into those areas it presumes to be new boomtowns.
Now imagine if that Darwinian approach was used here in the United States. A report (“City Beautiful”) authored by two economists at the Federal Reserve Bank of Philadelphia advocates pushing federal infrastructure dollars – which could soon be flowing in the hundreds of billions – not towards our tired, hard-pressed urban areas but those that have experienced the greatest extent of gentrification. read more »