Time for National Greatness Liberalism

Theda Skocpol says it's Time for National Greatness Liberalism:

America needs a National Greatness Liberalism -- a brawny brand of politics that makes a tough-minded argument about what it will take from our government and democratic politics to regain our national economic strength and rebuild a broad, secure, and innovative middle class. Our national military and diplomatic strength in a dangerous world depends, too, on our economic renewal as a middle-class capitalist economy. ...

Even a cursory survey of the last century shows that national economic fortunes have always depended upon robust synergies between public and private investment. Periods when the national government and state governments have been cowed into minimalism or captured by super-wealthy interests looking to rip off public resources -- think of the late 1920s as well as the Wall Street era of the late 20th century -- have been associated with faltering economic growth as well as extremes of poverty and middle-class decline. By contrast, times such as the post-World War II era of extraordinary American prosperity and power have been periods in which major social programs -- such as Social Security and the GI bill -- spread opportunity and security. Likewise, during these points, America made huge public investments in infrastructure -- such as the national highway system -- and the privileged paid substantial taxes, even as they reaped profits from the booming economy.

This is of a piece with the infrastructure investment plan I talked about a few days ago. We need to re-invest in America.

But what few leaders understand this point seem not to appreciate the scale of the problem. John Kerry has proposed a national infrastructure bank, a federally funded source of loans for large infrastructure projects, which would encourage public-private partnerships and encourage states and cities to rebuild and upgrade crumbling infrastructure.

But he's proposing to give it $10 billion to work with. Making every bridge structurally sound and functionally adequate for current safety laws and traffic needs would cost $140 billion. And that's not even considering upgrades to roads, let alone retrofitting existing buildings, upgrading tunnels, and building new bridges, roads, tunnels, buildings, and traintracks. We need all of that, and the economy could probably absorb one thousand times Kerry's $10 billion without much trouble.

$10 billion is peanuts. If every dollar were spent on workers, not material, it would directly fund no more than 200,000 jobs. There'd be a multiplier effect that would create many more jobs in the broader economy, but nothing to match the 14 million unemployed Americans, nor even the 8.3 million people who are working part time because they can't get full time work.

Kerry understands the issues, telling the Boston Globe, "Reliable, modern infrastructure isn't a luxury -- it's the lifeblood of our economy, the key to connecting our markets, moving people, products, information and energy, and the key to generating and sustaining millions of jobs for American workers." But he still made it too small, explaining, "With only loans and guarantees, and no grants, the bank will not be a drain on the treasury beyond the original investment. It would also be far smaller than other proposals, reflecting the political reality of the day, he said."

Over six years, the federal investment in the bank would total $30 billion dollars, and Kerry, co-sponsor Kay Bailey Hutchison (R-TX), and Transportation Secretary Ray Lahood say that the bank would fund no more than half of projects, leading to total investments of $556 billion over 6 years. But again, that's peanuts relative to our needs.

We don't just need to fix existing bridges, we need to build new ones. We need to tear down coal plants and build new dams, and new solar, wind, geothermal, and even nuclear plants. We need to retrofit and upgrade existing nuclear plants to ensure they're safe, and we need to start building sea walls to protect coastal cities from rising oceans. We need new transmission lines so that energy from solar plants in the Southwest can supply homes in the Northeast, and so that hydroelectric power from the Pacific Northwest can supply the Southwest when skies are cloudy.
A pessimistic geologist friend of mine points out that, when the big earthquake hits the Bay Area, the region's roads, bridges, tunnels, and public transit will all be in ruin for months, and worse yet, the water tanks, pipes, and aqueducts that bring us drinking water will all be destroyed. We know that earthquake will hit, and by investing in new infrastructure now, we can ensure that the survivors of that quake have safe evacuation routes, safe sources of drinking water, and secure supply lines for rescuers and rebuilders. So do areas subject to tornados, hurricanes, and even blizzards.

I don't doubt that we can spend the money, and that we need to do so to fend off disasters that we know will hit us eventually. More importantly, I know that spending the money now will fend off the existing disaster of massive unemployment.

This bank is a fine idea, but it needs more money, and it needs to be supplemented with direct grants, all funded by a higher gasoline tax (which already fund federal road and bridge construction programs).