Applause for Obama’s Thoughtful Stand on Infrastructure Investment


The New America Foundation’s Sherle Schwenninger and industrialist and philanthropist Bernard Schwartz were out way ahead of the pack in calling for massive government commitment to infrastructure investment.
Now this has become conventional wisdom of late. Not too long ago, Senior Obama economic policy adviser Austan Goolsbee complimented Schwenninger’s heavy-lifting on the infrastructure agenda before many others were in that policy space.
But beyond a bland embrace of the need for new infrastructure investment, I really appreciated Barack Obama’s thoughtful dissection and embrace of the infrastructure challenge in his exchange with Rachel Maddow last night.
He’s exactly on target.
From the Maddow-Obama interview:

MADDOW: There may be some policy fights ahead, particularly in responding to the economic crisis that will have both a practical and an ideological component. If we are looking at economic stimulus, is there a possibility that you could see in your first term, if you are elected, that we’d need an economic stimulus program that felt to Americans a little bit like a public works program, a little bit like an FDR-style infrastructure building program?
OBAMA: Well, I’ve actually talked about this. And I haven’t been hiding the ball on this. I think we have to rebuild our infrastructure. Look at what China’s doing right now. Their trains are faster than us, their ports are better than us. They are preparing for a very competitive 21st century economy and we’re not.
One of the most frustrating things over the last eight years has been the ability of George Bush to pile up debt and huge deficits and not have anything to show for it, right? So, if you’re going to run deficit spending, then it better be in rebuilding our roads, our bridges, our sewer lines, our water system, laying broadband lines.
One of, I think, the most important infrastructure projects that we need is a whole new electricity grid. Because if we’re going to be serious about renewable energy, I want to be able to get wind power from North Dakota to population centers, like Chicago. And we’re going to have to have a smart grid if we want to use plug-in hybrids then we want to be able to have ordinary consumers sell back the electricity that’s generated from those car batteries, back into the grid. That can create 5 million new jobs, just in new energy.
But, it’s huge projects that generally speaking, you’re not going to have private enterprise would want to take all those risks. And we’re going to have to be involved in that process.
MADDOW: Also an issue on something like the electrical grid, that’s an issue of American resilience, even against the threat of terrorism. A lot of times when you look at counter-terrorism, officials think that they came out, or an al-Qaeda attack on the electrical grid.
OBAMA: That’s exactly right.
MADDOW: Well you know, at this point, a snow storm is an attack on our electrical grid.
OBAMA: That’s exactly right.
MADDOW: Are there Homeland Security vulnerabilities that you think are fixable in ways that would also be good for the economy?
OBAMA: Well, you mentioned one. The electricity grid I think is important. I think that chemical plant security is another where the chemical industry has been resistant to mandates when it comes to hardening their sites. But, you know what? If you’ve got a chemical plant that threatens 100,000, or a million people in New Jersey, we better have some say in terms of how serious they are about guarding that facility.
MADDOW: Why hasn’t that been fixed already?
OBAMA: Well, I think it’s a classic example of special interests lobbying. There has been resistance from the chemical industry. And it is this — again, an ideological predisposition that says regulation’s always bad. So, stay out of the market place.
Well, look. I am a strong believer in the free market. I am a strong believer in capitalism. But, I am also a strong believer that there are certain common goods that you know — our air, our water, making sure that people are safe — that require us to have some regulation. Now, it has to be well designed.
But, the financial system is a classic example of a deregulation philosophy run amuck. And now, you see the consequences and ironically, had we had some sensible regulation, we would not have now, actually, a much closer approximation to socialism when it comes to the banking system, then anything that any Democrats have been proposing over the last several years.
When you don’t guard against excess, then a lot of times government ends up having to step in anyway, in a much more burdensome way.
MADDOW: Part of the ideological argument against regulation is that
government always does things (INAUDIBLE).
MADDOW: I’ve been worried about this because I’ve been very focused on the GI bill.
OBAMA: Right.
MADDOW: VA is making worrying noises about their ability, their capacity to implement it. Can you give me an example of how you would make agencies better at doing what they’re supposed to do? Just improving capacity?
OBAMA: Well, look. Look, look. I mean, there’s a great example in FEMA. Now, they’ve gotten better since Katrina. But, the idea that our basic emergency functions had been under the leadership of a guy whose only expertise was you know, the Arabian Horses Association. That’s a problem.
So, some of it’s just getting the right people. Some of it is using technology in intelligent ways. One of the things that I’m excited about is to transfer what we’ve learned from this campaign in using technology, into government. I mean, there are huge areas where we can open things up, make things more transparent.
I passed a bill working with a Republican, Tom Coburn, called the Google for Government Bill, where now you can go to a single site and you can pull up a searchable database of every dollar of Federal spending that’s out there. Which means now you’ve got a lot greater accountability.
While there are examples of that all throughout our government that can remove bureaucracy, eliminate red tape, make the whole process more customer friendly. Anybody’s who’s gone to the post office and wants to buy some stamps and you’re trying to figure out the machine, it’s not working properly, the lines are long.
There’s no reason why we can’t make operations like that more efficient and work better. They do it in the private sector all the time.

Barack Obama really impressed me with this policy discussion — as did Rachel Maddow, as usual.
— Steve Clemons


7 comments on “Applause for Obama’s Thoughtful Stand on Infrastructure Investment

  1. Christian Faries says:

    It’s about time someone is doing something about the
    unemployment rate. I think this is a great idea, America needs to
    get back to work. LiUNA (Laborers’ International Union of North
    America estimates 1.5 million men and
    women in the construction industry are jobless. That’s
    unacceptable, somethings gotta be done


  2. söve says:

    So you’re not alone. Nor has Sherle or Bernard been the only folks pushing for the upgrades that will allow us to compete with China and other global actors. Earl Blumenauer, Mariia Zimmermann, John Norquist and the folks at America 2050 have been all over this. Hell, Bill Richardson had to go and do commuter rail on his own b/c we have no national policy for high speed rail and don’t support land- and energy-efficient transportation.


  3. Charles says:

    I think that one infrastructure project that President Obama should consider is the Trans-Global Highway, proposed by Frank X. Didik a number of years ago. According to Didik, the proposed “highway”, which would contain roads, rail roads, water, oil and gas pipes as well electric and communication cables. The highway would use and standardize the existing road networks and build new roads as well as a number of key tunnels. Interestingly, the longest Tunnel in the proposal, would still be shorter than the longest existing tunnel today. It would seem that there are many advantages to the construction of the Trans Global Highway including vastly lower cost and faster shipping, better allocation of resources, the ability of utilizing raw materials and much lower carbon emissions, than the existing transportation system. The highway would open up a new era of international cooperation. The Trans-Global Highway site is located at


  4. Sammy says:

    Obama should be really appreciated.
    McCain v/s Obama issue- is exciting.


  5. rich says:

    Thanks for this one.
    I would be very, very careful on a number of points. It matters which projects & modes get the investments. Some–highways–will undermine us economically, others–transit–will make us more efficient. If it’s ‘anything goes’, we’re in deep, deep trouble.
    As an infrastructure planner and transportation planner at the country’s 5th largest MPO, I’ve been exposing our ExecDirector and Trustees to this issue, conducting analysis, and pushing for more effective investments by state and federal decision makers. For the past 3 or 4 years.
    The ‘New Deal’ proposed by Schwenninger & Schwartz (An Economic Recovery Program for the Post-Bubble Economy) is a vital contribution—up to a point.
    The authors note that:
    “The U.S. Department of Transportation estimates that for every $1 billion invested in federal highways more than $6.2 billion in economic activity would be generated.”
    Yes, and every $1 spent on street trees returns $7 in economic benefit—outperforming highway building as an economic driver. If cost/benefit is the measure, it’s trees before highways any day of an economist’s week.
    This type of article needs deeper and more nuanced analysis. First cut reaction is: highways don’t always create economic benefit outright: the effect is limited. There are jobs and materials for construction—but other than that, highways just move existing businesses around, sucking the economic lifeblood out of cities and taking irreplaceable land out of commission permanently. Build a highway, undermine a city.
    Key example, WIDOT just figured out Milwaukee’d realize a $5.7 BILLION gain by replacing the Hoan Bridge with an at-grade boulevard. Think about that: Take the bridge DOWN, gain $5.7 billion.
    It’s a no-brainer, you take the $5.7 billion, and demolish the bridge.
    It’s not just about building Big Things or having all the toys everybody else has. This cannot be a capacity-building exercise. It has to be an efficiency-enabling program.
    This is why I was disgusted to hear Gov. Corzine urge massive spending on highways to inject contracts and salaries into New Jersey’s economy. It repeats The Same Mistake that got us into this economic mess. Instead, why not extend Newark’s subway system?
    Why not insist on linking transit funding to economically-efficient land use? Why not invest in making cities like Newark great places to live?
    I’ve heard Gov. Corzine has ingratiated himself into a position in an Obama administration. I’d be dead-set against it: it’s an egregious mistake on two levels. Corzine (though I agree with his politics) leaped instantly advocate building more highways when he knows that will hurt, not help, our economic circumstances; and second, Corzine hasn’t fixed NJ’s catastrophic budgetary problems, he’s made them worse. and he’s a Wall Street guy. We need somebody who’s on the right track, and politicos from Chicago, Milwaukee or California are better choices from a policy and economic point of view. (others, too) So when it comes to appointments, remember one thing: Ixnay on the Orzinecay.
    So you’re not alone. Nor has Sherle or Bernard been the only folks pushing for the upgrades that will allow us to compete with China and other global actors. Earl Blumenauer, Mariia Zimmermann, John Norquist and the folks at America 2050 have been all over this. Hell, Bill Richardson had to go and do commuter rail on his own b/c we have no national policy for high speed rail and don’t support land- and energy-efficient transportation.
    I’ll check Sherle & Bernard’s article in detail. They’re probly aware of what I’m saying, but still, it’s absolutely critical to get this right.
    When Morocco, Vietnam and Turkey have high-speed rail and we don’t , who’s the ‘Third World’ country? We’ve mis-conceived the difference between us and other nations.
    Don’t forget: FDR had a CCC to go with his WPA, and the retaining and capitalizing on the economic value of ecosystems has never been more important. In an era when moderately sized cities have to spend $6 billion on CSOs just to handle major stormwater events—but can eliminate those costs by knitting groundwater recharge areas and green infrastructure into urbanized areas—it’s a no-brainer: you don’t pave more land just because you can.


  6. Zathras says:

    Perhaps I’m at a disadvantage, having only read the above transcript and not seen what was doubtless a mesmerizing presentation, but there doesn’t seem to be that much here. Frankly, there isn’t all that much in the Schwenninger/ Schwartz piece either, though I mostly agree with what specifics there are about infrastructure.
    Infastructure investment can lay the foundation for a modernized economy. It can also be a tremendous money pit. Simply running down a laundry list of infrastructure project categories — roads, bridges, sewer lines, etc. — doesn’t help a lot as far as getting us to the first and avoiding the second. It doesn’t indicate priorities, which matters because there will always be more potential projects than there are necessary or worthwhile projects. It doesn’t address what I suspect will be a key issue with infrastructure investment, generating jobs that make use of the skills of people who need jobs. During the 1930s a large unemployed workforce with no more than basic education and simple mechanical skills could be directed at projects requiring unskilled labor, like large construction projects. Many people displaced by recent changes in the world economy will be harder to place.
    The electricity grid is actually the kind of thing that large private enterprises do invest in. Utility ratepayers fund these investments more than taxpayers do, and many of the obstacles to them do not involve lack of capital. NIMBYism is a huge problem for companies seeking to build new transmission lines, for example; getting state approval for these can take years. Increasing capacity in the grid to allow electricity to flow through quickly to areas stressed by peak loads could be paid for by utilities under federal mandate, the utilities then passing along the increased costs to their ratepayers (certain large utilities with little perceived need for such extra capacity to protect their own customers have resisted this idea in the past). Storage of electricity is a new frontier that could be explored through regulation also. Is Sen. Obama really proposing to bypass all the obstacles to these objectives by having the federal government, and federal taxpayers, assume full responsibility for their attainment?
    There’s a difference between sounding thoughtful and being thoughtful. I know Sen. Obama can get through an interview with a sympathetic talk show host and sound more informed than, say, Sarah Palin. So could Steve Clemons. So could I. What does that tell us about what to expect from an Obama administration? At least in this case, not that much.


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