America's Coming Infrastructure Crash

Forget about "shovel-ready" projects. We need bigger, better thinking about moving people and products across the country

REUTERS

When President Obama took office in January 2009, he promised that " to lay a new foundation for growth....we will build the roads and bridges." And in his 2011 State of the Union address, he promised to "put more Americans to work repairing crumbling roads and bridges."

But as all attention is focused on the debt ceiling battle, here's what's happening on the infrastructure front. Highway, street, and bridge construction jobs through the first five months of 2011 are running 18% below 2007 levels, and the stimulus money is fading. House Republicans are proposing to cut future federal infrastructure funding by roughly one-third. And any defaults among state and local governments would raise borrowing costs for infrastructure bonds across the country and in some cases make the bonds unsellable.

In short, a difficult infrastructure situation is about to turn worse. The U.S. seems likely heading for an infrastructure crash that will terribly damage both our prospects and those of our children.

But in the spirit of making lemonade from lemons, budget austerity may offer an opportunity to rethink our priorities and consider our vision for the future of infrastructure. The big question is: Do we want to build roads, bridges, harbors and airports to support the current consumption- and import-oriented economy? Or should we focus infrastructure spending to encourage the shift to a more sustainable production- and export- oriented economy?

The shift from a consumption economy to a production economy is probably the most important--and most difficult--task that the U.S. faces. The clearest sign of the problem is the apparently intractable trade deficit. Over the past ten years, the country has run up a cumulative deficit of $5.7 trillion with the rest of the world, and there's no sign of that reversing any time soon. To put it a slightly different way, the U.S. imports almost as much goods ($1.9 trillion in 2010) as the country produces (value-added of $2.2 trillion in manufacturing, mining, and agriculture).

Both Democrats and Republicans agree that one way out of this dilemma is to increase exports. But with resources scarce, that means tough choices for infrastructure spending. For example, consider our spending on ports. The Port of New Orleans is a major shipping point for our agriculture exports. Meanwhile the Ports of Los Angeles and Long Beach, with many more loaded inbound containers (imports) than outbound containers (exports), are running a significant trade deficit. Should we devote more resources to beefing up the Port of New Orleans, or to improving the Ports of Los Angeles and Long Beach?

Or think about road and bridge construction. Should we spend scarce resources on improving road links to a regional shopping mall? Or should we place top priority on infrastructure improvements that might entice foreign firms to locate manufacturing facilities in the U.S.? These are tough questions to answer. I know which way I lean--towards production rather than consumption--but there are good arguments on both sides. What's more, there are a couple of other big wild cards. For example, the retirement of the baby boomers will change infrastructure needs, as more and more people will want to be located in inexpensive areas near hospitals.

The other big concern is defense surge capacity. If the U.S. were engaged in a major global war, heaven forbid, the country would need an efficient transportation system (there's a reason why the construction of interstate highway system was originally justified on defense grounds). A major war would require that the U.S. beef up its manufacturing very quickly, and we wouldn't want to have to divert manpower to rebuild our transportation infrastructure at the same time. A good infrastructure base is an insurance policy against future events.

What Washington needs is a coherent strategy for infrastructure that goes beyond "shovel-ready." We need to shift project selection and investment decisions away from a politically-driven process to one that fits our overall economic aims as a country.

Treating infrastructure spending as an essential part of a shift towards a production-oriented economy may provide the right framework for good decisions that can get support from both Democrats and Republicans.

More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.

One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”

Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”