With the financial crisis monopolizing official attention, no attention -- or money -- will be available for our crumbling infrastructure

Aug. 1, 2007: the I-35 bridge collapse in Minneapolis

by Ken

I'm going to say a word that I'll bet will send you straight into a coma -- or make you wish you were comatose. You may pretend to be reading your newspaper, or trimming your sideburns, or having to feed your goldfish. But we'll all know you're just trying to escape that word.

And the word is:

infrastructure

"Oh no," I'll bet you're thinking, "he's going to start going on about crumbling roads and bridges and dams."

Um, yeah, I'm afraid so.

These are rare times of ferment in one of the most neglected fields of public policy—the nation’s infrastructure, or what used to be known as public works, including roads, mass transit, bridges, ports and airports, flood control systems, and much else. We have been confronted with spectacular and tragic evidence of the inadequacy of these facilities in the failure of the levees in New Orleans and in the collapse of the I-35 bridge in Minneapolis. More generally, a recent report by the American Society of Civil Engineers concludes that America’s infrastructure overall is close to “failing” and deserves a grade of “D.” It estimates that an investment of $1.6 trillion will be needed to bring it up to working order.

According to the report, nearly 30 percent of the nation’s 590,750 bridges are “structurally deficient or functionally obsolete” and it will take “$9.4 billion a year for 20 years to eliminate all bridge deficiencies.” “The number of unsafe dams has risen by 33 percent to more than 3,500.” Public transit facilities —including buses, subways, and commuter trains—are dangerously under-funded, even as demand for them has “increased faster than any other mode of transportation.” Current funding for safe drinking water amounts to “less than 10 percent of the total national requirement,” while “aging wastewater management systems discharge billions of gallons of untreated sewage into US surface waters each year.” Yet government investment in these vital facilities is generally held to be below the level needed simply to maintain them in their current poor state.

Obviously this is way too smart and informed to be me talking. It's Everett Ehrlich and Felix Rohatyn, in an article in the October 9 issue of the New York Review of Books titled "A New Bank to Save Our Infrastructure."

I don't mean to suggest that none of us care about infrastructure. I doubt that anyone reading Down With Tyranny is unaware, either of the crisis facing us with regard to our crumbling infrastructure or of the root cause -- the sad but inescapable fact that there's no political constituency for maintaining of roads, bridges, dams, and the like.

Oh, the average citizen bumps up against the subject when he/she drives through a pothole or is stuck waiting for a stuck drawbridge to get unstuck, and it even makes headlines when a bridge collapses or a dam fails or flood-control devices like levees fail to control floods. For a while there's a lot of anger and indignation, aimed at "them" -- "them" who failed to anticipate the problem, that is -- but of course there's never any public uprising to do something about the problem before it becomes a problem.

The fact is, the issues that are allowed into campaigns are the ones that poll as potential winners. If people were demanding road repairs and bridge maintenance, we would get it.

And meanwhile the infrastructure continues to crumble. And the less we do about it, the worse it gets, and the faster it gets worse.

I don't know Everett Ehrlich beyond the fact that he has been collaborating with Felix Rohatyn on this issue, but I have a long-standing regard for Rohatyn, a patrician -- and, yes, a longtime high-level investment banker! -- who seems forever to have been there working on the thorny issues of public policy, the nitty gritty on which our ongoing quality of life depends. And now, as you may have survived, Ehrlich and Rohatyn have a plan to suggest, one two which these clearly practical-minded thinkers have clearly devoted a lot of thought.

It's based on the report of a Commission on Public Infrastructure, "to outline a new and different approach to selecting, financing, and managing infrastructure," established in 2004 by the Center for Strategic and International Studies (CSIS) and chaired jointly by former New Hampshire Republican Sen. Warren Rudman and Rohatyn himself.

The central idea of the CSIS commission proposal is to establish a National Infrastructure Bank, an institution that would be similar to the World Bank, a private investment bank, or any other entity that evaluates project proposals and assembles a portfolio of investments to pay for them. Traditionally, public financial institutions such as the one we propose are created to correct problems in capital markets, whether they be the failure of markets to fund projects that support development in the world’s poorest nations or their undue pessimism regarding the long-term solvency of a particular city or state government. This is not the case here.

State and local governments generally can borrow for infrastructure purposes in line with their ability to service debt and the strength of their credit ratings. The issue here is not the efficiency of capital markets but rather the efficiency with which federal programs work and spend funds. The purpose of the National Infrastructure Bank would be to use federal resources more effectively and to raise additional funding. We propose this bank because we believe that markets for capital do work and can be harnessed to solve the critical shortfall in funding infrastructure.

The authors note that, based on the commission report,

a bill to enact its approach, the National Infrastructure Bank Act of 2007, has been submitted by Senators Chris Dodd (D., Connecticut) and Chuck Hagel (R., Nebraska), both of whom served as members of the CSIS commission. A companion bill has been offered in the House of Representatives by Banking Committee Chairman Barney Frank (D., Massachusetts) and Representative Keith Ellison (D., Minnesota); while a similar approach has been proposed in a bill introduced by Representative Rosa DeLauro(D., Connecticut). Barack Obama has spoken of the need for “a National Infrastructure Reinvestment Bank that will invest $60 billion over ten years.... The repairs will be determined not by politics, but by what will maximize our safety and homeland security; what will keep our environment clean and economy strong.”

Naturally the authors have much more to say about the problem and their proffered solution. I don't understand it all that well, but it sounds to me like serious work on a serious problem, and I would like to think that under normal circumstances it would get at least some serious attention. Is there any possible question that something has to be done about our famously crumbling infrastructure?

Alas, these are not normal circumstances.

Let me confess that I'm no more turned on than anyone else by infrastructure chat. In fact, under my own normal circumstances, after starting the Ehrlich-Rohatyn piece Sunday on the subway, I might not have gotten all the way through it.

In this case, however, my circumstances took an odd turn. I was on my way Sunday to brunch with a cohort of fellow New York-area progressive bloggers. But I brutally botched my schedule, and instead wound up in Chinatown enjoying a heaping plate of shrimp-and-egg fried rice and a nice big pot of tea -- circumstances that got me back to the Ehrlich-Rohatyn article. Luckily or otherwise, the tea held out to the bitter end. At the very least, the article -- and the report backing it up, not to mention the efforts of the CSIS commission, of Senators Dodd and Hagel, and of Representatives Frank, Ellison, and DeLauro, should occasion some serious public attention to what we do plan to do about the infrastructure.

But even as I finished the article, I recognized the cruel irony. NYRB has a practice of dating articles on topical subjects. The published date, I assume, represents when the author(s) signed off on the text. The date on the Ehrlich-Rohatyn article is September 10. It was a mere 11 days later that I finished reading it over my pot of tea, but in those 11 days, too much had happened.

Thanks to those happenings, the chance of any serious attention -- let alone any serious money -- being available to devote to infrastructure issues has sunk from "not really great" to "approximately zero." This is in some measure understandable, because the immediate financial crisis obviously has to be dealt with.

But an event like this also hijacks the agenda. There is growing sentiment that the plan put forth by Treasury Secretary Paulson isn't even designed to cope with the crisis, but is simply constructed to give Secretary Paulson unchecked -- and uncheckable, according to the proposal's infamous Section 8 -- authority to distribute $700 billion, or maybe who knows how much more, among his old pals in the financial-services industry.

Of course it would be unworthy to suggest that either Secretary Paulson or the rest of the Bush regime is running a shell game here. A cynic could look at what's being proposed here as a parting shot, in the dying days of the Bush regime: (1) to continue their policy of enriching their rich cronies and (2) to ensure that no money will be available for the foreseeable future for any of the array of crucially important social needs that have been so cynically and tragically short-changed these past eight years.

That's what a cynic might say, but would any of us dare to stoop to such cynical depths? Where the Bush regime is concerned? For shame! It's just one of those cruel coincidences that, even as we continue to hemorrhage public funds in Iraq and Afghanistan, any possibility of socially more useful spending -- no matter how urgent the need -- is now officially "off the table," to coin a phrase.

My blogspheric colleagues working the environmental and energy beats were quick to notice how those agendas are going to be starved, possibly for a generation, and with likely catastrophic results, by the Paulson plan. Whatever the heck the "Paulson plan" is. Our Hank seems to feel no obligation to clue us in. The idea is that we the people write him his check and then get to mind our own beeswax while Czar Paulson goes about his business. His proposal, again, is crystal-clear about one thing: that it will be impossible for those of us ponying up the cash to challenge in any way anything that's done.

Meanwhile, I imagine that Mssrs Ehrlich and Rohatyn, wherever they are, must be all too aware that since they signed off on their NYRB article, their National Infrastructure Bank is DOA.

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