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The Hoax That Is The Infrastructure Bank
This article originally appeared on the Daily Capitalist.
Does anyone seriously believe that the reason we have high unemployment in America is because we have a substandard infrastructure?
Apparently the politicians in Washington believe that is so because they are trying to make a case for massive infrastructure spending in order to "create jobs" and to "prepare our economy for the 21st Century." I was watching that fountain of conventional wisdom, Fareed Zakaria tonight and he seems to buy into this proposition. He interviewed Senator Kay Baily Hutchison about her proposal for an infrastructure bank: The Kerry-Hutchison Bipartisan Infrastructure Bank also known as the BUILD Act. It won't cost the taxpayers any money, she says, because it is a one-time $10 billion funding of this bank which will lend money for projects. As she says on her web site:
The idea of a national infrastructure bank is an innovative way to leverage private-public partnerships and maximize private funding to address our water, transportation, and energy infrastructure needs. In our current fiscal situation, we must be creative in meeting the needs of our country and spurring economic development and job growth, while protecting taxpayers from new federal spending as much as possible.
This is viewed as a "sensible and business-like approach" to solving this "problem."
When anyone does reporting on this topic you see shots of China's high speed trains zooming along as well as Brazil's new super port that will be "the road to China." We don't need any of these things because we have an excellent infrastructure despite what the "experts" say. Most of these experts want to cash in on this spending boondoggle.
Let me be clear: not one new job will be created by this infrastructure bank.
The truth is, we don't need it. Our freeways, trucks, railroads, and aircraft do just fine getting around delivering people and goods. I'm not arguing that some things need repair, but that is minor compared to what this Infrastructure Bank envisions. As we all know, like all things run by government, they have let some of our bridges, roads, and schools go into disrepair because they manage it incompetently. While I am sure some kids go to run-down government schools, it's not the buildings that are the problem, it's the unions. I haven't heard that our water supply is unsafe or that anyone has been poisoned by drinking out of the tap (spare me the occasional example, please). Our ports are fine despite the longshoremen's union. We don't need high speed trains because they are expensive and inefficient and people will fly instead. Please see Bob Poole's work at the Reason Foundation if you need confirmation of this fact or on any matter dealing with public transportation.
Here are some things to think about when the politicians spout this nonsense:
1. Jobs aren't created by government. That is not to say that government employees or contractors do not work; they do. What it means is that government does not create wealth-creating jobs that are self-sustaining as would a private business. This should be fairly simple to understand. Taxes fund government operations. Only the private sector creates wealth that pay taxes. We can have an argument about whether or not government should provide much of the services that they do. For example, we know that private schools do a far better job at providing an education because they are not controlled by unions who control politicians. But, that is not the topic here.
2. Government spending known as fiscal stimulus, or Keynesian stimulus, as a cure for unemployment is another matter.The idea here is that since consumers aren't spending all we need to do to revive the economy is to start spending somewhere in the economy and magically things will revive and take off. Unfortunately such stimulus never works to "jump start" the economy. It never has and never will. The American Recovery and Reinvestment Act of 2009 pushed $840 billion into the economy under this theory and it failed.
No one (especially our politicians) asks where the money comes from to stimulate the economy. It comes from us, whether through taxes today or taxes tomorrow. And, the more you take out of the private economy, the less capital is available for businesses to create real jobs. Politicians never seem to see this.
Right now the Keynesians are pushing on a string with this idea. Until we clean up all the excess houses, commercial real estate and related debt, no amount of spending or tax cuts will work.
3. Then there is the "quality" issue. Assuming that such infrastructure spending worked, the projects chosen are those favored by government politicians and bureaucrats and we know how well they do competing with the private sector. Need I mention the $535 million government loan guarantee to the soon to be bankrupt Solyndra? These folks shouldn't be handing out your money; they don't know what they are doing.
Solyndra may be the tip of the ice berg. This selection below is just the first four contracts on the Recovery Act web site that you can bid for. (If you wish to see all of them, go here or here.)
As you can see, as with most of these Recovery Act contracts, it is just another way to pay for things the government needs or want. Nothing here will create real jobs, the kind that will be market-based taxpaying jobs. It's a waste of your money.
4. Union workers will be employed for these construction projects since they are all federal contracts and that requires union workers. No big issue here; we all understand this is a payoff to the Democratic Party base.
5. Then there is Japan. They spent trillions on fiscal stimulus for much of the same things that are proposed by the Infrastructure Bank. It was all a huge waste of money there and the result was 20 years of sluggishness and the highest debt to GDP of any industrialized nation (225%; we are at 100%). Their economy is still in the doldrums and they stupidly push for even more such stimulus spending. We are going Japanese with all this spending but with a twist: we have inflation and we will have more inflation from quantitative easing and more spending.
The Infrastructure Bank is a hoax. Kill it now before it grows.
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No, it's not that the infrastructure was privatized and stripped clean by the "free market". It's those eevil unions again! Oh the humanity
Yes. But the communist, high yellow nigger of no parents, who in better times would have been lynched long ago, says it's a good idea. Pass this bill.
All the losers of the world embrace the socialist-Obama view. Why? Because they are losers and don't know how to be winners. A lot of you commented in favor of the ever knowledgable government. You're the ones I refer to.
Infrastructure issues aren't the cause, but rather just a worthy job in a country that needs them.
So drop your ideology for a moment to allow your brain to function properly.
Contrary to what Washington, D. C. believes, industry and production do not begin with them. In fact, I remember how refreshing it was, when Federal agencies had to shut down, furlough the desk jockies, or both. The notion that everything will collapse in a heap or grind to a halt, without their overbearing micromanagement is Socialist nonsense. The culture of bureaucracy brings out the little Hitler in everyone. The meekest of people can become whip - cracking despots. The only thing that bureacracy produces is what it wants to see - more bureaucracy. When will people see how much better off they would be, if they took care of themselves and their communities, without central government getting it's greedy hands on their money? The United States of America was a nation of autonomous and Sovereign States, in confederation, until 1867. That was replaced by one monolithic corporate structure ty 1877. It's been downhill, ever since.
http://georgesblogforum.wordpress.com/2011/06/26/217/
Downhill since 1877? One of the stupidest comments I've read on ZH, and that's saying a lot. 110 years ago, life was like this:
Life expectancy for white Americans was just 48 years and just 33 years for African Americans--about the same as a peasant in early 19th century India. Today, Americans' average life expectancy is 74 years for men and 79 for women. The gap in life expectancy between whites and non-whites has narrowed from 15 years to 7 years.
In 1900, if a mother had four children, there was a fifty-fifty chance that one would die before the age of 5. At the same time, half of all young people lost a parent before they reached the age of 21.
In 1900, the average family had an annual income of $3,000 (in today's dollars). The family had no indoor plumbing, no phone, and no car. About half of all American children lived in poverty. Most teens did not attend school; instead, they labored in factories or fields.
------
Most of the changes made from that time until the present were the result of activists forcing the government to regulate. The changes in the last 100+ years. Good shit didn't happen because a bunch of caplitalists could do whatever the fuck they wanted. "The market" did not fix slavery, widespread poverty, women's rights, ignorance. The market didn't create national parks, build dams and highways, or deliver the mail.
"The market" did not fix slavery, widespread poverty, women's rights, ignorance. The market didn't create national parks, build dams and highways, or deliver the mail".
Are you saying those things would be impossible without a federal government?
Another sheep looking for a master.. unable to see how a community could possibly work.
You just keep doing what the government tells you and I'm sure everything will turn out fine for you ;)
http://www.nytimes.com/2011/06/26/business/global/26bridge.html?pagewanted=all
Bridge Comes to San Francisco With a Made-in-China Label
How much in State Tax Revenue did those idiots give up by sending all the work to China?
This Country has been fucked up on purpose!
Save your breath JW (You can lead a horse to water but cant make him drink.)
The clueless do not want to know that this has been NWO planning from the start achieved through globalization. For those of us that lived through the laste 60's early 70's, (I know its ancient history for many,) you can see it in retrospect very clearly.
The US nation has been sacrificed at the alter of globalism by an apathetic public and the criminal banker/political elite.
This from a spy from China..
Re-post. this idiot doesnt deserve new.
"China can afford to put in airports because they are rich"
That quote is from Idiot Schiff.
Now I could spend more of my time dumbing down the out in the open, blatant facts.. AGAIN!
or I could say.. that everyone is Blind to what is going on.. and it is NOT Hidden from view! it is not the NWO / TPTB over running "We the People" with dark pools. O Wait Yes it is! Well! it is all still out in the open for everyone to see.. but people are ignorant and happy and Schiff is one of them.
China.. is stabilized by the United States sending 11 million PLUS!! Manufacturing Jobs there in the last 11 years.
The Factories that sit empty with no one paying the property taxes on..
The people without jobs.
The Tax Base.. which @ $50k a head.. for 10 years equals $7 Trillion.. but when you factor it to $100K in real monies circulating it is.. YEP!! Exactly what we are short as a Country! $14 Trillion in LOST TAX REVENUE!
I could go on but you people are going to have to start waking up and helping carry the fucking load.
China Buys treasuries to Stabilize its Currency.
China Currency is Leveraged 1,200 times over! and that number is from fucking March before China went around the World pretending to bail people out with its watered down fake Renminbi!
Yes! China services its 1,200+++% Debt on its own Currency!
By Building 7 - 12 Empty cities a Year! Who thought that one up?? The same people who made China Liquid enough to go vertical with its factories in the beginning! WE DID!
America sells its debt so that some fucking greasy banker can collect servicing fees.. and that same banker is a share holder of the Federal Reserve Bank!
The system is sooooooooooo fucking corrupt that you can pick anywhere to start looking and you will find shit!
and NO ONE GIVES A FUCK!! ENOUGH!!! to want to risk their life style!
This is a Joke!
Job Creators / Regulation.. and that is the BIGGEST Problem that we have as a Nation?? or that is the one we want to talk about so we can pick up and extra 50% - 100%?
Greedy Idiots got us here, short sighted fucking morons keep us here.
We are in a Hole as a Country by design, FACT!
Just what we need.. another government bottomless money pit.
Or over the Tappan Zee.... it's 'expiration date' was a decade ago and there's not eveen a replacement plan.
I don't know where the author lives but roads and bridges here are falling apart. Mass transit is using 60 year old trains on some lines. But then the rich guys taking black cars to work on Wall Streeet - whose businesses were kept alive by government hand-outs and 0% loans - take chauffered cars to work so they don't notice these things.
The biggest problem is that the companies hired to do so much of the infrastructure work do a lousy job - there are no 5 year guarantees on road work and such - like in other countries - where the contrtactor is responsible for a project for a set period of time. I've seen roads repaved fall apart in 3 years, the contractor bragging abouth how they paid off inspectors and only put down half the asphalt required.
Tappan Zee, ha ha...I ran into a salesman who was selling some super duper corrosion resistant paint. One of his customers was the Thruway Authority. The guys in the shop laughed at him when he demoed the product. They had no intention of painting the bridge with anything remotely corrosion resistant. My guess is, if you sampled the paint they were using, you would find that they probably dumped salt into the paint before they applied it...
okay, its late, maybe i missed this but...
isn't the "infrastructure bank" just an artificial construct engineered specifically for repatriation of global corporate earnings, another tax avoidance scam by multinationals? just wait, what, 7 years? and no prob. you can pay a reduced rate. another advantage for the too bigs. if we really care about jobs, we would be figuring out a way to make these guys pay MORE taxes. But what can I say, I'm a nationalist. F*** the global economy.
when was another bank ever the solution?
The real hoax of the Infrastructure Bank is that is simply a way to direct more Washington printed money to the bankrupt Blue states.
Would that the same blue states that support the poverty-stricken red states with their taxes?
http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html
That's an interesting statement since it is the RED states that traditionally get more taxpayer money than Blue states do.
The legacy of negros and illegals.
Does anyone seriously think that anyone in DC thinks that our jobs problem was CAUSED by infrastructure?
What a ridiculous straw man argument, to be swallowed by the stupidest of the stupid.
It's about PUTTING PEOPLE TO WORK doing SOMETHING USEFUL. I know, a difficult concept for many.
Yep the original premise is absurd. He follows with other brilliant arguments such as "Our freeways, trucks, railroads, and aircraft do just fine getting around delivering people and goods." I guess he's one of those extremely rare travelers whose flights always arrive and depart on time.
I'm sure there is plenty of money to be made for a guy like you who can make flights run on time.
Wow and I thought it was just things like fog, weather, engineering, human error, peak periods, school holidays, industrial action, and the rest of the stuff.
I am in total awe...
I think its both a good and bad statement.
It's a good statement because if we have a jobs problem then we should attack the problem (for example, giving tax breaks to companies who ship jobs overseas).
OTOH, no one believes that our infrastructure is fine. That sounds like people who oppose health care reform saying that our health care system is "the best in the world". You have to wonder what those people are smoking.
I know it may not be fashionable around here with all you libertarians pining for the days of the Guilded Age but we tried a capitalist society without unions before and it wasn't very great for the common man. If you don't agree just study a little history from about 1870-1910 and see how that turned out for us. Unions serve a purpose. They were formed for a REASON. Every time you get to go home on the weekends, get overtime pay for working over forty hours, enjoy your paid vacation, get sick leave, get maternity leave, workman's comp for injuries, send your children to school instead of work, work in a safe environment, and receive some sort of pension when you retire you need to thank god that you actually had ancestors who stood up to financial and economic elite of their day and fought and sometimes died to give you those rights. These benefits weren't given up easily. They were forced upon the elite by organized workers. I laugh when I hear people throw around the accusation of class warfare because economics is nothing but class warfare. Your ancestors fought against the same elite families by the way that TO THIS DAY continue to rob and oppress the people from their positions of power. I mean how can any reader of this site read whats going on in the world today and conclude that the problem is that workers have too many rights?
So, I'm sorry my friend. Its not because of unions that our education system sucks. I seem to remember that at one time our President challenged us to land on the moon and we buckled down and got the job done. We had teachers unions then. The reason we got passed by the rest of the world is because while we were spending money coming up with new and interesting ways to kill people the rest of the world was spending their money investing in their people and infrastructure. The fact that we live in a society that teaches mindless consumerism and assures that parents aren't able to spend as much time with their kids since they both have to work to survive, plays a part also.
It's not the same to day. Unionism worked because the unions could, and would, unionize all employers in a sector/ type of job. But today the competition is in a third world country were wages are very low. Price sells; We just have to look at Walmart's prices, and where their goods are made. You got to love "free trade". Nothing is free, and this time it's the American worker who is paying for the "free trade". This is how the upper 1 tenth of one percent makes all that money. They have it made cheaply out side the country, and mark up the price before selling it to us. They lie to us how we will get more jobs by selling to these third world countries. They lie about how the Glass-Seagull act is not needed, and how much better it will be for our banks selling to others over seas. Our government has been bought by them. They work for them , NOT us, the people.
The truth of your words will fall on deaf ears
The solution in one word - monorail.
How many does America have that are unemployed? OK; It's all about who does the counting, but it's a very big number. I don't see them because of food stamps & open ended unemployment the government pays them. There are no great depression lines of men waiting to get in to a soup kitchen these days. They can't find work. Look at who is working in the fast food places. It's not high school kids any more, and that's part time employment. Walmart, it's the same thing, part time. This allows them to not pay benefits. Some want to lower the minimum wage, with the idea it will open more jobs. If they or any of their family get sick, it's to the EM. We have to pay that (that's if you are lucky enough to have a full time job). So the question is should the government make low paying jobs so those that can will make more than food stamps & unemployment. This way we get something for our money (nothing for food stamps & unemployment). At some point way down the road if the government gets it's act together jobs will come back, and pay more than what the make work pays. Last; Most people don't want handouts, but work. It gives them some dignity.
Clearly, this man does not regularly drive on the BQE.
The US infrastructure has been neglected for decades.
The problems are REAL. But don't expect Obama-build to be a real solution.
Infrastructure problems won't be properly addressed by a croney capitalist government, no more than the real need for health care, nor the real need to stop despoiling the environment.
The fake "solution" of Obamacare doesn't mean there isn't a health care crisis.
The fake financial solutions don't mean there is no economic problem.
The fake withdrawals and fake spending cuts don't mean that the problem of militarism has been addressed.
The American Society of Civil Engineers’ infrastructure report card:
2009 Grades
Aviation D
Bridges C
Dams D
Drinking Water D-
Energy D+
Hazardous Waste D
Inland Waterways D-
Levees D-
Public Parks and Recreation C-
Rail C-
Roads D-
Schools D
Solid Waste C+
Transit D
Wastewater D-
America’s Infrastructure GPA: D
Estimated 5 Year Investment Need: $2.2 Trillion
http://www.infrastructurereportcard.org/
http://www.reuters.com/article/2011/08/16/uk-usa-economy-infrastructure-idUSLNE77E04E20110816
http://www.youtube.com/watch?v=zBSPcIGGcIc
The fake solution of "obacare" does mean that there is not a health care crisis. You nitwit; if there was a health care crisis you'd be listening to nothing else 24/7; as it is you never heard of this "crisis" until der Socialismo rapped to you about it; and you can de-bunk this right here on your computer; all you have to do is start reading.
"IQ 145" ???
The caliber of your comment belies your intimated IQ.
Name-calling followed by the preposterous argument that there can't be a health crisis because if there were a health crisis the media would keep broadcasting "nothing else 24/7"?
Amazing also that you pretend to know what I "never heard of". Nonetheless, what I do know is that the obesity epidemic, the aging population, and the boondoggle financing of health care does combine to make a "crisis".
When was the last bridge collapse? Where did Barry/Pelosi/Reid spend the last 870 billion?
Is this going to get me admitted to AttackWatch finally? ;-)
it's is all about following along the fotosteps of Wilson and FDR...the original and godfather of progressivism....after all it is the only "proven" way of dealing with the hole we are in....FDR showed us the way. With policy like this we will be following more the footsteps of Japan, remember 36,000 Nikkei.
Ilene are you reading this? You should, you need to learn a thing or two before you post on ZH. Bitchez.
The big-government set is constantly flogging the need to "invest" in "infrastructure" such as roads and bridges, but then is horrified when people actually USE the infrastructure. Then they shriek about how we're squandering non-renewable fossil fuels, that carbon emissions are killing us all, and that we're using imported (trucked-in) goods instead of local produce.
Much better than more government spending or loans for infrastructure, would be privatizing it all (into INDIVIDUAL, not corporate ownership). That way people could make intelligent decisions about the best way to use and maintain the routes, and charge travelers appropriate tolls.
What it means is that government does not create wealth-creating jobs that are self-sustaining as would a private business.
It's a simplistic view of things. What about NSF or Defence scientists inventing Internet or laser or some other new chemical or material? No private business would ever fund fundamental research, because it does not bring any short term profits. Or infractucture development? What private business would fund I-95? What was the impact of interstates on the US economy? How would you enumerate the impact of this on self-sustainablity of jobs in the US?
On the other hand, I am aware of a number of very smart, very hard working private sector professionals, who tirelessly pushed the projects, which ended up being huge job destroying endevours. Are subprime/ PET.COM created self-sustaining jobs? These were trillions of dollars mis-allocation of capital and resources. What about outsourcing pushed by McKenzie and other private sector consultants? They create jobs in China - should we be happy about it? Can this stop without some sort of government intervention?
I would not pray so much on the altar of the private sector - it is overrated. And corporate management is full of scoundrels.
The internet was effectively invented when Stanford sent an information packet to UCLA. So the internet was invented by Pac Ten universities.
The laser was the brainchild of the Hughes Research Laboratory.
I'm not sure a private research facility or a couple of universities qualify as 'NSF' or 'Defence' (sic) scientists...
Well you have to admit he has the right screen name. One of those unusual posts where everything he says is wrong in detail and easily refutable withe simple research; but pointless; Comissars really, really, believe in the wonder and power of the State; right up until the day it goes plop.
all advanced/defense research was done by using the taxpayers' money but commercialization of those tech put profits only in highly selective private hands and pockets.
And yet here you are using the internet, for very little cost, especially considering the amount of benefit you get from it. Many indivduals have found ways to make money from the 'net, you're just not one of them. A lot of medical research has been government-sponsored as well.
Society benefited as well: online billing cut a lot of mailing costs, tech jobs which did not exist before. And even unemployed have cell phones!
oh yeah? but you have to spend a few hundred dollars every three years to buy that computer plus a few hundred dollars years to connect to the network before it can allow you to save the stamps.
"And even unemployed have cell phones!"
So do wards of the state. I wonder who pays that bill?
I'm shocked!...shocked I say!...to see there is cronyism happening in this establishment!
"These vast contributions to the coffers of state and local governments, though pitched as a jobs bill, are in reality the latest in a series of bailouts for debt-ridden state and local governments. They are of special benefit to states in the blue regions of the country where the president's most fervent supporters reside."
http://online.wsj.com/article/SB10001424053111904353504576568352231645730.html
100%. That doesn’t even count the GSE’s, now backed by the US government, it doesn’t count state and local debt and when you add those in you are at 170% of GDP, which is higher than Greece. If you add in unfunded social security and medicare you are at 460%. If you add in unfunded medicaid you’re north of 600%.
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/19_Ro...
If you're going to add up mult-year obligations, you have to also add multi-year GDP, or you're comparing apples to oranges.
For example, I pay about 1/4 of my annual salary for housing costs. If you add up the next 20 years in unfunded housing obligations, I have to spend 500% more in housing costs than my annual income. That's CRAZY! It'll NEVER WORK! Except it does, because I make a new annual income every year.
Creditors have cottoned on to the fact that, over the next couple of decades, the entire US will be earning your salary every year.
I mean the whole country will make about $50k or $100k or whatever, and have do divide it between 300 million people. China's gonna be pissed when the loan repayments stop, so they'll come looking for payment in whatever can be collateralised.
"You! You fat because you not work hard! Build iPod quicker, fat American! Oh, I'm sorry, maybe you can't see little components with your stupid round eyes! You so lazy, maybe that why I make love to your ex-wife now. That, and the food parcels I give her. Ha-ha-ha-ha!"
It would be a waste of time to address every premise in this simplistic piece of drival to I will just address point #1 and offten stated erroneous assertion "The government does not create jobs."
I will just give one example - When the government created NASA and put a man on the moon the governemnt underwrote years of scientific and technological research and development which went on to create whole industries in the US and the world. Today the National Laboratories under the Department of Energy continue with both pure and applied research that has and will have far reaching impact or the evolution of our US corporations.