Infrastructure Inspiration

While walking, a gal named Maria
Soon stumbled upon an idea:
"To patch up, quite simply,
The pothole that tripped me
Is pro-growth, if no panacea."

The preceding verse is brought to you by the latest round of economic statistics, from which I deduce that a greater level of public spending would produce much-needed counter-cyclical effects (or stimulus, if you like). As the Wall Street Journal notes, consumer prices remain flat, unchanged in July for the fourth consecutive month. This is in line with wages, which also remained flat. As noted elsewhere in this blog, housing activity is still mixed, with recent rises noted in commencement of foreclosure activity. Manufacturing, meanwhile, is up strongly, rising 0.5% in July and 5.0% year over year, but this has not ameliorated the unemployment rate, which remains stuck at 8.3%. The missing link in all this data is the shrinkage in the public sector, which works both directly and indirectly against a struggling recovery. Not only are public sector workers laid off, but construction companies are less engaged than they could be... and those potholes won't fix themselves.

Constructive Solutions

What should we have done if we craved
That America's middle be saved?
Researched and retooled,
Retrained and reschooled,
Reinvested, rebuilt and repaved.

Financial Times' Washington correspondent Edward Luce has written a book that nobody wants to hear, but everyone needs to read: Time to Start Thinking: America in the Age of Descent. In it, Mr. Luce discusses the causes, and some solutions, to the declining state of American affairs. One of the difficulties in winning public investment in the renewal of American competitiveness, as in the verse above, is that neither party is willing to admit the state of decline. Thus, where the government has addressed our problems, it has generally made them worse. The solutions, however, are fairly clear, once we acknowledge the issue.

Overheard at the CEO Council

"It's harder to face competition
In a poor infrastructure condition,
But reversing neglect
Would lead, I expect,
To many a full-time position."

The Wall Street Journal's Alan Murray surveyed chief executives of some of the world's largest companies through the paper's CEO Council. Many CEOs would support a U.S. effort to update aging infrastructure, financed in part by private money, as a way to create jobs and make U.S. business more competitive. Typical was the comment of Marcelo Claure of Brightstar Corp., who said: "Upgrading our subpar infrastructure in the U.S., and even considering options like privatizing infrastructure if needed for funding purposes...would be a good place to start delivering meaningful jobs in the U.S."