I found this in the
Daily Reckoning in an article by Marc Faber and thought I would post it:
At about the same time, John Gapper, writing for the Financial Times,
lamented the poor state of US infrastructure in an article entitled “On
the pot-holed highway to hell”:
“If anyone doubts the problems of US infrastructure, I suggest he or she
take a flight to John F. Kennedy airport (braving the landing delay), ride
a taxi on the pot-holed and congested Brooklyn–Queens Expressway and try
to make a mobile phone call en route. That should settle it, particularly
for those who have experienced smooth flights, train rides and road
travel, and speedy communications networks in, say, Beijing, Paris, or Abu
Dhabi recently. The gulf in public and private infrastructure is, to put
it mildly, alarming for US competitiveness...
“Faced with the emptying of the Highway Trust Fund, established in 1956 as
the US entered a period of growth and prosperity, Mrs. Clinton suggested
cutting its source of funds (which she claimed could be made up by a tax
on oil companies)... At times I wonder whether the world’s biggest economy
has the will to solve its challenges or will end up wandering self
indulgently into the minor economic leagues. I expect it will get serious
when the crisis is too blatant to ignore, but it has not done so yet.
“Perhaps this is a bit unfair. Some leaders have recognized the problem
for economic development, as well as for safety. They include Arnold
Schwarzenegger and Ed Rendell, governors of California and Pennsylvania,
and Mayor Michael Bloomberg of New York. The trio have allied to press for
the states and Washington to act.”
Gapper then quoted Ed Rend, incidentally one of Mrs. Clinton’s biggest
supporters, who supported her initiative to suspend the “gas tax” and
increase taxes on oil companies (a really bad idea, since higher oil
company taxes will curtail exploration). “Dams are in a horrible condition
... we have no real rail transport, unlike most nations in the world...
Summer delays make flying in America a disaster,” Rendell said.
According to Gapper, “...there are lots of ways in which infrastructure
inadequacy matters to the US but I would focus on two.
“First it imposes a drag on economic growth. The private infrastructure is
poor enough – broadband speed lags behind other countries and mobile
coverage is spotty. But much of the public infrastructure is unfit, a fact
that was becoming clear even before Hurricane Katrina flooded New Orleans
and a Minneapolis bridge collapsed during rush hour last year.
“Second, it presents an awful image of the US to investors and other
visitors. The state of transport and communication infrastructure is a
symbol of a nation’s economic development and the US is starting to look
like a third world country. In fact, scratch that. Many developing
countries look and feel better. Of course they are in a different phase of
development. The US invested 10% of its federal non-military budget in
infrastructure in the 1950s and 1960s as it built the interstate highway
system – at the time, the envy of the world. While the US investment has
fallen to less than 1% of gross domestic product, China has been matching
its double-digit postwar record... Americans may not like the sound of
that, but they cannot expect the US to maintain the economic dynamism of
the late 20th century in the 21st unless they buckle down. Sooner or
later, wishful thinking is going to crash into financial reality.”
In a column for the New York Times, Thomas Friedman noted that Americans
really “want to do nationbuilding” – not in Iraq and Afghanistan, but in
America.
According to Friedman, “We are not as powerful as we used to be because
over the past three decades, the Asian values of our parents’ generation –
work hard, study, save, invest, live within your means – have given way to
subprime values: ‘You can have the American dream – a house – with no
money down and no payments for two years.’ ...
“A few weeks ago, my wife and I flew from New York’s Kennedy Airport to
Singapore. In J.F.K.’s waiting lounge we could barely find a place to sit.
Eighteen hours later, we landed at Singapore’s ultramodern airport, with
free Internet portals and children’s play zones throughout. We felt, as we
have before, like we had just flown from the Flintstones to the Jetsons.
If all Americans could compare Berlin’s luxurious central train station
today with the grimy, decrepit Penn Station in New York City, they would
swear we were the ones who lost World War II.
“How could this be? We are a great power. How could we be borrowing money
from Singapore? Maybe it’s because Singapore is investing billions of
dollars, from its own savings, into infrastructure and scientific research
to attract the world’s best talent – including Americans...
“And us? Harvard’s president, Drew Faust, just told a Senate hearing that
cutbacks in government research funds were resulting in ‘downsized labs,
layoffs of post docs, slipping morale and more conservative science that
shies away from the big research questions.’ Today, she added, ‘China,
India, Singapore ... have adopted biomedical research and the building of
biotechnology clusters as national goals. Suddenly, those who train in
America have significant options elsewhere.’”
