by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Former FDIC chair Sheila Bair devotes her latest Fortune magazine column to the concept of boosting American infrastructure through creation of a taxpayer-funded National Infrastructure Bank. Regardless of the idea’s merits, one particular passage struck this observer as particularly interesting:
With government borrowing rates low (courtesy of the Fed) and so many construction workers eager for work, you would think that the federal government would launch major infrastructure programs. Unfortunately, the Fed’s cheap money has been squandered mostly on sugar-high stimulus and paper profits in the stock and bond markets — ephemeral benefits that are fading fast. In contrast, infrastructure programs would have lasting and much-needed benefits for this and future generations. Yet Washington’s bigwigs are providing little leadership on the issue, and they are missing the boat, as government borrowing costs will continue to go up.
Many in the GOP seem to think the government spends too much already and is too incompetent to run major infrastructure programs. But lots of sensible people, including those at the New America Foundation, a leading centrist think tank, have proposed the creation of a National Infrastructure Bank, which would support only projects that were approved by a team of engineers and that could be paid for over time with user fees or dedicated revenues like energy taxes.
Why did this passage raise a red flag? Bair makes no reference to the fact that those “many in the GOP” have good reasons to be skeptical about the government’s competence to run — or even fund — major infrastructure programs. She must have forgotten the debacle of President Obama’s stimulus program for “shovel-ready” infrastructure projects.