US Infrastructure Crumbles As Solons Ignore The Easy Money They Have Here
It takes money to make money, so the saying goes. A few years back I read Robert Kiyosaki’s “Rich Dad, Poor Dad” series. Here’s this guy making millions on real estate (or at least on telling other people how he made millions on real estate) giving near-countless anecdotes and Asian-American wisdoms and one thing stuck out: He talked about how his poor dad clipped coupons; his rich dad looked for cheap real estate investments and then took out low-interest loans to purchase them. Because that’s how you succeed: You look for ways to spend money to purchase longterm investments, especially when you have access to cheap money. In America there would be no better way to spend the billions rushing in for historically-low-interest-rate US bonds than to rebuild crumbling US infrastructure and create millions of jobs. But that won’t happen. Because for all its talk, Congress and the Senate don’t want to run America like a business; they seemingly don’t want to run it at all.
Run America as a Business?
Right now there’s a spoiled rich kid running for president based on the fact that people think he would run the nation like a business, the pinnacle of American greatness, and by doing so he would create jobs. The problem with that is he could never run the nation like a business; the same people who extol the virtues of free commerce and the God-given virtues of US corporations (since corporations aren’t just people but job-builders) also claim that debt is bad, investment is bad, and the key to regaining American greatness is cutting back on spending, ideally on spending for people and things they don’t personally come in contact with.
Right now government bonds are offering such low interest rates that one wonders who purchases these things. It comes down to the old umbrella-in-a-rainstorm theory: With global markets in Asia, UK, South America and Southern Europe entering deep hollers of uncertainty, US and German bonds are about as secure a way to keep your money from disappearing as there is in the world. In Germany you’re actually paying the government to keep your money from disappearing; in the US there’s the 10-year bond at 1.469% and the 30-year at 2.172%, both record lows that also attracted near-record purchases (about $30B or so).
The Office Building Is Falling Apart
Right now, America’s infrastructure is crumbling. In 2015 Congress passed a bill to spend $305B on roads, bridges and rails (even though it was a good bit less than the $478B Obama had wanted after over a decade of Congressional neglect of federal transportation programs). And people thought maybe finally congress had decided to address the peeling paint and termite-riddled sideboards that make up our eagle-topped house.
But as evidenced by water issues in Flint and many other cities, including most recently in bastions of health Pac Northwest states Oregon and Washington,our nation needs more than an overhaul of its shipping routes. In fact recent supposedly “nonpartisan” bills have made their ways through Congress and the Senate respectively amidst frantic back-slapping like a dysfunctional family applauding the fact that they made it through a dinner without Becky bringing up Sally’s 5 abortions or Mom bringing up Dad’s decades-long affair with the nanny. Yet when they hit their opposite halls of government, the bills weren’t so much as touched much less debated and adapted for possible passage. As of today they’re stagnant, much like the drinking water in many states, and starting Saturday all our hardworking solons who constantly lecture us about how noble it is to have a job in the only civilized nation that doesn’t guarantee sick or vacation time will set off for 6 weeks of R&R until September. So the Senate and Congress, instead of pushing for much-needed urgent repairs to pipes that are pumping chemicals into the bloodstream of lower-to-middle-class children, decided the differences in their separate water bills can just wait a couple months. Which likely means until 2017 despite desperate pleas from the few politicians who actually seem to want to accomplish anything.
Why is this acceptable? How can anybody give a pass to a supposed leaders who instead of spending the last few weeks tying up legislation to fix rotting, and in some cases deadly, infrastructure investigate some sextuagenarian’s email usage for the 86th time? And how can they go on vacation in good conscience knowing that a natural disaster or even just a standard day of usage could turn the old star-spangled ranch house into a pile of worm-ridden clapboard and rusty metal with body parts of the dead trapped inside?
It’s because they worship this idea of asceticism, though it doesn’t extend to them. Their PTO and bloated payrolls must be maintained but for everybody else, it’s time to work harder and tighten the pursestrings.
US Infrastructure Is Easily Ignored If You Avoid Most of It
America has neglected its infrastructure for years because it’s not flashy, nor is it a set expenditure. And because most of the shot callers live in places where there’s enough local public funding from their wealthy cronies to keep the roads and bridges and buildings in a state of permanent renewal and upkeep. And with the many wannabe wonks pretending they understand economics by claiming the way to fix America’s deficit is to cut all spending, it’s the easiest cut. Can’t cut Medicare and Medicaid; military funding keeps the priapisms rock solid; Congress likes to give themselves raises and corporate subsidies make the world go round. So let’s drop all the necessary rehabilitations on the states.
The last Great national financial crisis, also known as “The Depression,” ended for several factors. But one of those was the WPA, a central part of the New Deal, which gave jobs to men and women who wanted to work in their particular expertise but simply couldn’t find jobs. Many of the most beautiful and longstanding classics of American architecture were built by WPA workers. Artists, musicians and writers created everything from legendary murals to one of the finest travel guides to NYC but such soulful “frivolities” wouldn’t even need to be a part of this infrastructure spending. Just make sure levees don’t fail and tunnels and bridges don’t collapse.
Investments in infrastructure would put all the disgruntled blue collar Americans who are out of work back to work with tens of thousands of jobs. It would usher in a new age of American pride by hiring people to build concrete works of art without having to be beholden to the necessity of immediate profit, thus driving down rent and purchase costs and taking the money out of greedy swine like Trump and his ilk. It’s necessary as our bridges rust, our waterways clog and run dry and foul and especially as global warming threatens many of our most important cities.
But our Congress and Senate aren’t likely to take advantage of the high demand for low-priced stable T-bonds. Soon you’ll have the people decrying Chinese ownership of American “debt.” The success and growth of American business is mostly based around investment. And the best companies are the ones that issue bonds with the lowest returns and use that to build their companies. So if people want Trump to run America like a business, that would mean taking advantage of the low cost of money by way of selling shares in America and then using that money to build America back up. Those investors, of course, would include the Chinese, and probably some Russians, and rich South Americans, and people from plenty of other nations with horribly unstable or weak economies for whom an American interest rate that doesn’t keep up with inflation is still better than anything their local banks can provide.
But this is counter to the Republican idea that we need to get rid of debt by cutting costs, despite the fact that this theory has been disproven by nearly every respected economist in the world. And the few theories posited by plausible economists that Obama’s high debts would lead to absurdly expensive T-bills for future expenditures have been turned on their head, giving more credibility to the fact that now is the time to take all the money pouring into T-bonds to fix America and in the process creating jobs and increasing safety for American citizens and that all the austerity heads have no idea what they’re talking about. Just look at how austerity has ruined southern Europe. Meanwhile, Nobel-winners like the bearded guru Krugman are screaming (at least as much as Krugman ever “screams” – more of a distinguished wail) that now is the time to take that cheap money and rehab the joint.
So as the solons leave for the rest of the summer — and let’s admit, when they come back the presidential elections will give them the perfect excuse to accomplish nothing until January — everybody should know that even if America could be run like a business, lifetime political leaches will never allow that. Because every good businessman knows when you have access to easy, cheap money, you spend that to build, rebuild and fix up longterm assets. And the tunnel vision from Capitol Hill has spent so long railing against this principle they couldn’t go back now without admitting everything they’ve said for years was a lie.
They would rather leave the money on the table, let the country crash into the sea and keep investigating their political opponents and when a tough negotiation hits the table, put the “Out of office” sign on the door and go for their 6-month lunch break.
Regardless who wins the presidency, this egregious disregard for America’s rotting body should be the final straw to convince patriots everywhere to kick their representatives to the curb and find new leaders who actually care about this great nation.