POLITICS - Carlini's Comments

INFRASTRUCTURE STIMULUS PACKAGES

Filed Wednesday, January 14. 2009

With all the talk of U.S. stimulus packages for infrastructure, let’s make sure everyone is on the same page about what that encompasses. What does the word infrastructure mean to you?

Most would say it’s the roads and bridges on which we drive. While some would also include the railroads, it’s much more encompassing than that. We should look beyond the layers that create and maintain Industrial Age jobs to also include those that demand more complex skills and translate into more rewarding careers.

This is not the 1930s. Handing everyone a shovel and hammer doesn’t mean we’re putting a lot of people back to work. We’re also not utilizing the many talented people we have on the sidelines due to the labor dumping of many skilled technology people into the work force.

There are too many politicians who are clinging onto the manual labor solutions of the past. Those solutions don’t address the challenges of today let alone the challenges of the future. Many citizens who are underemployed are not “underskilled”.

If anything, they have been told they are overskilled for jobs they applied for and now make a fraction of what their earning potentials really should be. Before any huge stimulus package of money is approved, Congress, state legislations and all organizations wanting some “free cash” should be aware that the infrastructure cash pie has to be divided into at least seven major slices.

Why seven? Who are the rest of those organizations wanting money for the infrastructure? See the first chart below. Each infrastructure layer deserves a substantial sum according to what’s within those layers. What has to be done first is to understand that all the money should not go to roads and railroads.

What layer will benefit the most by a cash infusion? What layer will be hampered by a swarm of lobbyists trying to lock in a lot of money for their organization without promising much in return?

These are all issues on which those in Washington better spend some detailed time. While just handing out billions of dollars will make Congress feel like they are helping, we don’t need “make-work jobs” that come from an Industrial Age mindset.

Where Would You Put the Money?

I would put the money where it would do the most good not only for the local people but for strengthening the national economy, too. While some people want to put a lot into high-speed rail, is that going to have a real payback compared to spending money in some of the other layers?

All the green people advocating that we should spend billions on mass transit should take a strong look at that area to see if we’re getting the benefit to the environment that they think we’re getting. Those who are all for green solutions want more mass transit, but in looking at some mass transit, it’s more like mass waste.

How many suburban buses do you see riding throughout the day with maybe one or two riders (aside from the bus driver)?

How many trains and buses stop at stops where there is never anyone there to pick up and it’s a very common stop for every vehicle on the line? Perhaps at one time 20 years ago it was a busy stop, but now whatever used to be there is long gone. That is not mass transit. That is mass waste.

In the second chart above, you can see how I would spend each dollar in the stimulus. I’d give 20 percent to each top layer and nothing to the telephone network for two reasons. First of all, the incumbent phone companies were given many tax incentives to encourage them to build a better network. They failed Where did all that money go?

In the same time, they also spent tens of millions of dollars on lobbyists and other obstacles to stifle innovation and competition in that layer. Because of that, we have fallen further and further behind in the global market when it comes to network speed.

Second, all communications are rolling up into the integrated layer of broadband connectivity. Any monies that would be given to network infrastructure should be used for broadband connectivity. This includes the transport of voice, data and video. Broadband means 1 gigabit or above. It doesn’t mean 100 Mbps or less.

Railroads get 10 percent because they already get a good subsidy in the form of paying a lot less taxes on their fuel. Roads and bridges get 15 percent because state governments should have funds for this through the motor fuel taxes they collect every year.

In terms of the lowest layer, 15 percent to port, dock and water infrastructure would be a huge injection to what they typically get. I’m sure they would put all of it to good use. There are several projects in Illinois alone focused on expanding the locks on certain rivers in order to expedite barge traffic along the river.

The locks in use are old. If they’re updated, shipping can move faster along the water and barges that are tied together can stay together as they go through the locks. Instead, they currently have to be untied to maneuver into the locks and then retied to move further down the river.

When you compare Illinois to other states that are on either coast, we have more shoreline than most of them when you take into account that the western border is all shoreline against the Mississippi and part of the eastern border is on Lake Michigan and other rivers.

Target Speed: 1 Gigabit

Any speed objectives should be 1 gigabit or more. Any study done by any organization that focuses on a speed less than 1 gigabit should be thrown out as its authors have no clue about where the market is and where it’s going.

Great analysis has to be done before earmarking billions of dollars to what used to be pet projects like the “bridge to nowhere”. The “bus to nowhere” is just as wasteful and usually not as scrutinized.

Carlinism: Infrastructure has become a complex, multi-layer foundation for economic development.