"The Great Economic Equalizer"
by Nomi Prins
"In an interview with CNBC in February 2021, after being confirmed as the first female Treasury secretary, Janet Yellen stressed the crucial need for both a Covid-19 stimulus relief bill and a sustainable infrastructure bill. When commenting on the Biden administration’s “Build Back Better” agenda, she underscored the “long-term structural problems in the U.S. economy that have resulted in inequality [and] slow productivity growth.” She also highlighted how a major new focus on clean-energy investments could make the economy more competitive globally.
When it comes to infrastructure and sustainable development efforts, the U.S. is being left in the dust by its primary economic rivals. Following his first phone call with Chinese President Xi Jinping, President Biden noted to a group of senators on the Environment and Public Works Committee that “if we don’t get moving, they are going to eat our lunch.” He went on to say, “They’re investing billions of dollars dealing with a whole range of issues that relate to transportation, the environment, and a whole range of other things. We just have to step up.”
China Races Ahead: While this country, deep in partisan gridlock, stalls on infrastructure measures of any sort, its global competitors are proceeding full speed ahead. Having helped to jumpstart its economy with projects like high-speed railways and massive new bridges, China is now accelerating its efforts to further develop its technological infrastructure.
As Bloomberg reported, the Chinese are focused on supporting the build-up of “everything from wireless networks to artificial intelligence. In the master plan backed by President Jinping himself, China will invest an estimated $1.4 trillion over six years” in such projects. And it’s not just China leaving the U.S. behind. Major trading partners like Australia, India, and Japan are projected to significantly out-invest the United States.
The World Economic Forum’s 2019 Global Competitiveness Report typically lists the U.S. as 13th among the world’s nations for its infrastructure quality. (It had been ranked 5th in 2002). In 2020, that organization ranked the U.S. 32nd out of 115 countries on its Energy Transition Index. Despite the multiple stimulus packages that Congress has passed in the Covid-19 era, no funding - not a cent - has been designated for capital-building projects. In contrast, China, Japan, and the European Union have all crafted stimulus programs in which infrastructure spending was a core component.
A Water Main Breaks Every Two Minutes: Here’s a simple reality: a strong American economy is dependent on infrastructure. That means more than just a “big umbrella” effort focused on transportation and electricity. Yes, airports, railroads, electrical grids, and roadways are all-important economic drivers, but in this twenty-first-century world, high-capacity communications systems are also essential to economic prosperity, as are distribution channels of various sorts.
At the moment, there’s a water main break every two minutes in the U.S. Nearly six billion gallons of treated water are lost daily thanks to such breaks. Situations like the one in Flint, Michigan, in which economic pressure and bankruptcy eventually led a city to expose thousands of its children to poisonous drinking water, will become increasingly unavoidable in a country with an ever-deteriorating infrastructure.
The great economic equalizer is this: the more efficient our infrastructure systems become, the less they cost, and the more they can be readily used by those across the income spectrum. What American history has shown since the time of Abraham Lincoln is that in periods of economic turmoil, major infrastructure building or rebuilding will not only pay for itself but also support the economy for generations to come.
The Greening of the Economy? Moving forward, it’s already clear that clean and sustainable energy will be crucial to achieving a more equal, economically prosperous, and environmentally friendly future. Building a renewables-based economy and creating jobs to go with it would be much more than a niche set of activities in the usual infrastructure spectrum ... It would be the future.
High-paying jobs within the sustainable energy sector are already booming. The Bureau of Labor Statistics reported that "green" work would be among the occupations projected to have the fastest employment growth from 2016 to 2026. Wall Street and big tech companies are also paying attention. Amazon, Google, and Facebook have become the world’s biggest corporate purchasers of clean energy and are now planning for some of the world’s most transformational environmental targets. That means smaller companies will also be able to enter that workspace as innovation and infrastructure drive economic incentives.
The Next Generation: It may be ambitious to assume that we’ve moved on from the Groundhog Day vortex of “infrastructure week," but the critical demand for a new Infrastructure Age confronts us now. From Main Street to Wall Street, the need and the growing market for a sustainable, efficient, and clean future couldn’t be more real. An abundance of avenues to finance such a future are available, and it makes logical business sense to pursue them.
It’s obvious enough what should be done. The only question, given American politics in 2021, is: Can it be done? Joe Biden has said that infrastructure investments "are among the highest value investments we can make." He added, "I'm convinced that if we act now, in 50 years people will look back and say: This was the moment that America won the future."
The economy of tomorrow will be built upon the infrastructure measures of today. You can’t see the value of stocks from space, nor can you see the physical value of what you’ve left to the next generation from stat sheets. But from the International Space Station, you can see the Hoover Dam and the Golden Gate Bridge. What will future generations see that we’ve left behind? If the answer is nothing, that will be a tragedy of our age."
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