Why We Need the Infrastructure Bill to Pass

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Lessons from overseas and from our own history. 

Infrastructure is how governments produce economic growth.

Squabbling over every socially desirable goal in an infrastructure bill is not how governments produce economic growth.

Refusing to spend money is not how governments produce economic growth.

Building and maintaining highways, railroads, airports, and water systems is how governments produce economic growth. If you want to add solar power and digital infrastructure into the mix, fine. But not getting the stuff made out of concrete built is dangerous for the American economy and our national quality of life. 

I was not born to be a bridge and sewer system lover. It was forced on me by circumstances.

I am a development sociologist who spent 16 years looking at the relationship between the state and development in Brazil. When I first got started, I thought the answer was going to involve cleaning up corruption or cutting taxes. None of that had anything to do with anything.

The big driver of economic growth was infrastructure. Places that built airports grew. Places that built water systems grew. Places that built sewer systems grew. Places that built highways grew. Even places that built bus stations grew. This wasn’t just true for Brazil. It was true for every statistical study of infrastructure in the Global South.

"Well," I thought, "Brazil and the Global South are generally poorer; this wouldn’t apply to countries like the U.S. which had a lot of infrastructure already." 

Then I found it applied to the U.S. too. Statistically, cities that grew most in the United States were those with the largest airports. Having an airport that would allow you to be a regional hub made you grow more than comparable cities with less air traffic. The obvious illustration of this is the contrast between Atlanta and New Orleans. Originally, New Orleans was far richer than Atlanta. New Orleans was the biggest port in the South and the center of the cotton industry and the sugar industry. Atlanta was a just a rail junction not all that different from Chattanooga. What turned Atlanta into an economic juggernaut was the construction of Hartsfield-Jackson Airport. Historically, New Orleans was slow to develop airports. Bing surrounded by lakes and swamps did not exactly facilitate airport construction.

 

Atlanta got a jump start on building a giant airport from a semi-corrupt land deal in the 1920s involving the current mayor. This land deal allowed Atlanta to build one of the largest airports in the country. Airlines flying propeller planes from the great cities of the East Coast to Latin America needed an airport to refuel along the way. Airlines such as Pan Am and TWA adored refueling in the excellent facilities at Atlanta — and routed most of their flights through this city. Corporations began to locate their Southern facilities in Atlanta rather than New Orleans or Tennessee because of the excellent connections between Atlanta and their northern headquarters. Atlanta became the dominant economic center of the South — a position it still holds today.

Similar stories can be told of the effects of DFW airport on Dallas-Fort Worth. Structurally, there is not that much difference between Dallas Fort Worth and Oklahoma City, two central places in the middle of large plains. What allowed Dallas to take off was the existence of DFW airport — which attracted huge amounts of corporate headquarters and light manufacturing facilities to the Dallas-Fort Worth region.

Infrastructure besides airports matter. The creation of the Midwest’s great farm export economy was a function of railroads. A huge amount of both historic and present-day growth in the U.S. comes from the construction associated with suburbs and exurbs. Road building is what makes that possible.

When infrastructure falls apart, there is the risk that economic growth will go backwards rather than forwards.

Who would want to invest in Flint after its water supply became toxic?

The Brazilian Northeast is kept poor by the miserable quality of the roads connecting that region to the rest of the country. Manufacturers would rather invest in the Southeast than wrestle with getting merchandise and supplies out to the rest of the country on two lane roads that are being decimated by truck traffic.

Private capital is not going to save our infrastructure. Infrastructure is not profitable. Most of the toll roads that have been built in the United States are losing money. No major urban airport in the United States has ever been constructed with private money. Airports cost a fortune to build, buying all that space; landing fees don’t bring in a whole lot of cash.

If the government does not want to build infrastructure, the private sector will not do it for them. But the linkage between infrastructure and economic growth is enormous.

Yes, solar power, digital cable and elder care are important. But one can always have special appropriations for these items.

Low taxes are not so wonderful in an economy that is not growing. Louisiana has never been a high tax state. Their low taxes have not compensated for the advantages that would have been obtained by being the first to build Hartsfield-Jackson airport.

Our bridges are crumbling. Our highways are crumbling. We do not have enough airport capacity. All of these are going to put a limit on economic growth.

Fix what is broken. Build what needs building. The economic growth that follows will more than remunerate the tax dollars that are spent today.  

Originally Published by The Hill on Jun 23, 2021 - Link to Original