infrastructure inequality lends itself to economic disparity

Making America Competitive in a Global Economy

The case for investing in our country, state and community infrastructure systems has been made numerous times in the last three or four years, but has met resistance from our congress, state and even community representatives over the lack of revenue funds to pay for these projects. The early 2000’s found us keeping up with the Jones’s; infrastructure spending during the first decade found those metropolitan areas experiencing great real estate growth were able through developer impact fees the ability to fund infrastructure projects. Those areas not experiencing such could not take advantage of these impact fees. Impact fees are paid by developers at some point in the construction of their projects and are usually passed on to the consumer in the cost of their residence or commercial project. The concept of impact fees and another financing policy known as Certified District Deeds which developers used to finance the infrastructure and common area improvements of their projects were passed on to the customers in their property tax bill as a separate line item that would have a life of 10 to 50 years in way of a bond. The communities and regions in the country that were not able to utilize these types of financing instruments had to float their own bonds or go to Wall Street and borrow the money at a enticingly lower interest rate similar to those exotic mortgages that existed for the sub prime residential mortgage market. All of these instruments provided a utility to their community until the inevitable retraction in the residential, commercial real estate markets happened and expanded into other sectors of our economy slowing down growth, the loss of jobs which directly impacted these communities from paying their debts no matter if they were in a growing region of the country or not. I ask you now this question, are we as a people concerned and afraid enough now to not look at any financing tools available for fear of defaulting and how can we as a people collaborate together as a community, state and country to overcome those fears by creating enough jobs and employment to kick start and drive our economic bus to recovery and beyond.

The case for infrastructure private-public investment banking and the investment of a portion of our revenue dollars every year for the next 10, 15 even 20 years that spread the cost out, but more importantly the initial impact will put people back to work and break the backward cycle that has paralyzed our economy and ability to balance our nations budget.

This is what can happen in as plain of language that I can muster and few words as possible. We will never pay down our debt and deficits with continuing economic policies if we continue to implemented those policies of the past 30 years. Though the conservative movement of the 1980’s had some virtuous aspects that allow our society and culture to circle around and revisit some of our older long standing values and mores; by unwittingly blaming the government institutions of our Republic, the Democracy every free nation in the world had come to admire, we created and caused the cardinal sin of decay and obsoleteness when we stopped providing the revenue needed to modernize and build our infrastructure system that was put in place from after WW II through the 1960’s.

If you were a business you would never operate your machinery at full capacity 24/7 without allowing for quality maintenance and repair work to be completed. This down cost becomes a cost of doing business and is passed on to the consumer. Who would even consider flying today if our airline industry did not do the appropriate maintenance before there was ever a problem? How often do we find that because some airline took liberties to cut cost with their maintenance program only to find a problem that caused an accident? One crash is enough to affect hundreds, even thousands of lives when a plane full of passengers crashes and everyone dies, the families are impacted, wives, children, and parents to name a few.

We would not stand for these types of actions would we? We kind of like government regulation in this instance. Well the same is very much alive with our infrastructure system. We lose enough water in our country every day to supply enough water for our largest state California. We pollute our ground water every day with leaking sewage plants and even worst with septic-drain field sanitary systems which are used throughout our more rural areas of our nation which in some instances are not so rural now but the septic system is still utilized. How many illnesses and early deaths are attributed to these two issues we do not even measure in the public arena?

How about our bridges and overpasses that we built when we provided for the country’s economic distribution center that are now 40 to 50 plus years. The Civil Engineering Associations have been warning us for the past decade that horrible accidents that could have been easily prevented are about to take place. We all remember the I-35 bridge in Minneapolis that fell into the river three four years ago because it had become an unsafe structure. It was not a secret, no it was not a surprise to the engineers who had been inspecting that bridge for years before it collapsed.

I can go on and on, but the fact is right in front of us and we keep ducking our heads in the sand like ostriches thinking if I do not see it, hear it, and smell it, it does not exist. But “IT” does exist, look around America, while China, India, Brazil and all those other emerging nations are modernizing, building brand new transportation systems such as light rail, distribution rail, airports, sea ports, highways that are design to increase mileage, new bridges and over passes, new water delivery system and sanitary treatment, utilizing green energy, by advancing solar, thermal and wind systems to connect to their electric grid system we find our country and countrymen and women with all this knowledge unable to convince their representatives in our congress, state and local governments to work as a collaborative team for what will save America’s greatness instead of traveling in the direction of all the past great empires lmost recently Great Britain, the past decade has magnified that something is wrong. If we want to continue to be the leader in the world, in economic innovation that benefits not only humanity, not only the top 1% wealthy in our nation but our citizens who have had to live under the fear of jobs moving off shore, stagnant wages, and of course lower middle class democracy standards of living.

“IT” is us, it’s the moderate right and left and the middle independent silent majority who have swung all elections for the past twenty some years to the politician who had the best special interest ad on TV. These citizens are frighten by what they see happening in our country. After the recession of 2007-2008, after all the easy money that could be borrowed due to Wall Street’s engineering and mathematic wizards who devised instruments which in theory would make obscene profits for the world multinational banking industry; yes, those exotic, toxic, derivative bonds creating profit centers at different multiple times such as the initial loan, the servicing of the loan, the dicing and cutting up these loans, creation of these derivatives and in some cases betting against these types of financial instruments to succeed in order for the banking sectors to profit. The natural utility of creating profit centers that do not have any more function then to profit Wall Street and give the middle class democracy of our country easy low interest money; borrowing against their home’s, does not make for an upwardly mobile socioeconomic middle class.

So I get it, you’re angry, you have lost all trust, heck when is the last time you could go to your bank and meet with someone who had you and your communities interest at heart. For me, my banking is done at two banks, both are members of the two big to fail club. But this does not answer the question about how we create a more equal country both economically and demographically. I am sadden every time I hear about those amazingly great infrastructure projects that are put up in what seems over night in these emerging capitalistic markets; both in knowledge-information base sectors and in the manufacturing sectors.

Our multinational corporations have said they would bring back the $1.2-1.5 trillion dollars back into the USA if they did not have to pay taxes on it a second time. OK, but how do we lower their tax burden and still know they will invest in America’s future here at home? How about the tax write offs they took when they moved their company offshore? How about the social cost to our communities, states and federal government when these displaced workers needed unemployment funds, new vocational training, the cost to families affected by a parent who became ill through depression or lost their health insurance? You see this is my fear; in business school we were taught that corporations were special agencies, licensed by the state to create commerce. Lately during the past few years this has morphed into people hood, corporations are people who have freedom of speech rights and who no longer have to commit their stakeholder responsibility for their employees, community and country. Heck in the 1970’s the CEO’s of the average corporation made about 35-40 times what the lowest fulltime employee made. This all changed when the corporation became a purely profit center for the shareholders and Wall Street with no long term utility for the community. Profits are an important result of delivering a service to the customer, but when the middle class spending power because of stagnant wages is basically staying even and or even losing earning power when matched with the cost of living increases, how does a CEO’s 1000% increase in earnings from 35-40 to 1 justify an increase to $400 to every $1 dollar?

So I want to offer to our congressmen, our community, our citizens especially the middle class democracy wage earner this proposition; we must be vocal and communicate to our elected leaders and the corporate world our demands to create an infrastructure bank with the financial incentives for these corporations to make profits on their money boarding in off shore accounts, not creating any utility for our country, that we can accept a much lower tax rate if and only if these multinational corporations take those earnings and invest them in our country. The private funds from these off shore emerging nations would supplement the public funding and create “Infrastructure Investment Bonds” (IFB) in order to develop a more equal socioeconomic regulated capitalistic market, enabling our nation, the middle and working class, and the wealthy the opportunity to provide best in practice and modernization of our countries infrastructure system to compete on an equal footing with the world economy therefore creating the economic stimulus to revive our job base.

The political landscape though needs our silent majority and moderate right and left representatives to become collaborative, to be creative, innovative and most importantly pro American. Pro American is not a slogan to take lightly. There is a question of inequality that permeates throughout our country due to the polarization that has spread throughout our political discourse. We need to get back to the time when we were faced with similar economic inequalities and mandate that “We the People” includes the impoverished, the layers of our middle and working classes, our education needs, our infrastructure needs as well as the needs of our wealthy benefactors of how the economic policies of these past 30-40 years has created a great divide between the citizens our nation.

Time has run out, this next decade will set the tone for where we decide to go. Do we want to be the old power like Great Britain at the turn of the 20th century when they lost the mantel of the world’s economic engine which will allow the Asia Tsunami (China, India and Asia) or do we want to become a well rounded economy, an economy that we all can be proud of not only the top 1% who have seen an increase in income of 276% in the past 30 years while in comparison the middle class experienced a 40% increase and the poor among our nation which is now 1 in 7 American’s only gained about 20%. Something is drastically out of whack, creating a disparity in the inequality of living our American Dream.

We need $2 trillion dollars just to break even to repair and bring our infratructure up to 2011 standards. We need to create the economic plans to move ahead of what our break even point is and allocate and invest in another $2 trillion dollars through the next 15 to 20 years to maintain and move ahead as the world economic leader.

So we have two funds; (1) the break even fund which should be completed in the next 10 years or less, it would cost us $200 billion per year, but should be funded out of a combination of public-private or if you want the private-public investment funds that we filter our multinational off shore profits through so they (A) do not have to pay taxes twice, (B) make a profit on those funds and (C) put tens of millions of Americans back to work immediately during the next 2-3 years. The (2) fund; the fund that will reverse our slide into a second tier class society, the engine for our race back to the top of the pyramid, the funding that will position us at the head of the world markets making us competitive beyond reproach, creating the incentives for more innovation, upgrading our failing education system from one of how to take test to one of accomplishing a well rounded learning and fact gathering experience, investing in the sustainable energy resources giving our country greater security, eliminating our need to spend 100’s of billions of dollars to police the fossil fuel distribution trade routes. This fund is for the future generations; this is what our legacy will be judged on; do we leave our countries children of today with the opportunities to do better then what we did which has been one of our greater accomplishments in the past or do we retract back into a free non-regulated purely free market society that does not have economic, incentives for everyone in our country, We will need to fund an additional $2 trillion dollars stretch out through the next 15 to 20 years. This would obligate us to approximately $100/130 billion dollars a year.

A country as large and diverse as our country must be managed on a macro economical level, goals must be set in terms of decades; the big picture must be explored, our time to create simplified slogans of tightening the belt, eliminating entitlement programs and other social institutions would only eliminate our ability to do BIG THINGS, the debt will be eliminated once we have full employment not after we eliminate jobs and revenues to run our government. We must think big, we must make the sacrifices needed to make these long term goals a reality. Our generation must reestablish the character of our Nation as well as the ethics and mores of a great and just society. I like a few of the phrases from John F. Kennedy’s inaugural where he challenges that generation of 1961: (1) “"Let the word go forth.....that the torch has been passed to a new generation of Americans;” (2) "Ask not what your country can do for you - ask what you can do for your country", and (3) "All this will not be finished in the first 100 days. Nor will it be finished in the first 1,000 days, nor in the life of this Administration, nor even perhaps in our lifetime on this planet. But let us begin."

We are a great people, a thousand years from now when that world in 3011 is studying how we committed ourselves to create the greatest civilization, that even during imperfect times rallied around our inalienable rights to life, liberty and the pursuit of happiness, that we knew the meaning of sacrifice, we knew the meaning of greatness comes from not “I” but “We the People”. I am so proud of how our country has always become better through the history of our people. Even though we were founded on these principle of life liberty and happiness for white Anglo males in the 1770’s after only 240 some years we have included almost everyone; like the sacrifices made by the African-American slaves, the immigrant, women and all we truly do deserve to be a country of equal, equal to the task of assuring everyone an equal footing to become the very best American they can become, equality in order to live the American Dream, where the institutions are in place and functioning for us all.

What can you do for your country today, tomorrow, this year, next year, this next decade? Do not blame the polarization in Washington on anyone other than the people who show up at the ballot box each election cycle; if you vote for polarization, you will reap polarization; if you vote for collaboration, then you will receive collaboration.

JND

John is a former real estate industry director of construction, senior project manager and vice president of construction with over 30 years experience in managing $1.25 billion dollars in commercial hospitality, office, warehouse industrial and residential developments in Florida. John is a State of Florida Certified General Contractor and Licensed Real Estate Broker. John attended and completed majors in Sociology at Cornell College selected self studies at Palm Beach State College and Business Management at International College. John currently writes, lectures and consults about client/stakeholder relationships, quality management, value chain management, identifying organization organic leadership growth opportunities and mentorship, promotes private-public investments and other macroeconomic programs for our economy through, ”Infrastructure Modernization” , “Education for 21st Century Global Competiveness”, “21st Century Neo-Urbanism Development”, and the “Modernization of our Nations Power Grid”; solutions to integrate our nation’s power plants and new smart distribution networks powered by way of clean solar, wind, thermal and tidal generated energies to overcome the affects of global warming generated by 19th/20th century fossil fuel energy resources.

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