August 28, 2017

MSCI President & CEO: Time To Start Rebuilding America’s Infrastructure

Over at MSCI’s Edge, President and CEO M. Robert Weidner, III explains why the federal government needs to focus on infrastructure investment:

NFL training camps are back; pounding players into combat readiness, and at the same time shaping them into the cohesive teams that win games. The successful ones will have strong, skilled leadership, a quarterback who commands respect, listens to his teammates, but as the ball is snapped knows that the other ten on the field will do their jobs. “Individual commitment to a group effort,” as Lombardi puts it. Summer brings us this major reminder of the value, exhilaration, and often grinding hard work that championship teamwork requires.

Successful politics, an effective commitment to the common good and public service requires that same brand of teamwork. It requires first cohesive policy, a game plan if you will, and then an understanding that there can be just one quarterback and the rest of the team must join selflessly in the common goal of bringing that policy to life.

The Congress these days, in sharp contrast to that ideal, is packed with men and women of both parties who each think they are, or should be the quarterback. Serving the public, passing meaningful programs, has been swept aside by selfish individuals each demanding their ten minutes of fame. Consequently, the Congress has gone home for August still paralyzed by furious partisanship, and seemingly unyielding philosophical differences.

The result has been sound and fury, but no legislation on the most important issues of our day. Surely one of those, if not the most important now, is the dire need for a comprehensive program to rebuild this country’s infrastructure. The congressional paralysis is most troubling because on infrastructure there is little to no partisan disagreement. Both parties and their leaders seem to understand that this single initiative would grow the economy, increase productivity, boost our global competitiveness, support local business across the country, remedy a national disgrace, and oh yes, save thousands of lives.

More than that, it contains tremendous political advantage for its supporters. A national program to rebuild and modernize our roads, bridges, ports, airports, power grid, waterways, Internet connectivity, all the structures that are the lifeblood of this country would reach into every political district in the land. Pork for everyone, as the commentators would say.

In February, the National Governors Association sent the White House a list of 428 “shovel ready” projects considered essential to the national well being. This at a time when federal spending on infrastructure is at a thirty-year low.

The nation’s inland waterway system has not been updated since it was built in the 1950s. Seventy percent of the nation’s dams, more than 90,500 of them will be more than 50 years old and well beyond their predicted lifespan in just eight years. Traffic delays on our badly congested interstate highways cost more than $160-billion a year in wasted time and fuel, per the American Society of Civil Engineers (ASCE). At least twenty percent of our roads, it says, are in serious need of repairs. Drive around a bit, as I do, and you would be convinced that’s an underestimation.

The publicity besotted troop of would-be quarterbacks in the nation’s capital claim to be hung up on how to pay for the $4.6 trillion, or so, that the ASCE tells us is needed to erase the stubborn D+ the country earns annually for its perilously sagging infrastructure. The President’s plan, echoed by many others in his party, seems to rely on tax credits and turning the whole problem over to private enterprise, and public private partnerships. …

Certainly, private investment should be part of the solution. But private investors need returns. Viable toll roads and bridges will make a very small dent in the problem. Government guaranteed municipal bonds, and an increase in the federal gasoline tax—unchanged since 1993—must be part of the mix as well.

Infrastructure cannot wait behind the dicey prospects for comprehensive tax reform and a problematic new budget.

The solution is money, courage, and good will. It will take the kind of “get it done” teamwork that politicians on both sides of the aisle once took pride in.

When Congress returns from its August recess, we at MSCI intend to step up our advocacy on this, to argue aggressively for creative spending on this nation’s infrastructure. We will insist that rebuilding infrastructure, a growth and productivity juggernaut, must be a top priority.

The Society of Engineers conclusions are a national embarrassment: “Even though the economy is about six times larger than it was in 1955, we are investing no more in our critical infrastructure today than our grandparents did.”

Infrastructure is a national imperative.  It is not a Republican nor a Democrat nor an Independent endeavor.  Everyone needs to get on the team. If they do, an infrastructure program will happen.  As Helen Keller said: "Alone we can do so little, together we can do so much."