Skip to comments.The Hoax That Is The Infrastructure Bank
Posted on 09/19/2011 7:06:54 PM PDT by RobertClark
Does anyone seriously believe that the reason we have high unemployment in America is because we have a substandard infrastructure?
Apparently the politicians in Washington believe that is so because they are trying to make a case for massive infrastructure spending in order to create jobs and to prepare our economy for the 21st Century. I was watching that fountain of conventional wisdom, Fareed Zakaria tonight and he seems to buy into this proposition. He interviewed Senator Kay Baily Hutchison about her proposal for an infrastructure bank: The Kerry-Hutchison Bipartisan Infrastructure Bank also known as the BUILD Act. It wont cost the taxpayers any money, she says, because it is a one-time $10 billion funding of this bank which will lend money for projects. As she says on her web site:
The idea of a national infrastructure bank is an innovative way to leverage private-public partnerships and maximize private funding to address our water, transportation, and energy infrastructure needs. In our current fiscal situation, we must be creative in meeting the needs of our country and spurring economic development and job growth, while protecting taxpayers from new federal spending as much as possible.
This is viewed as a sensible and business-like approach to solving this problem.
When anyone does reporting on this topic you see shots of Chinas high speed trains zooming along as well as Brazils new super port that will be the road to China. We dont need any of these things because we have an excellent infrastructure despite what the experts say. Most of these experts want to cash in on this spending boondoggle.
Let me be clear: not one new job will be created by this infrastructure bank.
The truth is, we dont need it. Our freeways, trucks, railroads, and aircraft do just fine getting around delivering people and goods. Im not arguing that some things need repair, but that is minor compared to what this Infrastructure Bank envisions. As we all know, like all things run by government, they have let some of our bridges, roads, and schools go into disrepair because they manage it incompetently. While I am sure some kids go to run-down government schools, its not the buildings that are the problem, its the unions. I havent heard that our water supply is unsafe or that anyone has been poisoned by drinking out of the tap (spare me the occasional example, please). Our ports are fine despite the longshoremens union. We dont need high speed trains because they are expensive and inefficient and people will fly instead. Please see Bob Pooles work at the Reason Foundation if you need confirmation of this fact or on any matter dealing with public transportation.
Here are some things to think about when the politicians spout this nonsense:
1. Jobs arent created by government. That is not to say that government employees or contractors do not work; they do. What it means is that government does not create wealth-creating jobs that are self-sustaining as would a private business. This should be fairly simple to understand. Taxes fund government operations. Only the private sector creates wealth that pay taxes. We can have an argument about whether or not government should provide much of the services that they do. For example, we know that private schools do a far better job at providing an education because they are not controlled by unions who control politicians. But, that is not the topic here.
2. Government spending known as fiscal stimulus, or Keynesian stimulus, as a cure for unemployment is another matter.The idea here is that since consumers arent spending all we need to do to revive the economy is to start spending somewhere in the economy and magically things will revive and take off. Unfortunately such stimulus never works to jump start the economy. It never has and never will. The American Recovery and Reinvestment Act of 2009 pushed $840 billion into the economy under this theory and it failed.
No one (especially our politicians) asks where the money comes from to stimulate the economy. It comes from us, whether through taxes today or taxes tomorrow. And, the more you take out of the private economy, the less capital is available for businesses to create real jobs. Politicians never seem to see this.
Right now the Keynesians are pushing on a string with this idea. Until we clean up all the excess houses, commercial real estate and related debt, no amount of spending or tax cuts will work.
3. Then there is the quality issue. Assuming that such infrastructure spending worked, the projects chosen are those favored by government politicians and bureaucrats and we know how well they do competing with the private sector. Need I mention the $535 million government loan guarantee to the soon to be bankrupt Solyndra? These folks shouldnt be handing out your money; they dont know what they are doing.
Solyndra may be the tip of the ice berg. This selection below is just the first four contracts on the Recovery Act web site that you can bid for. (If you wish to see all of them, go here or here.)
As you can see, as with most of these Recovery Act contracts, it is just another way to pay for things the government needs or want. Nothing here will create real jobs, the kind that will be market-based taxpaying jobs. Its a waste of your money.
4. Union workers will be employed for these construction projects since they are all federal contracts and that requires union workers. No big issue here; we all understand this is a payoff to the Democratic Party base.
5. Then there is Japan. They spent trillions on fiscal stimulus for much of the same things that are proposed by the Infrastructure Bank. It was all a huge waste of money there and the result was 20 years of sluggishness and the highest debt to GDP of any industrialized nation (225%; we are at 100%). Their economy is still in the doldrums and they stupidly push for even more such stimulus spending. We are going Japanese with all this spending but with a twist: we have inflation and we will have more inflation from quantitative easing and more spending.
The Infrastructure Bank is a hoax. Kill it now before it grows.
I didn't see a thing about fostering the development of advanced computerized control modules for existing automobiles.
Then, the latest trick is to increase taxes on air travel.
Here's a neat one for Obama to make his program more consistent ~ stick a $1000 per trip tax on each planned high speed rail passenger ~ California by itself ought to be able to pay off the national debt in no time given the number of passengers they propose hauling.
Good roads are nice, sure. But prosperity does not magically occur just because you have roads and bridges.
They’ve been cooking this one up for over a year.
Real urgent stuff, don’t ya know.
WASHINGTON | Tue Sep 21, 2010 3:00pm EDT
Creating a national infrastructure bank is an idea whose time has come, Robert Wolf, chief executive of UBS Americas, told at a Senate Banking Committee hearing called to explore alternatives for financing infrastructure projects.
Obama envisions creating the bank as part of long-term infrastructure spending legislation expected to take shape in 2011. Presidential advisers have suggested capitalizing the bank at $25 billion.
The two men first met in December 2006 in the New York office of billionaire investor George Soros. Mr. Wolf was a newcomer to elite Democratic donor circles. Then-Sen. Obama, still months from launching his bid for the White House, was desperate to raise campaign cash on Wall Street.
In addition to his roles at UBS, Robert was appointed as a member of President Obamas Council on Jobs and Competitiveness and prior to that was on the Presidents Economic Recovery Advisory Board chaired by former Federal Reserve Chair Paul Volcker, from 2009-2011.
By the way, are we going to be bailing out UBS?
These people are crazy, where does she think that 10B comes from? My tree out front is just tired of getting picked!
Another day, another con.
I thought infrastructure spending was part of the yearly budget ? Oh wait, he never has a yearly budget
You would think Obama would give up on the failed idea of using a curious collection of White House czars to manage complex economic and regulatory issues. No way.
Instead, in the American Jobs Act, Obama is proposing a new group of czars as a part of his "jobs" act-- the American Infrastructure Financing Authority (AIFA) czars. President Obamas newest czars will be given the authority to manage over a trillion dollars of federal funding for roads, bridges, buildings, waterways, dams and other infrastructure.
Here we go again. No doubt, Obama hopes that few legislators or American citizens will read the deadly details buried within the 199 pages of his proposed American Jobs Act that will establish this latest czar-ship, nor understand just how expensive AIFA is going to be.
As with Obamas other czars, the AIFA czar comes with infrastructure requirements of his own: staff, office space and technology needed to perform the job. Managing what is in reality a trillion dollar budget is going to require a huge new staff that will, essentially represent an entire new federal agency. Of course, nowhere does President Obama tell us why a new czar is required to manage infrastructure projects. More importantly, Obama does not explain why the vast federal bureaucracy now responsible for these activities must be bypassed and a new, redundant agency is built.
Make no mistake: the AIFA Czar position is redundant. All of the infrastructure projects and tasks identified to be performed by Obamas new Czar are already the responsibilities of the Senate-confirmed heads of Department of Transportation, the U.S. General Services Administration and the Department of Energy.
Roger that. Prosperity causes good roads, not the other way around.
You damned criminals!
Kerry and Hutchison? Make a note of that.
The freaking "Money Fairy" again!
Where, pray tell, does the "Bipartisan Infrastructure Bank" get the money to lend?
It can't exist.
This is just a clone of the "Carbon Credits" Scam.
Create something out of nothing and then force taxpayers to pay for it.
The rubes will never notice...
This has got to stop!
Laws being written by outside groups.
We elect Congress to write needed laws and they allow outside groups to do the actual writing often years in advance.
There has to be something illegal about that.
Can FOIA demands identify who actually has written the horrible laws that have been shoved down our throats the last three years?
HELLO! ELECTED REPRESENTATIVES...
It’s a slush fund that is to be administered by yet another unelected “Special Adviser to the President” (read: “Czar”) who will deftly bypass the Congress completely (along with any prayer of checks or balances) to award money to unions who will return it to Democrat politicians via their dues which the Union will donate on their behalf.
And those very same Democrats will be running on a deficit cutting platform, and playing hero to the common man.
And there are plenty of RINOs in Congress who think this is a marvelous idea.
“infrastructure bank” = slush fund.
In my town, there is a public park with a 4-5 story fire training tower in it.
The first stimulus paid to tear down the perfectly usable tower, and replace it with a nearly exact copy, with possibly a few extra rooms and some kind of shiny siding on the outside. It also has a lovely new cement driveway and big fence around it now.
That’s the sort of “investment” these things pay for.