Monday, October 20, 2008

Spending Like There IS A Tomorrow

There's a growing consensus in the United States that this is no time to be waging war on deficits, just the opposite. The idea, proposed by Krugman and others, is that the US government needs to stimulate the economy by a variety of means, a key one being infrastructure projects. In essence they're talking about a new New Deal.

Unlike government giveaways, infrastructure projects are an investment, the sort of thing designed to reap big dividends in years to come. They're also a means to introduce major technology shifts.

Why restore obsolete or unproductive infrastructure? Maybe in the future the rising cost of fuel will mean you won't need three highways in some places but only one. Restoring all three, therefore, would plainly be little more than a glorified, make work project.

However, past experience shows this sort of depression-era infrastructure spending can, by its very size, allow governments to introduce new technologies and major changes that would otherwise have been impossible.

Look at Germany in the 30's. Monster that he was, Hitler's Nazi government brought that country back to life through some key pre-war infrastructure projects ranging from public housing to autobahns. Similar benefits came to Americans from Roosevelt's interventions which are neatly summarized in this from

"Together with a plethora of well-built public schools, libraries, post offices, parks, water systems, bridges, airports, hospitals, harbors, city halls, county courthouses, zoos, art works and more, New Deal initiatives spread the wealth and enriched the lives of uncounted Americans."

Most of North America is well overdue for a serious makeover. There's the essential infrastructure decay that needs fixing - water and sewer systems in many Canadian cities, for example. But there are also opportunities to get our nations aligned for the 21st century realities. I'll give you an example.

Rail transport. We know that rail is up to five times more fuel efficient for transporting freight over great distances than long-haul truck transport. Unfortunately the rail system we have today isn't up to the job. What if the government was to commit to a mega-project to construct a new, high capacity railway system for the 21st century? Use rail in lieu of trucks. Not only would it reduce fossil fuel consumption but it would make the transport of goods far more affordable. Trucks would be used for short and medium-haul delivery, not inefficient cross-Canada transport.

I'm sure there are several other equally sound ideas for overhauling and modernizing Canada's infrastructure to meet the changes we'll face this century. Let's identify them, see what can be done and what rewards we'll reap from them in the future.

If you see this as just standard, socialist babble, take a look at the 401 highway from Windsor to Montreal. Read about the old, pioneer path 2-lane routes it replaced and then learn about the role this one superhighway played in Ontario's economic rise in the postwar decades. Once you've digested that, you can come back and rail on about socialism. Look at the expansion and development of secondary airports and microwave communications and the role they played in opening up Canada's north and then you can bleat anti-socialist mantras.

We all pretty much realize that a real future lies in so-called green industries, everything from carbon capture technology to alternative, clean power projects. Those are industries that will create jobs and wealth. What better time to kickstart things like that?

Of course it will take a government with real vision to recognize the opportunities and exploit them for the benefit of the country. I doubt very much that's within the scope of the one-dimensional administration we have today.


Anonymous said...

Sounds like socialism to me.

(grin, i couldn't resist)

Excellent points.

The Mound of Sound said...

And thank you very much for that Joseph, you damned pinko!

Anonymous said...

Can you name a single conservative government anywhere that, in the past 25 years, has run a budget deficit to finance infrastructure projects rather than tax cuts and foreign wars?

The Mound of Sound said...

No, doz, I can't and that's why I expressed my reservation at the one-dimensional leadership we now face. Reconstruction, revitalization are, by their nature, genuinely progressive undertakings.

Anonymous said...

"Of course it will take a government with real vision to recognize the opportunities and exploit them for the benefit of the country. I doubt very much that's within the scope of the one-dimensional administration we have today."

It will be up to the people of
Canada to care enough and make the government do it. Oh!! For the love of country...don't become to Nationalistic...a good dose of "my country first" could do Canada a lot of good. On the other hand, how many trucking companies will go under with a 21st century introduction of the latest railway system? And what do you think any government would do if pressured enough not to build the same? It's like trying to put into force, a decent wage for working people......employers don't want to hear it and so governments ignore it. The mind-set has to be changed and the only place that is going to happen is in schools beginning now. It will take 12 years and an additional four years before those people hit the employment system. However, a group of people hammering the point could make a difference to tunneled vision fundamentalists. Morris

The Mound of Sound said...

Well, M., I don't see the shift from trucking to rail as quite so problematic as you suggest. I believe that, before long, world oil prices will dictate the adoption of the most fuel-efficient transportation for long-haul shipping. That, and of course, the fossil fuel/carbon issue.

We live in a world that has become dependent on long-haul shipping but the cost factor is already becoming problematical to producers, retailers and consumers alike. Truckers themselves are feeling the pinch and may be squeezed out.

Things change. I often wish they didn't but they do and that leaves us to change and find the best strategies to adapt.

We're only beginning to understand how unregulated corporatism can cause as much harm as good, sometimes less, sometimes more.

We're on the edge of an era of widesweeping and fundamental change that will cause us to remodel our societies, our economics and perhaps even our politics.

Look at the forces at work today: population migration, freshwater exhaustion, resource depletion, species extinction, desertification, overpopulation and, yes, global warming. As jared Diamond explains in his terrific book "Collapse" we have to deal with each and every one of these problems. We have to solve them all. It won't do to solve all but one. That simply won't work.

So, something as logical as reverting longhaul shipping to rail instead of trucking not only makes sense, but it will become just another adaptation technique.

Anonymous said...

MOS....I'm all for railways. It wasn't my intention to leave you with the opinion I don't. As I see it, change is what most people can't deal with....even you so you say. I live in a country where train service is excellent. I use it all the time. As for Canada, a train hauling system is the best, the best way to go. However, I do see where some reluctance would exist. In Newfoundland, CPP took out the whole rail system and that province could definitely use rail freight movement. A. Morris

Anonymous said...

That should read CN Railway. Morris