Politics & Policy

A Conservative Approach to Infrastructure Investment

A freeway intersection is seen in this aerial image above Fresno, California (Reuters: Lucy Nicholson)
No to bridges to nowhere, yes to nuclear, a faster Internet, and R & D

One of Donald Trump’s signature policy proposals has been a massive infrastructure investment plan. This puts conservatives in a bind. After all, didn’t we denounce the Obama administration’s stimulus plan as a massive boondoggle that didn’t do anything to boost the economy but wasted resources? 

At the same time, we should recognize that there is ample conservative warrant for believing that the government should ensure that the United States has the world’s best infrastructure. Most free-market economists agree that infrastructure is one of the few worthwhile jobs that government can do. What’s more, as entrepreneur and Manhattan Institute fellow Jim Manzi pointed out in “The New American System,” in the Spring 2014 issue of National Affairs, government concern for infrastructure was actually a major booster of American prosperity in the 19th century, usually thought of as the halcyon days of small government. Such luminaries as Alexander Hamilton famously favored government public works, as did (less famously) Abraham Lincoln, who expanded Henry Clay’s agenda of investment in telegraphs and railroads.  This communication and transportation network provided the backbone for America’s stunning late-19th-century growth, which made it the world’s richest nation well before it became a global power after World War I. 

There is a good case that now is also a good time to spend on infrastructure. It’s not only that the economy could use the stimulus, which would probably be real if almost certainly lower than breathless Keynesian types would assume, or that interest rates on American debt are at all-time-lows, although those are factors. It’s that American infrastructure in key areas — such as transportation, the Internet, and energy — is subpar, and that quality infrastructure is a key asset in economic competition in a globalized economy. 

But the question remains: What, exactly, does the Trump administration intend to do, and what might come out of Congress, where Democrats and big government are already salivating at the prospect of larding up a bridge-to-nowhere pretend-infrastructure bill? This is an area where conservatives can play a key role, constructively engaging with an administration that holds both great potential and significant risks for conservative-minded policies. Conservatives can and indeed should support a major infrastructure initiative — so long as it is done right. 

Here are some key points on what that might look like. 

1. First come the least sexy but most valuable parts: upgrading existing infrastructure. One major drawback of the Obama stimulus plan was technocratic white-elephant projects such as high-speed rail, which simply makes no sense outside the Acela Northeast Corridor (both literally and figuratively). Meanwhile, many American roads and bridges don’t require rebuilding but do require upkeep and perhaps an overhaul. 

2. That being said, there is still room for some major infrastructure projects. The main problem with these is — you guessed it — red tape. Overlapping federal, state, and local regulations, union work rules, private lawsuits, and especially environmental rules all hold back projects for years, if not decades. To sidestep this, Congress create “a class of federal ‘special national infrastructure projects’ that would be exempted from numerous regulatory and related barriers, granted presumptive immunity from specific classes of lawsuits, and given expedited eminent-domain rights,” Manzi proposes. “Congress should link funding for such projects to special exemptions from analogous state-level and local regulations in those areas that want to benefit from the projects.”

3. At the risk of uttering a cliché, it remains the case that what the telegraph and the railroad were to the 19th century, and highways to the 20th, the Internet is to the 21st. The United States, despite being the nation that invented the Internet and keeps pioneering its new technologies, has abysmally low rankings when it comes to broadband penetration, let alone the best technologies, such as Gigabit fiber to the home. Meanwhile, South Korea, for instance, reaps massive economic fortunes from having high-quality broadband saturation. Because South Korea has such a fast Internet, and the United States’ is so slow, it’s sometimes impossible to load a South Korean website from America — just as you’d never get a YouTube video to stream from a mid-1990s dial-up line. The Internet is so bad in the United States that Google famously started its own fiber Internet service simply to shame American Internet service providers into providing faster Internet service. The answer there is crony capitalism. Collectively, American localities, with the benign neglect of the federal government, grant utilities local monopolies or oligopolies so that they provide Internet access in exchange for wiring them up. As a result, service exists, but lack of competition means it is of poor quality. The federal government should start a vigorous bidding process for whoever wants to set up the fastest fixed and mobile broadband network, with the focus on results and time. 

4. It’s also the case that America’s energy mix could be better. Again, there is a bitter irony. As conservatives never tire of pointing out, the United States has spearheaded an energy revolution in shale gas extraction and hydraulic fracking. This has created a global macroeconomic boon by sending oil prices to the floor, and it may prove a geopolitical game changer by making the Middle East less relevant in global affairs. This astonishing innovation happened behind the scenes and through the free market, even as white-elephant government project after white-elephant government project in trendy industries such as solar and wind collapsed spectacularly (and at great expense to taxpayers). With that in mind, it’s the case that we can’t fund all our energy needs through oil, gas, and coal. They have significant operating costs and are commodities that suffer the vagaries of international markets. Meanwhile, while progressive fears about global warming are overblown, it’s true that the environmental cost of warming is probably not nil. The best energy solution for the future is nuclear, which is safe, clean, and very cheap to produce. Significant innovation has been happening in the nuclear arena in recent years, with technology visionaries such as Bill Gates funding nuclear power as the best energy source for the foreseeable future. The United States should embark on an ambitious plan to get the majority of its energy from new-generation nuclear sources by 2036. 

We don’t yet know whether Hyperloop will become a reality, but the example should still impress us. What other seemingly crazy infrastructure ideas are out there?

5. Some of the infrastructure in which America should invest is infrastructure we haven’t thought of yet. In his spare time, visionary entrepreneur Elon Musk seeded the idea of the Hyperloop, a very fast rail that would suddenly make projects such as a San Francisco–Los Angeles link economically viable and faster than airplanes — an innovation that could have major ramifications. Since Musk put the idea out there, private funders and entrepreneurs have been taking the baton and exploring real-world, economical Hyperloop projects. We don’t yet know whether Hyperloop will become a reality, but the example should still impress us. What other seemingly crazy infrastructure ideas are out there? As mentioned, the Internet has become a crucial part of our infrastructure, and it was invented by a government skunk-works project, DARPA. The United States should establish a “DARPA for infrastructure” that would seek to do the same thing that Elon Musk did with Hyperloop and other infrastructure ideas. 

This infrastructure plan could prove a real national boon — conservatives might well achieve their dream of having a competitive, advanced economy that avoids the pitfalls of self-aggrandizing progressive hobby horses. 

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