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One of the facts about life – and war – is that it is often the big decisions made early, well before you have enough information to make those decisions, that are transformative. It’s the same in business, and it’s the same in the economic life of a nation. “Who dares, wins.” We are at that moment now, as we begin to emerge from the Covid crisis. In an oddly timid America, it’s important to remind ourselves of who we are, and that the great moments in our nation’s history are almost always ‘go big, and go fast’ moments. Sure they involve risk, but that’s who we are, and that is how we built our economy.
Is there anything that makes more sense right now than a swift, deep and strategic infrastructure initiative – one that is forward looking, built on new technologies, and on the strength and creativity of our capital markets?
Infrastructure – bridges and tunnels, highways, clean water, oil & gas, clean energy, space – is peculiar: it benefits us all, is executed by a few, is transcontinental in nature, and while supported by local politicians it only moves forward if there is strong federal backing. The infrastructure cause doesn’t bring us together, but it works because we all come together.
The mighty innovation potential of infrastructure is what should galvanize us. For every bridge, think about 5G; and for every tunnel, think about how smart cities will power opportunity. Not only would an infrastructure stimulus be big enough – the $2 trillion initiative that is generally discussed – it would compellingly engage the imagination of our nation, with whole new businesses built around innovations from space technologies, to driverless trucks, rural broadband and renewable energy.
Action on an infrastructure initiative would accelerate our recovery, which is no longer projected to be a Nike
Peering into the future, here is what we see:
1. There is a clear opportunity, right now. This moment has all the ‘fog of war’ hallmarks that Clausewitz could have imagined, and that are befuddling our news commentators and politicians. Lots of threats: the economy has been driven over the edge, with nearly 40 million unemployed; on an annualized basis, our GDP has fallen by as much as 40%; our national debt, however you want to calculate it, is through the roof, and makes us exceedingly vulnerable in the medium term. So why do more, let alone pursue a great and costly effort, why not wait and see?
2. Inaction is dangerous. The war analogy works right now. The recession, as Chairman Powell has suggested, risks becoming a route. At the same time, voices are raised against any further compensatory action (there has been very little actual stimulus). On the infrastructure front the confusion is enormous, with smoke everywhere: just last night a well-respected economist wrote to tell me that we can’t get projects started soon enough; others are confident that infrastructure projects won’t create jobs fast enough; and still others – the ‘shovel ready shibboleth’ – hold that what’s created isn’t of lasting value. All mighty council for inaction, all false.
500 projects that my research has identified as transformative and ‘ready to go,’ are in fact waiting for action, for government action. Each project has specific job creation figures, and each project is a building block for the future, creating value for the next 30-40 years. More, pent-up demand is extraordinary, with states like Ohio having lost their yearly investment budgets, states like North Carolina have pushed investment 24 months into the future, and other states – Nevada and Illinois come to mind – have all but ceased building.
3. This is a ‘flip the switch’ moment. Our economy needs that decision. We have all the pieces in place, our best minds ready to engage, focused. Let’s put them to work: bringing technology to this old industry; bringing finance from Main Street finance – pension funds and retail investors – to our infrastructure markets; and bringing market discipline to the process – so that projects perform, opportunities are created, our economy is revolutionized.
If you look at historic moments of economic crisis – and this is surely one of the greatest in our nation’s history – it is new thinking that matters and struggles to emerge, while old thinking holds on, slows reactions, or compounds the damage. We’ve gotten through the worst of it, we’re going to recover – let’s flip the switch and invest in that economy that we can all see in our mind’s eye, that will power us forward, but that until now we’ve lacked the courage to create.
