America’s roads bridges, tunnels and rails are approaching third-world status. At the same time, Americans are growing more despondent about the time and effort it takes them to get to and from work. Ask anyone you know if they think their commute is getting easier. They’ll rightfully complain about mass transit delays and crumbling stations, potholes causing costly car repairs and bridge closures.
What’s worse is that we have come to accept these problems. As Americans, it is fair to say we don’t even have first-world expectations any more when it comes to our infrastructure.
Gridlock in Washington doesn’t help. But in the aftermath of the meeting in late April between the president, his staff and Democratic congressional leaders, perhaps we can allow ourselves a touch of optimism.
Things have gotten so bad that nationwide infrastructure investment is now a partisan issue. It is said there is no Democratic or Republican way to plow the snow – just the right way and so it was similarly said for transportation investments as well. Sadly, that view is now in the distant past as is evidenced by the partisan divide over building new train tunnels under the Hudson River. But it does seem after that meeting that there is now some effort to revive this spirit.
Even so, we still need some new thinking. That is why a proposal by Leonard Schleifer, the chief executive of Regeneron Pharmaceuticals, might make great sense. Writing in The New York Times, Schleifer proposes that we tap into businesses that stand to benefit from infrastructure improvements — and by extension their wealthy investors and pension funds. He suggests that for each of the next three years, every American public company be required to issue one percent of its equity in the form of new stock to a newly formed infrastructure “bank.” Given that American public companies have a collective market capitalization of about $30 trillion, this would raise about $1 trillion in three years.
The corporate stock contributions would be based on the number of shares a company has outstanding, not whether it makes a profit. The $1 trillion in stock would form the capital of a vehicle that would provide grants or loans to support worthy infrastructure projects. Although detailed mechanisms for issuing the stock and managing the portfolio would need to be defined, this plan should be more palatable than an income tax because the benefits would be tangible and obvious.
Schleifer makes the valuable point that rather than giving equity away these companies would literally be investing in their future. Last year the White House Council of Economic Advisors estimated that GDP would increase by as much as $13 billion for every $100 million invested in in infrastructure. By any standard, that is a good ROI.
Nonetheless, corporate America and its shareholders will vigorously fight this proposal. They probably should but this proposal is certainly more logical than essentially doing nothing, which is really where we are right now.
We need to have first world aspirations when it comes to our transportation system. Whether you’re in the one percent or the working class, we all use the same roads and suffer the same problems.
Schleifer’s proposal may be the way forward or not but what’s certain is that we are all stuck in gridlock – on our roads, on our rails and in our nation’s capital. As citizens and as a country we are all dealing with the consequences.
Gregory Lalevee is the general vice president of the International Union of Operating Engineers and business manager for IUOE Local 825.