Jobs: Saving American Society from Structural Disaster

As the midterm elections approach, the political topic on everyone's tongue is jobs. The discussion in the popular press, such as it is, takes several forms. Lately, the most common question one hears is how come the economy in general seems to be recovering from the recession (this was true until just a week or so ago) but the unemployment rate is so stubbornly high? The fact that corporate profits are high has also been mentioned repeatedly since itg was first introduced about a month ago: $1.8 trillion the larger corporations are sitting on (that's the number being endlessly repeated, without evidence that it is accurate, by the way), but they're not spending it, and hence not hiring--why?

Several kinds of explanations have been adduced for the discrepancy between supposedly incipient recovery and the unemployment rate of over 9.5%. One, which Republicans favor, is that the investment environment is very uncertain because of Obama Administration policies. Business planners don't know the real costs of the health care bill; they know the bill will cause them to have higher costs but they don't know how much higher. They universally deny that the bill could possibly be revenue neutral even for the government, and they are correct, since most of the things that have to happen to make it revenue depend on action Congress has yet to take, and almost certainly never will because it requires courage; but they are certain it will add to costs in the private economy. They don't know if some sort of carbon tax, whether cap-and-trade in structure or not, will pass Congress in the next year or two. That would also add to the cost of doing business. And financial markets remain unstable, and with the new financial regulations bill, too, more uncertainly is added to the mix. Some companies are holding companies that own banks, and until they see how banks figure out how to apply the Volcker Rule, they can't calculate what their overall portfolio looks like. Uncertainty breeds hesitation, and companies want to hang on to cash in uncertain times.

Another explanation, not necessarily contradictory of the first, is that economists underestimated the impact of public sectors layoffs. I think this is true; indeed, I implored one my authors, Desmond Lackman, to take it more seriously when he was preparing his excellent article on the coming double dip. And he did. But a lot of economic analysts who focus on national-level statistics did not realize how broke most of the state and counties were, and how little the so-called stimulus bill made a dent in their circumstances. The layoffs have been huge, and have offset hiring in some other sectors, including manufacturing.

These explanations are at best partial, however, because they are superficial. There's a lot more going on than this, and while I used to be reluctant to voice my views on this kind of thing, my not being an economist and all, I have lost a lot of my reluctance since it has become obvious that most economists don't know what they're talking about. Besides, this is just a blog, and it's August...

First, it is already obviou--has been for a long time--that this is not a "V" recession but more like a "U" or "L" recession: Many jobs that existed when all this started are not coming back. The industries in which they existed have either died or retooled. We have witnessed a massive substitution of new capital for labor in productive processes in recent years, and a lot of this has had to do with IT-related inputs. We have exported a lot of jobs, yes, some of that made possible by the death-of-distance phenomenon made possible by IT. We have allowed a lot of illegals to be hired, too. But most of all we have exported jobs to ourselves as teched-up consumers--think when you last had to deal with a bank teller, a gas pumper, a typist at an office, a telephone receptionist, even a grocery store checkout clerk.

It does not take a rocket scientist, or even an economist, to see that productivity increases are predicated on this capital-for-labor substitution, which has accelerated sharply because of the shake-up of the past two years. One of the reasons, of course, is that the cost of labor has gone up sharply as health care costs and related benefits have gone up--another reason why it is tragic that the so-called health care bill isn't a health care bill at all--just an insurance bill, that did nothing whatsoever to understand and get a grip on cost escalation. (TAI has also focused on that, and we have the best essay anywhere on the basics.) And this process of substitution is going on not only in the United States, but practically everywhere, including China and the Asian rimlands. This more than anything else explains how economic activity can become increasingly decoupled from employment figures.

Also,just by the way, there is a strong likelihood that the numbers we're using are inaccurate, but that's another matter. The way we collect these numbers embeds certain biases in the figures, as Ryan Streeter pointed out in TAI several issues ago. Most likely unemployment is even higher than we think on some counts, and not just because we don't count people who have stopped looking. But unemployment lower on others as people try to avoid taxes by moving into cash or barter economics. I am not talking about rich people, who always try to avoid or evade taxes if they can (and they often can). I am talking about people in service economics mostly who feel squeezed and to keep ends meeting have to shave expenses. They can do this by going off book, and I think we vastly underestimate how many people do this as a natural course of behavior. Lower middle class tax avoidance by this method is perfectly natural and in a sense fair, except that it burdens middle-class salary makers disproportionately. So what's new? How does it balance out, between our underestimation and our overestimation? Is 9.5% right, or is it closer to 8%, or 13%. I don't know; it would make for a terrific research project for those with the means -- maybe a Nobel in economics awaits.

The Democrats, it will be recalled, rolled out a few weeks ago a so-called manufacturing initiative. This was two parts hilarious, two parts pathetic and one part just stupid. The so-called initiative really wasn't; it just mainly renamed some other programs already out there for other reasons. They apparently thought voters would be too stupid or lazy to notice, and of course that's right. So now they can claim an initiative, which doesn't exist. This initiative's main element is to tax companies that export jobs. How that encourages new start-ups or actually helps revive manufacturing is a little hard to see. What these nitwits seem not to get, too, as Charles Davidson, TAI's publisher was quick to notice, is that any initiative that promotes a renewal of manufacturing is, under present conditions, going to accelerate the substitution of capital for labor and thus lead to a future with even fewer good jobs. So is it a good thing, then, that the Democrats' initiative is a sham? Not exactly, and now we come to the gist of the matter.

We have a structural problem with the economy (structural as opposed to cyclical in econ-speak), and with the labor profile that goes with it. This is the word -- structural -- you now hear a lot, a word I was using regularly to describe the situation at least 18 months ago. Of course this refers to a rapid shift in the labor profile as new investment becomes sharply more capital intensive and as global trends continue to send shock waves against national economies, including even very large ones like our own.

But the structural problem goes deeper than that. Here is what else is going on that contributes to the current structural situation. Americans are saving more, which is good. This leads to lower aggregate demand, which is also good if you care about the environment, bad if you care about the speed with which money moves to stimulate spending. Ah, but Edmund Phelps understands that what lower aggregate demand means is a whole lot less than it's cracked up to mean. He at least remembers Vilfredo Pareto, the Italian wise guy who substituted the concept of preferences for the older idea of utility. The Keynsian macro-economists have it wrong; people don't make choices just on the basis of rational value-added calculations. The micro approach that emphasizes preferences has it right, and right now Americans are in a new mood. Some, at least, are asking why they've been buying bunches of junk they don't need. Some are concerned about hyper-consumerism on the environment, if not also on their own mortal souls. It's about time. In short, I suspect that a cultural shift underlies the co-called weakness of "consumer confidence", which is a total misnomer for what is happening. It's not just that a lot of people are worried about overextending themselves, though that is part of it for many, it's that increasing numbers of marginally more intelligence people are re-thinking their styles of living, their priorities, what makes them happy and satisfied. Partly this is a generational change. A lot of people don't lack confidence; they're just not as foolish with their time and money as they used to be. When Time magazine, or all things, runs a cover story on "The End of Excess", which it did last year, you know something is cooking.

If this is true, it means we cannot go on, or at any rate seem not likely to go on, as we have constantly generating artificial demand without end. We cannot forever invent pointless new gadgets--we really need a new razor with 6 blades instead of "just" 5, don't we?--and throw billions of slick advertising dollars at them to sustain the economy on an upward tilt forever. And let me not leave this point too soon: science-based corporate advertising represents a kind of Weapon of Mass Deception (WMD, yes....). Do you realize that when a TV ad for some hot car shows you a sleek black vehicle with a hot blonde standing over it, saying "I love my whatever-it-is", that dopamine actually flows into your nucleus accumbens? The association between the sex object and the car for sale established by the ad image actually changes the neurotransmission sequences in your brain. The images create those pathways, and there is not a thing you can do about it, because human beings did not evolve over hundreds of millions of years under conditions in which their visual field included mediated images (as opposed to real ones) that could be rigged to deceive them. We have no natural defenses against such deliberate uses of neurochemisty to harvest us as consumers, anymore than Pavlov's dogs were capable of outsmarting Pavlov and screwing up his operent conditioning experiments. Man, would people really get angry if they knew this.....

Well guess what? People are figuring it out. And for that any other reasons it is going to get harder for corporations to sell people lots of crap they don't need. I think we may be coming to a point, ever so slowly to be sure, where the value-added content of new products is going to have to be persuasive in a way it has not been heretofore in order to get large numbers of people to buy them. I think, I hope anyway, that people's idea of what is and is not a "bargain" is finally starting to change, by which I mean to heal from the fetish-like sickness in which it has rested for about the past half century. (TAI reviewed a recent book by that name recently--I commend it to you.)

What this means is that economic growth beyond what population increase implies is going to depend increasingly on invention, innovation and that, in turn, depends on supporting entrepreneurial activity. That's what the Administration does not seem to understand, though it has gotten the same advice from just about everyone with a brain. But there are fewer people with a business background in the Obama Administration than any in American history. These guys are on balance hostile to business. The stimulus was just for union constituencies involved in old, shovel-ready projects. This was a stupid way to spend that money, and there is still zero sign that these guys know where new jobs come from. They come from high-tech start-ups and smaller businesses, which in turn thrive in investment-friendly conditions. The Obama Administration's bigger-government, higher-taxes approach to everything points in exactly the wrong direction, of course. They say they understand this, of course. Sometimes I think the President actually does understand it at some level. But where's the action? Where are the genuine initiatives? This is what comes of ceding authority to people like Harry Reid and Nancy Pelosi (not that most Republicans have shown any great acumen here either).

Truth be told, what we're witnessing now has been a long time in the making. It has a history. About 50, 60 years ago a lot of observers predicted that because of automation we'd eventually end up with overproduction, deflationary danger and structural unemployment. A lot also predicted that this was how the Cold War would end--through convergence forced by technology. We'd have a situation where less than half the work force would produce all anyone wanted or needed, and we'd have to figure out what the rest of the population would do to get its share of the goodies. If they did not have salaries because their labor was superfluous, how were they to live? What would they do, and how would they earn money? You can see where this is going, or seemed then to be going: The government would have to distribute the goodies. We would not necessarily have to collectivize the means of production, but we would have to collectivize the means of distribution. That's what a welfare state is to some extent, but these observers were talking about countercyclical policies much bolder than those of the welfare state.

This problem is essentially the same one Bismarck recognized in the middle of the 19th century. It's where his proto-socialist ideas of social inclusion came from, because he was worried about alienation and revolt. What these worriers did not see was that new technology could produce whole new industries that produced more good new jobs than the old machines took a way. It was dynamic and unsettling, but standards of living could rise fast.

When it dawned on people that this seemed in fact to be happening as the 19th century rolled on into the 20th, and that automation was not producing unemployment but growth and new structures of economic supply and demand, other questions arose. What about education? As the jobs got more technically demanding, wouldn't people have to know more? Herbert A. Simon took up this question in a 1964 book (The Shape of Automation) and concluded not really. He estimated that even if the share of capital in the economy as a whole increased by 3% a year, a workforce educated on the level of Japan or Western Europe, at the time lower on average than the U.S. levels, would be fine.

Simon was right for a while and those who feared the downstream impact of automation wrong, but I doubt he still is right, and I wonder sometimes whether the automation Cassandras were not so much wrong as premature. I think Simon may have underestimated the compound impact of IT-related value-added processes. I think we might be reaching limits here, and this is where our real problem comes into play -- this is what "structural" really means in practice.

I think the substitution of capital for labor is accelerating rapidly, and I think IT is largely responsible for the current wave of substitution--and it has a generic and generative impact other technologies have not had. It's not like a machine but like a machine tool. I think too we may well be moving into a situation, in a global scale, where comparative advantage is leaving high-wage jobs permanently scarce in the United States. If manufacturing at nearly all levels can move, largely thanks to IT, to find its level of highest sustainable profit, it will. Not that profit margins alone motivate employers. They, too, factor in all sorts of other considerations, like stability, community quality of life and so on, just as consumers do. They will pay higher wages in order to keep cadres of workers who know each other and perform well in teams. On balance, however, nearly everything can move now -- except maybe roofing.....--and it will, possibly until all the world's relative labor costs even out. And since there are still 800 million poor people in China, that's going to take quite a while. Either that, or the world will become sharply nationalist-protectionist as dispossessed citizens try to stop the global juggernaut, which could happen and which, under certain circumstances, would be understandable and could even be morally justified under some circumstances (though the thought of what political opportunists could do with such energies is truly horrifying).

It could be, in other words, that we could face a very large, more or less permanent massive unemployment situation -- unless we innovate like mad, and to do that we'll have to educate like mad. And here is the problem there: Pretty soon, for reasons concerning immigration and demography, most of our young people will be from minority groups that have a history of not learning very well. Let us not be coy: The reason for this is not mainly unequal educational opportunities, though there is plenty of that too, no doubt. The reason is cultural, and there is a strict limit to what public policy can do about this. NCLB cannot fix this, but to a limited extent. Kids who are not spoken to and read to at home start school is very inferior positions compared to other kids. A lot of this has to do with family stability, with having a mother and father in the house paying attention to and loving the children. The data on kids in minority groups growing up without fathers is appalling, and it is getting worse, not better. Schools alone can't fix this problem, and it is fast becoming not a humanitarian problem affecting the so-called underclass, as it has been since the Moynihan Report, but a core economic and social problem on a national level.

This is why I am on most days pessimistic not so much about the American economy--which remains capable of innovation and hence extensive growth--but about American society: We are going to have ever huger numbers of essentially unemployable minority citizens, a schizoid society as a result that is even worse than it already is. They won't be able to learn enough to take the higher value-added jobs an innovation-based global economy will generate. They will be competing not just with other Americans, remember, but with a global labor force in many if not most areas. The prospects fills me with dread.

Is there nothing we can do about this? No, in fact, there is plenty we can do. We can solve the problems ahead with structural unemployment, but it will take boldness, imagination and some political courage. Which means it probably won't happen. I think just two major programs would do the trick, at least to start.

The first, which I have written on before, and for years, is that we need a Baby Bond/National Service program. I have described this at length in an earlier post, and so will not repeat it here; TAI has also featured a milder version of this idea in print.

The second is a new Homestead Act. We need to get otherwise unemployable people out of the sinkhole cities in which they live in a spiral of hopelessness. We need to get them back on the land, increasing dramatically the labor-input of agriculture. We need to turn America into one huge environmentally self-sustaining garden, understanding what that word really means. We will solve the problem in American agriculture this way, too; the way we grow food in this country is environmentally unsustainable, unhealthy and utterly corrupt. Americans are obese to the extent they are largely due to the alliance of agribusiness, the fast-food industry and, of course, advertising...... Note too that about 9.1% of all health care expenses in the United States are spent on obese people, who are vastly more likely to be struck by disease than non-obese people. Folks, 9.1% is a very big number as these things go. I love it when I read ad posters on the DC Metro from the corn growers, telling me how efficient they are and isn't that wonderful. Right; all that high fructose corn syrup in nearly every damned processed food product in the store is making us sick. Thanks for being so damned efficient, you hogs.

We need to increase the number of smaller farms and cooperatives by at least 1,000% in a decade. I have a plan for how to do this--a kind of combination Homestead Act, CCC and GI Bill. It definitely can be done. It would stimulate the economy in many ways, teach millions of Americans touch labor skills they need to know, make the country vastly more healthy and help save and sustain our soil.

These two programs, the Baby Bond/National Service program and the New Homestead Act, taken together, can save the country from the disaster of permanent structural high unemployment and social upheaval ahead. Is our political system capable of generating serious change? Can a flock of pigeons perform Beethoven's Fifth?

What a morning

It has been more than a month, again, since I posted anything. I would apologize to my regular readers for this lapse, except that there are none--or at any rate, very, very few. I doubt I have disappointed anyone by being so absent from this page, but in case I am mistaken about that, I apologize.

It's not because nothing has happened worth commenting upon, or because I have been unusually thoughtless. Rather, it is a combination of three factors that have kept me away.

First, I have been very busy putting to bed the September-October issue of The American Interest. This issue is always sort of pain because a lot of it has to be done after the academic year is completed, and it is hard to get lots of people to do anything after a certain set of days in May. Also this time we devised a feature on the future of the U.S. armed forces, which locked me into dealing with a series of authors who, with almost no exception, are not particularly good writers (they have other virtues, to be sure, that are arguably a lot more important), who I have never worked with before, and who were generally late with their submissions. It all turned out fine, but it did not leave a lot of leisure time for blogging.

Another reason, however, for ignoring this blog in recent weeks is that I have to confess I had hoped that at least a few colleagues would take to reading it. None have. Indeed, I have come reluctantly to the conclusion that pretty much no one reads anything I write. My book Jewcentricity, published about 10 months ago, has been almost totally ignored--I know of only two short reviews in train, both positive but neither yet published. I published a review of Peter Beinart's new book The Icarus Syndrome in the July 19 issue of National Review (because they asked me to do it and offered money.....) As far as I know, no one has read it, except for maybe the copy-editor over there. Even my publisher seems not to read my essays in The American Interest. He was making all sorts of noises about the futility of the war in Afghanistan the other day, and complaining that the magazine had not pointed out all this. I, as editor, he implied, was responsible for this. I reminded him that we had, too, pointed these things out, most recently in my piece called "Disconnected" in the May-June issue. The magazine over the past five years has run at least a half dozen major pieces on the war and related matters, as well -- all critical of then-present policy. He remembered some of the other essays, I know. But not mine, apparently. He said, in effect, "well, you didn't put your piece on the cover, and you're not famous, so that's why no one reads or remembers what you said." Hard to reply to a remark like that, so I didn't. I guess he's right. That won't persuade me to put my own work on the cover, however.

I am certainly sure some days that I am not only not famous, and that no one reads what I write, but that I am in general doormat material par excellance. Take today.

Today I had to get up very early to make a 7:45 doctor's appointment--just a simple little tryst with my friend Dr. Martin K. to check on how a new blood-pressure medication is working. (It's working well, thank you very much.) But the Ride-On bus broke down just about 200 yards from the Metro. The driver seemed to lose his transmission. He found it again, because the bus got to the platform sooner than many of us did walking away from the breakdown. We just missed a train; those who hung with the bus made it. That's a pisser, ain't it? And it is very muggy today, so that by the time I'd walked that short distance I was already in a sweat--despite my short-sleeve shirt and casual pants. (I only wear a suit and tie in summer when there is some compelling reason to do so.)

Then I found that in addition to blood-pressure tests, I needed to get blood taken to test my potassium and vitamin D levels. Hell if I know what for. "Oh, no"--I say to myself, and here is why: Since changing insurance plans some months ago, I now have to go to a lab, in the same building as the doctor's office, that takes at least an hour just to take a vial of blood--this as against the lab I used to go to where the whole process never took more than ten minutes. And sure enough, the same three slow-witted, slow-moving, dialect-afflicted women managed to waste another whole hour of my time shuffling paper and turning in random circles. It's not just my time they waste, of course, but I can't say I particularly care about what happens to anonymous others, except theoretically. I always have a book with me to read to fill the gap, so the time is not really wasted. But still.....

Eventually I escaped the medical maze and walked back to the Metro, picking it up at Friendship Heights. It's only a four-block walk, but again, because of the humidity, I was re-drenched by the time I get to the Red Line. I took the train to my usual stop, Dupont Circle, and, once again, there were no up-escalators working. This was the case for several days running last month. It is hard to understand how a repetitive and predictable problem like that can go unrepaired for so long, and then recur in almost no time. Today, there was an escalator working, but it had been designated a down escalator. Go figure.

And please understand: We are talking about one of the deepest stations in the whole DC Metro system. There are something like 160 steps from bottom to top when the escalator is frozen, and there are no working elevators on that side of the station either. So some people, older people, obese people (of whom there are shockingly many) have real trouble making it up those steps. It is not good for their cardiac situation. They slow everyone else down, too.

The sheer incompetence of everything about the Ride-On and Metro systems is a wonder to behold. And no one, as far as I can tell, ever gets fired or reprimanded for repeated demonstrations of incompetence. So it continues. This is also the jist of the recent NTSB report on the fatal June 2009 Green Line crash that killed 9 people. Those running the system day to day are poorly educated, present-oriented people with very little sense of responsibility for outcomes, and the system of governance, which is really to blame, lets them persist in it. It's hard to get past the suspicion that Metro is mainly a jobs program for an unfortunately poorly educated minority, and that this is at the bottom of the reason why it is so screwed up. But you're not allowed to say that, because saying it raises accusations that you don't like the minority. Nothing could be further than the truth in my case; what I don't like is the systematic educational disadvantages afflicting this minority, which has a long and complex explanation I have no intention of going into here.

Anyway, so once spewed out of the Dupont Circle exit I go over to the pharmacy to fill my prescription for this blood-pressure medicine. Same people over there except for one new trainee, apparently. The woman who usually takes my script took my script, but instead of taking it to the pharmacist while I begin to wait my ten minutes, she stopped to answer a question from this trainee that inflated itself into several questions, a rant and a harangue taking many minutes to rise and fall. All the while, my script has not made it into the hands of the otherwise idle pharmacist. I did not say anything. Eventually, I got my pills. And then eventually I made it to my office.

And so I considered the morning thus far: I had woken up at about 6:00 am, and now it was 9:30 and I had yet to breakfast. Thank you Ride-On bus system, thank you idiot lab-tech administrators, thank you clueless Metro escalator mechanics, thank you oblivious pharmacy counter clerks. All I can say is that I am deeply thankful that I did not need to make a stop at the bank or the post office. Oh Lord, anything but the post office......

Now for the long-awaited third reason (thought I had forgotten, didn't you?): Blogging is a lot like exercising. If you get out of the habit, it's hard to get back into it. But once you do, you find you have more energy than you imagined possible, for both.

I definitely need to get more exercise, now that the magazine's offices have moved a floor up and I no longer have a shower to use--meaning I cannot commute part way by bike anymore. I did that, from my house in Potomac to the Metro and back, four days a week in the Daylight Savings Time period of the year, for 10 years -- 14 miles roundtrip. It was very good for me, and now I can't do it, because I cannot seem to find a way to replace the shower. All the gyms downtown refuse to let me keep my street cloths locked up over night. They expect people to walk in in their street cloths, change into gym cloths, and change back to leave; what I want to do is just the opposite. The only facilities they have to keep stuff overnight are these tiny wire baskets. They will not make an exception, which they have the physical ability to do. I have asked. I have offered to pay more than regular. They won't do it. The clerks are not paid to make decisions, and they seem not to care: They follow the SOPs to the letter, and their superiors let them. But that leaves me with no option, except maybe to join the Cosmos Club (where I had drinks a few weeks ago with my friend and member Dov Zakheim). But I think I can't afford it, or rather, choose not to afford it

It is clear that if I were famous, not only would people read what I write, but I could get some customized service at the gym. Maybe the elevator at Dupont Circle would always work, too--who knows? If you're going to fantasize, don't pull punches. But I don't know how to get famous (and I am not at all sure I want to). So I suffer or, in Cartesian form: I languish, therefore I am.

But what goes for exercising goes for blogging--that, I think, was my point here. If I just make myself do it more, I'll be able to do it more. That doesn't mean anyone will read it. But so what?

Now that I have wasted your time, dear non-existent reader, with pap and persiflage, you are probably wondering whether I have anything of actual interest to say. Of course I do. Since we're on the subject of incompetence, and incompetence related to infrastructure (buses, trains, health-care system...) in particular, let's stay there for a bit.

We have in The American Interest, as you ought to know if you don't, an ongoing project called "Nation-Building in America" and infrastructure renewal is a subject I have been trying to get covered, to no avail.

To be specific, I have sought for The American Interest an essay on how we should build a 21st century infrastructure for the economic and broadly social good of our country. That, apparently, is where the simple part stops. That is because I define a 21st century infrastructure as an integrated structure that encompasses energy, transportation, communication, airports, water/sanitation and all the rest, bound together by an IT-driven central nervous system. We all know about the “smart grid”, but that’s just about electrical utilities. I am talking about something an order of magnitude above that. I am taking about maximizing the synergies among developing technologies, and I am talking about skipping a technology generation to acquire a truly advanced infrastructure that can serve as real productivity value-added for the economy. It’s not exactly like the opportunity Japan and Germany had after WWII, where the Allies had destroyed their legacy systems, but we’re in such bad shape that it’s almost analogous.

Yet the government seems clueless. The stimulus program was about shovel-ready projects--old technology that it's foolish and wasteful to fix--but of course that that also a jobs programs and little more. The Obama Administration's new investment in railroads is nice, but it's a one-off. It is not integrated into anything, as best I can tell. The President is just jealous that French and Japanese and Chinese trains can go faster than ours. That's what he actually said, in the State of Union address, no less. I waited to hear a vision for infrastructure that was economically sensible and sound in terms of engineering principles. Nothing doing. If this guy is really so smart, why is he consistently so disappointing?

Now, I am not a centralization freak; on the contrary, I am more impressed by the efficiencies of subsidiarity. But there are some public-goods functions that can benefit from technical and engineering synergies, and I think infrastructure in an age of rapid IT advances is one of them. We want an infrastructure that’s efficient in thermodynamic terms, but also desirable in broader social terms, because we know that the choices we make about technology affect social patterns, attitudes and behaviors (think internal combustion engines, highways, suburbs and drive-ins....or think the Pill, for that matter — not all the shaping is spatial in nature). We don’t get integrative efficiencies from dumb luck. They require some planning, some forethought. They also require a capacity to trade short-term for longer-term benefits. Why, for example, do we still keep so many of our power and telecommunications lines up in the air, where they’re vulnerable to every passing windstorm, instead of burying them? Partly because we’re incapable, it seems, much of the time, of front-loading a long-term investment.

Seems to me, too, that if we now need some aspects of this system to be national in scope for the sake of efficiency and rational management (say, the telecommunications piece), then we cannot keep doing on the state level some of the things we’ve always done before. How much sense does it make to have 50 separate licensing schemes when the technology is of national (and international) scale? (Though perhaps there are some functions that would be better de-federalized and given to the states.)

And it seems to me that the principle of modularity needs to be built into a new infrastructure, so that just as newer avionics packages can be put into old airframes (to a point), technological advances can be instituted in infrastructure systems without having to start over every time some component ages. Now we face a mountain of costs because we have let systems age so badly. If they had employed modular designs, we would be able to upgrade without that mountain being so high, and that should be our aim in the future: to use modular design, insofar as possible, to space out our investments, so that maintenance is a form of upgrading, again, insofar as possible.

Moreover, I want this essay to consider what the role of government ought to be to promote (not to own and manage) a new infrastructure. That is what the whole nation-building project is premised on: that if you want genuinely new and better policies leading to better outcomes, you need to consider the design function, because old bureaucracies can rarely do new and different things well, or do them at all.

There are some people I know who argue that government should have zero role in infrastructure, that it all should be privatized. I regard this as an insane remark, but actually, so do most of the people who assert it — because the moment after they got their liberatarian rocks off, so to speak, they acknowledge all the “exceptions” in which some government role was necessary. If you add up all the exceptions, there’s not much ideology left. Any reasonable and historically literate person knows enough of the history of the canals and roads and railroads and telegraph and so on to realize that we need government for a variety of purposes: licensing to ensure health and safety and rational use of scarce public goods, providing an understory market for new technologies, basic science and R&D investments, and so on. There is a logic to some kinds of public monopolies, after all.

The design problem in this regard is that we need a place where the partners and participants involved in building a new infrastructure can convene to decide what to do and how to do it. I have a hard time seeing how people who build electricity grids, people who build road systems, people who build trains and light rail, people who do energy infrastructure, people who do fiber optics, people who plan airports, people who think about financing such things, people who consider safety and environmental issues (one of several necessary governmental functions) and so on, will all somehow get together on their own accord within a private-market framework to plan an integrated system. Without such a place to convene and plan, we will get incremental developments at best, and possibly developments not up to efficient scale. We will get a system that is less than the sum of its parts rather than more. As things stand now, there is no such place in the Federal government, nor is there any interagency arrangement substituting for such a place.

Now, I am mindful that even if a concept for such a place were developed (say, merging the Dept of Transportation, the non-military side of DOE, the FCC and the NTSB) there is a good chance that the U.S. political system, as presently constituted, could not do this right. (Look how the Feds messed up the original DHS proposal to create the dysfunctional monstrosity we have now.) The opportunities for distortion, corruption and God-knows-what are almost too large to imagine. But is that a reason not even to think about it? Moreover, seems to me that the promise of a really major leap forward could attract significant private sector support. Oddly enough, in this economic climate, it may be easier to think and build big than to persuade people to go further into debt to fix already obsolete bridges, rails, roads, water/sanitation systems and so on.

I have explained this project to a few sets of authors in recent months. Some tried and failed because they ignored the governmental piece, after promising me they wouldn't; some did not understand what I wanted to start with. I just don’t see the problem here. I don’t say it’s easy to think practically about this — a writer or team of writers would have to understand both the technical side and how the government works — but this isn’t rocket science. And I am not asking for a book or for the final word: I just am asking someone to start a useful conversation, that’s all. What’s the best infrastructure for our future we can think of, and how do we need to organize ourselves to translate vision into reality? As I said to begin with, simple.

I think I have finally found an author who understands what I want and can do it. We'll see. In the meantime, I went with some optimism to the newly opened offices of Building America's Future (BAF) here in Washington. This is, supposedly, an infrastructure renewal project co-sponsored by Governors Schwarzeneggar, Rendell and Mayor Bloomberg. I told the head of this office, Marcia Hale, that I wanted to help them get out their message. Come to find out, they have no message. They do not have any version of even 2,000, let along 4,000 or 5,000 words they can give me for TAI. So far, it seems, they have only a PR stunt, a minor upper-middle-class jobs project and some rental real estate; they seem to have done no actual thinking at all. If they have, I can find no evidence of it. What a typical Washington escapade. Unkind? Too cynical, you think? Maybe; let's see. So OK, Arnold, Eddie and Michael: Prove me wrong. I dare you.

Mornings like this can peel the paint right off a person's residual optimism.

Well, that's all for now. Come back in days soon to come for commentary on William Graham Sumner, plutocracy, Pakistan, and the scourge of the designated-hitter rule. Promise. And I promise I will not discuss Charlie Rangel and Maxime Waters. Why waste the electrons?