By Nancy Spannaus
Sept. 1, 2022—When will the U.S. Congress finally decide to deal with the national emergencies overwhelming cities and rural areas throughout the nation? The first step toward a solution lies with enacting the National Infrastructure Bank Act of 2021, HR 3339, which is garnering increasing support from local elected officials, but has not yet become a priority for the Congress.
Repairing and rebuilding the nation’s collapsing infrastructure – from its water systems to its schools, transportation, and public health systems and more – is the singular mandate laid out for the $5 trillion NIB, which would be capitalized by repurposing existing Federal government debt. Such a funding mechanism is a tried-and-true method of the Bank of the United States established by Alexander Hamilton in 1791, and followed as a model by successful public banks under President John Quincy Adams, Abraham Lincoln, and Franklin Delano Roosevelt.
So far, sixteen Congressional Representatives have signed onto HR3339, which was introduced by Rep. Danny Davis (I-Ill) in 2021. Time is short for putting this bill on the table for implementation during this session of Congress, but the needs are forcing themselves onto our agenda every-day.
The Water Crisis
Let’s start with floods. The latest example of devastation has come in Jackson, Mississippi, which is currently operating without clean water because flooding from the Pearl River overwhelmed its water treatment plant. The water facility was known to have required upgrading, and the Mayor had been warned of impending failure—on the eve of the current catastrophic event. Jackson had already been under a “boil” order for its water due to contamination, and was known to be plagued with lead pipes. Now this state capital of more than 160,000 people is in worse crisis, forced to rely in large part on bottled water.
This flooding comes, of course, on top of the wider spread damage which devastated eastern Kentucky just a couple weeks ago, killing at least 37 people and rendering towns near unlivable. The affected region was a former coal mining area, left to fend for itself as the coal industry has collapsed with no new investment coming to take its place. Infrastructure to protect against such weather events was near-non-existent in this area of Appalachia, as in many other of our rural communities.
The other water crisis which has appropriately grabbed headlines, of course, is the lack of water, as the drought spreads throughout the Southwestern states. This is a disaster which has hardly been unanticipated; local aquifers have been being depleted for decades and the number of years without adequate rain and snowfall have been clearly chronicled, and the consequences known. Yet, totally workable plans of water transfer from rivers and water basins which have a surplus of water, have been consistently put off, or rejected, for both ideological and financial reasons.
Of less drama, at the moment, are the silent water crises, such as the lead contamination in the water pipes in the school systems and poor urban areas of the nation’s urban areas. The 2021 Infrastructure and Jobs Act was touted as a cure for this infrastructure failure, but as the NIB staff has documented, its funds would not cover anywhere near the required replacements.
It’s not my intention to say that a $5 trillion bank can literally solve all these problems – it can’t. But it can launch a recovery and rebuilding process that will begin to provide life-saving solutions right away.
And the Schools
Another emergency caused by failing infrastructure has hit with the opening of the school year – lack of air-conditioning in our schools. News reports this week announced the shortening of school days in Philadelphia and Baltimore (and perhaps elsewhere) due to the fact that classroom temperatures were hitting unsafe levels of 90 degrees.
And don’t blame global warming. The decrepitude of these school buildings has been an issue for years, long before any recent heat waves. What we are facing is the failure to maintain and invest in public infrastructure – precisely, the mandate of our governments at all levels. But for governments to fulfill that mandate, they need a reliable source of low-interest funding, precisely the job of the NIB.
The Coalition in Action
The NIB Coalition, a group of political leaders from around the nation, has been mobilizing around the Hamiltonian bank concept now for several years, winning adherents in legislatures and local citizens groups throughout the nation. As summarized in a recent resolution:
Twenty-four state legislatures have filed resolutions in support of the National Infrastructure Bank and seven passed at least one legislature. The Maine and New Jersey legislatures passed the resolution in both houses, and the Rhode Island Senate and Delaware Senate each passed a resolution; bipartisan resolutions are introduced in the Pennsylvania Senate and House, and a Dear Colleague Sign-on letter is circulating in the New York Assembly.
Full lists of endorsements can be found on the Coalition’s website, but two recent ones deserve special mention.
On August 15, the Council of State Governments East, a coordinating body for 18 Eastern states on policies and programs for the region, passed a resolution endorsing HR 3339. The resolution especially highlighted the need for funding transportation projects, including urban and rural transit. (That vital tunnel across is the Hudson is still in perilous shape.)
And on May 5, 2022, the California State Assembly, the legislature of the largest state in the Union, passed a resolution “strongly encouraging the Congress of the United States to pass HR3339.”
Can Optimism Be Revived?
Can the national tide be turned away from what appears to be pervasive pessimism and culture wars, toward the urgent tasks of building a functioning nation again? The prospects seem daunting and our recent failures, including mismanagement of a pandemic which has left a minimum of 1 million of our citizens dead of COVID, only underscore how huge the task is before us.
The latest sign of that pessimism, as well as our health and infrastructure failures, has come with the announcement of the huge collapse of U.S. life expectancy last year, now at the shocking level of 77.4 years for whites born in 2021, 70.8 years for Blacks, 77.7 years for Hispanics, and 83.5 for Asian Americans.
This collapse is not all due to COVID, of course. It is driven as well by deaths of despair (drugs and suicide and obesity), in addition to lack of access to health care, decent food, and a livable wage. And before anyone mentions that jobs are skyrocketing, I point them to the analysis by ZeroHedge on the real story: the surge in multiple job-holders.
My contention is that an infrastructure job boom – which the NIB’s success would launch – would go a long way toward addressing this problem: providing decent-paying union jobs, rebuilding communities, improving transportation, and, of course, assuring adequate, clean water.
Yet presently Congress is going along with the insane prescription of the Federal Reserve, which claims it is going to “fight inflation” by dramatically raising interest rates. The Fed acknowledges their actions will increase unemployment and raise the cost of borrowing for physical investments, yet it is listening to those so-called experts like Larry Summers who are explicitly calling for unemployment to rise to 7.5 or 10%.
Economist and Hamilton expert Robert C. Hockett spoke to the point on a recent NIB webcast when he said: “Summers’s view—which, alas, is very much in keeping with contemporary orthodoxy—is rooted in the curious notion that if you make enough people poor by taking away their jobs, they won’t be able to buy goods or services, which will result in lower demand and, eventually, lower prices. But a policy of killing demand by taking jobs from 18 million Americans will leave an awful lot of collateral damage.”
“Before even considering such “kill the patient” remedies, we ought to ask whether better-targeted, non-carpet-bombing-style tactics are available.”
For example, what about producing those scarce goods whose prices are skyrocketing, including housing? If inflation is too much money chasing too few goods, we should produce more goods!
Fatalism never used to be in the American character. Indeed, the Hamiltonian financial system was the policy of choice in the face of national crisis – as the Lincoln and FDR cases show most clearly. Both policies created the basis for new optimism, and a better future. Study the history on this blog, and see how we can do it today.
Nancy Spannaus is the author of Hamilton Versus Wall Street: The Core Principles of the American System of Economics, available from https://www.iuniverse.com/BookStore/BookDetails/788568-hamilton-versus-wall-street