Infrastructure bank a bad idea

AFL-CIO president Richard Trumka wants it. The rent-seeking and increasingly statist U.S. Chamber of Commerce wants it. So does RINO Senator Lindsey Graham. Senator John Kerry really wants it. Former SEIU boss Andy Stern envisions it being a mechanism to tax the overseas profits of multinational corporations. President Obama is supposedly obsessed with it and is considering making it part of his latest "jobs plan."

It is an infrastructure bank. The idea, under different names, has been around for several years. The government-owned entity would provide funding for, primarily, transportation projects through federally funded loans, guarantees, and grants and "leverage" those funds to "attract significant private-sector investment." Tax payers would initially capitalize and ultimately underwrite the "bank" (a misnomer, as banks do not award grants).

In theory, the concept has certain merits, but the reality, especially in the grips of big government ideologues, would be something different. To call for such an entity is to admit governments' past failures and improvidence in this critical area, highlighting the untold amounts squandered on non-critical if not wasteful, even unconstitutional, expenditures. Recall that the massive, $800 billion "stimulus" bill in 2009 was sold largely on the premise of funding much-needed infrastructure improvements and repairs.

For centuries, this country has financed most of its local, state and federal infrastructure through our existing governmental bodies and taxing authorities--without an infrastructure bank--via regular appropriations, municipal bond markets, and other means.  

Ronald Utt, Ph.D, of the Heritage Foundation thinks the idea of an infrastructure bank is "a dangerous distraction and a waste of [Obama's] time." Paul Roderick Gregory of Forbes believes such an institution "would simply be a political slush fund and encourage wasteful spending by political cronies." Conn Carroll of the Washington Examiner describes the proposed bureaucracy as "just another stimulus boondoggle." House Republicans are suspicious that such a bank "is nothing more than a vehicle for more stimulus spending, disguised as "capital investment."" Picture a kind of TARP/stimulus/Fannie Mae Frankenstein.

Big, federally directed and funded infrastructure projects are currently viewed by many on the American left as a panacea to the ailing economy and to their guy's re-election chances. That belief, writes Chris Edwards of Cato Institute, is a "liberal fairy tale, detached from the actual experience of most federal agencies over the last century." As Carroll put it, "When [infrastructure spending] decisions are made at the federal level, politics, not cost-benefit analysis, dictates what gets funded."

The track records of our country's existing governmental "banks," like the Federal Reserve, Fannie Mae, and Freddie Mac, don't bode well for a national infrastructure bank. Like most "public-private partnerships," the associated risks would be borne solely or disproportionately by the public. Further, granting decision-making authority to unelected bureaucrats rather than elected officials is a bad idea (though neither is perfect). A national infrastructure bank would be an embodiment of statism, central authority, deficit spending, and social engineering (think "green jobs" and union favoritism) in the form of a new, eternal and ever-expanding federal bureaucracy. It is exactly what we don't need.

AFL-CIO president Richard Trumka wants it. The rent-seeking and increasingly statist U.S. Chamber of Commerce wants it. So does RINO Senator Lindsey Graham. Senator John Kerry really wants it. Former SEIU boss Andy Stern envisions it being a mechanism to tax the overseas profits of multinational corporations. President Obama is supposedly obsessed with it and is considering making it part of his latest "jobs plan."

It is an infrastructure bank. The idea, under different names, has been around for several years. The government-owned entity would provide funding for, primarily, transportation projects through federally funded loans, guarantees, and grants and "leverage" those funds to "attract significant private-sector investment." Tax payers would initially capitalize and ultimately underwrite the "bank" (a misnomer, as banks do not award grants).

In theory, the concept has certain merits, but the reality, especially in the grips of big government ideologues, would be something different. To call for such an entity is to admit governments' past failures and improvidence in this critical area, highlighting the untold amounts squandered on non-critical if not wasteful, even unconstitutional, expenditures. Recall that the massive, $800 billion "stimulus" bill in 2009 was sold largely on the premise of funding much-needed infrastructure improvements and repairs.

For centuries, this country has financed most of its local, state and federal infrastructure through our existing governmental bodies and taxing authorities--without an infrastructure bank--via regular appropriations, municipal bond markets, and other means.  

Ronald Utt, Ph.D, of the Heritage Foundation thinks the idea of an infrastructure bank is "a dangerous distraction and a waste of [Obama's] time." Paul Roderick Gregory of Forbes believes such an institution "would simply be a political slush fund and encourage wasteful spending by political cronies." Conn Carroll of the Washington Examiner describes the proposed bureaucracy as "just another stimulus boondoggle." House Republicans are suspicious that such a bank "is nothing more than a vehicle for more stimulus spending, disguised as "capital investment."" Picture a kind of TARP/stimulus/Fannie Mae Frankenstein.

Big, federally directed and funded infrastructure projects are currently viewed by many on the American left as a panacea to the ailing economy and to their guy's re-election chances. That belief, writes Chris Edwards of Cato Institute, is a "liberal fairy tale, detached from the actual experience of most federal agencies over the last century." As Carroll put it, "When [infrastructure spending] decisions are made at the federal level, politics, not cost-benefit analysis, dictates what gets funded."

The track records of our country's existing governmental "banks," like the Federal Reserve, Fannie Mae, and Freddie Mac, don't bode well for a national infrastructure bank. Like most "public-private partnerships," the associated risks would be borne solely or disproportionately by the public. Further, granting decision-making authority to unelected bureaucrats rather than elected officials is a bad idea (though neither is perfect). A national infrastructure bank would be an embodiment of statism, central authority, deficit spending, and social engineering (think "green jobs" and union favoritism) in the form of a new, eternal and ever-expanding federal bureaucracy. It is exactly what we don't need.

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