Five developments that caught my eye:
Douglas Rediker and Heidi Crebo-Rediker at the New America Foundation have released a policy paper suggesting a novel way to fund improvements in America’s crumbling infrastructure. They recommend two financing initiatives (beyond direct government grants):
[W]hile we have enormous infrastructure financing needs, there are also enormous pools of capital available for investment. The trick is to bring the two together in a commercial, sustainable, and politically acceptable way.
First, we suggest the enactment of legislation and the development of regulations to facilitate the origination and issuance of public sector covered bonds in the United States, which will provide a market-based, efficient, and secure mechanism to attract capital for infrastructure investment.
Second, along the lines of a proposal by Congresswoman Rosa DeLauro (D-CT) last year, we recommend that the federal government consider the creation of a new, government-owned and -capitalized infrastructure financing entity — a National Infrastructure Finance Enterprise — that would pool, package, and sell existing and future public infrastructure securities in the capital markets. The proposed entity would also seek to develop an in-house capability to originate infrastructure loans and would be able to fund itself through the international capital markets. We believe that the entity should be capitalized at a far higher level than proposed in the DeLauro bill. Further, its scope should extend beyond that of the National Infrastructure Bank as currently proposed by Senators Christopher Dodd (D-CT) and Chuck Hagel (R-NE).
The need for much greater investment in U.S. infrastructure should be obvious. But if you’re new to this issue, here’s the intro:
America’s basic infrastructure is outdated, worn, and in some cases, failing. Most experts agree that it is inadequate for meeting the demands of the 21st-century global economy. If we are to remain competitive, we must invest in capital assets like roads, ports, bridges, mass transit, water systems, and broadband infrastructure. Many other countries — both rich and poor — see investing in infrastructure as imperative for economic survival and success in an increasingly competitive economic environment. But the United States has lagged in infrastructure investment, in both relative and absolute terms. We are spending less than 2 percent of GDP on infrastructure, while China and India are spending 9 percent and 5 percent of GDP, respectively.
Related: Rebuilding and Renewing America: Toward a 21st Century Infrastructure Investment Plan (Wilson Center event summary)
Update: (23 February 2009) NYTimes.com Op-Ed columnist Bob Herbert on the need for a U.S. infrastructure bank: http://idek.net/3RJ (via @michaelgoldberg)
Top five political issues in the U.S. ( May 2008 )
Issues cited as “very important”
- Economy (88%)
- Education (78%)
- Health care (78%)
- Jobs (78%)
- Energy (77%)
Source: Pew Research Center telephone poll of 1,505 adults, conducted May 21-25; multiple responses allowed. The margin of error is +/- 3 percentage points. Reported in The Wall Street Journal 9 June 2008.
Note: A similar poll last year had Iraq as the top issue.
Global food prices are up 83% in the past three years, putting huge stress on some of the world’s poorest countries, notes a recent Wall Street Journal article ( 14 April 2008 ).
Rioting in response to soaring food prices recently has broken out in Egypt, Cameroon, Ivory Coast, Senegal and Ethiopia. In Pakistan and Thailand, army troops have been deployed to deter food theft from fields and warehouses.
World Bank President Robert Zoellick warned in a recent speech that 33 countries are at risk of social upheaval because of rising food prices. Those could include Indonesia, Yemen, Ghana, Uzbekistan and the Philippines.
Some countries say the U.S. appetite for biofuels is part of the problem.
“When millions of people are going hungry, it’s a crime against humanity that food should be diverted to biofuels,” said India’s finance minister, Palaniappan Chidambaram, in an interview. Turkey’s finance minister, Mehmet Simsek, said the use of food for biofuels is “appalling.”
The U.S. government notes that biofuels are only one contributor to rising food prices. Rising prices for energy and electricity also contribute, as does strong demand for food from big developing countries like China, the article said. Aggravating the problem, in some countries food inflation has prompted a wave of protectionism — in essence, trying to keep more food in their country by restricting exports. Also, some countries are boosting consumer subsidies and instituting price controls.
The price of rice is sky high
Riots, instability spread as food prices skyrocket
Haiti’s government falls after food riots
The latest consumer spending survey from ChangeWave Research shows “a sudden, huge pullback in U.S. consumer retail spending on electronics — the largest decline since 2002.” The survey of 4,427 consumers, conducted February 18-25, looked at discretionary spending on a range of popular electronic devices, including video game consoles, digital cameras and iPods.
In an unprecedented sign of weakness, only 19% of survey respondents say they’ll spend more on electronics over the next 90 days, compared to 33% who will spend less.
“These results clearly show that the consumer electronics sector is getting whacked,” said Tobin Smith, founder of ChangeWave Research and editor of ChangeWave Investing.
Hardest-hit stores: Best Buy and Circuit City. (But Costco and Wal-Mart will be OK.)
Hardest-hit products: LCD TVs, digital cameras, cell phones and iPods.
Bright spots: The Nintendo Wii, Blu-ray HD DVD players and GPS devices.
And there was little evidence that consumers will be spending their “economic stimulus” tax rebate checks on consumer electronics.
“Rather, our findings point to an increasingly preoccupied American consumer who has fallen out of love with gadgets — at least temporarily,” Smith said.