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In the new New Deal, South competes for infrastructure dollars

December 9, 2008 — Back in the 1930s, when a teenager from south Alabama took a train to east Tennessee to begin a hitch with the Civilian Conservation Corps, the South was the lowest hole in the Great Depression.

It was a rough and tumble existence, but in later years, the man who became my father would take great pride in the work his CCC unit did around Norris Dam State Park, and while he’s passed on, many of the cabins and rest areas he helped to build still stand as a permanent asset to the area.

The definition of infrastructure development has broadened considerably since then, to include such things as green technologies and extended broadband coverage. But the basic idea of putting money into the economy while getting some “bang for the buck” in public works projects, as President-elect Barack Obama put it over the weekend, remains the same.

Whether it amounts to a new New Deal or not, Obama is thinking big. When he met with the nation’s governors last week, Pennsylvania Gov. Ed Rendell told the Washington Post, he “didn’t blink an eye when we talked about $136 billion.”

That’s a healthy boost for the economy, but only a fraction of the $1.6 trillion which the American Society of Civil Engineers (ASCE) says needs to be spent over the next five years to bring the nation’s infrastructure up to good condition. A case could be made that the nation's infrastructure, after decades of neglect, is in worse shape than the economy.

“If you look at the type of dollars being discussed, we still have an investment gap, but if we’re working on closing the gap, it’s a good thing for the country,” said ASCE president D. Wayne Klotz, a Houston engineer.

The next edition of ASCE’s four-year report card comes out next March, and it’s likely to show the same dismal conditions in the nation’s roads, bridges, dams, ports, schools and sewer systems that earned a “D” on the last report card.

There are a lot of needs to be addressed, and this time it’s the Rust Belt, not the South, which is the nation’s economic basket case and could use the greatest stimulus. But William S. Fox, director of the University of Tennessee’s Center for Business and Economic Research, said the infrastructure should go “where it has the greatest chance for long-term benefit, and not where economic activity is going to be stagnant.”

Responding to Obama’s overture, Virginia Gov. Tim Kaine said his state could have $1 billion in infrastructure projects under contract in 180 days, if the feds send the money. But those who’ve watched Mississippi’s Katrina recovery effort note that some $2 billion in committed federal funds remains unspent, simply because of the time involved in getting such projects as the $570 million Port of Gulfport redevelopment which got the go-ahead from the Department of Housing and Urban Development last month.

“One of the things I’d be worried about a lot is, where can we expand the construction sector?” Fox said.

He noted that while home construction has fallen off, work on highways and other state projects around the nation has only recently been affected by the economic downturn, meaning that it would be hard to get some worthy infrastructure projects off the ground fast enough to have much impact on the current economy.

However, James H. Johnson of the University of North Carolina’s Kenan-Flagler Business School said Obama should proceed with care, and “think clearly about the mechanism through which this money will be filtered into the economy.”

The proposed infrastructure program is a good opportunity, Johnson said, to reform a system by which smaller and minority-owned firms get only a small amount of the business that comes with big public works projects.

“The challenge will be to build a system that is flexible enough to insure that all people have equal opportunity to take advantage,” said Johnson, who is director of the Urban Investment Strategies Center at Chapel Hill.

The South’s highest infrastructure priority, Johnson said, should be “figuring out how to connect our rural communities to the global economy,” a task which involves a combination of “hard” and “soft” infrastructure, from better roads to broadband. A second major goal should be rescuing the South’s major urban school districts, to give students a chance to compete in the new economy, he said.

Inevitably, there’s going to be some competition between asphalt and the internet, which is to say, the more traditional versus the more newfangled definitions of  infrastructure. But Fox, at UT, said Obama is right to throw the net wide and include projects, like extending broadband coverage, that might not have been considered “public works” in the past.

“We need infrastructure that supports the economy we’re going to have, not the economy we used to have,” he said.