Felix Rohatyn, the financier who helped save New York City from going broke in the 1970s and the author of a new book about public spending, did a turn on CNBC this morning to discuss Obama’s stimulus program.
The $800 billion bill, he said, “was necessary” but he “would have preferred a bigger percentage going to infrastructure.” In fact, he was a bit surprised at the result: “I was under the impression infrastructure would have [a] broader” role in the bill. “Then, lo and behold, it disappeared” after congressional committees began rewriting things.
A truly key point: “We treat infrastructure from an accounting point of view as if it was an expense” instead of an investment.
Maybe we should call it something else?, he mused. “Infrastructure” doesn’t quite roll off the tongue. It’s “an awful word.” But, as a matter of substance, spending on infrastructure is one of the best things we can do: “it is such a creator of employment, wealth [...] and productivity. [...] I get tired of hearing that the government can only do bad things.” If you look back through history, “the results of government investment are spectacular.”
(We’ll post the video if/when it become available.)
February 25th, 2009 at 4:34 pm
[...] from an accounting point of view as if it was an expense” instead of an investment. The Infrastructurist LA holds the key to less crowded highways INRIX, a company that provides technology to help [...]
February 25th, 2009 at 8:57 pm
The reason they didn’t invest in infrastructure was 1)the liberals had their own pet programs they wanted money for, and 2)the conservatives didn’t want to start any more programs. This last was really the kicker, as small-government types in both parties knew that, by starting to spend large amounts of federal money on rail, etc, they were increasing the size of goverment for years to come.
February 26th, 2009 at 3:58 pm
[...] actually seems like a rather serious point (and one that public works guru Felix Rohatyn made yesterday). It’s not a good word. It’s long and twice in rapid succession entails three ugly [...]
March 4th, 2009 at 1:51 pm
I think the Federal Government as well as State, County, City, and other public entities need to have separate operating and capital budgets. This gets those involved in forming budgets to think of expenses and investment separately. True somewhat questionable “investment” like aircraft carriers or jet fighters are likely to end up in the capital budget, but if anything that might increase the willingness of our congresscritters to fund infrastructure.