Fareed Zakaria: Republicans Should Embrace an Infrastructure Bank

Have you seen Fareed Zakaria’s editorial in the Washington Post today? It’s pretty stunning. He begins with some pretty gloomy analysis of the country’s economic trajectory and some bad news about unemployment and growth. And just when it seems like there’s no hope and the country’s going down the tubes, he suggests one shining beacon of hope: a national infrastructure bank, the “simplest way” to help unemployed workers — “and the country.”

Not only that, he makes a strong case for Republicans and even tea-partiers to embrace the concept:

House Majority Leader Eric Cantor has played down this proposal as just more stimulus, but if Republicans set aside ideology they would see it is actually an opportunity to push for two of their favorite ideas: privatization and the elimination of earmarks.

The United States builds infrastructure in a remarkably socialist manner; the government funds, builds and operates almost all American infrastructure. In many countries in Europe and Asia, the private sector plays a large role in financing and operation of roads, highways, railroads and airports, as well as other public resources. An infrastructure bank would create a mechanism by which such private-sector participation would become possible here as well. Yes, some public money would be involved, mostly through issuing bonds, but with interest rates at historic lows, this is the time to rebuild. Such projects, with huge long-term payoffs, could genuinely be called investments, not expenditures.

A national infrastructure bank would also address a legitimate complaint of the Tea Party — earmarks. One of the reasons federal spending has been inefficient is that Congress wants to spread money around in ways that make political sense but are economically inefficient. An infrastructure bank would make these decisions using cost-benefit analysis, in a meritocratic system, rather than basing decisions on patronage and whimsy.

He makes it clear that such a bank is no panacea, but it’s a good start toward a national jobs plan he thinks President Obama should propose. Of course, the president has proposed an infrastructure bank — one focused exclusively on transportation, no less. While he might need a push to start talking about it again, Zakaria is smart to direct his remarks to conservatives who have opposed such an idea, in hopes that the bank will make it into the House transportation bill.