More stories

  • in

    US society is fraying at the seams. We need to think about our ‘civic infrastructure’ | Jan-Werner Müller

    Infrastructure has been for bipartisanship what Thanksgiving is for American life in general: the last best hope for all of us coming together. For anyone who has been stuck on New Jersey Transit in a tunnel under the Hudson or felt trepidation when crossing a rusty bridge in the midwest, the need for massive investment in infrastructure is self-evident. But that has not kept Republicans from finding fault with Biden’s infrastructure plan: when their busy schedule of culture warring and “owning the libs” allows it, they are making meager counter-proposals. More importantly, they attack the administration for tucking all kinds of supposed pet policies into the plan – from crazy socialist heresies like support for home care (why, when the wealthy can easily afford help themselves?) to government-financed research, which, as everyone knows, is highly ineffective because it has only ever given us things like the internet.It is true that two cliches central to our political language today – “resilience” and, indeed, “infrastructure” – have often covered up a lack of real public policy justifications. But the fact is that Biden’s plan is in one sense not ambitious enough: it does not address the country’s decaying civic infrastructure.Infrastructure is about connecting people; it enables us to reach others and be reached by them. Roads, but also the post office, are paradigmatic examples. The culture war rhetoric of Republicans has made it sound as if the main problem of those “left behind” is the condescension of supposedly liberal-cosmopolitan-bicoastal elites who have nothing else to do than sneering at “real Americans”. But plenty of people are left behind because it’s hard to reach them, and hard for them to reach out: deregulation made airplane tickets to remote parts of the country horrendously expensive; buses and trains, if they exist at all, are infrequent and shoddy. People have been cut off, while many of their local resources have been cut down, as institutions like community savings banks, which draw on and provide local knowledge, keep disappearing.Building back better physical infrastructure – and, no less important, regulating back better – can do a lot more for overcoming the country’s divisions than the communitarian kitsch rhetoric which some of us feared might become the default political background noise of Biden’s presidency. But democracy itself also depends on being able to connect with others. What’s more: while everyone possesses basic political rights – speech, assembly and association – the impact of using such communicative rights is multiplied if we have the resources and tools to spread our views.Yes, infrastructure connects – but it is not a guarantee of consensus, let alone community. Social scientists have emphasized that democracies need citizens to both bond in tighter groups and build bridges across divisions, generating mutual trust in the process. But democracy is not primarily about unity; it is meant to enable conflict within rules. Having an excellent highway network does not mean we all have to drive in the same direction (or, for that matter, that we transport the same number of people with us). A democratic infrastructure prevents collisions, but also allows taking very different routes. It certainly does not determine them.What does civic infrastructure mean, concretely? American democracy got a major boost in the first half of the 19th century through the development of the press and political parties – in fact, these two crucial parts of a communicative infrastructure for citizens were often one and the same. Alexis de Tocqueville marveled at the lively political scene in the US; he also observed that “in democratic countries … large numbers of men who feel the desire and need to associate may often find themselves unable to do so, because all are insignificant and none stands out from the crowd, so that they cannot identify one another and have no idea how to meet. But let a newspaper come and give visibility to the feeling or idea that has occurred simultaneously but separately to each of them, and all will immediately rush toward this light.” Newspapers, often owned by political parties, defended particular doctrines which tied people together.We feel queasy at the thought of an openly partisan press (or an openly partisan cable TV station, for that matter), but we cannot deny that the media, even media outlets with an agenda, are part of democracy’s infrastructure. One of the most visible signs of that infrastructure’s decay is the lamentable state of local journalism. Fewer local news translates into less civic engagement and more corrupt politics. To make matters worse, the resulting void is often filled with national news that can exacerbate polarization. Taxing large platforms and using the funds to support local journalism – including citizens’ journalism – is one remedy.The American Academy of Arts and Sciences has recently proposed a National Trust for Civic Infrastructure, akin to the National Endowment for Democracy. Local associations promoting dialogue could receive grants from it, alongside public libraries and other spaces with civic uses. The proposal can be extended to online public spaces. As everyone knows, the dominant social media platforms today – especially Facebook – are based on the business models of “incitement capitalism”: the imperative to segregate and rile people up, and keep them under constant surveillance, all in order to monetize their “engagement”. By now, there are excellent plans for public, non-partisan platforms and digital democratic infrastructure. It would be naive to think that these could replace behemoths like Facebook, with its billions of users and corresponding network effects; but they might complement them with proper spaces for civic exchange. Some scholars also advocate a Corporation for Public Software, on the model of the Corporation for Public Broadcasting, to make civic digital tools freely available.That leaves one elephant in the room – political parties, and the one with the elephant in particular. They are a crucial infrastructure, which is why well-functioning democracies regulate them tightly (sometimes even in the constitution). In particular, they prescribe democratic procedures inside parties as well as transparency in financing. With the current supreme court being what it is – an active promoter of dark money and dependency on large donors – there is little chance of addressing campaign finance. But pluralism inside parties might be strengthened. After all, when a party is turned into a personality cult, as happened with the Republicans under Trump, there cannot be any critical loyalty inside the tent: any criticism of the person is deemed betrayal. More

  • in

    Existential challenges from China, climate and more demand new US industrial policy | Robert Reich

    America is about to revive an idea that was left for dead decades ago. It’s called industrial policy and it’s at the heart of Joe Biden’s plans to restructure the US economy.When industrial policy was last debated, in the 1980s, critics recoiled from government “picking winners”. But times have changed. Devastating climate change, a deadly pandemic and the rise of China as a technological powerhouse require an active government pushing the private sector to achieve public purposes.The dirty little secret is that the US already has an industrial policy, but one that’s focused on pumping up profits with industry-specific subsidies, tax loopholes and credits, bailouts and tariffs. The practical choice isn’t whether to have an industrial policy but whether it meets society’s needs or those of politically powerful industries.Consider energy. The fossil fuel industry has accumulated “billions of dollars in subsidies, loopholes and special foreign tax credits”, in Biden’s words. He intends to eliminate these and shift to non-carbon energy by strengthening the nation’s electrical grid, creating a new “clean electricity standard” that will force utilities to end carbon emissions by 2035 and providing research support and tax credits for clean energy.It’s a sensible 180-degree shift of industrial policy.A proper industrial policy requires that industries receiving public benefits act in the public interestThe old industrial policy for the automobile industry consisted largely of bailouts – of Chrysler in 1979 and General Motors and Chrysler in 2008.Biden intends to shift away from gas-powered cars entirely and invest $174bn in companies making electric vehicles. He’ll also create 500,000 new charging stations.This also makes sense. Notwithstanding the success of Tesla, which received $2.44bn in government subsidies before becoming profitable, the switch to electric vehicles still needs pump priming.Internet service providers have been subsidized by the states and the federal government and federal regulators have allowed them to consolidate into a few giants. But they’ve dragged their feet on upgrading copper networks with fiber, some 30 million Americans still lack access to high-speed broadband, and the US has among the world’s highest prices for internet service.Biden intends to invest $100bn to extend high-speed broadband coverage. He also threatens to “hold providers accountable” for their sky-high prices – suggesting either price controls or antitrust enforcement.I hope he follows through. A proper industrial policy requires that industries receiving public benefits act in the public interest.The pharmaceutical industry exemplifies the old industrial policy at its worst. Big pharma’s basic research has been subsidized through the National Institutes of Health. Medicare, Medicaid and the Affordable Care Act bankroll much of its production costs. The industry has barred Americans from buying drugs from abroad. Yet Americans pay among the highest drug prices in the world.Biden intends to invest an additional $30bn to reduce the risk of future pandemics – replenishing the national stockpile of vaccines and therapeutics, accelerating the timeline for drug development and boosting domestic production of pharmaceutical ingredients currently made overseas.That’s a good start but he must insist on a more basic and long-overdue quid pro quo from big pharma: allow government to use its bargaining power to restrain drug prices.A case in point: the US government paid in advance for hundreds of millions of doses of multiple Covid-19 vaccines. The appropriate quid pro quo here is to temporarily waive patents so manufacturers around the world can quickly ramp up. Americans can’t be safe until most of the rest of the world is inoculated.Some of Biden’s emerging industrial policy is coming in response to China. Last week’s annual intelligence report from the Office of the Director of National Intelligence warns that Beijing threatens American leadership in an array of emerging technologies.Expect more subsidies for supercomputers, advanced semiconductors, artificial intelligence and other technologies linked to national security. These are likely to be embedded in Biden’s whopping $715bn defense budget – larger even than Trump’s last defense budget.Here again, it’s old industrial policy versus new. The new should focus on cutting-edge breakthroughs and not be frittered away on pointless projects like the F35 fighter jet. And it should meet human needs rather than add to an overstuffed arsenal.Biden’s restructuring of the American economy is necessary. America’s old industrial policy was stifling innovation and gouging taxpayers and consumers. The challenges ahead demand a very different economy.But Biden’s new industrial policy must avoid capture by the industries that dominated the old. He needs to be clear about its aims and the expected response from the private sector, and to reframe the debate so it’s not whether government should “pick winners” but what kind industrial policy will help the US and much of the world win. More

  • in

    Biden's infrastructure plan should cover childcare and home care. Here's why | Jamaal Bowman

    It’s the one thing everyone in Washington can agree on: our nation’s infrastructure is crumbling and in desperate need of repair. The Biden administration has outlined its sweeping plan to overhaul crumbling roads and bridges across America, while building up the clean energy economy of the future, and that’s an important first step in the right direction. Still, as my colleagues begin debating and negotiating over specific details in this proposal, one thing has become really clear to me: the way we think about infrastructure itself needs a rethink.What we need to understand better as a nation is that our infrastructure does not just look like steel, concrete and transport – it is also the nurturing, patience and diligence of care workers. Care work touches all of our lives from beginning to end, from the unpaid labor of those who raise us as children, childcare workers, teachers, home aides and healthcare workers, to those who care for us in old age and see us through the end of our lives. Care is one of the strongest pillars of our economy, yet those who do this work – disproportionately Black and brown women, often immigrants – are under-supported, undervalued and under-compensated, if compensated at all.Just as our physical infrastructure is crumbling and requires substantial reinvestment in a 21st-century economy, our care infrastructure is fundamentally broken. As the only industrialized country in the world without a national paid family and medical leave program, only 17% of our people have paid family leave through their employers. Hundreds of thousands face daunting waitlists for essential home care. Childcare is the highest household expense for families in much of the United States. And the median annual pay of childcare and home care workers is $25,510 and $17,200, respectively, leading to high turnover and reliance on public assistance.This does not have to be a moment of total desolation. It can be a groundbreaking opportunity to rethink our entire economy and the workers who support itAs the Biden administration unveils its plan for job creation and infrastructure, it can and must center care work as part of rebuilding the country. More than 550,000 Americans have died and 30 million have been infected with Covid-19. We are staring down decades of trauma, grief and long-term health impacts from the past year. But this does not have to be a moment of total desolation. It can be a groundbreaking opportunity to rethink our entire economy and the workers who support it.As part of the next investment in infrastructure, Congress and the Biden administration can and should take major steps toward addressing these longstanding injustices, including passing universal childcare and pre-K, six months of paid family leave, and free, high-quality home and community-based services for seniors and people with disabilities, along with Medicare for All. Strong care programs also boost the economy: investing in care work invests in us all. A recent study found that for each public dollar invested in the care sector, $2.80 in total economic activity is created; roughly speaking, five additional jobs are created for every 10 jobs created in care work.We must go beyond incrementalism and create new, universal, public programs that treat care as a right – bringing New Deal-level of ambition and imagination to the care economy. The New Deal vastly improved the quality of life for many and led to increased prosperity, but key components excluded communities of color. What would we be able to accomplish, what limitless potential could we achieve, if the prosperity of the New Deal was extended to all?Indeed, that is precisely the aim of today’s movement for a Green New Deal. In the congressional resolution I recently introduced with Senator Elizabeth Warren, the Care for All Agenda, I made the case that care investments are a crucial part of transformative climate action. We cannot build a thriving, 21st-century economy without a solid foundation of care to sustain us.In fact, care jobs should be thought of as green jobs: they are already relatively low-carbon, and are becoming even more essential as we cope with the health impacts of climate change. We need to make these fast-growing jobs the high-paying, unionized jobs of the future, just as we do in the green energy and manufacturing sectors. Fundamentally, the next economy will be about caring for each other, our communities, and the planet. That means we need to think of climate and care investments as comprising one holistic, integrated agenda – and not prioritize one over the other in the recovery effort.Additionally, the Biden administration can usher in a paradigm shift in how we measure and evaluate our economy. The United Nations has estimated that the economic value of unpaid care work accounts for as much as 40% of GDP. Scholarship has repeatedly questioned the value of economic modeling based on GDP and stock market trends but without evaluations of quality of life, satisfaction and health of working people. What if we rooted our economy in solving problems and promoting collective wellbeing, rather than profit-making to benefit the few? What if we invested massively in the arts, research and restoring the natural world – and gave everyone the time and economic freedom to care for their loved ones, and unleash their full talents?Care can and must be at the center of the rebirth of our country. As Joe Biden unveils his next ambitious plan for rebuilding the economy, he can shape the next vision of American exceptionalism by extending prosperity to those forced to live at the margins. Human potential is unlimited, especially in a nation as wealthy as ours. We have the resources to ensure high-quality care to our people and a life of dignity to those who provide it. Let’s get it done. More

  • in

    The Guardian view on the US infrastructure plan: Joe Biden's bold bet | Editorial

    President Joe Biden is governing like a man in a hurry. Three weeks ago, he persuaded the US Congress to pass his $1.9tn Covid stimulus package. This week, he began the task of building congressional support for an even larger jobs and infrastructure renewal plan. The package is worth at least another $2tn. It involves massive investment in transport, housing and commercial buildings, green jobs, social care and much else besides. Further spending plans on “human infrastructure” – in the shape of aid to the poor, to parents and to women – are expected in a few weeks’ time. The total cost may end up close to £4tn.This week’s package involves several bold bets whose outcomes should be closely watched in America and beyond. Mr Biden’s central proposition is that the federal government can resume the activist role in economic growth that it played in the mid-20th century under leaders from Franklin Roosevelt to Richard Nixon. This comes with a second twist, that the activist role can deliver tens of thousands of well-paid and unionised climate change and clean-technology jobs, rather than those that involve pouring concrete or boosting fossil fuel consumption. Wrapped into this is a third gamble, that the United States can take on and defeat China and other Asian economies to become a global leader in the semiconductor, electric battery and electric vehicle industries.Spending of $213bn on energy-efficient housing and construction, and of $174bn on electric vehicle incentives are the centrepieces of the package. Given that the US is the planet’s second largest fossil fuel emitter, these are the right priorities. Whether they go far enough is more doubtful. In a country with more than 276m vehicles, the planned 500,000 vehicle charger points by 2030 will not go far, for example. But improved high-speed broadband in rural and urban America is desperately needed, not least to reduce inequality. More traditional infrastructure projects such as roads and bridges, rail and disaster resilience are part of the package. Airports, on the other hand, come low down the pecking order.The president is also making a big gamble on taxation. Unlike the stimulus package, the new spending will be paid for by new corporate taxes and taxes on the wealthy, not by new borrowing. Eight years of planned new spending will demand 15 years’ worth of new taxes, the White House says. Mr Biden plans to raise corporate tax rates from 21% to 28%. This falls well short of the 35% rate that was slashed by Donald Trump in 2017. The top rate of income tax is expected to rise from 37% to 39.6%, precisely reversing a Trump cut. Even so, Mr Biden’s initiative offers a huge ideological and fiscal challenge to the small state, low tax orthodoxies that have shaped politics in the US and beyond since the Ronald Reagan era 40 years ago.Partly for that reason, Mr Biden faces an even tougher road in getting Congress to back him. While many Democrats say that the plan does not go far enough, others cavil at its size and implications. With wafer-thin Democratic majorities in both houses, and the Republican party obdurate in its opposition, the president is unlikely to get his way without concessions on both wings.If this suggests an ultimately doomed effort to re-energise bipartisan politics in an era of ideological confrontation, it is important at the same time to recognise the historic nature of the president’s basic proposition. Mr Biden may be acting like a man who is aware his congressional base may not outlast 2022. But he is also trying to show that government is still capable of doing big things, and even of proving that democratic capitalism can work. More

  • in

    Biden’s $2tn infrastructure plan aims to ‘finally address climate crisis as a nation'

    Joe Biden has said his new infrastructure plan will allow “transformational progress in our ability to tackle climate change” by bolstering investments in clean energy, electric vehicles and building homes resilient to threats posed by the climate crisis.The $2tn plan will make “crumbling” American infrastructure more robust to extreme weather events, the US president said in a speech on Wednesday, while providing funds to “build a modern, resilient and fully clean grid”.Biden said that tax incentives should allow “all Americans to afford clean electric vehicles” and workers will be able to “seize amazing opportunities in a clean energy future”.Biden opened his White House term with a cavalcade of executive actions to begin the gargantuan task of shifting the US to net zero greenhouse gas emissions by 2050 and the new $2tn package, known as the American Jobs Plan, is the first indication of the scale of spending that will be required to reshape day-to-day life in order to avert disastrous climate change.As well as huge investments in crumbling roads and bridges, the Biden plan takes aim at the emissions created by transport, currently the country’s largest source of planet-heating gases. There’s $80bn for Amtrak and freight rail, $85bn for public transit, $174bn to promote electric vehicles through various incentives, the electrification of school buses and 500,000 new plug-in recharging stations within the next decade. The federal government’s vehicle fleet will also be electrified.Ports and airports will be upgraded, the plan states, while more than $200bn is proposed to build, modernize and fortify housing for low-income people affected by the storms, heatwaves and wildfires of growing intensity that are upending American lives and threatening billions, if not trillions, of dollars in ongoing damages. A further $100bn will be spent upgrading an electricity grid vulnerable to the sort of climate shocks that recently shook Texas, as well as aiding the transmission of a glut of new renewable energy. In all, 40% of this spending will be aimed at vulnerable communities of color.The scale of the investment, even in the wake of the giant Covid relief bill, is striking. Biden made clear in his speech on Wednesday that this is the point when the US “finally address the climate crisis as a nation”, according to an administration official.“There’s a lot to like in this plan, it’s excellent in almost every way,” said Julio Friedmann, who was a climate and energy adviser in Barack Obama’s administration and is now an energy researcher at Columbia University.“This is a generational commitment and it can only be applauded. The $2tn is half the price tag of World War Two, it exceeds the scale of the New Deal, it’s wildly larger than the Marshall Plan – and appropriately so. This is the hardest thing we’ve ever done. People generally don’t understand how much construction and reduction is required.”But even the administration’s allies concede further, longer-term spurs to remodel the economy and alter behavior will be required on top of this plan.The package includes a major boost to clean energy research and development, as well as a proposal for a clean electricity standard – a mandate for utilities to phase out fossil fuels use across the grid to zero over the next 15 years that Friedmann said will be a “vital” element of eliminating planet-hearting emissions.But these measures will, like the new spending, require congressional support that is far from guaranteed. Republicans have recoiled from Biden’s idea of raising corporate tax rates to help pay for the investments, with Mitch McConnell, the GOP’s Senate leader, calling the plan a “Trojan horse” for climate measures the party doesn’t support.“In an ideal world this plan would be part of a set of policies to lower emissions but with American politics it’s not clear the rest of it will happen,” said David Popp, a climate policy expert at Syracuse University. “Infrastructure alone won’t get you to net zero emissions. The hope is that you build a green economy to the point where emissions reduction mandates become more doable.”Progressives, meanwhile, have complained that Biden’s plan does not meet the scale of the climate crisis.“Needs to be way bigger,” tweeted Alexandria Ocasio-Cortez, the Democratic representative from New York. Ocasio-Cortez and her allies back an alternative $10tn plan, called the Thrive Act, that proponents say would create 15m new jobs and cut emissions in half by the end of the decade. Rallies are set to be held across the US on Wednesday by climate activists who support this plan.Communities of color, which often suffer the brunt of the climate crisis, helped elect Biden and “it’s time to make sure that our government delivers a real recovery that recognizes the harsh reality our communities continue to face on the ground,” according to Elizabeth Yeampierre, co-chair of the Climate Justice Alliance. “We’ve had enough excuses, enough delays.”The Biden plan is a “big opening gambit, a big downpayment, but it’s not the totality required,” said Friedmann. “It focuses on what’s actionable quickly that yields big emissions abatement. I would like more too, but it’s easy to throw rocks from the outside. It’s a great start but, yes, we will ultimately need more. For the next 30 years, every week is infrastructure week.” More

  • in

    The $2,000 stimulus cheques alone won't work – the US needs better infrastructure

    With the Democrats’ stunning sweep of Georgia’s two Senate run-off elections giving them control of both houses of Congress as of 20 January, the idea of $2,000 stimulus cheques for every household is sure to be back on the agenda in the US. But although targeted relief for the unemployed should unquestionably be a priority, it is not clear that $2,000 cheques for all would in fact help to sustain the US economic recovery.One post-pandemic scenario is a vigorous demand-driven recovery as people gorge on restaurant meals and other pleasures they’ve missed for the past year. Many Americans have ample funds to finance a splurge. Personal savings rates soared following the disbursement of $1,200 cheques last spring. Many recipients now expect to save their recent $600 relief payments, either because they have been spared the worst of the recession or because spending opportunities remain locked down.So, when it’s safe to go out again, the spending floodgates will open, supercharging the recovery. The Fed has already promised to “look through” – that is, to disregard – any temporary inflation resulting from this euphoria.But we shouldn’t dismiss the possibility of an alternative scenario in which consumers instead display continued restraint, causing last year’s high savings rates to persist. Prior to the Covid-19 crisis, some two-thirds of US households lacked the savings to replace six weeks of take-home pay. Having reminded Americans of the precariousness of their world, the pandemic is precisely the type of searing experience that induces fundamental changes in behaviour.We know that living through a large economic shock, especially in young adulthood, can have an enduring impact on people’s beliefs, including those about the prevalence of future shocks. Such changes in outlook are consistent with psychological research showing that people rely on “availability heuristics” – intellectual shortcuts based on recalled experience – when assessing the likelihood of an event. For those parents unable to put food on the table during the pandemic, the experience will establish a heuristic that will be hard to forget.Moreover, neurological research shows that economic stress, including from large shocks, increases anabolic steroid hormone levels in the blood, which renders individuals more risk-averse. Neuroscientists have also documented that traumatic stress can cause permanent synaptic changes in the brain that further shape attitudes and behaviour, in this case plausibly in the direction of greater risk aversion.Though the pandemic is in some ways more akin to a natural disaster than an economic shock, natural disasters also can affect saving patterns: savings rates tend to be higher in countries with a greater incidence of earthquakes and hurricanes.This behavioural response is largest in developing countries, where weak construction standards amplify the impact of such disasters. One study of Indonesia, for example, found large increases in both the perceived risk of a future disaster and risk-averse behaviour among people who had recently experienced an earthquake or flood. While the response to natural disasters may be more moderate in advanced economies – where individuals expect that their government will compensate them – some lasting impact will almost certainly remain.The upshot is that we can’t count on a burst of US consumer spending to fuel the recovery once the rollout of Covid-19 vaccines is complete. And if private spending remains subdued, continued support from public spending will be necessary to sustain the recovery.But putting $2,000 cheques in people’s bank accounts won’t solve this problem because unspent money doesn’t stimulate demand. With interest rates already near zero, the availability of additional funding won’t even encourage investment. Sending out $2,000 cheques to everyone thus would be the fiscal equivalent of pushing on a string.Fortunately, there is an alternative: the president-elect Joe Biden’s $2tn infrastructure plan would mean additional jobs and spending, which is what the post-pandemic economy really needs. Better still, under the prevailing low interest rates, this option would stimulate job creation without crowding out private investment.Guardian business email sign-upAlthough Biden’s plan will require more government borrowing, infrastructure spending that has a rate of return of 2% will more than pay for itself when the yield on 10-year US treasury bonds is 1.15%. By raising output, such expenditure reduces rather than increases the burden on future generations. The International Monetary Fund estimates that, under current circumstances, well-targeted infrastructure investment pays for itself in just two years.Obviously, the “well targeted” part is important. President Donald Trump was right that the Coronavirus Aid, Relief, and Economic Security Act was loaded with pork, not least his own “three-martini lunch” tax deduction for businesses. There’s every reason to question whether Congress can do better when crafting an infrastructure bill.In response to this problem, countries such as New Zealand have established independent commissions to design and monitor infrastructure spending initiatives. If Covid-19 changes everything, then maybe it can change the way the US government organises infrastructure spending. Creating an independent infrastructure commission with real powers would go a long way toward reassuring the sceptics and insuring the recovery against the risks posed by the pandemic’s lingering behavioural effects. More