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Reason Foundation

The Politics of Disaster

Geoffrey Segal
August 1, 2007, 3:42pm

Following yesterday's horrible tragedy in Minneapolis there has been non-stop coverage of America's infrastructure needs. Our roads, bridges, airports, ports and water infrastructure all need significant investment -- its true. For some, the answer is easy -- a massive federal spending program. Even my colleague at Reason magazine fell for the trap in connecting the two (federal spending and infrastructure) in a recent blog post; suggesting that money currently spent in Iraq could be redirected to funding infrastructure. Problem solved, right? Wrong. A federal bailout and/or spending program is not the answer and frankly runs counter to more than 30 years of policy research conducted by my colleagues at Reason Foundation. For example, the recently published 21st Annual Privatization Report includes a lengthy sections on transportation, water and airports (to name a few) demonstrate how the private sector can play a significant role in infrastructure development in the US. In just a short time private companies have raised a significant amount of capital and they certainly have the expertise and willingness to invest in our infrastructure -- more efficiently and effectively to boot. While a role for the government will always remain, a massive federal bailout is not the solution -- even Wall Street sees it. This is part of a larger trend -- a bipartisan one where the doors to private capital and expertise are increasingly being opened. Former Colorado Governor Bill Owens, a Republican, discussed it in our recent Innovators in Action as did Indiana Governor Mitch Daniels in last year's edition. Even Pennsylvania Governor Ed Rendell, a Democrat, acknowledged an increased role for the private sector to play in financing, developing, and managing our nations' infrastructure. Despite recently signing a bill in Pennsylvania that would not privatize the Pennsylvania Turnpike, Rendell admitted on national television that privatization would have generated significantly more money than the plan the general assembly and he ultimately supported. Its true that Rendell also called for a 1% national income tax increase to fund a "Federal Capital Budget" so he's not entirely sold but at least he didn't play politics with the war.


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