07/19/2008 05:12 am ET Updated May 25, 2011

Reinvesting in America

Our economic recovery depends upon not only rehabilitating our national infrastructure, but also on large scale investment in state-of-the-art new projects. Infrastructure investment is a precondition to robust economic growth. America benefited from this insight during the New Deal period and also through Cold War-period investments in our information infrastructure, creating the Internet. The US has long advocated this strategy abroad contributing to the East Asian miracle and jumpstarting the post-War European economy through Marshall Plan infrastructure investments in Europe.

As the showdown between Senators Barack Obama and John McCain appears increasingly likely, how the candidates plan on jumpstarting our economy and achieving durable growth may decide the election. One of the main differences between the candidates is their approach towards this international orthodoxy that investment in infrastructure is a precondition to economic growth. Senator Obama favors the bi-partisan National Infrastructure Bank proposed by Senators Christopher J. Dodd and Chuck Hagel. Senator McCain has not sponsored the Bank, seemingly favoring a less interventionist, more laissez-faire approach to our economic crisis.

Support for infrastructure induced economic growth draws on US experiences and also on international experiences. Modernizing and importing successful models is paramount. The models now circulating among policy-makers invariably are public-private partnerships, referred to as PPPs or P3s. From Illinois to Florida to California, all recognize that limited government budgets necessitate private sector co-financing to meet dire needs. Governors Schwarzenegger and Rendell and also Mayor Bloomberg advocate P3s in their sub-national 'Building America's Future' plan.

While the argument for P3s is sound, to make use of the large pools of private capital now forming and the increasing political will accumulating, we must take care to avoid the Wild West mentality that has often undermined PPPs abroad leading to large numbers of failed projects and renegotiations. Arguments that we must learn from China or emulate the UK's railway privatization must be viewed with skepticism.

Internationally, too often P3s are carried out in the shadow of government regulation. P3 planners consistently advocate lessening government oversight and bypassing government agencies. The idea is that the private sector can itself recreate the good aspects of government and shed the bad. The result of this parallel private government has resulted in many low quality projects, public outcry over unaffordable toll roads, undrinkable water, and uneven electricity.

In introducing P3s, we must maintain America's strong public civil engineering culture to ensure that infrastructure quality will be not only profitable, but high standard. Our tradition of participatory planning will ensure that projects meet public needs and are accountable to citizen users. In our national economy, we must also ensure that our government planning coordinates local, regional, and national levels. Importantly, although we must partner with international allies, we must employ our under-compensated, highly skilled American workers to carry out these projects. We must encourage the use of US manufactured equipment and technological know-how. If we build American labor into our infrastructure investment, then projects will not only stimulate economic growth but also create the high quality jobs we so sorely need.

We thus must urge our presidential candidates to take the lead in reinvigorating our economy through strategic public investment that benefits Americans not only tomorrow but also gives them jobs now. Infrastructure should be the cornerstone of this strategy.