Re-laying the Foundation

We do not invest in infrastructure projects because they are inherently profitable. Instead, a quality portfolio of infrastructure projects is itself a precondition to self-sufficiency and economic development. President Barack Obama views infrastructure and energy projects as a way of re-laying the foundation of our economy, as we saw in earlier chapters. Our physical and social infrastructure is, for Obama, what “binds us together.” For this reason, the federal government should adopt a prudent management standard for its investments, as it did within the American Recovery and Reinvestment Act (ARRA), which viewed infrastructure investments as vehicles for preserving and creating jobs as well as providing long-term benefits. Such a standard ensures that the president, officers of the bank, and heads of agencies will view project investments as a holistic portfolio. In addition, attention will be paid not only to the cost of capital and leveraging ratios tied to project delivery, but also to the impact of the infrastructure projects on their intended beneficiaries.

Infrastructure is a foundational right. Professor Louis Henkin defines human rights as: “a floor,” which is “necessary to make other values flourish.” It is the precondition of our shift to an energy-independent twenty-first-century economy promoting equal opportunity. Likewise, laying infrastructure has been the necessary first step toward recovery after most large-scale financial crises, conflicts, and occupations. This was true with the Great Depression, the Second World War, and decolonization in Africa, Asia, and Latin America. Infrastructure was thus the cornerstone of the New Deal, the Marshall Plan, and nation-building among newly independent states.