POLITICAL ECONOMY RESEARCH INSTITUTE
Robert Pollin, James Heintz, Heidi Garrett-Peltier and Jeannette Wicks-Lim show that since 2009, U.S. commercial banks and large nonfinancial corporations have been carrying huge cash hoards and other liquid assets, totaling $1.4 trillion. Small businesses, by contrast, have been locked out of credit markets. The authors examine the impact on job creation of mobilizing these excess liquid assets into productive investments, finding that U.S. employment could expand by about 19 million jobs by the end of 2014, with unemployment falling below 5 percent. The paper discusses policies to transform these hoards into job-generating investments, both for the national economy and, specifically, the Los Angeles and Seattle regions.
PRIVATE AND PRIVATE/PUBLIC INFRASTRUCTURE
It is widely held that traditional infrastructure investments — that is, investments in transportation systems, water management and energy transmission — are the domain of the public sector alone. In fact, a high proportion of U.S. infrastructure is owned and managed privately or through private/public partnerships. In previous research work, we have strongly supported the idea of expanding public infrastructure investments (e.g. Heintz, Pollin and Garrett-Peltier 2009). For the purposes of this discussion, in which we are focused on expanding job opportunities in the private sector, we concentrate on areas of infrastructure that are either privately owned or involve private/public partnerships. The primary areas of private or private/public ownership of infrastructure include:
- the electrical grid system — private/public partnerships;
- freight rail — all private;
- airports — private/public partnerships; and
- water ports — private/public partnerships.
As with the case of building retrofits, private sector investments in upgrading the stock of infrastructure will improve efficiency and lower costs. This will enable the private owners of these businesses to increase their profits, even allowing for the prospect of no increase in market demand.
In recent years, various federal government agencies have developed assessments of the long-term infrastructure investments needed to close the gaps created by inadequate investment levels over the previous 30 years. Focusing on their specific areas of jurisdiction, these agencies include the U.S. Department of Transportation, Association of American Railroads, Federal Aviation Administration, Army Corps of Engineers, Environmental Protection Agency, and Energy Information Agency. In Table 5, we summarize the assessments made by these agencies in the areas of electrical grid, freight rail, and airports. To our knowledge, there has not been any equivalent needs assessment for water ports.
“The Political Economy Research Institute (PERI) promotes human and ecological well-being through our original research. Our approach is to translate what we learn into workable policy proposals that are capable of improving life on our planet today and in the future. In the words of the late Professor Robert Heilbroner, we at PERI ‘strive to make a workable science out of morality.'”