Because of readers’ interest and reactions to the column on infrastructure (“Why the Nation’s infrastructure is falling apart,” Times, September 23), I will continue discussing today infrastructure development and maintenance, and how this is the key to building a better country and national modernization.
Perhaps the best book on the role of infrastructure development and public investments in national development is Bold Endeavors (Simon & Schuster, 2009), Felix Rohatyn’s riveting account of how several visionary US presidents built modern America through well-targeted infrastructure and focused public investments.
Rohatyn is a respected US investment banker and former US ambassador, who as chairman of the Municipal Assistance Corporation (NE York City’s fiscal watchdog agency) msterminded the Big Apple’s survival and recovery from financial crisis in the 1970’s.
In Bold Endeavors, Rohatyn contends that American infrastructure is in a rapid stage of deterioration, and he sounds the call for a massive effort of rebuilding in order to stop the decline and shore up America’s position as the world’s biggest and most dynamic economy.
10 transformative events
The book tells the story of ten transformative events in US history. He takes the reader on a journey through the past, and narrates how determined leaders found the will, steadiness, and political acumen to make the decisions that are the building blocks of American history.
The 10 events discussed are:
1.The Louisiana Purchase
With the American nation still in its infancy and George Washington recently dead, Thomas Jefferson took the historic decision to buy Louisiana from France instead of going to war with her.
After lengthy negotiations, the two nations finally agreed on a deal. the United States would pay France 80 million francs, a total of $15 million dollars; 60 million francs ($11,250,000) for all the land, and an additional 20 million francs ($3,750,000) for an indemnity on France’s debt to US merchants.
Both Napoleon Bonaparte and Jefferson—giants in their nations’ history—signed on to the agreement. On December 30, 1803, the deal was finalized.
The returns for the US were immediate. The size of the US was immediately doubled – 828,000 square miles purchased at the cost of about four cents an acre. War was averted. The Mississipi was secured for trade.
The long-term rewards were even more spectacular. The orderly repayment of US bonds during the next 15 years established America’s place as a world power, a responsible nation with the potential for even greater growth.
2. The construction of the Erie Canal
The canal opened a water route from East to West in America by connecting the Great Lakes to the Atlantic ocean, by a path of integrated rivers.
After the 363-mile Erie Canal was completed in 1825, New York City became America’s chief port and one of the world’s great metropolitan centers.
The canal established the precedent, says Rohatyn, that “a visionary and innovative government can finance and build significant projects that will dramatically improve the nation’s wealth and quality of life.”
3. The Transcontinental Railroad
Abraham Lincoln laid the case for building the transcontinental rail line uniting the East and West coasts of America, and move goods from one end to the other.
Even as the nation fell into civil war, Rohatyn narrates, “President Lincoln found the vision and the courage to involve the federal government in the large challenges of building and financing a transcontinental railroad across America.”
On May 10, 1869, the railroad uniting America from coast to coast was completed.
According to Rohatyn, “the costs of this enterprise were huge and traumatic. Chinese workers died by the hundreds. Native Americans were massacred, and their cherished way of life fell into ruin.”
Yet the transcontinental railroad proved to be a shrewd investment for the government. By 1869, the railroads had settled their debts, and the government had earned a profit of more than $103 million on its loans.
4. Land Grant Colleges
The Morill Act of 1862 was a far-seeing national investment inspired by one of America’s founding ideals – “the enemy of American success is not failure but lack of opportunity.”
The greatest obstacle to the success of the land grant schools were America’s classical colleges. Harvard and Princeton University lobbied against the law.
Today, the land grant colleges are an essential feature of American academic life. Over 3 million students are enrolled each year in America’s land grant institutions. To date, they have collectively awarded 20 million diplomas.
5. The Homestead Act
On May 20, 1862, President Lincoln signed the Homestead Act into law.
The legislation sought to provide Americans incentives to settle, farm and own land in the new territories opened by America’s relentless expansion – with the Louisiana purchase; the annexation of Texas in1845; the establishment of the Oregon territory in 1846, the Mexican secession of its northern lands in 1848.
The Homestead Act accomplished a great deal in helping build America.
Between 1850 and 1920, the number of the nation’s farms quadrupled, and a significant majority of these began on what was once public lands.
It was the largest transfer of public land to private ownership in history – a total of almost 300 million acres were settled by homesteaders between 1862 and 1955.
6.The Panama Canal
Theodore Roosevelt was the Panama Canal’s visionary and greatest champion. He nearly singlehandedly pushed a reluctant Congress into action, sent troops to the isthmus, and covertly fermented revolution.
More than 25,000 people died during the canal’s construction, the majority victims of yellow fever and malaria. The final cost, including French and US investments, was $639 million.
In August, 1914, six months ahead of schedule, the first ship traveled through the locks of the Panama Canal and made its way from the Atlantic Ocean to the Pacific Ocean.
The canal changed America, writes Rohatyn. “It made the United States a stronger, richer, and more militarily secure country.”
On December 31, 1999, the United States ceded control of the Canal to Panama.
7. Rural Electrification Administration
On May 21, 1936, as part of his New Deal program to combat the Great Depression, Franklin Delano Roosevelt signed the Rural Electrification Act into law, and established the Rural Electrification Administration. His great vision was to electrify and bring the boon of electricity to all America.
Within the first two years of the REA’s operation, 1.5 million farms in 45 states received electrical power from 250 cooperatives.
By the 1950s, REA provided power to nearly all of American farms. The default rate on REA loans is under 1 percent.
An electrified America was a stronger, better-educated, more prosperous, and more democratic republic.
8. Reconstruction Finance Corporation
It was Herbert Hoover who established the Reconstruction Finance Corporation (RFC) in the midst of the depression to lend federal capital to failing private businesses.
But it was Franklin Roosevelt, who had the bold vision to expand the RFC and transform the agency into the crucial financial engine that would drive the New Deal, and revitalize an economically battered America.
The RFC was the essential instrument that two very different presidents used not only to rescue America, but also to transform and rebuild the country.
9. The GI Bill
On June 22, 1944, Franklin Delano Roosevelt signed into law the Servicemen’s Readjustment Act of 1944, more popularly known as the GI Bill.
The GI Bill offered four revolutionary benefits to any World War II veteran who had served at least 90 days after September, 16, 1940. These benefits were:
The opportunity of resuming education or technical training after discharge, for which the government would pay up to $500 per school year, and provide a monthly allowance while the veteran was enrolled.
Vocational education and on-the-job training.
Housing and business loans guaranteed by the government.
Unemployment benefits of $20 per week for up to a year.
By the end of the program in 1956, out of a veteran population of over 15.4 million, more than half – about 7.8 million veterans – participated in traditional education or vocational programs.
The total cost of the program was $14.5 billion. Yet the return on this colossal investment was nothing less than the creation of a knowledge-driven America – the society that provided the economic engine for the second half of the 20th century.
10. The Interstate highway System
On June 29, 1956, President Dwight Eisenhower signed the federal-Aid Highway Act of 1956 into law.
As a young lieutenant in the US military, he had a vision of an America connected by a network of smoothly paved high-speed roads.
In Rohatyn’s account: “The insterstate highway system was a monumental construction project, an engineering feat that went on for 40 years rather then the 13 that was promised in the original legislation.”
Safe and readily accessible roads for high-speed automobile travel led to a building boom that revitalized the US economy.
In the end, says Rohatyn, “it was a president’s sense of commitment that changed America. It was bold and tenacious leadership that led the nation to make the colossal investment in its infrastructure.”
Public investment: An activist tradition
Rohatyn wrote Bold Endeavors to reaffirm what he calls “the activist tradition of public investment.”
America’s ascendancy in the world was facilitated by leaders who invested money to build a country that worked. “It was the extensive and innovative infrastructure that made life in the United states more comfortable, more egalitarian, and more secure.”
The same belief and commitment to infrastructure is what is called for in our dream of a better Philippines and a higher quality of life for all Filipinos.
We need leaders who can make this dream come alive in our country.
That window of opportunity is behind President Aquino now. He has only 19 months left in his term. But he can contribute to building a better country, if he devotes his energies towards funding better infrastructure projects instead of wasting public money on DAP schemes.