Investing in Unready Projects

In an earlier post, I outlined what a common seanse infrastructure bill should look like.  As the Wall Street Journal reported yesterday, President Obama is apparently not an avid reader of Supplemental Conditions because he is getting ready to market a new “investment” in infrastructure spending program that misses the mark entirely.  I understand that many underemployed construction firms see a new infrastructure spending program as a silver lining to the dark cloud that hangs over the industry right now.  Indeed, the AGC is all but begging to for this bill to be passed.  But, as the Journal alludes to, any new infrastructure spending program is likely to have little impact on the economic realities the industry faces.  First, many of the so called shovel ready projects are at least 3 years from the first shovel being put into the ground.  Additionally, President Obama’s plan will undoubtedly require the use of project labor agreements thereby funneling the spending to union only construction firms and leaving an overwhelming majority of construction firms out in the cold. 

What we need is not targeted spending, but pro-growth policies that will benefit the entire market place.  Public spending directed at 11% (the percentage of the construction industry that is unionized) is simply not going to do it.  Yes, infrastructure spending is nice – and necessary – but it is also useless without vibrant private sector projects.  Unfortunately, no amount of President Obama’s “investment” can get those projects going.