Equipment World Digital Magazine
Issue link: http://read.dmtmag.com/i/748269
B y the time you read this the United States will have a new president-elect. But if there is one attribute both candidates had in com- mon is they both bashed China. Donald wants a trade war. Hillary had her "pivot to Asia." That's the benefit of living in a democracy. You get to choose your own flavor of stupid. China is no democracy, but that brings cer- tain advantages. Their government can focus on things that are good for the county, not just good for lobbyists, politicians and TV ratings. And what China is focused on these days is not war, but infrastructure. The stats don't lie: China spends 8.6 percent of its GPD on infrastructure. We spend 2.5 percent. And in dollar amounts, China spends $129 billion on their military annually. We spend $571 billion. China seems to have figured out something our Greatest Generation understood years ago when they created the Federal Highway Pro- gram – that spending on infrastructure boosts middle class wages and jobs. In the 1950s, 60s and 70s, we spent 6 to 7 percent of GDP on infrastructure. The econo- my was great and middle class jobs and wages were terrific. Now that we've let that dwindle down to 2.5 percent, wages are terrible, half the men in the country aren't working, drug abuse is soaring and national pride has col- lapsed in the wake of the most corrupt and contemptible presidential race in American history. Coincidence? I think not. Causation or correlation? Open for debate. There are critics of China's infrastructure push. In their paper: "Does Infrastructure Investment Lead to Economic Growth or Eco- nomic Fragility? Evidence from China," Atif Ansar, Bent Flyvbjerg, Alexander Budzier and Daniel Lunn at Oxford's Said Business School call into question the value of China's infra- structure spending. Their study of 95 complet- ed projects showed cost overruns (31 percent on average), benefit shortfalls and rail projects that took 25 percent longer than usual. But those kind of cost overruns and delays don't hold a candle to budget blowouts like Boston's Big Dig, or the decades it seems to take to build highways in this country. And the paper's conclusion that China's big spend on infrastructure is bad for their national debt may well be true; but it's laughable in the face of the fact that our national debt has rocketed up from $5.6 trillion in 2000 to $18.2 trillion last year. And what do we have to show for all our deficit spending? China has 10 bullet train proj- ects underway. We have one – and 15 con- tinuous years of wars and unresolved military conflicts. A healthy economy needs the right bal- ance of blue collar and white collar jobs; of manufacturing, farming, high-tech, service jobs and infrastructure. That requires some level of involvement from the government, much to the libertarians' dismay, but we can't all be software programmers, or Wall Street bankers or work for the military industrial complex. Somebody has to put food on the table and roofs over heads. When it's put to the vote, citizens over- whelmingly approve bond initiatives to build or improve state and local infrastructure. And I feel reasonably certain that if we got to vote on wars, we'd have a lot fewer of them. So what's it going to be, Mr. or Mrs. Pres- ident-elect: War or infrastructure? Can our democracy, flawed as it is, outperform China's autocracy? We need an answer soon. November 2016 | EquipmentWorld.com 98 final word | by Tom Jackson War or infrastructure? TJackson@randallreilly.com