'Fannie Pave' Infrastructure Bank: "It’s like Fannie Mae was, before its exposure became real and the taxpayers had to come in and bail it out."
John Kerry’s ‘Infrastructure Bank’: A corporate welfare slush fund
By: Timothy P. Carney , Senior Political Columnist
The Washington Examiner
The flowers are blooming and the birds are chirping, and so it’s time for Sen. John Kerry, once again, to stand on stage with Republicans and Big Business and call for a dramatic expansion of government.
Last Spring, Kerry had lined up some corporate luminaries – BP, Conoco, and Shell – to endorse his cap-and-trade scheme for greenhouse gasses. Even though BP’s Deepwater Horizon had already exploded and was sinking, it was only a spat with his GOP ally, Lindsey Graham, that derailed that little moment of corporatism.
Today, Kerry’s Big Business-Big Government collusion would be a federal “Infrastructure Bank,” described by a Boston Globe reporter as “an independent entity called the American Infrastructure Financing Authority, which would be similar to the Export-Import Bank.”
Ex-Im epitomizes corporate welfare. It also is a prime example of unaccountability. The agency is independent of any cabinet department, and it hands out loans and loan guarantees basically at its own discretion. Congress typically gives Ex-Im lengthy reauthorizations, thus minimizing congressional oversight. In recent years, Ex-Im was moved off-budget, meaning it funds itself with the repayments from old loans and the fees from new ones. So it’s kind of like Fannie Mae was, before its exposure became real and the taxpayers had to come in and bail it out.
So, Kerry wants to create Fannie Pave, and the U.S. Chamber of Commerce loves the idea: a bunch of free money that seems to cost nothing.
Perhaps we’ll learn more about this idea at today’s press conference, featuring Kerry, the Chamber, and retiring Republican Sen. Kay Bailey Hutchison. But for now, some of my early reactions:
- The Boston Globe quotes Kerry using Obama’s “Win The Future” talk: “As we invest too little and our competitors invest more and more, the harder and harder it will be to catch up." As I wrote about Obama’s use of this framework:”In Obama's America Inc., vision, all of the United States is competing against China, Germany, India and Spain in Olympic solar panel making, the biotechnology sprints, and the manufacturing relay.”
- Kerry spoke about the infrastructure bank at a Center for American Progress event in January. Remember, CAP has also advocated a “Green Bank.”
- Amity Shlaes at Bloomberg has a great response to this idea (h/t Future of Capitalism blog):
The second thing the U.S. can do is stop kidding everyone about infrastructure as stimulus.... Infrastructure spending as stimulus is no medicine for dramatic downturns or tsunamis. In fact, the very reason Japan was carrying destabilizing amounts of debt even before the quake was its infrastructure spending that failed to stimulate. Our own emphasis on stimulus plans that included infrastructure gave a lurching quality to recent growth. Now everyone is concerned that, absent stimulus, the U.S. can't grow farther. So sure, Japan will need new infrastructure now. But that infrastructure should be recognized for what it is: brick, wire, mortar. Remember, though, that growth comes from competitiveness, not government spending.
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