About Me 0084: Making Easy Money

Coming to a station near you any time soon?Photo: Tim GilliamPresident Obama doesn't seem
like he's going to let this high-speed rail thing go, making it a centerpiece
of the infrastructure section of his State of the Union Address last night:

Within 25 years, our goal is to give 80 percent of Americans
access to high-speed rail. This could allow you to go places in half the time
it takes to travel by car. For some trips, it will be faster than flying --
without the pat-down. As we speak, routes in California and the Midwest are
already underway.

Sounds great, if you're a
high-speed rail fan. But last fall's midterm elections exposed GOP opposition
to Obama's plan to bring fast train service to all regions of the country. As a
gubernatorial candidate, Republican Scott Walker of Wisconsin made opposition
to a Milwaukee-Madison high-speed route a centerpiece of his campaign. After he
was elected, he
handed the feds back $810 million that would have funded the line, on the
grounds that it would be too expensive for the state to run. It was a move
echoed by New Jersey Gov. Chris Christie's rejection of funds for a regular-speed
rail tunnel under the Hudson River (Christie is fighting hard not to repay money the feds already spent on that project).

And in California, which
ended up getting some of that Wisconsin money, there's been controversy over the first phase of the state's own HSR project, with detractors calling it "a train to
nowhere" and farm communities worried about the impact on available land.

So it's notable that Obama
doesn't seem to be backing down from his push to make HSR part of his legacy.
That 80 percent figure is pretty aggressive.

The president also hammered
away at the need for the need to continue upgrading and repairing the
transportation infrastructure we already have:

So
over the last two years, we've begun rebuilding for the 21st century, a project
that has meant thousands of good jobs for the hard-hit construction industry.
And tonight, I'm proposing that we redouble those efforts.

We'll
put more Americans to work repairing crumbling roads and bridges. We'll make
sure this is fully paid for, attract private investment, and pick projects
based [on] what's best for the economy, not politicians.

Obama's
stance was cheered by Transportation for
America (T4A) a coalition group calling for a reform of the nation's
transportation system. At the same time, the group's statement also acknowledges the difficulty of
getting projects funded. From the statement released by T4A's executive director, James Corless, today:

We were thrilled to hear the President come right
out and say that investment in transportation and other infrastructure is
central to rebuilding and growing our economy. An upfront investment in the
most-needed, clean transportation projects is a great opportunity to create
near-term jobs and lay the groundwork for the future economy.

He acknowledged that money will be tight and we
have to make the best of use it. That requires fixing the 20th century
infrastructure -- our crumbling roads and bridges -- as we build out the
infrastructure for the 21st. That certainly includes
high-speed rail, but it also means helping communities get moving on
long-planned networks of light rail, street cars, rapid buses, and making
progress on road reconstruction to make our streets safer people walking,
biking and driving.

The President's vision for infrastructure is not just about
near-term construction jobs. It is, as he said, about growing new businesses,
livable neighborhoods and dynamic regions that can attract a young and mobile
workforce and compete with our international competitors. It's about the jobs
associated with new transportation technologies
and manufacturing modern transit vehicles, everything from real time
information systems to make our highways and transit corridors smarter, to the
new rail cars being built today by United Streetcar in Oregon that can breathe
new life into our cities and suburbs.

T4A's Equity Caucus, which focuses on
the needs of poor, working-class, and minority Americans, had this to say:

[O]ur inadequate, outdated,
and underfunded transportation systems are keeping too many struggling
Americans -- young and old, rural and urban -- from fully connecting and
contributing to the national economy.

Millions of Americans
rely exclusively on public transit, walking, or biking to get to work, to the
doctor's office, to school, and to the grocery store. Nearly 20 percent of
African American households, 14 percent of Latino households, and 13 percent of
Asian households live without a car. Fifteen percent of Native Americans must
travel more than 100 miles to access basic services.

Smarter transportation
investments can unleash the under-realized economic power of communities across
America.

All this comes in the context
of a transportation reauthorization bill that has been stalled for the past year and a
half in Congress -- and that was when the Democrats controlled both the House and the
Senate. With Republicans now in control of the House, things are bound to get more complicated. Rep. John Mica (R-Fla.), the new Republican chair of the Transportation and Infrastructure Committee in the House, had this to say about the president's call for more infrastructure spending (via Transportation Nation):

After the Administration derailed a major six-year transportation
bill in 2009, it is encouraging that they are now on board with getting
infrastructure projects and jobs moving again. However, just another
proposal to spend more of the taxpayers’ money, when we have billions of
dollars sitting idle tied up in government red tape, will never get our
economic car out of the ditch.

We’ve got to do more with less to improve our infrastructure in a fiscally responsible manner.

Central to all future
discussion about infrastructure enhancement and repair will be the question of
money. With lawmakers avowedly against raising the gas tax, finding the cash to
build new systems -- or to stop the proverbial crumbling of the old ones -- is
going to be the biggest problem.

Thought the ZH famiglia would enjoy this comment from my old friend Sol Sanders, who has been watching China long enough to actually remember Mao. I read Chinese history as an undergrad and worked as a banker in the semi cap equipment market, which is now dominated by Asian nations. But the export market that China and its neighbors depend upon has never come back. Is China the next Egypt? A version of this column is scheduled for publication in The Washington Times, Monday, Feb. 14, 2011. -- Chris

Follow the Money No. 53: Rolling the dice in China

By Sol Sanders <solsanders@cox.net>

When scientists get further along with epigenetics, they may discover the Chinese have two unique DNA: a gambling gene, and another for hospitality. The first, of course, explains why Macau is odds-on favorite for replacing Vegas as No. 1 world gambling champion. The second suggests why few escape the lure of a Chinese campaign to win visitors’ hearts and minds.

Looking at a new determined shift in Beijing’s economic strategy, one has to chalk it up to that gambling gene. Intoxicated with turning into “the world’s factory”, Beijing plans to sail right past their successful collaborative development with foreign multinationals. Its new strategy literally amends Maximal Leader Deng Hsiao-ping’s dying instructions two decades ago to hide their capacities until they had achieved his four modernizations.

One can only chalk up Western businessmen naiveté to that second suspected Chinese gene, the ability to vamp any visitor. Of course, Frederick Engels, Karl Marx’s more literary companion, explained it all more than a century ago. He foresaw that on the way to the gallows, the capitalists’ greed would drive them to compete with one another to sell the rope to their executioners.

From mid-summer last year Chinese authorities – as a muddled but highly informative U.S. Chamber of Commerce report concludes – shifted from defense to offense. Years of studying their acknowledged total dependence on foreign technology has culminated in proposing 16 new megaprojects. With them they aim:

1] To provide new opportunities for stealing foreign technology. Now, before any technology can be introduced into China, it must be intensely “studied” -- in fact, stolen even before it enters the market. Another is increased allocation of “patents” to Chinese firms with virtually no verification, making it virtually impossible to pursue legal indemnification for losses.

2] To restore the primacy of the SOEs, the state-owned enterprises, those giant behemoths notorious for their inefficiency and corruption but powerful political entities. Massive funds [$25 billion] -- out of the huge 2008 stimulus package, originally aimed at warding off contagion from the world financial crisis – have been allocated to the SOEs to produce “indigenous innovation”

3] To continue to ensnare foreign companies, Beijing will suggest in return for continued tech transfers, they will get a share of the growing Chinese markets. They will also be offered participation in new technologies in China using government funds. But increasingly “import substitution”, that protectionist policy which crippled much of the third world before “globalization” became fashionable, is government policy.

Beijing’s new turn is loaded with risk. The history of Chinese innovation during the current boom is miserable. Eighty percent of China’s major firms do not have R&D at all. One reason may be it has been so easy to rent or steal needed foreign technologies. But there may be even more important – if difficult to evaluate – cultural factors.

Although China was historically leader in basic scientific development, simply said, the Europeans picked up on those breakthroughs to initiate the industrial revolution leaving China behind. Why? The answer to this question is perennial among scholars. One answer lies in China’s intense bureaucratization, in part arising from the need for huge collective enterprises – largely for water control. Another, of course, is Chinese learning has always put the emphasis on rote memorization and an inordinate, even religious, respect and adherence to what has gone before. It may be no accident, as the Communists used to say, now bereft of its Marxist-Leninist-Maoist dogma Beijing is turning back to Confucianism. [A statue of Confucius was recently installed in Tien An Mien square alongside a huge portrait of his greatest adversary, Mao Tse-tung.] With its emphasis on ritual, Confucianism represents the antithesis to the restless European [Greek] mind. An even greater threat to the new effort to produce originality may be the all pervasive corruption permeating Chinese life today which means vast sums promised R&D will go astray.

China is also taking other risks. Despite an intense campaign, Beijing has not been able to lure home more than a few prominent scholars among more than 62,000 Chinese in the U.S., many in technological research. With ties in both cultures, they have been critical to transferring technology. The new Beijing strategy may jeopardize that relationship as American business, reluctantly, and the U.S. government becomes increasingly cautious about China deals.

True, economic development in East Asia was always full of warfare over intellectual property. Japan, Taiwan and South Korea have been major culprits. But the Chinese pour salt in the wound by offering products overseas based on stolen technology. Thus California’s former Gov. Arnold Schwarzenegger was talking to the Chinese about proposed federally subsidized high-speed rail based on their theft from three foreign companies that had cooperated in creating them in China. At the moment, Washington is grappling with the proposed purchase by Huawei, a Chinese entity with military connections, of an American IT company with the Pentagon as a client.

Beijing’s gamble if successful would insure continued giant leaps forward but like Mao’s infamous economic plays, this one could prove catastrophic.

bench craft company sales

About Me 0084

Thursday, February 17, 2011

Making Easy Money

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