Marshmallows, “Roaring Kitty,” Public Trust & $7.7 Trillion In Missing Infrastructure Investment – Forbes

“Damn, the torpedoes! Jouett, full speed! Four bells, Captain Drayton!”  Admiral James Glasgow Farragut during the Battle of Mobile

We are in the midst of a once in a century economic shift, and the extraordinary social upheaval we see around us – not unique in history, just think of the Red Scare of 1919 in the middle of that pandemic – is a bad match for the historic investment call facing us, the requirement to invest big in the 5G/Big Data/Deep Learning ecosystem across all infrastructure if we are to move our economy forward. 

Trust in our institutions is at an all time low – particularly trust in Congress, the institution charged by the Constitution with the power of the purse – and this was before the contested election. Just be be clear, when I say historic levels of investment it is in the range of at least $7.7 trillion through 2030 (3% of GDP for ten years) if we are to electrify and digitize the infrastructure that enables, and that is increasingly the brains, of our economy. This is a great time for us to all be rowing together.

As the French say, we are in the soup. How do we rouse ourselves to make one of the biggest lifts of any generation, when we are divided, uncertain and led – at least some of us, on occasion – by people with troublingly evocative names like Roaring Kitty?

The Marshmallow Experiment. The infrastructure investment decision we face looks a lot like the world famous marshmallow experiment, just writ much larger. In the 1960’s Walter Mischel conducted the experiment on a group of four and five year-olds. Individually, alone in a room, they were asked to sit with a single marshmallow in front of them for 15 minutes. If they could hold out, then they were promised a second marshmallow – they would get two! Cutting to the chase, those that showed discipline, or impulse control, turned out to be much more successful in life – they were followed for 40 years or more, and they had, in the words of James Clear, “higher SAT scores, lower levels of substance abuse, lower likelihood of obesity, better responses to stress, better social skills as reported by their parents, and generally better scores in a range of other life measures.”

That is, in the choice between satisfying current wants (consumption, cheaper clothes and electronics are good examples for us) versus the results of delayed gratification, promising more in the future (in infrastructure that would be better jobs, a cleaner environment, more opportunities more widely spread and world-class businesses), discipline begat success. This is only natural, it is what the Greatest Generation did for us.  We, on the other hand, have $27 trillion in debt – and are about to run that up to $30 trillion – a lot of grab and go marshmallows!

A follow-on experiment showed that delayed gratification – that cast of mind – is more prevalent, because more successful, in an environment of high trust and reliability. These are two factors critical to long-term decision-making that are in noticeable retreat in the U.S. (and practically non-existent in places like Argentina).  As my son, the lawyer, once told me ‘our generation doesn’t believe in the future like yours did, we’ve seen 9/11, the forever wars and the financial crisis…’ This was before the pandemic.

Instead of asking “why don’t we invest,’ or defaulting to the ‘when the next bridge collapses that will wake us up,’ knee jerk mental explanations to our failure to invest in infrastructure, a better course of action may be to systematically work on the trust issue – in our institutions, in our confidence in investment now creating a brighter future, and – above all – in ourselves. After all, as a country we clearly have serious impulse control issues.  

The Work in Front of Us. All of this suggests to me, at least, that the Biden Administration needs to work with Congress to notch some very quick wins. Fighting Covid is necessary, but no sufficient – we need to do a lot more. You build trust in an emergency – especially a prolonged, chronic, draining emergency – by getting things done. 

Earlier in the summer – as an example of how you don’t build trust – we surveyed the infrastructure industry, and 94% said that an infrastructure stimulus was critical for the U.S. to emerge from the crisis (see graph above). Inexplicably – truly – no action was taken. Failure to act in this case is exactly the same as incompetence, or simply a lack of concern – and inspires the opposite of confidence. 

Three actions come to mind for us to begin to put things right. First, pass the $1.9 trillion stimulus, and get it done quickly – this seems counter to my argument, but… Second, focus the stimulus on states and municipalities, and on infrastructure – reduce scarring, and put funds into job creation…  

Third, get on the offensive and define a series of mini moon shots, like getting $100 million in finance into each state infrastructure bank, or fast-tracking the solar project approval process, or getting the Economic Development Administration revved up, using its funding to make investments that matter – and publicizing those investments. Do something, get the motor started. The focus on Covid is fine, necessary, but that is a long, drawn-out battle, and we have to do more than that – much more than that – to show people that they will get our economy back on track.  

The Problem – Projects. Gateway, Brent Spence & California High Speed Rail are projects that have been with us, without going anywhere, since my youngest employee was in 6th grade! That generation has lost its faith in these projects. The failure to get moving on major projects is not unfathomable – it is pitiably understandable. Infrastructure investment is a tough sell for us, a consumer society that seems to be built on the opposite of impulse control. The problem is doubly tough given the slow productivity of our infrastructure system: when it takes an average of 9.5 years to get a highway approved, and 4.5 years to get a project from shovel in the ground to people zooming, people plugging in, or kids drinking clean water – who has the patience for that investment in an era of Amazon’s

AMZN
same day service?

Another Problem – Institutions. It seems as unlikely as it is absolutely fundamental to spend sustained effort in creating – somehow, as quickly as possible – trust in our institutions. When President Biden entered Congress 42% of Americans had ‘a great deal’ or ‘quite a lot’ of trust in Congress – and that was the year of Watergate; last year only 13% fell into those two categories. In the 2021 Edelman Trust Barometer the U.S., shockingly given our self-perception, is nestled in between Brazil and Mexico in the list of 13 distrusted governments – if you’re looking for a silver lining our government’s standing is a couple of points above Argentina and Russia, not much to brag about.

The Work Ahead of Us – Building Trust. “Build Back Better” works from a trust point of view, but from an infrastructure point of view the objective has to be different – we need to do something more robust, confident and productive, and something on the order of ‘build forward together’ captures a better sense of the moment. In normal times envisioning what you get from an infrastructure investment is difficult enough, but when you are shifting from an analogue to an electric and digital world – in a climate of depreciating trust and reliability – not making big investments is as big a mistake as not moving forward rapidly to produce a series of well-thought out, competently managed, quickly successful and rightfully celebrated mini moon shots.

Returning to 1919, that year of panic, pandemic and hysteria: “On the morning of July 7, 1919, the great “motor truck train” [of the U.S. Army’s Motor Transport Corps] slowly rumbled due west out of Washington, D.C., following an elaborate dedication ceremony for the Zero Milestone, the point from which all highway miles to the nation’s capital are to be measured, just south of the White House…” and headed to San Francisco. In the midst of confusion as deep as we are now experiencing one of the most trusted institutions in the U.S., the U.S. Army, was planning ahead – taking the reins, acting publicly, giving the country a shot in the arm. But it wasn’t public relations active, but planning, building, confident: “I think that every officer on the convoy had recommended in his report that efforts should be made to get our people interested in producing better roads,” wrote one of the leaders of the expedition, a champion of delayed gratification, a young captain named Dwight D. Eisenhower, who complained about the lack of our country’s investment…

Note: this is excerpted and edited from my forthcoming book, Vision – OUR Strategic Infrastructure Roadmap Forward.

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