A Mental Tangent on the Way to Connecticut: Infrastructure and the Game of Risk

For the first time in eight years my sister and I are riding Metro-North railways to visit my family in CT. As we rumble along, my sister muses that these train-cars are so old that they can be used for movies portraying the 80’s. Mind you this is the major CT-NY public transportation line connecting the mansions of high-powered attorneys and financiers of America's upper class with horizontally challenged NYC. Ironically they take the train because they cannot afford to waste two plus hours taking the major roadways which are congested with rush-hour traffic.

My sister's audible criticisms prompted a mental tangent and I began to ponder the ramifications of our “antiquated” infrastructure. After all this is one of those issues that challenges revenue rich CT as much as it does tax thin NY. In my head I responded to my sister with an analogy.

At the conclusion of your turn in the game of risk you receive a card. At a minimum of three or at a maximum of five turns you have a match. This match enables you to receive extra resources to place where you wish. Each time a match is submitted, there is an incremental increase in resources the next time a player submits a match. Let us say that you have a match after the minimum of three turns. On one hand you can get a short term boost towards your strategic goals. On the other hand if you wait you can potentially receive more then what you would get now, because others may use their match before you.

Every year Americans hear how this developing country or that European country just completed a new high-speed railway system or other such infrastructure innovation that give it an immediate surge in production and ultimately a boost over global competition. Learning that China just inaugurated the fastest train in the world may sound like an interesting fact on the back of your cereal box, but such facts have real implications.

To better understand these implications let us engage in dual perspectives. For example how did the world view Eisenhower’s great interstate highway (also known as the defense highways) project that opened and integrated once isolated state-markets to the commerce of the nation? Most educated Americans now know that the highway, and all the infrastructure improvement that came along with it, injected our economy with the equivalent of steroids. We were the Barry Bonds of global commerce. Of course the fact that our major competitors -Europe, the Soviet Union, and Japan- were all devastated by WWII amplified the impact of our economic innovations. At the time the rest of the world looked on and nodded appreciatively as we helped rebuild Western-Europe and Japan, with major loans (the Marshal Plan). They however did not recognize or were not in a position to recognize, that our economic clout, spurred on by domestic infrastructure initiatives, was the reason why we were going to win the Cold War. Our infrastructure was the best so our economy was dominant.

Now why didn’t the rest of the world do what we were doing? Was it because they didn’t have a “match”, the capital to invest in major infrastructure overhaul? Or were they biding their time, waiting for America’s economy to stumble and use their accumulated infrastructure capital, their “match”, to solidify their advantage?

Regardless, our competitors “match” came after ours and subsequently their match has an incrementally larger affect on their economy enabling them to jump twice as far as we jumped when we installed our, then, state-of-the-art city and interstate transit systems. Moreover the reversal in context vis-a-vis sovereign debt, further validates the dual perspective approach. Now it is America and Western-Europe borrowing capital from China and Japan. Similar to these countries during the WWII era, we are behind in infrastructure and we are precluded from matching our competitors because of our debt.

This is really the question: Why are we not investing heavily in infrastructure? Why are we not using our match? Why is Metro-North so antiquated, our subways overcrowded and why are our bridges and tunnels on the perpetual brink of collapse? Are we waiting for the next wave of technology to submit our match or are we unable to submit a match because of debt?

To be clear, if we do not immediately begin to invest in a widespread and comprehensive infrastructure overhaul we may be behind China for decades to come. Post WWII, Europe’s debt gave them no choice but to fall behind. Do we have the same excuse?