Posted on 11/12/2012 9:50:23 AM PST by blam
Welcome To 1933: A Forecast For Infrastructure
Nov 12th, 2012
Matt Insley
Thank goodness I’m heading to the dentist, I thought to myself last week. Not often that happens, eh?
I just received a call from a co-worker, that my morning commute was set for a hellish twist. What was normally a quick 20-30 minute commute was set to take over an hour and a half!
Luckily, though, I wasn’t heading in to the office until later that day so the commute from hell was avoided.
The reason for the delay, however, is sparking a new resource trend I want to bring to your attention. Here’s what happened…
Turns out a 60 inch water main broke in uptown Baltimore.
Raging rapids filled a multi-block area. Traffic ground to a halt and businesses were shut down.
The first task, once emergency crews secured the area, was locating the center of the problem.
You see, to shut down a 60 inch water main the engineers must first locate the problem in the web of underground piping (in this case 17ft underground.) Next they have to turn it off.
You’d think turning off a pipe would be as easy as flipping a switch, but you’d be wrong. As one Department of Public Works (DPW) representative led on, there are multiple sections of pipe that need to be turned off, each of which has a large valve that has to be physically turned shut. I can’t even begin to imagine what kind of spigot-knob a 5ft diameter pipe has!
But that’s not the surprising part. The big surprise was what I heard next…
According to the DPW representative in Baltimore, the 60 inch water main was forged in 1913 and installed in the early 1920’s. Add it up and the water main was over 90 years old – geez, no wonder it gave way!
That’s the point, much of America’s infrastructure is old and ailing. Just take a walk around any large North East city in the U.S. The decrepit state of bridges, pipes, electricity systems, subways and other vital infrastructure is palpable.
The rest of the country has its set of problems, too. Indeed, from coast to coast this ailing infrastructure problem is common place.
Remember the bridge collapse in Minnesota in 2007? 13 people were killed and 145 injured when a bridge spanning the Mississippi River gave way. This led to a race for every major city in the U.S. to make sure their major bridges were structurally sound. But since 2007 the gusto has surely worn off.
Today, I see a convergence of trends that will start the next wave of infrastructure improvements…and lead to our next profit opportunity.
A Four-Year Prediction…
Looking at this situation from another angle, let’s say you’re a president who just got re-elected…
From the get-go of your first inauguration you didn’t care too much for America’s fossil fuel industry. In fact, at one point, as our friend Byron King points out often, you even made an enormous mistake calling oil “yesterday’s energy.”
But here’s the rub. You’re in the middle of what could be America’s next great depression and you’re being beat over the head with a fossil fuel-fueled renaissance like America hasn’t seen in decades. The cheap energy is staring you in the face.
That’s where Obama finds himself today.
A borderline socialist president, dealing with a poor economy and high unemployment? All at the same time America’s renaissance is gearing up?
Well, while some geologic pressure forms carbon into coal and some forms carbon into diamonds, I believe this convergence of factors will squeeze Obama into utilizing America’s newfound energy bonanza.
In fact, if my strong suspicion is correct this will lead to a mega infrastructure project, second only to Franklin D. Roosevelt’s creation of the Civilian Conservation Corps (CCC) in 1933.
Remember, back when FDR created the CCC the U.S. was in a situation much like today – a shaky economy, high unemployment, and a citizenship looking for direction.
Only back then they had plenty of able hands ready to pick up a shovel and get to work. Today’s infrastructure overhaul will surely use a lot of manpower but it’ll also take a load of cheap energy, which we’ve got!
“Our [oil and gas] industry has done a great job of getting us cheap energy” prolific oilman T. Boone Pickens said last week in an interview.
Pickens also went on to show exactly how much of an advantage America actually has. Oil is at a 15% discount to the rest of the world. Gasoline is at a 50% discount to the rest of the world. And Natural gas is at a whopping 75% discount to the rest of the world.
With cost advantages like that it’s only a matter of time before the U.S. gets back on its feet. And the way that I see it, one of our first steps towards a recovery starts with infrastructure.
To be clear, this isn’t the “broken window” fallacy you’ve heard much about lately with Hurricane Sandy. These are vital pieces of America’s infrastructure that have done their duty. The 90-year old water main referenced above doesn’t owe a debt to you me or Lord Baltimore.
Truly, it’s a new round of infrastructure improvement that will replace America’s elderly infrastructure system. And all of a sudden there’s reason to produce as much cheap energy as we can, spur manufacturing (energy, chemicals, steel, etc.) and get a lot more Americans back to work.
Whether the government should have its grubby hands in the kitty is a whole ‘nother debate – which we won’t get into today.
But rest assure that this situation – much like a lot of the action in the 30’s and 40’s — will have a very positive outcome for private sector companies in the infrastructure and energy business. More to come on that point…
Seems like a reasonable argument.
One problem I see:
One piece of heavy equipment with one driver and a mechanic and do the job that 100 men with shovels did in 1933.
What job will the other 98 (low skilled) workers do?
1. I don't accept the "borderline" modifier for our socialist leader.
2. I believe Obama will gleefully crush anything that might promote economic recovery - especially cheap energy of any kind.
The underlying fallacy in this piece is the failure to recognize that as the price of fossil fuels drops, Dingy Harry and The Won will increase taxes on them even faster.
I doubt it. Whatever profit they make will be taken away from them for more freeloader handouts. Someone still has to come up with the money for Obomacare, which is going to be more costly than anyone could ever imagine. It's going to be a national nightmare. Then, there's the new free stuff added to win the election. Someone has to pay for the sex life of Americas parasites. Someone will have to pay for all those kids freeloading around the colleges for years.
No. Stay away from the U.S.. When you dance with the devil...er, I mean Marxists, you get burnt. That's just the way it is, because if you have a business - you didn't build it. Therefore, you don't own it.
.
This would be nothing but a full-employment act for labor unions; to repay them for their support.
FUBO & FAD
Same thing happened in the other marxist "paradises."
That's exactly what the puppetmasters want (the ones that got him elected). Only problem is that he is a jerk and might just decide to stiff them instead of us.
Would have been true if Romney and a few GOP senators were elected. The rats will make sure this baby is aborted, they hate fossil fuels. So look for a deluge of regulation to strangle oil and natural gas in te US ( first salvo already fired with putting a couple of millin more acres of oil shale off limits).
It will be presented by the Administration as the Obama Infrastructure Endeavor in all 50 States & will be Federalized. All workers will be categorized as Federal employees (also unionized) attached to the Army Corps of Engineers.
State Governors will be forced to accept the ‘offer they cannot refuse’ to approve this monstrosity and it will be Obama’s legacy - more expensive, but more applauded than ObamaCare.
At heart, the thug in our White House is a drug-addled anarchist. He'd rather crush than build, even if the "building" is a socialist tyranny. He'll still us for sure.
This is insanity. A water main in Baltimore is NOT the problem of the US Federal Government. Its Baltimore’s or Maryland’s problem. Perhaps its even the private utility’s problem. So why can’t Baltimore pay for it — because they spend all their money on keeping a huge number of workers on the public teat and on forms of transfer payments and have no money for what used to be core services like infrastructure. So now let’s use the federal tax power to turn it into a federal issue since the Fed isn’t quite broke yet. Its like a junkie maxing out credit card after credit card until the credit card companies stop giving them cards.
There is plenty of money in the current federal budget to pay for federal infrastructure projects (if you get rid of the extras like electronic billboards every couple of miles). The rest is a state issue.
Thanks for the tip. I downloaded it for $9.50, annotated 2012 printing for my Nook reader.
I knew a lot of these details from other sources but haven’t read anything that is this comprehensive. We’ve had a lot of myths about presidents from Wilson the benevolent to Hoover the Malevolent, the Kennedy mythology, the myth of Reagan the Dumb, the myth of the Clintons and now the truly malevolent and dangerous myth of the fascist obama.
FUBO & FAD
Actually, I’d lie to see te GOP draft a TARGETED works bill. Look we are going broke anyway, we should at least use the borrowed money to build stuff while the suckers around the world will still end us the money. So upgrade the interstates, rebuild bridges, better airports, tidal surge protection for coastal cites. That way when the collapse finally comes we can at least use the stuff.
So the author believes that the President who squandered the “stimulus” on pure political waste will suddenly discover how to do it right? All these 90 year old water mains were 86 years old in 2008. Why didn’t Obama fix them originally?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.