whateverworks

In with Infrastructure for Long-Term Investing?

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I'm reading more articles in the media, recently, about how bad the economy is and plans for band-aid bailouts. This leads me to ask, "What would I do if I were President? And what publicly traded companies might benefit from my plans?"

Well, I definitely would NOT just hand every citizen a tax rebate. For one thing, it is inefficient due to the money wasted on the cost of administering that and, more important, there are better uses for the funds. To improve the overall economy I'd try to improve the infrstructure that supports it. (A definition from Wikipedia: "Economically, infrastructure could be seen to be the structural elements of an economy which allow for production of goods and services without themselves being part of the production process, e.g. roads allow the transport of raw materials and finished products.)

Not that this goal is easy. When you come right down to it, the present credit mess grew from an attempt to improve the economic infrastructure in such a way that would enable more of the population to become homeowners. This is a very sensible, stabilizing idea which got out of hand due to greed. I would support some bailouts for financial institutions because they are a vital part of our system which needs to be fixed fast.

Looking at the bigger picture, I remember Al Gore saying that he invented the Internet and everybody laughing. He didn't, of course. But his support contributed to the US leading role in its development. And the 'Net is certainly infrastructure just as much as roads and bridges. Speaking of our bridges, they're starting to get worn out and are in danger of collapsing. How about tax credits to companies which repair them? As an added benefit, they would employ more workers laid off by the housing bust. Speaking of workers, we need to implement a national health plan because keeping the workers in good shape is as important as keeping the bridges in good shape. This doesn't mean I'm in favor of the government running our hospitals directly. (As somebody else put it: do you want the efficiency of the Post Office combined with the compassion of the IRS?). And then there's education, the most important element of an information-age infrastructure.

Hopefully the President we elect next will take this approach. So, long-term, way past the end of SLO2 and the elections in November, I may look for companies likely to be again offering credit to low-income families, building bridges, advertising loss-leader generic drugs (as some large companies already are) or importing books from the Singapore math curriculum (already approved for use in California schools).