National Investment in National Renewal—Three Whys and Three Hows

Abstract

Abstract There is one crucial error in America’s national planning, writes the author. It is to think of “national development” as a one-off achievement, rather than as a perpetual process of ongoing renewal. Three obstacles also must be removed. They are how to coordinate the formulation and execution of a regularly updated national development policy, how to capture and incentive-compatibly channel the gains to continuous infrastructural renewal in a mixed public/private economy, and how to control macro-financial conditions in a manner that renders investment in continuous industrial renewal privately rational. We must make three institutional reforms in response: a National Reconstruction and Development Council (NRDC) that combines all cabinet-level executive agencies into “an FSOC for continuous national development,” a National Investment Corporation (NIC) that designs price-signal-impounding and equity-stake-justifying financial instruments in connection with national infrastructure projects, and a “Spread Fed” that restores the Regional Federal Reserve Banks to their original status as a network of regional development banks. Here is the “three-legged stool” on which “Building Back Better—and Beyond” can succeed.