National Investment in National Renewal—Three Whys and Three Hows

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.