This op-ed originally appeared in the Flashreport
The Governor wants to build “s—” he exclaimed at a recent press conference announcing support for high speed rail, which was followed by a surprise proposal to dig tunnels for water transport from the Sacramento Delta, and the grand opening of the Sunrise Powerlink, that will one day allow for transmission of solar power from the Imperial Valley to San Diego and beyond. According to the Governor, these projects will create jobs and propel CA into the future – a new future that may not look like the California we see today or that of the past.
The question arises, will these projects and the state’s current debt-laden financial trajectory, pave the new path for the return of the “Golden State” dynamism of yore? Roughly a decade ago we boasted the 6th largest economy in the world (now 8-9th) with more U-Haul trucks entering than leaving. For decades we led the nation with entrepreneurial spirit, low unemployment, high-paying middle class jobs in manufacturing and technology, state of the art infrastructure, high performing K-12 schools, affordable higher education, low debt, balanced budget, abundant natural resources and of course, great weather.
We still have great weather, and abundant natural resources, however restricted. But in taking the “new path forward” we should be examining if all “s” is created equal. Private investment in infrastructure, financed with company investment and/or private capital from bondholders, does provide employment and a multiplier effect to stimulate the economy. Unlike the recent spate of government investment, private investors analyze and justify projected cash flow repayment from a reliable, verifiable source. With the exception of the Powerlink, which appears to have been built with private investment, the rail and water infrastructure have yet to define a funding or repayment source.
Time will determine if the water tunnel idea is feasible and how it will be financed. As for High Speed Rail, we have had numerous audit and other reports that questioned the utility and the lack of financial data or support for the project and debt. One of the many problems with this type of supposed “stimulus” was stated in a recent opinion piece in the Wall Street Journal:
“Public investment might increase productivity in theory—the GI Bill and investment in the federal highway system, for example, helped make Americans more productive. But today’s endless increases in government spending, with no discernible improvement in our infrastructure or educational outcomes makes it painfully obvious that politics and special interests have undercut its benefits.”
So, while I seek continually to work with this Administration, I find it very difficult to reconcile supporting tax increases, cuts to education, taking billions from local governments, while promoting useless debt spending, with unknown impacts of Cap and Trade looming on the horizon. Our unemployment situation or statewide financial woes will not be improved by more debt or increasing regulations.
The first order of business should be getting our financial house in order and retaining and expanding employment with existing employers. Then, we might be able to encourage much needed investment in infrastructure for a brighter future. All “s” is not equal; we need private sector investment to stimulate employment and return the Gold to California.