which would provide assistance to state and local governments to increase investment in infrastructure. With an initial capital base of $60bn and the ability to insure the bonds of state and local governments, provide targeted and precise subsidies and issue its own 30-50-year bonds, the bank could easily provide $250bn of new capital to invest in local infrastructure over five years, which would also create several million new jobs, just as the domestic recession threatens to gain momentum.
This isn't the first time Rohatyn has advocated increasing spending on infrastructure. See, for example, this Washington Post op/ed from 2005 coauthored by him and Warren Rudman, "It's Time to Rebuild America: A Plan for Spending More -- and Wisely -- on Our Decaying Infrastructure". In March of this year, Rohatyn and Rudman teamed up again in a Financial Times column titled Infrastructure is America's best Investment". Someone more politically astute than me might know how much influence Rohatyn retains within the Democratic Party. He was prominent during the Clinton administration, and was rewarded with the ambassadorship to France for his efforts, as I recall. It's worth noting that in today's column, Rohatyn teamed up with a fellow Democrat, the former Clinton administration official Erlich, instead of with his Republican friend Warren Rudman. Perhaps Rohatyn sees the current political environment as so tilted toward Democrats that he is less interested in making a bipartisan pitch for his proposals? Or perhaps I am reading too much into his choice of coauthors this time around.
This FT op/ed comes less than a month after the Economist editorialized about the need for increased infrastructure spending in the U.S., as I noted and commented on in this post, The Economist: "The Cracks are Showing".