Business groups push infrastructure investment

Two prominent business organizations launched separate campaigns focusing on the need to invest in America's infrastructure.

The U.S. Chamber of Commerce plans to spend millions of dollars on its "Let's Rebuild America" initiative. The chamber plans to issue state-by-state infrastructure report cards, work to remove legal and regulatory impediments to private investment in infrastructure, and lobby for more public spending.

Raising the federal gasoline tax should be considered, as well as other financing options, according to the chamber.

"We're rapidly running out of capacity, and it's already costing us jobs, productivity, competitiveness, mobility, and most tragically, innocent lives," said Tom Donohue, chamber president and chief executive officer.

The National Association of Manufacturers, meanwhile, formed the Alliance for Improving America's Infrastructure.

"We will aggressively seek solutions and resources to upgrade and modernize the transportation infrastructure system," said NAM President John Engler.

"Ever-increasing traffic backups from coast to coast are impeding the ability of business to transport goods efficiently from state to state and town to town," he said. "Transportation costs are a major factor in our ability to compete in the global marketplace."

The deadly collapse of a bridge in Minneapolis Aug. 1 has made infrastructure a major issue for Congress. The House Transportation and Infrastructure Committee will hold a hearing Sept. 5 on structurally deficient bridges in the United States. Rep. James Oberstar, D-Minn., who chairs the committee, has proposed a dedicated trust fund for the repair and replacement of unsafe bridges.

The Senate passed legislation Aug. 2 that would create a national commission to analyze and prioritize America's infrastructure needs.

The key issue is how to fund infrastructure improvements. President Bush opposes an increase in gasoline taxes, contending Congress should first re-examine how it allocates federal highway funds.

Sen. Chris Dodd, D-Conn., and Sen. Chuck Hagel, R-Neb., introduced legislation that would create a National Infrastructure Bank to finance large projects. The bank would develop financing packages that would include direct subsidies, loan guarantees and bonds.

Economics education could reduce need for broad regulations on businesses

Economics may be the "dismal science," but if Americans knew more about it, businesses would face less of a regulatory burden.

That's according to Gary Stern, president of the Federal Reserve Bank of Minneapolis. Stern spoke at a Washington, D.C., press conference where the National Assessment Governing Board announced that 42 percent of 12th-grade students last year were proficient on economics. Nearly 80 percent showed they had a basic understanding of economics and personal finance.

Stern said the scores were "perhaps a bit better than I would have guessed." He is optimistic the results of the tests, administered for the first time last year, will lead to better economics education. This, in turn, will lead to better economic policy, he said.

"I view consumer regulation and consumer education as substitutes," Stern said. "If consumers are more educated and able to make good decisions on their own, regulations can be narrower and more focused on clearly abusive practices such as deceit and fraud."

The cost of regulation goes up as its scope widens, he said.

"I'm not just referring to enforcement costs, which are high enough," Stern said. "More significant, in my view, are the extra compliance burdens that broad regulations impose on legitimate transactions and the opportunities forgone when legitimate potential transactions are prevented outright."

Economics was added to the National Assessment of Educational Progress because of the growing emphasis on economics instruction in high schools, said Mark Schneider, commissioner of the National Center for Education Statistics. Nearly two-thirds of 12th-graders have taken an economics course.

"Many of our 12th-grade students have a pretty good grasp of the logic of economics -- of the tradeoffs of supply and demand," said Bruce Damasio, who taught economics and social studies at Liberty High School in Eldersburg, Md., for 27 years and is president of the Global Association of Teachers of Economics.

But, he added, "many students are pretty shaky on the terminology of economics and on the actual ways that government and financial institutions work."