A New New Deal?

Today's economy is one in which the rich get much, much richer, while the middle class increasingly struggles to get by. So argue Joel Kotkin and David Friedman in a Los Angeles Times op-ed that was published on Sunday. Can this problem be fixed? Kotkin and Friedman, who have written for Inc. for years, assert in the article that massive investments in infrastructure projects, such as roads, ports, and the energy grid, could provide stable, high-paying jobs for hundreds of thousands of Americans. At the same time, these improvements would create opportunities for the business community and would benefit the economy in many secondary and tertiary ways—making supply chains more efficient, for example. Perhaps most important, investing in infrastructure would help to train workers in a variety of important skills that will help them compete in the global economy.

"Admittedly, this back-to-basics strategy is not glamorous," the authors write. "But it has helped narrow economic inequality in the past by producing more balanced economic growth." In both the 1930s and again in the 1950s, infrastructure improvements helped more Americans climb into the middle class and helped members of the middle class attain higher levels of prosperity, the authors argue.

"There also are alternatives to public debt," they note. "Today, many needed public investments can be — and in some places are — privately financed. By steering capital — through tax breaks and incentives — now flowing to speculative Internet stocks and luxury condominiums toward roads, bridges and electricity lines that can carry surplus power from the heartland to urban consumers, productivity can be enhanced and large numbers of blue- and white-collar jobs created." (To read the rest of the opinion piece, click here.)

What do you think? Would such projects really stabilize the middle class? Can middle class stability even been seen as an economic goal in and of itself, rather than a byproduct of continuing innovation and overall economic growth? The authors say that infrastructure-as-stimulus policies have been in disfavor for years, because conservatives think they give government too large a role to play, and will inevitably be used to justify higher taxes. Meanwhile, liberals would rather focus on poverty and worry that big highway projects, etc., tend to cause environmental problems. Do either of those objections ring true to you? Finally, if only one area of infrastructure improvements were to be funded, what do you think should take top priority and why—airports, highways, ports, energy, or something else altogether?

Mike Hofman was previously editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio Magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City. @mikehofman