Former United States Treasury Secretary Larry Summers spoke with FOX Business Network’s (FBN) Maria Bartiromo about the economy and industrialization. Summers said, “I am still concerned about secular stagnation in the industrialized world” and “we are still having great difficulty maintaining reasonable monetary conditions and adequate rates of growth.” When asked about infrastructure, Summers said, “Carrying oil on trains is a 20th century technology, and not the last half of the 20th century. We need an adequate pipeline infrastructure.”
Larry Summers on infrastructure:
“In the United States, infrastructure is a public issue and it is a private issue. As a public issue, it is crazy that at a time of unprecedentedly low-interest rates, unprecedentedly high rates of non-employment for men who work with their hands, that we are doing less public investment than at any time since the Second World War relative to the economy. It is crazy that we are not, after adjusting for depreciation, growing our public capital stock at all. It is odd in the extreme that we have an air traffic control system that’s based on vacuum tubes here in 2015. At the same time, there is a lot we could do that would promote private infrastructure investment as well. Carrying oil on trains is a 20th century technology, and not the last half of the 20th century. We need an adequate pipeline infrastructure. We should not have much inferior cellphone service to many other countries. We should not have inadequate broadband.”
Larry Summers on recovery in the United States:
“I am still concerned about secular stagnation in the industrialized world. We are still having great difficulty maintaining reasonable monetary conditions and adequate rates of growth. When we have unreasonable monetary conditions we can generate reasonable growth, but when we have more traditional monetary conditions you have to worry about what is going to happen to economic growth. So I think we will have real challenges in the United States and in the industrialized world until and unless we can generate a meaningful increment in demand that isn’t coming from liquidity. That means more public investment, that means equally freeing up barriers that are holding back private investment and an investment-led growth agenda coupled with supporting a robust consumer, coupled with providing incomes that make that robust consumer possible. That is what I think we will need in the United States and beyond if we are going to get out of the malaise of relatively low growth.”
Larry Summers on why we haven’t seen more pipeline development:
“It is a combination of things. We have a regulatory framework in which the right to veto is promiscuously distributed. And when you have so many who are able to veto a pipeline, it is very hard to get it started. To some extent misguided concern about fossil fuels has delayed pipeline infrastructure. I am as concerned or more concerned about global climate change as an ultimate issue, but we do not advance the fight against global climate change by dangerously transporting oil on trains. And so I think that a more proper focus on pipelines would be appropriate. I also think that we could stimulate significant investment by permitting the full export of oil, crude oil from this country. We have large waste because that doesn’t happen.”
