Brian Snyder/Reuters
Jamie Dimon, CEO of JPMorgan Chase, takes part in a panel discussion about investing in Detroit at the Kennedy School of Government at Harvard University in Cambridge, Massachusetts, U.S., April 11, 2018.
- Jamie Dimon, CEO of JPMorgan Chase, is urging American politicians to invest in infrastructure.
- American roads, bridges, tunnels, airports, and more have been crumbling for decades, and time may be running out to catch up to the rest of the world.
- The billionaire points to Canada and Germany as examples of efficient investment in major projects that the US could follow to kick-start America's resurgence in infrastructure.
The CEO of the largest American bank is sounding the alarm about the country's crumbling infrastructure.
In his annual letter, JPMorgan CEO Jamie Dimon chided US officials for allowing the state of the country's roads, bridges, airports, and more to fall behind much of the rest of the developed world.
"The country that used to have the best infrastructure on the planet by most measures is now not even ranked among the top 20 developed nations, according to the World Economic Forum's Basic Requirement Index, which reflects infrastructure along with other criteria," Dimon wrote. "We are falling behind on airports, bridges, water, highways, aviation and more."
Later in the letter the CEO urged American leaders to look outside of their own borders, specifically to Canada and Germany, for examples of how to return the US to its former glory.
"Experience from other countries may help," Dimon said. "We could learn from Germany and Canada, for example, whose officials endorsed large infrastructure projects and sped through permitting in two to three years by forcing federal, state and local approvers to simultaneously work through a single vetting process. Significantly reducing the time of permitting also dramatically reduces the cost and uncertainty around making major capital investments."
Time and money tend to be the two biggest pain points for US infrastructure projects. Take New York, for example, which is working on a 3.5 mile tunnel extension to bring commuter trains from its eastern suburbs on Long Island into Manhattan's Grand Central Terminal. The latest estimates place the uncompleted project's cost at $12 billion, or $3.5 billion per new mile of tracks, not to mention the more than 10-year delay.
$4 trillion is actually a good deal
Dimon says that no matter the cost to fix America's crumbling network of roads, bridges, and tunnels, the price to pay for not fixing them would be far greater. He points to one academic research to prove his point:
One study examined the effect of poor infrastructure on efficiency (for example, poorly constructed highways, congested airports with antiquated air traffic control systems, aging electrical grids and old water pipes) and concluded this could all be costing us more than $200 billion a year. Philip K. Howard, who does some of the best academic work on America's infrastructure, estimates it would cost $4 trillion to fix our aging infrastructure - and this is less than it would cost not to fix it. In fact, a recent study by Business Roundtable found that every dollar spent restoring our infrastructure system to good repair and expanding its capacity would produce nearly $4 in economic benefits. What happened to that "can-do" nation of ours?:"
The American Society of Civil Engineers agrees. The group estimates the US needs $4.5 trillion by 2025 to cure its infrastructure ills. In its annual report card, ASCE gave many parts of the US' infrastructure network close-to-failing grades.
"We can no longer afford to defer investment in our nation's infrastructure," the group said. "To close the $2.0 trillion 10-year investment gap, meet future need, and restore our global competitive advantage, we must increase investment from all levels of government and the private sector from 2.5% to 3.5% of U.S. Gross Domestic Product (GDP) by 2025.
"This investment must be consistently and wisely allocated."
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