Things Have Changed

Infrastructure: An Opportunity to Rebuild Modern Society?

May 23, 2021 Things Have Changed
Things Have Changed
Infrastructure: An Opportunity to Rebuild Modern Society?
Show Notes Transcript

Infrastructure today cannot meet the needs of the digital economy tomorrow. 5G, driverless cars, Sustainable cities, broadband access to all are some of the breakthrough technologies promised in the coming decades.. But how are these even possible if the underlying foundation i.e infrastructure itself is weak!

Infrastructure has been neglected far too long. The easiest way to get a slowing economy going again is for the government to put people to work!

Investing in roads, bridges, providing access to broadband, improving our electrical grid can go a long way to building a more efficient and sustainable modern society.

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Reporter [00:00:04] Experts say behind the scenes, key parts of the nation's infrastructure system are at a breaking point. 

Shikher Bhandary [00:00:09] Infrastructure today cannot meet the needs of the digital economy tomorrow, 5G, driverless cars, sustainable cities, broadband, access to all power, all these breakthrough technologies even possible if the underlying foundation itself is so weak. 

Reporter [00:00:28] Most of the investment, especially in water and wastewater, took place in the 1940s and 50s following World War Two. So it's coming to the end of life and a lot of cities and municipalities simply don't have the money to invest in their infrastructure. They're busy funding pensions and they're busy with firefighters, police officers, building schools, all the important things that cities have to do. 

Shikher Bhandary [00:00:48] Infrastructure has been neglected far too long. The easiest way to actually get a slowing economy going again is for the government to put people to work. What's the wireless networks in rural communities so everybody can tap into world markets? Let's put construction workers back to work, investing in roads, bridges, broadband, and improving our electrical grid can go a long way to building a more efficient and sustainable modern society. 

Donald Trump [00:01:19] They want a trillion dollar infrastructure plan to build new roads and bridges and airports and tunnels and highways and railways all across our great nation. 

Shikher Bhandary [00:01:29] Just ask the residents of the cities in Texas and Portland that did not have access to electricity for almost a week. 

Reporter [00:01:38] We are continuing to monitor the fallout from winter storms that swept across Texas, of course, derailing the energy grid. 

Shikher Bhandary [00:01:44] It just shows how bad it could be living in a place which lacks high speed Internet or access to clean water. 

Reporter [00:01:52] Millions not power for days during one of the worst storms in Texas history, 

Shikher Bhandary [00:01:56] Poor infrastructure dramatically impacts your daily life, and the systems are long overdue for a resurgence. 

Joe Biden [00:02:03] It's a once in a generation investment in America, unlike anything we've seen or done since we built the interstate highway system and the space race decades ago. It's the largest American jobs investment since World War Two. It's big. Yes, it's bold. Yes. And we can get it done. 

Jed Tabernero [00:02:32] Welcome to THC, where we unpack the ever changing technology economy 

Adrian Grobelny [00:02:37] hangout with Jed, Shikher and Adrian as we tackle the industries of tomorrow. 

Shikher Bhandary [00:02:43] This is Things Have Changed. 

Jed Tabernero [00:02:50] Think about the infrastructure in the U.S. and in Western countries, it seems like everything's good, everything's nice, the roads are nice, especially when you've come from a developing country like the Philippines, like we we don't have the same infrastructure as the US. So when I came here, everything seemed like beautiful. The roads are massive, you know, like we have you have clean water, drinking water from the tap. You guys have no idea how much that's a privilege that just because what would we you cannot even drink some water in restaurants in the Philippines and they serve that shit to you and they'll give you the option. They'll say, you want to you want a cup of water or you want a bottle because they know you might get sick. No, seriously, like, it's such a crazy thing to think about. But, you know, the reason why all this conversation about infrastructure is coming up, right. Is because there is another bill that's coming out of of Congress right now that relates solely to infrastructure. And it's been on the news. You've probably have seen it a couple of times where people are either talking shit about it or talking about all the great things that it can accomplish. Right. It's a two trillion dollar plan that's that's going to essentially revitalize our economy. 

Shikher Bhandary [00:04:03] What does that even mean to truly like what does it even mean? 

Jed Tabernero [00:04:09] What revitalization? Because, you know, 

Shikher Bhandary [00:04:11] a trillion, 

Jed Tabernero [00:04:13] two trillion dollars. So, I mean, to put it in perspective, right. We actually spend a lot of money already, like on a yearly basis, you know, on on not infrastructure related projects, but we we spend a lot on on a yearly basis know. So if you think about defense versus nondefense spending. Right, that's four trillion dollars a year. So like two trillion doesn't seem like a ridiculous amount, but it does for something that goes on top of the already four trillion dollars that we're going to spend, you know what I mean? Like, that's why this is so controversial. That's why this is on the news is, you know, a lot of contention from both sides of the House. And there is always there has been all this spending during the coronavirus pandemic that another two trillion everybody's like, should we spend a lot of money recently? Right. So that's why we're having this conversation today, is to talk about, you know, the the current infrastructure bill that's coming out. So to start, like, we we just kind of got into how I thought personally coming to the United States was kind of amazing because I immediately saw what the effects of good infrastructure looks like right now. You can drink straight from the tap, how you can get on the roads without too many cracks, you know, depending on where you are in the country, have infrastructure for Internet, like having strong Internet wherever you go in your city. That is a privilege. Let me repeat that. That is a privilege. You've I'm sure you've been to a different country where you're like should you know, it is it is a privilege, but it's often something that's not really discussed today in politics. I mean, if we think about the last massive infrastructure deal that has come out, when was that? It's been decades, there is a lot of small projects coming from state and local cities, but if you think about like from national spending perspective, it's been a long time, right? Like post-World War two, we had a lot of infrastructure spending. But to the politicians of today, infrastructure spending is just something that it's not very popular. But why, though? 

Adrian Grobelny [00:06:19] Yeah, I feel like they see it as unnecessary because they always have their agendas. There's always other topics that are more forefront, you know, in the past. Right now we're going through a pandemic. So they're just trying to deal with this jolts and the they're trying to jolt back the economy with jobs being lost. Then throughout the pandemic, we had Black Lives Matter. So that was on the forefront of their agenda. And infrastructure is just not sexy. No one sees it as, oh, wow, I think this president's forward thinking because he's spending on infrastructure, people kind of take it for granted. And because, like you mentioned, it's a it's a privilege. People feel like it's you know, they've grown up with it. So they're not the norms are, you know, I expect high speed Internet. I expect my roads to be paved. And but we're starting to see cracks. You know, people are starting to see cracks. 

Shikher Bhandary [00:07:19] Yes. 

Jed Tabernero [00:07:19] On the roads and bridges and bridges. If you're from the bay, I mean, sheesh, you probably saw the old Bay Bridge get destroyed and a new one get constructed. Right. Quite, quite recently in the past, like five years. So it's it's fascinating to see. But there are a lot of problems, even in first world countries, even in very developed nations that have, you know, crazy infrastructure relative to where we've been in the past. I mean, Shakr, coming from India and the Philippines. Right. 

Shikher Bhandary [00:07:51] The base case here in developing countries is pretty good itself. But the thing is and that results in them not really investing a whole lot in it for a while. And then you realize, hey, these things, everything degrades over time. So things are falling apart in many regions. So and Corbitt, you know, we speak a lot about change. We are in a common theme, seems to be covered like everything else in the world now. But what was interesting is like to maintain roads and bridges and highways and airports and stuff. You need revenues coming in. Who generates that revenue? You're tall when you're driving through tolls, that's revenue, the taxes that you pay traveling are flying that pays for your airports. There's a lot of. Do you know, during the pandemic, people sat at home, people didn't travel a whole lot, revenues got shot and now all these. Big transportation networks are facing huge cuts, huge cuts, New York subways, Washington, San Francisco, Boston, all of these cities that have decent transportation networks are like underwater. They need help from the government to actually inject some. Capital into the, ah, you know, faltering system right now, 

Adrian Grobelny [00:09:28] it'd be a good time to dove into what this infrastructure plan makes, what's made up of it, you know, how is it divided? I think in the past we did this with the covid Cares the Kids Act Bill, and kind of understanding the components of it, how it all comes together, where's the money going towards and yeah, just how it's made up. And so how how can we expect this infrastructure bill to revitalize our economy? And will it be based on how the economy is set up now versus how it was set up, you know, 20, 30, 60 years ago when the New Deal came out. So. So kind of high level, you know, forty two percent of it's towards traditionally recognized infrastructure parts, this includes transportation, so roads, bridges, water. So there's a big issue. We still have lead based pipes. And so they really want to focus on creating more access to clean water and communities that still don't have access like Flint. And it's been a big issue, hasn't been addressed. They've tried to get creative in certain ways. But, you know, at the end of the day, we need a good infrastructure for communities to just depend on basic human needs of clean water. And so that's the traditional infrastructure aspect. Forty two percent 

Jed Tabernero [00:10:54] within that that infrastructure piece, beyond the traditional routes of investment for infrastructure. We're also building some some new pieces that we haven't seen in bills in the past for infrastructure. Right. Like the idea of investing in sustainability. So what does that look like, like right now? Climate change has been the top of our list for topics we always talk about climate change and what it's doing to our our our normal everyday lives. So this infrastructure bill also focuses a little bit on sustainability. Environmentalists see infrastructure as a crucial path to kind of solve a lot of a lot of our climate problems, and it's always including climate agendas, right. So this is a really bold plan, including climate change initiatives. One really huge thing that stuck out to me about the the electric vehicles piece of the sustainability is we're putting in one hundred seventy four billion dollars into the infrastructure essentially of of electric cars. Right. So what does that mean? Like we have charging new charging stations in certain areas. Right. If your electric car owner. Right. Some of the things that you will have in your decision points is, am I going to be able to to charge my vehicle in certain areas? Right. Some people make the decision not to get an electric vehicle, not because they don't give a shit about the climate. Right. It's because they don't have access to infrastructure that will make it easy for them to have electric cars. Quite simply enough, in California, it's actually pretty normal to have an electric vehicle. There are Tesla charging stations everywhere if it's a Tesla, and there's also those other California sponsored electric charging stations. And so that needs to exist for the rest of the country to be able to adapt or to adopt electric vehicles. Right. And now we have we just talked about how these massive legacy automobile companies investing in electric cars. Well, how are they going to service all those electric vehicles? We need the infrastructure for that. 

Adrian Grobelny [00:13:03] The report just came out with the truck, the lightning F1 50, which is a huge just one for them because they've been just one of the biggest advocates of. You know, in the past, GM, Ford, Chrysler, the big three, back in the day, they were big proponents of the New Deal, actually, the infrastructure bill. They really lobbied hard for the government to create these roads to to have oil companies built gas stations to have access to that and to really push for that. And now they're just pivoting completely from their old ways and going electric because they have to you know, they're going to get eaten up by other competition if they don't pivot. And so they're going to start investing in infrastructure. And then we're also going to see rebates reintroduced. They still have them for some electric vehicle cars that are us based, I believe. But they're going to revitalize these rebates that you get from purchasing an electric vehicle car made in America. So they're really trying to focus on our economy, putting prioritizing that and incentivizing US consumers to purchase within America so that we can boost our economy the most. 

Jed Tabernero [00:14:19] And, you know, it's not just like for your normal average consumer cars, like we're going to replace like fifty thousand diesel transit vehicles. That could be busses. All right. So even the yellow school busses for school, this is the state that they put out, is that they want to electrify 20 percent of yellow school busses. Those busses that are picking up the kids from school, they'll be exposed to electric vehicles so early in their life. And this is massive, right? If we're thinking about transitioning into the electric vehicle market, we can't just think about the private space. Like, obviously the government has to put its investments into 

Shikher Bhandary [00:14:55] and this does a big play for getting more real into it. And I think that's that's probably going to have the biggest net impact just because, you know, you electrify rails and you. Partnered up with Amtrak to kind of build a broader rail road network, you know, that helps everyone because just think about it and it's something that is so weird to me, because having lived on the East Coast, like everything, Boston is connected to New York two hours, three hours away. But there's an entire eastern corridor and people use it like crazy. Right on the west, you have two of the biggest cities on the planet, San Francisco, Los Angeles. And you can't there is not a single rail. Train that runs between two of the biggest cities, which are just five hours away by car. So. It takes right now if you have to actually go by rail from L.A. to San Francisco, it's a 24 hour journey where you have to do multiple stops and it's rack. So like actually building rail helps a lot to just people are not going to drive a whole lot if there's actually reliable railways taking you from one point to another, especially big cities. 

Adrian Grobelny [00:16:24] Yeah, and in the past, I've I've heard of, you know, green new deals where they're trying to invest in green energy, solar, wind, trying to make everything get rid of coal and just live in a cleaner community. But something that I noticed that I didn't really see in this infrastructure bill was, you know, we're building all of this charging stations for these electric cars. We're improving the roads. But where are we getting this electricity? And we have all these electric cars on the road. I didn't see any any spending or investment into solar or wind or, you know, cleaning up the way we create electricity, which I think could be an issue. Even though they're investing in infrastructure. It's going to put a strain on the electric grid, in my opinion. 

Jed Tabernero [00:17:15] Yeah, I mean, you know, that's another thing that the problem with with massive bills like this is that they can't get too specific. Right, when they're putting it out there. And these are going to be one of the holes that that they need to address as they think about how much they're actually going to accomplish. But, yeah, that's a valid point. So, I mean, yeah, we have a pretty complex case. We have thirty three hundred sixty million people in this country. Yeah. That's a massive population. And the average median age is still around thirty eight. Thirty nine. Right. Like that hasn't changed much in the past. But investing in this, I don't know if we can justify it. Like we don't have that aging aging population problem as Japan, you know what I mean. Where we're just losing the younger population that pays mostly for what comes into the retirements of these older people. So I don't know how we justify that. Sorry. I just want to cover home health care workers real quick, because this is a huge thing in my community. Right, Filipino's? A lot of the the Filipinos I've met in the United States work in home care services. What does that mean? Like people who let's say. Are in there like 80s and 90s and are like close to death, they will be living in a care home. You know, you hear something that you don't really hear in other countries. In the Philippines, for example, we don't put our elderly in homes right in the US. Those first time I experience actually people put their elderly in homes. Right. They're going to put them there until they pass away. And a lot of the people who work there are Filipino. So I know a lot of these Filipinos who own these businesses. Right. That are all about taking care of elderly people. And because the funding is so low for that from the government and you don't make a lot of money because they can't pay out too much for on a monthly basis to stay in these fancy places. Right. It's really cheap to live in in home care homes. And so the the people that work there are typically underpaid. Right. So crazy stat that I saw about homecare workers is that one in six home health care workers live in poverty row in the U.S. This is in the United States. I'm not talking about some third world country. So, like, that's that's fascinating to me, but also really sad that there is this industry where, you know, it's typically near to a nurse's job, right, of taking care of somebody and you're living in poverty. So that's fascinating. So I think I don't know what their solution is to putting money into this industry, but hopefully it's just to raise the minimum wage right now. 

Shikher Bhandary [00:20:00] And we also spoke about semi's a lot. We've covered semi's a lot. Investment in manufacturing has been so low over the past few decades. So they are really. Trying to get that whole system set up and moving again, you know, a lot of manufacturing was outsourced to Asia from the United States, and when you do that, you actually lose the knowhow. To build for them, and that's when that's how you see, you know, South Korea, Japan, China, the boom of Asian countries is directly correlated to the movement of manufacturing and infrastructure out there. Right. So one big thing that they are bringing is 400 billion dollars for manufacturing that inclusive of R&D as well. So manufacturing specifically was, you know, let's go out there and create projects that is going to further us with regards to medical response, medical manufacturing, shore up the nation's ability to, you know, safeguard ourselves and counter a future outbreak. And also semi's because, you know, like we discussed in our semi's episode, everything runs on chips. So you got to be able to when the supply chains are at risk, you've got to be able to somehow fulfill the demand that we're seeing. So there's a lot of good things coming up that are tabled as part of this bill. You know, but I would look at it as largely a climate bill that has other supporting infrastructure aspects that, you know. Might help moving, might help move the needle to where we need to be if. We are going to that digital economy that everyone talks about, you know, where you have smart cities, you have efficient buildings, efficient waterways 

Jed Tabernero [00:22:09] and so on. Another interesting thing about I guess, you know, you mentioned the R&D piece is that historically, like the investments in in R&D will naturally go to like some quote unquote, high end universities and some private universities that have led certain R&D efforts for certain industries. Princeton's the Harvard's you know, the massive is the Berkeley is like the massive institutions that have been doing R&D for very niche parts of the economy to develop, you know, certain expertize in these areas. And so one thing that I found interesting about this bill is that R&D investments from the government will actually go into historically black colleges and other minority serving institutions so that it gives the opportunity for these institutions to actually participate in the next wave of of innovations towards our new industries. Right. Let's say we build a semiconductor manufacturing based in the U.S., let's say with this infrastructure bill. Right. Then the the historically black colleges and the minority serving institutions may be able to play a part in developing that new technology and may shift the balance of opportunity when it comes to universities. 

Adrian Grobelny [00:23:33] So that was a breakdown of the infrastructure bill. You know what it's made up of and what it's designed to do. It goes beyond just infrastructure. It includes parts that are designed to help those that haven't had equal pay, haven't had equal opportunities. And it's in an economy that's different than what we lived in 20, 30 years ago. And it makes us ask the question, will it work? In our next episode, we're going to cover on how this infrastructure is going to be paid for, why it why these bills are so important to our economy and the effects that they have in the long run to US consumers and citizens. 

Shikher Bhandary [00:24:14] Hey, thanks so much for listening to our show this week. You could subscribe to us. And if you're feeling generous, well, you could even leave us a review. Trust me, it goes a long, long way. You could also follow THC @thc_pod on Twitter and LinkedIn. This is things have changed.