Scene: Jordan alone in office working on the paper for POTUS.  Earlier POTUS asked Jordan for ideas how to convince politicians and the public that it would be a good idea to fund rebuilding US infrastructure by fixing the price for gas and diesel fuel.  The paper is overdue, POTUS is frustrated and Jordan struggling to finish because of a series of interruptions.  Original conversation with POTUS Entries #104, #105.

Jordan (talking to himself):  Alright, I really need finish the draft.  POTUS mentioned the need for rebuilding infrastructure in the State of the Union speech.  Now people are asking for details.  Why am I so far behind on this?

I’ve got most of the draft completed.  What’s left to cover?  Plan details will take a while to hammer out.  However, I need to make sure the plan is reasonably practical before it hits the press.

Practicality – does it pass the smell test?  Is the plan practical or is this some ‘inside-the-beltway’ mirage that has no chance in the real world?

Setting a fixed price for fuel – gasoline and diesel – is practical.  Setting the price is the easy part.

What about profit margins?  The oil-and-gas executives and the fuel-station operators could gouge prices under this plan given half a chance.

What if the plan ensured that the infrastructure tax – quit calling it a tax?  The “infrastructure investment” would be limited to say $2.00 to $2.50 per gallon?  Having a ceiling on the amount of infrastructure investment would be an incentive to the oil-and-gas companies to increase domestic exploration and production.  The ceiling would also encourage the companies to reduce costs.

Funny, I suspect the oil-and-gas guys will scream about more government intervention with this proposal.  But they don’t seem at all upset that the industry and the companies are whipsawed by a limited number of oil traders, who basically decide the price of oil.

I need to ask these guy, “Would you rather have fate in your own hands or someone else’s?”  But Texas being Texas, I can hear them now.

If they’d stop and think about how the proposal could benefit them directly, they might support it.  As crazy as it first seems, under this plan the oil-and-gas companies could increase profits and have a more predictable cash flow.  But they’ll never buy that idea on their own.

I need to find a respected oil-and-gas executive who can carry the torch on this idea.  And I know just who to call.  He’ll say no at first, then have a drink or two, sleep on it and call back saying he supports the idea.  I need to call him.  (To be continued)

Scene: POTUS’ office calling Jordan.  Earlier POTUS asked Jordan for ideas how to convince politicians and the public that it would be a good idea to fund rebuilding US infrastructure by fixing the price for gas and diesel fuel.  Original conversation with POTUS Entries #104, #105.

Jordan:  “Hello, Jordan Abel here.”

Caller:  “Mr. Abel, this is Harriet Breadsaker in POTUS’ office.  He asked me to remind you that you owe him a draft of how he should propose the idea of a fixed price for gasoline and diesel fuel.  When can we expect the draft, please?”

Jordan:  “Part of its complete.”

Caller:  “Mr. Abel.  Maybe my question was not clear.  When will you send the draft for POTUS to review?”

Jordan:  “Give me another week.”

Caller:  “I’ll tell him more like 10 days.  Hope we don’t have to talk again.  Goodbye Mr. Abel.”

Jordan (mumbling to himself):  “I’ve got to get going on this project.  POTUS is already on my case.  What’s the next item I need to address?

(The balance of the entry is Jordan talking to himself.”

The next “P” is “perception”.  How did I overlook perception?  The issue of perception should be upfront.  Calm down, Jordan, you are where you are.  Just be diligent and plow through the balance of the “P’s” and you will make the deadline.  Besides you told POTUS it would be a “working draft” and not a final recommendation.

“Perception.”  I need to make sure as many people as possible understand the “extra” cost of fuel is really an investment in America…and not a tax.  People should consider cost to rebuild infrastructure as an investment.   Considering as an investment seems so obvious, but not everyone gets it.

I recall before the Revenge Revolution – sometime late 2014, early 2015 – just before the Republican Congress was sworn in, there was an article in the New York Times about the lack of support for increasing the gas tax.  Some Republicans were resisting a Federal tax increase and wanted responsibility for roads transferred to the states.  (15 01 04 NYT re Little Support for Gas Tax

I recall being dumbfounded anyone would think like that.  Can you imagine having a highway system without national standards?  No guarantee of consistency among the states for road quality, signage, bridges, etc.  Talk about a potential negative impact on commerce.  What were these Republicans thinking?

OK, there’s a few wackos still in Congress.  Fortunately the public threw out most of them following the Revenge Revolution.  POTUS still might need to throw the wackos a bone to avoid a fight or have the legislation stalled, especially in the Senate.  What bone?  Maybe consider allocating part of the revenue from the fixed fuel price to reduce the deficit.

Another head scratcher.  Why do some Republicans think the US should pay down the Federal debt…and some even want a surplus.  Why they think like that is beyond me.  What I do know is no matter what I say or POTUS’ says, or any professional economist loaded with empirical data says, that group will never change its mind.  Do these same guys really think commercial and investment banks have enough money to pay depositors or pay off their debts?  Wall Street prints money every day.

OK, enough sidebars, back to the issue at hand.  POTUS’ proposal needs to build a credible and well-understood argument that: (i) reinforces why repair to infrastructure is needed; (ii) emphasizes the benefits of a wide range of infrastructure projects, not just road and bridges; (iii) makes it clear the extra cost for fuel is really an investment, not a tax.  Jordan, stop even considering the word “tax.”  Take the word “tax” out of your vocabulary for this project.  Repeat after me: the extra cost is an investment, the extra cost is an investment; the extra cost is an investment.

An unresolved issue is how to allocate the funds generated.  To avoid the perception of partisanship, maybe the solution is to create a team of different key constituents – business leaders, academic, politicians and citizens.  Need to keep the team small – ideally no more than say 9 members.  Each team member could have a supporting workgroup.  A team larger than 9 will get out of control and not provide real guidance.  Recommendations from a highly respected smaller team will be more cohesive and more difficult for Congress to reject.

Just for fun, who could be on the team?  I’ll make a list and then prune it after reviewing with some other people.  For now, let’s include representatives from: (i) auto industry (ii) airline industry (iii) water transportation (iv) communications industry (v) municipal infrastructure – water, sewer, local roads (vi) environmental groups (vii) 2-3 academics – engineering (civil), business, maybe an anthropologist.  That would make for an interesting group. (viii) electricity generation industry – need alternative energy also (ix) energy producers.  Alright you are already over the limit…but a decent start.

Whew.  Some progress.  No go get some coffee and take a short break, then back to work.  No more calls from old Harriet Breadsaker.  Be nice to Ms. Breadsaker, Jordan.

(To be continued)