As explained in my first post this year, Federal Earthquake, I’m on a steep learning curve when it comes to political science and practical applications thereof. But the effort to better understand this is necessary to provide real-world political context for the main topic here, federal infrastructure loan program policy. In normal times, the political context for policies concerning such an apparently technical and neutral area would be relatively straightforward and essentially unchanging — I could remain focused on analytical details and refinements. But these are not normal times.

In an essay a few days ago, Taking Sides, I sketched out the two, opposing, paths which I think serious people may be developing underneath the daily chaos. The first, which I label ‘Post-Neoliberalism’, is a reformist approach that seeks a true break from the neoliberal past. The second, which I label ‘Neo-Narrative Neoliberalism’, seeks to roughly preserve the neoliberal status quo with a new, and perhaps more powerful, narrative. (Btw, I do takes sides on this — you can read the last few sentences of the essay for my personal opinion).

In this post, I’ll try to put those opposed approaches into a more practical political context. As you can see from the diagram above, I don’t think the approaches neatly correspond to standard political party classification — at all. Political experts who know about this stuff are constantly writing about the factions within both parties. Although it’s a little more evident with the Democrats (because they lost), the Republicans are also divided on many things. But I’m guessing the various divisive issues probably can be roughly divided into two categories — real change or status quo, with neoliberalism (again, roughly) being the reference point.

That doesn’t shed much light on possible agreement on specific issues, because how to change, or how not to change, something specific is still open to a lot of debate (e.g., MAGA Republicans and New Left Democrats might agree that the economy should be fairer, but won’t agree, to put it mildly, on how that should be achieved). But my aim here is different and much less ambitious — to look at what might be the opposing forces involved as the change vs. status quo battle starts to play out.

Institutional Power is the traditional force that comes from big, established organizations like the Democrat and Republican parties. To some extent, agreement can be imposed within the party, and I’m sure that that extent was greater in the past. But now that force is diluted by the essentially irreconcilable difference between Neo-Narrative Neoliberalism (status quo) and Post-Neoliberalism (change). I think this is pretty typical in history — when a pressing need for change surfaces, existing alliances are fractured. But they keep working for a while.

Neo-Narrative Power is a relatively new force made possible by digital media. I believe that we saw this in action 2008-2024 as the post-WFC defense (or more precisely, camouflage) of otherwise obviously failed neoliberal policies. We also saw this camouflage incinerated in the 2024 election, but a new and ‘improved’ version of the narrative will return. How else can neoliberalism be maintained? Note that this power crosses party lines, and the details will be adjusted to audience taste, but that does not dilute Neo-Narrative Power — because they know at some level it’s all bullshit anyway. Hence, Traditional Republicans and Establishment Democrats can privately agree on a lot about policies which preserve the status quo.

Ideological Power is the force of a belief that change is necessary. This doesn’t imply that the believers are idealistic fanatics — far from it. Many will see opportunities in change for their own careers or power bases. But it can’t be bullshit in the way a neo-narrative story can because it must be founded on a lived reality about which there is widespread agreement (that the status quo is intolerable and must change) and for which a plausible vision for improvement can be persuasively articulated to a skeptical audience (that’s the ideological part). Not easy — but it gets harder in the current political context. MAGA Republicans and New Left Democrats could easily agree about the need for change, but the ideological vision for solutions is another matter. In effect, Ideological Power is diluted when crossing party lines, when it’s possible at all.

When things are relatively stable in a society, Institutional Power predominates. When things are intolerable and unsustainable, Ideological Power can have a dramatic effect and lead to massive change, though not always in the originally intended direction. Narrative power failed spectacularly in 2024, but new and improved Neo-Narrative Power? More serious, as the stakes are higher, and powered by rapidly advancing AI technology? I don’t know.

The dynamics certainly make it worse. Proposals for change will be opposed by a combination of Institutional Power and Neo-Narrative Power. Ideological Power, in contrast, is likely to be reduced by Institutional Power, as things currently stand anyway. At some point, change will happen because it must, so in one sense Ideological Power will prevail. But what point is that? Torches and pitchforks? Civil war?

Reforming Federal Infrastructure Finance?

All these forces will swirl and gyre in complex and unpredictable ways over the next few years, at least. People with expertise in political science and practical US politics will understand it all far better than I ever can. I hope they write the stories and analyses because it’s interesting to watch.

But my main purpose in thinking about any of this goes back, of course, to the topic of this site: federal infrastructure finance. To finish off this essay, I’ll explain briefly how an examination of current political forces is relevant to my narrow focus.

My goal is to see federal infrastructure finance, especially the loan programs, substantially reformed and expanded. If Institutional Power predominated, the path to that goal might be largely technical and analytical — as I saw it to be pre-2024.

But in a political context where forces of change and the status quo are battling it out, not only will federal infrastructure finance reform look like a low priority, but the technical and analytical approach, however valid, won’t cut much ice. Bigger and more fundamental questions are being raised about the objectives (or lack thereof) of federal policies.

Not an optimistic outlook, I have to admit. But I do see a path forward to the goal. Federal infrastructure finance reform in itself is very unlikely to attract Ideological Power, for obvious reasons. Without that, however, reform is not possible — the neoliberals will keep the programs pretty much as they are, unless infrastructure P3s become a thing again, in which case federal finance will be distorted and degraded to deliver stupid money for rent-seeking projects. Since I don’t think P3s are coming back, the likely result would be the status quo — federal infrastructure finance as small and relatively meaningless, and as such, unthreatening to the tax shelter created by the municipal bond market.

Public infrastructure, however, as a focal point of many important issues could attract Ideological Power — and maybe a lot of it. There’s the obvious stuff we’ve all heard about for years, e.g., crumbling, inefficient, not ready for a changing climate and so on. But I’m now thinking that infrastructure renewal will touch on much deeper issues — the role of localized labor and local communities in a new economic world of AI and robotics, the importance of place and continuity, and (most importantly) the moral right to preserve these things. There may be true, even ideological, bipartisan agreement on these issues. Much more on this topic in future essays.

Here, then, is the possible path: To the extent that a very substantial improvement of US public infrastructure is supported by Ideological Power, that power will be extended to the means for accomplishing that improvement — and reformed federal finance is that means.