The role of airports in building the economy

If the United States wants to continue to be the major player in the global economy, it needs an efficient, robust aviation system. Here, an aerial view of Reagan National airport photographed on Nov. 30, 2011 in Washington, D.C.

Jeremy Hobson: The latest ranking of the best airports in the world does not offer much good news for the United States. Only one terminal makes the top ten on the list from Frommers.com -- that would Jet Blue's Terminal 5 at New York's JFK airport. Meanwhile, the U.S. is home to four of the ten worst airports on the list, including Delta's Terminal 3 at JFK. Does it matter?

Well, for answers, let's bring in Marketplace economics correspondent Chris Farrell. Good morning.

Chris Farrell: Good morning, Jeremy.

Hobson: Well Chris, why does a good airport matter to our economy really?

Farrell: Well, besides that a bad airport is a miserable experience whenever you travel? Look, over the years, you've talked a lot about this evolving global economy. And if you think about it, airports, airlines, commercial aviation -- I mean, this is a linchpin infrastructure in this global economy. It's important locally, it's important nationally, it's important around the world. And the U.S. accounts for about a third for the world's total air traffic. So, if the United States wants to continue to be the major player in the global economy, you need a really efficient, robust aviation system.

Hobson: But we've got incredibly high unemployment right now, we've got very high deficits. Should we really be spending money on airports or high-speed trains or other infrastructure like that at a time like this?

Farrell: You know, Jeremy, it's really striking whether you're doing research into the airports and the airlines or looking at the railways or the roads. There's a constant theme that our transportation network is starved of investment capital, that we've neglected it for too long. And the thing about public investment and transportation is that it makes the private sector more efficient. So it's easier for people to do business travel, it's easier for goods to travel their way on an airplane -- a lot of goods have to go on airplanes. Think of FedEx and UPS. So this is the kind of investment that makes the private sector more efficient, which would lead to more jobs, which leads to more wealth.

Hobson: But does this kind of investment have to happen right now, at a time when we've got such big problems?

Farrell: I was watching Ben Bernanke and his press conference the other day and there was a question about low interest rates that savers are getting, and he said, well that's, you know, the economy that we're in. Let's flip it around -- those low interest rates, that means that the cost of capital, the cost of building your infrastructure is really cheap. The time to do it is now, because the capital's low and there's a lot of labor that would like a job.

Hobson: Marketplace economics correspondent Chris Farrell. Chris, thanks a lot.

Farrell: Thank you.

About the author

Chris Farrell is the economics editor of Marketplace Money.
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I have to disagree about "more efficient..lead to more jobs". Corporations try to make things more efficient so that they can lay people off or not fill empty positions. Also, since airlines, in general, do not make a profit (comment from Warren Buffet), and with climate change being fueled literally with things like jet fuel, should we really be supporting growth in air transport? Why should local/state/federal governments pay for airport infrastructure when the users (airlines, delivery services, passengers) should pay for it. This is like getting cities to pay for sports stadiums. Yes. having an airport or professional team creates jobs in that there are people to be fed and housed etc, but if what we really want are a well-educated populace, then the infrastructure that needs work is school buildings and more good teachers and principals. Then the populace will be better able to perform the jobs that Americans want to have.

Having been through a number of "down turns" I find myself looking for the opportunities in challenging times, because we will eventually come out of them. We have restarted our business with this in mind.

Here in Maine we have a long running (dare I say constant) call for improving roads, airports and railways. We are also starting to explore moving people by ferries more. Chris Farrell points out why now is the perfect time to improve infrastructure across the country. We'll need it. There are plenty of people out there who need the work (housing at its lowest level in nearly 100 years!) and money is cheap. They are practically giving it away.

Stupid question: Why is it that at the end of the worst financial crisis we have ever had we could suddenly afford the most expensive war we have ever fought? I am thinking of 1941. One thing that the war effort did was sell bonds. Can we do that now? Invest in your country. Could these bonds have a variable rate, like some mortgages? The longer people held onto them the more the bonds paid, presuming that times would get better and the US would be better able to pay them off. We could have a very tangible part of improving things and the debt we incurred would be building a system that our kids would inherit that improved their chances for a better life. It is like planting the tree that will take 100 years to mature: there's not a moment to be lost.

Thanks so much for such refreshingly intelligent stories and discourse.

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