Gingrich, former House speaker, visits P&Q Roundtable

Former Speaker of the House Newt Gingrich spoke on issues such as the supply chain, inflation and infrastructure at the 2022 Pit & Quarry Roundtable & Conference. Photo: PamElla Lee Photography

Newt Gingrich, former speaker of the U.S. House of Representatives, took part in a virtual Q&A June 8 during the 2022 Pit & Quarry Roundtable & Conference. Gingrich offered perspective on several issues pertinent to the aggregate industry, including infrastructure, the supply chain, labor and energy.

Infrastructure

Responding to questions about the Infrastructure Investment & Jobs Act (IIJA) and infrastructure throughout the U.S., Gingrich noted that reforms to the bureaucratic process are necessary in order to improve the state of infrastructure nationwide.

“You can pour a billion dollars [into] wind [energy] and get about $600 million of actual construction by the time you have the time value of money, the regulatory process, the paperwork [and] the constant requirements to change things,” Gingrich says. “We found, for example, with the U.S. Army Corps of Engineers, that the length of time it took to study improving the harbor of Charleston was longer than the length of time it took to build the second Panama Canal. They literally couldn’t even get the study done in the length of time it took Panama to actually build the whole canal.”

A factor at play in adding costs to construction projects, Gingrich says, is unions. While he is pro-union, Gingrich says unionized work is adding costs to projects that could be cleaner, simpler and more direct.

Additionally, Gingrich says the U.S. must do better at creating more efficient and direct types of infrastructure and transportation. At the Roundtable, he referenced a situation in Los Angeles where the city opted not to expand a highway out to port, keeping ports clogged and even forcing West Coast cities to turn to ports in other areas such as Jacksonville, Florida, for efficiencies.

According to Gingrich, another area in which the U.S. is falling behind in terms of infrastructure is in high-speed rail.

“I think we really underestimate how well the Chinese have been doing at building high-speed rail,” Gingrich says. “There’s no reason you couldn’t have a very high-speed train between Washington and Boston. It probably isn’t economically rational in most of the country, but certainly in that corridor it would be.”

Public-private partnerships represent yet another opportunity for the nation, according to Gingrich. He argues that these are utilized well in other parts of the world, but not in the U.S.

“As a result, they bring in both capital and entrepreneurial management in a way which would make a big difference,” he says. “If there is a Republican Congress, as I suspect there will be [come January 2023], I’m going to encourage them to think up an entire infrastructure modernization act that begins to meet these kinds of needs and continues to invest.”

Gingrich

Supply chain

With aggregate industry stakeholders continuing to struggle with supply chain issues, Gingrich discussed the ongoing struggle to get ahold of necessary things.

After buying a house in April 2021, Gingrich says he and his wife are experiencing delays firsthand.

“Things as simple as ordering faucets can be a 20-week wait or, in this case, it’s a 24-week wait,” he says. “There’s a continuing supply chain problem, particularly if you want a specific thing. There was a paint supply problem and, [with] the color we want, Sherwin Williams had to look all across Florida to accumulate the paint because they literally didn’t have any left. The supply chain remains a problem.”

Gingrich points to China as a big part of supply chain problems. Specifically, he says how China’s zero-COVID policy led to the shutdown of Shanghai for two months.

“Shanghai is an enormous center of exports and literally nothing was moving,” Gingrich says. “China has had two effects: one, they made the supply chain problem worse and two, companies have begun to look at other countries, whether its Vietnam, Thailand or the Philippines. You’re going to see a lot of sourcing move away from China, because they’re now seen as increasingly unreliable.”

The ongoing war in Ukraine is another factor having a notable effect on the supply chain, according to Gingrich. Given Ukraine’s wheat exports and Russia’s fertilizer exports, he says the effects of the war on the supply chain could be widespread and severe.

“Friends of mine who are experts on this expect millions of people to die in the third world,” Gingrich says. “Egypt, for example, gets 85 percent of its wheat from Ukraine. In addition, Russia is a major exporter of fertilizer. Countries like Brazil, Western Australia [and] India all now [have] a scarcity of fertilizer and dramatically higher prices. You should expect to see food pricing go up.”

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