Weekly Wisdom | Digital vs Physical
The "Physical" Economy Needs Attention
Last week, this substack highlighted the “unstoppable” stock market which ignores inflation, interest rates, wars, and a struggling consumer. Buoyed by the Magnificent 7 technology companies and the global dominance of America’s S&P 500 corporations, the elite are getting richer while the savings and purchasing power of the working class continue to decline. But all of this wealth is primarily benefitting the tech and investor classes, while the physical economy falters. AI is important to our nation’s future, but so is the state of our infrastructure and other “real” parts of the economy. Hopefully more investors and entrepreneurs (like Elon Musk) will take on the task to invest back into the physical economy.
The needs of the physical economy are many:
The median age of an American home is 44 years, a record! Drive around even affluent cities and counties like Sarasota and it becomes readily apparent that there are thousands of homes in need of updating. According to the National Association of Realtors, the repair backlog for American homes with at least one major repair is a staggering $198 billion. And to fully update America’s housing stock would easily cost trillions!
The technology boom and strategic competition with China have thrust domestic critical mineral mining and refining to the forefront of America's economic and national security priorities. Currently, China controls nearly 90% of rare-earth minerals refining capacity. What America lacks is the ability to refine and process minerals and rare-earth minerals on a scale that would decrease our dependency on other countries. The investment needed to build refiners will be in the hundreds of billions.
According to traffic and technology company INRIX, congestion costs the American economy around $90 billion per year. Congestion, car accidents, and expensive modes of transportation are hindering the needed productivity boom America needs to outgrow the federal debt. The American Society of Civil Engineers is projecting that $87 billion per year will be required just to maintain America’s roads and interstate system.
In 2025, the ASCE gave our overall infrastructure a grade of C, which is the best rating since 1998. But take a trip to an airport that isn’t Atlanta or Tampa, and you will see the immediate need for updating. Or consider the mediocre state of our bridges. Or ports. The list goes on and on. The total funding gap needed for A level infrastructure over the next decade is $3.7 trillion!
The Trump administration has done a superb job on the energy front by eliminating onerous regulations. In July of last year, President Trump launched the Quad Critical Minerals Initiative along with Japan, India, and Australia, which coordinates and strengthens supply chains related to processing and refining critical minerals. And even within Washington D.C., President Trump has worked to clean up the city and its monuments like the Columbus Fountain. But this substack will continue to encourage the Trump administration to go even further by championing a world class infrastructure that will benefit millions of Americans while rejuvenating our economy.
