Tuesday, October 06, 2009

The Poseidon Recovery

Recall the scene from the Poseidon Adventure where the captain sees a tsunami coming toward his giant ocean liner, and orders the ship turned? The ship banks dangerously, but it's much too slow. And, to put it mildly, things don't go well for most on board. The captain can't be blamed for the tsunami, or for trying to avoid having it capsize the ship, but sometimes no matter what you do you are going to be overwhelmed by forces larger than yourself.

President Obama was sworn into office as an economic tsunami hit the nation. After (ahem) bailing out the banks, he proposed a stimulus bill that would arguably help create jobs in an economy that did not appear able to do so. The immediate reaction from the right was either to do nothing, or to cut taxes for the wealthy. Once the stimulus bill passed, many immediately demanded to know why it hadn't worked, even though it hadn't been either funded or implemented. As if the U.S. government, an entity that makes the Poseidon look nimble, can turn on a dime. From the other side, Obama was pressed to do more, and to do it faster - a bigger stimulus bill. But Congress lacked the urgency of the crew of the Poseidon, perhaps because it was primarily other people who needed to be protected from the economic tsunami, and although Obama can be fairly criticized for making a lot of up-front concessions to try to gain Republican support I'm not sure how much more Congress would have given him under any circumstance.

Now we look like we're poised to have, at best, a U-shaped recovery of the employment market. The economy is doing better, but it's still shedding jobs. There are lots of things the government could spend money on, with Bob Herbert (for example) proposing:
A massive long-term campaign to rebuild the nation’s infrastructure - which would put large numbers of people to work establishing the essential industrial platform for a truly 21st-century American economy - has not seriously been considered. Large-scale public-works programs that would reach deep into the inner cities and out to hard-pressed suburban and rural areas have been dismissed as the residue of an ancient, unsophisticated era.
But massive, long-term job creation schemes aren't going to fix things this year or next year. There is a need to improve our nation's infrastructure, and there's little question but that the inner cities can't be physically cleaned up (removing abandoned buildings, environmental clean-up, creating viable brownfields for redevelopment etc.) without a massive investment of government money, Good public policy arguments can be made for that type of investment. But to me it's not clear that it's the best way to create new jobs, let alone to create them quickly.

It's easy to suggest that Obama "needs to do more" about one crisis or another - we have any number of huge crises to deal with. The hard part is figuring out what to do - what will work. (And although I'm skeptical of the motives behind Republican opposition to the stimulus bill, sometimes the answer truly is that "nothing will work", "nothing will work fast enough to matter", or "despite the need, that proposal isn't the best way to use our nation's resources.") I'm a proponent of long-term thinking, and of trying to make our society better and more sustainable for the next generation. But I suspect that to create jobs over the short-term, the ideas proposed by Herbert would have had to have been implemented and funded several years ago.


  1. I would concur with Mr. Hebert's statement that, "A massive long-term campaign to rebuild the nation’s infrastructure - which would put large numbers of people to work establishing the essential industrial platform for a truly 21st-century American economy - has not seriously been considered."

    I would add that it apparently hasn't been seriously considered by him either. The last time we tried this is was a great success. It was also closer than not to a century ago and the country and the people far different than they are now.

    The majority of the people "in" the program then came from a background of manual labor and a good many of them had been born on farms. They were used to hard work and there was remarkably little complaining about where they were sent and what they were asked to do (or if there was, I sure haven't heard about it.) Nearly all of the participants were men and at that time in history the vast majority of children were raised by a stay at home mother. Oh yeah, and expectations were lower and people more desperate.

    Can you imagine trying to run that program today? You would have to establish a childcare program - and it would have to be sufficiently mobile to accomodate single parents moving from job site to job site). You would need a system to feed, clothe, house, and provide medical care to the participants. You would deal with people insisting that the participants get to choose where they worked and what they did (and got to go home at night). Any reference to "camps" (the most efficient way to manage a large, low tech work force that you will be moving across the country from project to project from the standpoint of transortation, housing, management, etc) would lead to allegations of slavery and allusions to genocide.

    I've heard a great many good things about the old WPA, but I havent' heard anyone saying that it provided "job skills" - but you know that will quickly become one of the aims of any new program.

    Setting aside all of the above - what work would Mr. Hebert have the participants do? Rebuilding insfrastructure sounds good - so how do you think the unions will feel about it when the work that their members used to so is suddenly handed to the participants in this program? (Or, to be fair, screw the unions, how would "you" feel if you survived the recession only to be laid off because your job was outsourced to someone being paid by your tax dollar?)

    "Rebuild the inner cities?" Hmmm, let's see we'll do toxic waste removal (which is pretty much what you are talking about, at least in terms of asbestos, gas tanks, etc) with untrained workers who will be working and housed in high crime areas . . . yeah, that's going to go well. Let's just say that there was a reason that most of the WPA programs were done in the country side . . .


  2. I suspect that Mr. Herbert would find acceptable a public works program that involved contracting with private companies to do the work, as those companies would have to hire and train laborers. I don't know that such a program would actually be more expensive than trying to launch such a program as a government-run enterprise. (Not that it wouldn't be theoretically feasible to do it for less; but for the reasons you note it just isn't going to happen.) But certainly, if the program were offered on a large-enough scale, there would be pressure to extend contracts to union companies or to those who pay union or "living" wages.

    Also, if you delegate the contracting to local governments you're likely to see an incredible amount of self-dealing - people giving contracts to friends and supporters, or quitting government to start a business that coincidentally "wins" some rich contracts - and siphoning (misallocation and misappropriation) of funds, and the same unfortunately is probably true (although I would hope to a lesser degree, although... look, for example, at Blogojavich) at the state level.