Stimulus Blame: 'The Centrists' AND Barack Obama
by fairleft, Sun Feb 08, 2009 at 08:35:23 AM EST
Blame the centrists as Paul Krugman has decided to, but is Obama one of them or one of 'us' (whoever we are)? The anti-Keynesian inadequacies of the stimulus package are not simply the result of the bad guys' playing their predictable head-in-the-sand denial games. The President, Barack Obama, needed to have a progressive vision and rally the people, us, around that vision. Then we could've, and perhaps can still, pressure Congress and get the job done. But he didn't do that.
Instead 'we the people', a potentially great Obama political asset, were left on the sidelines as the stimulus package was worked out. Obama and the usual Congressional suspects (America is not inspired by the Harry & Nancy show) have tried to get the bill passed 'inside the Beltway', with the traditional, 'please as many constituencies as needed' hodge podge of tax breaks, and okay but uninspiring and 'vulnerable to attack' stuff. That adds up to a mash that even a brilliant White House P.R. machine cannot unify into a sellable, coherent vision for a great American economic future.
America needs, for example, to transform through green infrastructure the way we live. Then, 2-3 years from now we start to see results from this record spending splurge, for example vastly expanding mass transit systems, massive new and cheap alternative energy sources, and millions of money-saving conservation-enhanced housing units. (I realize some of this is in the present bill, but it's what, 10% of the total? You can't sell a vision with a bill when it's only 10% of the bill.) The vision includes replacement of infrastructure but is much larger, more expensive, and employs a lot more people, longer term, at union jobs (more below the fold but this was fleshed out in detail in a pre-election book I can't remember the title of, sorry!).
My opinion, one of the centrists who wrought the inadequate and sometimes misdirected stimulus plan is named Barack Obama. We may have to either fight or get used to this.
To do more for the real economy, to deal with the major non-economic problem in America's future, to make the stimulus plan Obama could've sold and gotten the population to rally around, and to make sure the package didn't mainly provide just an economic sugar rush, the stimulus bill should've been aligned with the following four paragraphs by Robert Pollin:
Recessions create widespread human suffering. Minimizing the suffering has to be the top priority in fighting the recession. This means expanding unemployment benefits and food stamps to counteract the income losses of unemployed workers and the poor. By stabilizing the pocketbooks of distressed households, these measures also help people pay their mortgages and pump money into consumer markets.
Beyond this, the stimulus program should be designed to meet three additional criteria. First, we have to generate the largest possible employment boost for a given level of new government spending. Second, the spending targets should be in areas that strengthen the economy in the long run, not just through a short-term money injection. And finally, despite the recession, we do not have the luxury of delaying the fight against global warming.
To further all these goals we need a green public-investment stimulus. It would defend state-level health and education projects against budget cuts; finance long-delayed upgrades for our roads, bridges, railroads and water management systems; and underwrite investments in energy efficiency--including building retrofits and public transportation--as well as new wind, solar, geothermal and biomass technologies.
This kind of stimulus would generate many more jobs--eighteen per $1 million in spending--than would programs to increase spending on the military and the oil industry (i.e., new military surges in Iraq or Afghanistan combined with "Drill, baby, drill"), which would generate only about 7.5 jobs for every $1 million spent. There are two reasons for the green program's advantage. The first factor is higher "labor intensity" of spending--that is, more money is being spent on hiring people and less on machines, supplies and consuming energy. This becomes obvious if we imagine hiring teachers, nurses and bus drivers versus drilling for oil off the coasts of Florida, California and Alaska. The second factor is the "domestic content" of spending--how much money is staying within the US economy, as opposed to buying imports or spending abroad. When we build a bridge in Minneapolis, upgrade the levee system in New Orleans or retrofit public buildings and private homes to raise their energy efficiency, virtually every dollar is spent within our economy. By contrast, only 80 cents of every dollar spent in the oil industry remains in the United States. The figure is still lower with the military budget.
The following New American Foundation paper also is a big idea core that could've been sold over the tops of the usual inside-the-Beltways suspects: An Economic Recovery Program for the Post-Bubble Economy.