On the Contrary

As the economy continues to collapse, the plans for an economic stimulus package are slowing starting to take shape.  Well kinda, sorta.  We know that the talk is about investing in infrastructure and other rebuilding projects to get people employed  and back in the workforce.  We know that the last time “we put money directly in the hands of the consumer who know best on what to spend it”, they mainly saved it or spent it on stuff made in China which had little impact on our ailing economy.  So this time the spending is going to be more like during the New Deal, on projects to improve our society.  But what projects?

Well some of our mayors have a list of ready-to-go projects to get those old dollars flowing. The U.S. Conference of Mayors went to Capitol Hill earlier this month with a report listing 11,391 infrastructure projects proposed by 427 cities (CNN).  The mayors claimed the proposal would create 847,641 jobs in 2009 and 2010.

The problem with this list was that it was full of pork and had no integrated or coherent plan for our future.  I listened to one hilarious interview on CNN where they challenged one mayor on some of the projects.  In particular they questioned a waterslide construction in a city’s theme park.  The mayor being questioned said he could not vouch for all 11,391 projects and then the questioner pointed out this project was from his own town.  It is politics and pork as usual.  If there is going to be handouts, then I want what I can get for my community.  These are the bozos we have been electing for years that are more creatures of past business connections than pragmatic planners of our future.

What is wrong with all this thinking is that we really are in dire straights and the way we have to look at every dime we spend is how does it leverage and multiply our economy down the road.  It can’t be money just to make-work and provide jobs; it has to be jobs that lead to an improved and growing future economy.  We are once again treading on Republican conservative economic theory that says that the market place will determine an equitable distribution of benefits.  Baloney.  Government is going to have to plan very carefully how to invest our money in the future so that the jobs we create and the work we do lays the foundation for a growing and sustainable economy:  A bridge to somewhere.

This is where I have some fear about what investments we make.  Here in California, because of the budget’s shortfalls, many highway projects have been put on hiatus.  Now the conventional wisdom is that these are jobs that if we get federal help, will keep our infrastructure improvements going and employ many people.  But lets step back and think about this a little.  In an age when the future promises us $8-$9 a gallon gasoline, do we really want to focus on more HOV lanes, or do we want to rethink that investment and improve our mass transit system?  We are one of the only industrialize country that does not have a high speed rail system that would give us an option to airline travel and reduce potential terrorist attacks on our major transportation hubs (you can’t ram a train into a building unless you lay tracks to it first).

Sure there are a lot of infrastructure projects on the books that really do need to get done like improvements to waste water treatment, or repairing crumbling bridges and highways.  But the big investments we make should not be sustaining the status quo, but should be in an investment in a new future.  Thomas Friedman of the New York Times has written copiously that the future is in green energy.  This may be where we need to be investing our money.  Improving local parks may be an esthetic improvement, but are our parks going to be driving our future.  We as a people, meaning our government that represents us, needs a vision of that future, and then invests our money wisely to move us toward that future.

My point is simply this:  In the past we have let the market place take us where it wanted to and that approach has served us badly.  Now we must take charge and that requires an understanding of our realistic future.  That future includes an ever increasing competition for natural resources and a world where our ecosystem is degrading.  Good jobs and a growing economy are going to take some careful planning by all of us to invest in the kind of things that will move us forward.  I don’t think that is water slides and a new paved path through the parkway.  I think that is investment in the types of projects that have multiplier effects; for every dollar invested, it multiplies its value in the future.  We need to evaluate each project on its multiplier effect and take a long view to pick the best ways to invest our money.

Finally, if I were to pick types of projects we should be investing in, here would be my list and you have to think big:

• Transportation – Projects that recognized the use of more mass transit and reduce energy costs
• Education – Projects that make sure that higher education becomes more available to everyone.  Human capital is our most valuable resource and is our most important investment
• Healthcare – To make our businesses more competitive and to improve the welfare of our most important resource
• Energy – Projects that promote a whole new infrastructure and industry of green energy
• Aid to States – In order to keep our safety nets in place while we get things rolling again

Barack has asked his team to think big on this plan.  My only fear is that they won’t think big enough and we will spend money on the bridge to nowhere.