A grim lesson from the stimulus
In the post below, Gary Burtless explains that fairly little of the stimulus was devoted to actually building stuff because the government (correctly) assessed that it couldn't build stuff quickly enough to make building stuff a good use of stimulus funds given that the stimulus funds needed to be spent quickly. The question is "why?"
As Harold Meyerson notes in his column today, FDR "authorized Harry Hopkins, his jobs-wizard, to create a four-month-long project (the Civil Works Administration) that would employ 4 million people. Beginning operations on Nov. 9, Hopkins had 2.6 million Americans on the job by Christmas and 4.3 million by February -- this in a nation of 125 million. In their four months on the jobs, they built or improved 40,000 schools and 998 airports." So what happened? Why are we so much worse at direct employment today?
Part of the answer is technological: Most WPA and CWA workers were employed on pick-and-shovel jobs long since replaced by labor-saving (and job-reducing) machines. Part of the answer is that big government (the stimulus) was slowed by good-government requirements (environmental impact reports, competitive bidding and the like) that didn't exist in the '30s. Also, strapped state and local governments laid off many of the workers needed to approve the stimulus projects. Layoffs and furloughs in California's Office of Historic Preservation, the state's inspector general told me this summer, created a 60-day bottleneck for even routine structural improvements.
Infrastructure projects remain among the most stimulative forms of anti-recessionary activity - so long as the projects actually happen. That's one reason liberals like me have enthusiastically supported them. It's now clear, however, that unless presidents, governors and mayors appoint their own Harry Hopkinses and create fast-track procedures for construction, stimulus projects will be no more than a pale ghost of their 1930s' predecessors, unemployment will remain outrageously high and the politicians who backed the stimulus will be left scrambling for explanations. These are among the grim lessons of our mega-recession, as many of those swing-district Democrats can sadly attest.
If anything, I think Meyerson is too optimistic: There's no Harry Hopkins -- or fast-track procedures -- on earth who can turn back the clock on how we build stuff such that we need more people with shovels and fewer guys who know how to drive tractors. Of course, the fact that infrastructure investment isn't going to be a mass employment program that can be rolled out and completed inside two years doesn't mean it's not a good idea that would employ a lot of people doing useful things at a low cost.
| December 29, 2010; 2:34 PM ET
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