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Government against itself

Harold Meyerson and I don’t see eye to eye on every issue involving the Obama administration’s job-creation and economic stimulus efforts. But we do agree on this: If you’re going to borrow and spend money to create jobs in the short run, a good model would be the New Deal’s Civil Works Administration, which reduced unemployment from 13 million to 9 million between November 1933 and February 1934. As Meyerson explains in this excellent article, the CWA worked because the executive branch officials in charge, led by the redoubtable Harry Hopkins, were fully empowered to approve projects and spend money with practically no bureaucratic hassle in between. The result was a swift and highly visible improvement of the nation’s infrastructure. That was good economically for the country, and good politically for FDR.

If anything frustrates me about the federal response to this recession, it is the conspicuous absence of CWA-like teams – perhaps dressed in bright yellow T-shirts with a recognizable logo on the front? – toiling on the nation’s roads, bridges and schools.

Meyerson also correctly diagnoses a major cause of this failure: “the checks that liberals created to keep the government from building roads, rails, and other infrastructure by executive fiat,” a.k.a., the forest of regulation and bureaucracy that has grown up since the New Deal. In today’s America, the government can’t act like Harry Hopkins did in 1933 because of, well, government.

California, Meyerson’s home state, received $620 million in stimulus funds in 2009 to support weatherization projects -- but only spent about 1 percent of that money because the stimulus bill did not waive the usual environmental impact, competitive bidding and historic preservation review requirements. Notwithstanding the fact that the country was facing a once-a-century economic emergency, the Obama administration left all of this standard procedure intact, and added more.

To be sure, some of the bureaucratic burden was imposed to counter Republican charges of corruption. But most of it was not. In fact, at organized labor’s behest, Obama and Congressional Democrats imposed a new requirement on the Energy Department’s weatherization grants: that they pay “prevailing,” i.e., union, wage rates. The impact of this provision was especially poignantly irrational, Meyerson reports, since it priced local community organizations -- the very people the stimulus bill was supposed to favor -- out of the business. “Weatherization work in Los Angeles ground to a halt,” Meyerson writes. (Why buildings in sunny LA needed so much protection against the weather is a question for another day.) LA’s experience was replicated nationally, with the result that a $5 billion weatherization program that was supposed to create 87,000 jobs in its first year created practically none.

Where Meyerson and I disagree is on the lessons of all of this. He argues that it would have been easier to cut through the red tape if Gov. Arnold Schwarzenegger had not laid off so many state staffers to ease the state’s budget deficit. But where was Schwarzenegger supposed to get the money?

The real question is why you have to meet so many officious requirements to get anything done in the first place. Meyerson describes the dilemma as a collision of big government (spending) and good government (regulation). Having breezed through the California State Office of Historic Preservation’s prolix rules, I’m not so sure about that. It might be more accurate to speak of a clash between urgently necessary government and mind-numbingly excessive government. To be sure, Meyerson argues that liberals should exercise “a preferential option” for job creation over punctilious environmental impact statements. But he doesn’t get very specific about how to square that circle -- except to suggest, not that plausibly (as he admits) that Obama should try funding more home health care jobs.

What Meyerson can’t or won’t concede is that some liberal institutions have, over the years, become the enemies of some liberal policy goals -- and that this economic crisis has starkly exposed the contradiction. Some of the very groups that populate and fund the Democratic Party – lawyers and labor unions come to mind – have accumulated and used political power to advantage themselves or their causes with no benefit for the poor and jobless. For all his promises of change, President Obama seems never to have considered using the crisis to do something about that. If anything, his policies, parts of the stimulus bill included, have made the problem worse.

UPDATE, 3:09 p.m.: An earlier version of this post mistakenly said that the New Deal's CWA program reduced unemployment from 13 million to 4 million between November 1933 and February 1934. Actually, it cut unemployment from 13 million to 9 million, a total reduction of 4 million. Sorry.

By Charles Lane  | June 16, 2010; 1:50 PM ET
Categories:  Lane  | Tags:  Charles Lane  
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Comments

" For all his promises of change, President Obama seems never to have considered using the crisis to do something about that. If anything, his policies, parts of the stimulus bill included, have made the problem worse." And slowly....ever so slowly, the scales on the eyes of the bedazzled peel off, one by one, as they finally begin to see the light.

Posted by: CREEBOLD | June 16, 2010 3:19 PM | Report abuse

Lawyers to the left of us
Lawyers to the right of us
They volleyed and thundered

So da Prez is frozen in his ability to act by "independent" Agencies responsible neither to the Executive or Legislative Branches...an automatan government independent of any restraint...such as the EPA contemplated attempt to regulate carbon emission by bureaucratic (not Presidential) fiat.

This is a 2001 Space Odesssy robotic take-over nightmare

Oh and by the way, hand-in-hand with the apparatchiks go the lawyers . A squad of rangers can't fire a weapon without them. We can't do propaganda abroad without them. Picking your nose in the presence of Somali Pirates can get you prosecuted and hailed up on human rights violations. Now..who did the trial lawyers support and why??

Posted by: wjc1va | June 16, 2010 10:56 PM | Report abuse

"CWA worked because the executive branch officials in charge, led by the redoubtable Harry Hopkins, were fully empowered to approve projects and spend money with practically no bureaucratic hassle in between.....California, Meyerson’s home state, received $620 million in stimulus funds in 2009 to support weatherization projects -- but only spent about 1 percent of that money because the stimulus bill did not waive the usual environmental impact, competitive bidding and historic preservation review requirements."

===========================

Hmmm...didn't waive the usual environmental impact, competitive bidding and historic preservation review requirements....

Didn't we basically waive the regulations for BP?? And that worked, didn't it? We got a lot of oil....just not exactly where we wanted it.

Posted by: eeterrific | June 17, 2010 2:06 AM | Report abuse

Even if one accepts in principle the idea that we can spend our way out of our recession, those who advocate it refuse to, or cannot, deal with one simple and undeniable fact:

In 1929, the public debt was 16.34% of the GDP. This year, it is 83.29% the GDP. Next year it will be 94.27% IF Congress is being honest.

(http://www.usgovernmentspending.com/federal_debt_chart.html)

There are a lot of flaws with the idea of spending our way out of our problems. Last I checked, over 13 trillion of them.

If we are to "spend" our way out of a recession, we need money to spend in the first place. The well is running dry!

What is going to happen when people and nations will not or cannot lend our government more money?

If we don't stop spending more than we make, this is INEVITABLE! Sooner or later the interest will become unmanagable and we will default. Even more likely, though not as certain, some sort of general economic crisis could lead to the credit drying up.

This is not speculation. This will happen if we do not change our ways. And soon. This should not be a partisan issue and the ONLY people who benefit from our making it so are the scum who created the problem in the first place! Politicians from BOTH parties have been feeding us a line for decades about how we can do this, have that, fight them without having to pay for it ourselves and we have swallowed this line like good little sheep.

We are STILL swallowing this poison! We need to grow up and accept responsibility for what we have done, for squandering in a generation the legacy built up by our forebears through decades of sweat and painful progress! We need to face the fact that we have been living a life-style that we have NOT earned and financing it with other people's money! We need to tighten our belts, accept a temporary decline in our standards of living and then work like dogs to make this nation into what is SHOULD be!

Austerity IS coming to the USA. It is simply a matter of whether we welcome it on our own terms before it's too late or wait until it mugs us "Greece" style!

Posted by: andrew23boyle | June 17, 2010 5:44 AM | Report abuse

Acceptable idea. We can start with the fence separating us from Mexico. From one end of our border, to the other. NOW.

Posted by: bobbo2 | June 17, 2010 6:18 AM | Report abuse

General theme in America right now: get someone else to do it. Lawn care. Raise the children. Make our stuff. And we are turning into a nation that does not know how to do anything. What we need now is a leader who calls upon its people to get up and act. This starts at home (parents, teach your child to mow the lawn!) then at work (employers, expect the best from your people or fire them)and our President (ask us to help, and we will!) All of these things give you a sense of accomplishment- when is the last time you felt that? American Pride is dying.
If we wait for a government agency to do it, whatever it is, it will be too late and sloppy.

Posted by: dcjayhawk2 | June 17, 2010 6:22 AM | Report abuse

Mr. Lane: here in New Hampshire they did exactly as you suggested. They erected signs at the roadway projects that the stimulus/ARRA funds paid for.

The Republicans threw a fit, claiming it was political grandstanding and a waste of money to make the signs.

Admit it. The GOP would screech about any obvious jobs program paid for by federal government fiat.

Posted by: steveboyington | June 17, 2010 7:20 AM | Report abuse

Government not waiving regulations ... merely proving that its all about power and control.

Once government assumes certain powers and creates a bureaucracy for enforcement, it's virtually impossible to get them to give up any of their power. And we, the small people, continue to suffer.

Posted by: Hazmat77 | June 17, 2010 8:21 AM | Report abuse

This is all you have to know -

WASHINGTON (MarketWatch -6/17) -- The number of people applying for unemployment benefits shot up 25,000 in the latest week, indicating continued weakness in the U.S. job market, government data showed.

Initial jobless claims rose to 471,000 in the week ended May 15, the highest level in a month, the Labor Department reported Thursday.

And most economists have concluded that the New Deal did not end the depression of the 1930's - WW2 and the required national mobilization ended it. You could look it up. Nothing will change until the entire leftist anti-business and pro-regulation of anything and everything ideology is dumped into the ash pit of history, where it properly belongs.

Posted by: txoh | June 17, 2010 9:27 AM | Report abuse

Since when is watching porn on the job sabotage??

Posted by: richard36 | June 17, 2010 10:09 AM | Report abuse

Truer words have not been spoken

the forest of regulation and bureaucracy that has grown up since the New Deal. In today’s America, the government can’t act like Harry Hopkins did in 1933 because of, well, government.

Posted by: bruce18 | June 17, 2010 10:36 AM | Report abuse


Sooo many of Lane's columns need a
correction! As Today.

That's exact proof of sloppy writing,
and really faulty research.

Though with Lane, who thinks it's an accident as long as he's on his anti-everything American tirade.

Posted by: whistling | June 17, 2010 10:56 AM | Report abuse

Sooo many of Lane's columns need a
correction! As Today.

That's exact proof of SLOPPY WRITING,
and FAULTY research OR FALSE research
(le'ts try to get this past, catch me if you can).

Though with Lane, who thinks it's an accident as long as he's on his anti-everything American tirade.

Posted by: whistling | June 17, 2010 10:58 AM | Report abuse

Timing matters. When business and consumers are NOT spending, then it makes sense for government to spend (even if it has to borrow). But, one thing that the Stimulus has shown us is the extensive time lag between proposing and executing some of the "shovel-ready" projects. It simply takes to long for the most stimulative parts of government spending to work their way into the economy... the less stimulative parts of the Recovery Act (tax cuts and subsidies to the states) can be executed quicker. Once these projects get online (over a year later), you do have to worry about government spending crowding out resurgent business spending.

Posted by: ablum1 | June 17, 2010 11:44 AM | Report abuse

Two problems with this: 1) the use of "liberal" as a universal and pejorative noun connected with the creatoni of government policies. 2) the idea that the purppose for many rules and regulations in the rewarding of contracts is for liberal purposes.

The main reasons for having the onerous rules is that too many well-heeled and well-connected private enterprises will win no-bid contracts that over pay them and that the rules were created to make sure that the public-private corruptoni partnerships are impeded. This is not liberal, it is common sense. The sheer number of examples of this from Halliburton to Boeing to the Luzerne County, PA juvenile "justice" scandal are the reasons why the rules are necessary.

The real solution is to have the fed agencies hire the worker directly to compelte the project as federal employees rather than farm the work out to contractors who often abuse the system for their own private gain at the public's expense

Posted by: MrCompGov | June 17, 2010 1:41 PM | Report abuse

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