What Is To Be Done?

What Is To Be Done? (In appreciation of Vladimir Lenin, but no Vanguard Party, unless it’s led by Bernie Sanders)

I was going to begin with fiscal stimuli that are no-brainers, but W, our deeply compassionate conservative, outfoxed me, by just announcing his support for an extension of unemployment compensation to 39 weeks, instead of 26, after having opposed this in the past. This extension has been done seven previous times in seven previous recessions, often, like in this case, late in the game. Democrats should one-up Bush and extend it for more than 13 more weeks, given the fact that so many have exhausted their benefits and that there are many more long term unemployed than usual. In fact they should also increase the average amount received from $15,000 a year to something higher–say $20,000 (and aid the states in being able to do this). This is as effective a stimulus as there can be, as almost all will be spent and the delay in spending this money is minimal. [There is also little fear, in light of how little the amounts are, and how short the payment period is, that the number of free-loaders will be significant.]

Other no-brainers are food stamps and avoidance of cutbacks in Medicaid. Again, if needed, aid to the states should be immediately forthcoming, so these measures can be done promptly.

Philadelphia, I read, has announced library cutbacks. New York is planning to cut back subway service and raise rates. I am sure similar things like this are happening all over the country. The most effective stimulus, because of its speed in being used to bolster employment, after enactment, is Federal aid to states and cities, to prevent cutbacks of this type. I have no real idea as to how much should be enacted to avoid these cutbacks, although I do recall reading a figure of $100 billion. I suspect we should be thinking in terms of $250 billion. I doubt even Republicans will block this effort–it simply doesn’t sound like the actions of the Socialist devil –although at some point the amounts involved will bother some. The goal, simply is to prevent cities and states from laying off their employees and cutting back needed services, although perhaps it might help some states and cities to make infrastructure improvements they otherwise would not be able to do.

But the main fiscal stimulus had to be broader and include infrastructure and research and investment of a type that will help in the long run our environmental needs. Here, I hope those in charge separate expenditures into two categories–those that can immediately employ workers, and do so intelligently–and those that are needed long term–but require careful planning, if inappropriate projects are to be avoided. I should think fixing potholes and repairing bridges fall more into the first category while setting up electric car recharging stations (apparently big in Australia), which will have to be co-ordinated with improvements in electricity production, might require more time and be in the long term group, although partly, I assume, some activities (beyond planning) can be started sooner rather than later.

The two main New Deal projects were the Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA). The first is hard to duplicate today since many workers lived in camps and wore uniforms as they planted trees, worked to prevent soil erosion and built telephone lines. But the WPA, started in 1935, involved spending on parks, bridges and schools all over America. The main problem, then, as now, is that there will be inappropriate political considerations involved, such as earmarks for "roads to nowhere," or roads to somewhere, but where you need a magnifying glass to find what you are looking for. [Will someone please tell me why "earmarks" has apparently replaced "pork barrel?"]

I have three responses to this. First, haste makes waste, but waste makes jobs. Second, the WPA built the very useful and magnificent Triborough Bridge (just yesterday renamed the RFK Bridge) and if a few unnecessary earmarks were also created–well life isn’t perfect! Finally, it’s hard to know what’s waste and what’s needed. Years ago, just after the War, when driving down Liberty Heights Avenue in Baltimore (yes, the name of the street a recent Barry Levinson movie was named for), my father pointed to a three foot wall near the sidewalk, in back of which was Hanlon Park. This park had a reservoir, tennis courts–yes I played on them–and hills, such that the absence of a wall would mean that the dirt from the park might fall onto the sidewalk and even onto the street. He told me this wall was built with WPA funds. Was it really needed? I don’t know, but I do notice that Central Park has walls, but perhaps for other reasons.

By all means, let us hope the expenditures on infrastructure will be, for the most part, useful. But if we are to avoid catastrophe–and as I write, the Dow has just dropped another 5 1/4 percent, to about 7,550–we have to accept that waste will exist. (Keynes once said, possibly with whimsy, that in a depression it would be better to dig holes and drop currency into them, and then cover the holes, and let the free market induce people to dig out the money, than do nothing at all.)

Finally, if the first order of business is a fiscal stimulus, to jump-start the economy, the other parts of the Obama program can be thoughtfully introduced later in the spring. I have in mind a universal medical program, educational reforms and environmental programs. [More on General Motors and the auto situation another time, and more on some of the long run problems greater deficits will bring, and also delayed to the future, possibly, a few wild card proposals I hesitate even to print.