A lot of us fear turning the clock back about 70 years to another Depression. While it would have been a good idea to avoid it, people like me who spread the alarm were largely ignored because too many people made too much easy money off of nothing. In a certain sense, it was all inevitable given the fact that no one was willing to do anything else. What makes it all good in a certain sense is that we have, in fact, been through this before and know what we have to do. The government is acting quickly, the Federal Reserve is firing up the presses, and the Democratic candidate for president is proposing a return of the WPA.
The Works Progress Administration was not just a part of the “alphabet soup” of programs that FDR quickly passed through Congress. This was the most important thing going, and Roosevelt put his personal secretary Harry Hopkins (who had a room in the White House) in charge. They employed 3.8 million people at the height, building infrastructure all around the nation. Our city hall here in Saint Paul was built by the WPA, as was much of our State Fairgrounds. If you visit rest stops on the Pennsylvania Turnpike or Garden State Parkway you’ll see some of their classic architecture.
This came from the Obama campaign after a small conference with advisors, including Warren Buffet. It’s more than just a copy of what worked last time, it’s targeted at the kind of infrastructure the nation needs. From the Obama-Biden website:
Create a National Infrastructure Reinvestment Bank: Barack Obama and Joe Biden will address the infrastructure challenge by creating a National Infrastructure Reinvestment Bank to expand and enhance, not supplant, existing federal transportation investments. This independent entity will be directed to invest in our nation’s most challenging transportation infrastructure needs. The Bank will receive an infusion of federal money, $60 billion over 10 years, to provide financing to transportation infrastructure projects across the nation. These projects will create up to two million new direct and indirect jobs and stimulate approximately $35 billion per year in new economic activity.
This could include a high speed rail initiative, and is similar in size to what I proposed as a starter program in that area. I hope that’s just what they have in mind, especially since it has the potential to solve our energy dependence while creating jobs and jump-starting the economy.
Just as before, the idea is that a handout is less useful for everyone than a job. We have work to do and we have people who can do it. So why not get it going? It worked before and it can work again. I’d also like to note that it’s less than 10% of the cost of the bailout plan and a similar fraction of the cost of the war in Iraq, both of which haven’t produced anything of value.
It’s about work and it’s about progress. The new WPA can accomplish a lot, and the Obama administration will give it another chance. At least we already know that it works.