Saturday, November 22, 2008

NPR Tells Bambi He’s Wrong on Economic Stimulus

I had to read this NPR article twice to be sure I had it right. Obama says his economic stimulus plan will be A, B, and C. NPR quotes two guys that say – A, B, and C. are the standard remedy – but it’s not right this time.

Whoa. The thrill is gone, eh, NPR?

What is your plan, Bambi? "We'll be working out the details in the weeks ahead, but it will be a two-year nationwide effort to jump-start job creation in America and lay the foundation for a strong and growing economy," he said.

So you don’t really know. OK.

Well, what do you know? "We'll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels, fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead," he said.

So you are going to get Congress to approve money. State contributions, Bambi? You know – unfunded mandates? Then the roads and bridges need to identified – all union jobs, of course. Then the bidding process kicks in, which is months and months long according to law. Then the engineering needs to be done. Few more months. Then the slow work actually begins. If the first contract is awarded before 2010 rolls along, you’ll be lucky.

But that’s just my opinion. Someone else out there? Business and economics historian John Steele Gordon says the discussion of infrastructure investments and government programs rings familiar. / "That's the standard remedy for this illness," he said. "Now whether it's the best remedy or not is another question." / Gordon argues it isn't. He says the New Deal didn't end the Great Depression, World War II did. He says building bridges and painting schools won't provide a quick fix. / "That's all very good, but you can't start that on Jan. 21 even if Congress agreed," he said. "It's going to take a long while to plan it and decide who gets what and where and how and when."

Let’s not leave out the Great Society – it doubled inflation.

But you’re just one guy. Anyone else? Economist Lakshman Achuthan agrees that government-funded job creation alone won't solve the problem. Atchuthan is director of the Economic Cycle Research Institute and as he sees it, there are two other elements needed: extending jobless benefits, which Congress just did, and some sort of direct economic stimulus. / "Rebate checks or food stamps or payroll tax holidays or tax breaks for specific businesses — whatever," he said. "The content is less important than the timing."

I get your point, but you don’t mean that a 7-week extension of unemployment benefits will have a deep macroeconomic impact, do you? It extends the ability to pay bills to buy the economy time to recover. But point taken – do something, do it now, and don’t tell us about creating union jobs as the cure.

NPR trashes Bambi. Who’da tunk …

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