Work Projects Administration: Is It Too Late?

What if Obama had really gone forward with his program to rebuild America’s infrastructure that was a major part of the original stimulus package, but somehow largely got derailed? What if, instead of paying and then rolling over most unemployment benefits, the administration had adopted a Work Projects Administration (WPA) type of program to employ such welfare recipients and implement rebuilding America’s infrastructure under the stimulus program, largely along the lines of what was originally planned.

I think the answer pretty clearly is we would be better off regarding unemployment then we are now. I suspect, however, that many of the funds targeted for new jobs and infrastructure repair went to the states to avoid governmental layoffs and to stimulus funding of Democratic pet programs, but I am not sure. It is quite difficult to get good information about what happened to the infrastructure rebuilding program. But as Peter Morici reports, now only about $100 billion of the $759 billion stimulus package is slated for brick and mortar programs. Infastructure rebuilding is not only proceeding too slowing, it has been largely gutted by the Administration.

Assuming the moneys were as much diverted as not into tax cuts and aspects of the Democratic agenda, it seems that the federal government made a pretty big mistake here. If I had known more conclusively, I would have included this error of the Administration in my recent article on Washington’s Problem is Poor Economic Solutions. But the water is a bit muddy. What is clear is the infrastructure rebuilding program too largely went nowhere and we have high and rising unemployment.

But the next question is, is it too late?

That is, is the economy too much on an upswing and mending to get such a WPA infrastructure rebuilding program and funding for it on its feet in time to be really useful? The answer largely depends, I think, on one´s assessment of where the economy is going with unemployment and what the worth of a repaired infrastructure and some clean up is.

The stock market now clearly thinks the economy is on the mend. Many here at Seeking Alpha have serious longer run reservations. Many economists and others believe the unemployment problem is going to last for a good while; some think a large part of it is permanent. Paul Krugman, himself quite an optimist, apparently has his doubts about employment improving quickly, too. So does Brad DeLong.

Such a program is certainly the most direct way to attack unemployment; however, as I pointed out in my article above, indirection and obliqueness have been the government´s big problems in trying to solve the nation’s economic problems. The proposal here would fix that regarding unemployment.

But what should we do now?

I think we should initiate a WPA type of program now and take people off the unemployment rolls and put them for starters on the “shovel ready” projects in their areas that never really got started. Also, much general repair and clean up is needed in America that they could also start on. Taxpayers would get something local and tangible for their money, for a change.

The infrastructure clearly needs help, some $2.5 trillion in maintenance, repairs and rebuilding according to the Americans Society of Civil Engineers. The expense of those unmade repairs and lack of maintenance grows annually with further physical deterioration. Basic maintenance is lacking in too many areas. It will cost us much more later. We are digging ourselves into a hole here. The program suggested should help. We would not be having people dig holes and then refill them. There is honest work to be done.

If it turns out that the economy recovers more quickly, fine; continue with the program anyway. We need it. If the economy has a relapse, then we should be glad to have the program in place and we can expand it. Unemployment is forecast to continue for a good while anyway. The repairs are badly needed. We should get on with it.

These suggestions are better than simply giving the money away in unemployment benefits and planning a new stimulus program that has only temporary effects and costs too much. Many useful things can be done in almost all areas, down to picking up the trash strewn about America. Also, it would not cost us $92,000 to $257,000 per job, as some have variously estimated the last stimulus program cost us -- the price of Washington's economic indirection and obliqueness, I contend.

I also believe that such a program, in addition to impacting the unemployment problem, could seriously improve our nation’s spirit and outlook. Something tangible would be getting done. People who had no work, would be usefully employed. Bridges in shambles and roads badly pocked would be getting fixed and repaired. Things would get cleaned up and look better. People would notice. It would do us good and it would be useful.

We should have implemented such a program at the outset, but it is not too late. We should do it now.

Disclosures: none

Comments

[PastTense:]

I believe there have been quite a few shovel ready projects done in the highway area (I have noticed a higher number of road resurfacings than usual).

Basically construction is much different now than it was in the Work Projects Administration era. Back then projects could be designed in a short period of time; now it takes years to design projects (including environmental reviews...) Back then any able-bodied person could participate: now construction is only something specialists do.

Nov 10 09:31 AM

[User 353732:]

There are indeed many useful things to be done.
However, it is the productive Economy not the Parasitic Economy that accomplishes and creates value and does these many and various useful things.
Free and fair markets , honest credit, equitable alignment of risk and reward , an honorable dollar and incentives for innovation and entrepreneurship are "the work projects administration" of a free people with free minds and free markets.

If you want millions of net new jobs, a vibrant Middle Class , prosperity, security and a strong currency then argue for liberty and the defense of the Constitution and liberty will bestow all the "work projects" you want.

Nov 10 09:37 AM

[Leftfield:]

For decades, even when America was actually #1 in most things and it was shocking information to read otherwise, maintenance of our infrastructure has been described as a crisis. If our politicians can't get enough focus on the real world into their minds during this crisis to see a serendipitous opportunity to accomplish a needed goal and put massively unemployed to work, they really need to be put out with the trash. Every election, over and over.

Nov 10 09:51 AM

[John Galt:]

Obama didn't REALLY want to rebuild our infrastructre. The stimulus was a giant state budget bailout so that they didn't need to make the cuts that need to be made for another year with hopes of recovery by then.

It was all a slogan, "build bridges instead of bombs". We are still dropping bombs in Afganistan, and we still aren't building bridges at home.

Nov 10 11:23 AM

[chris coonan:]

I think most people would prefer to work in a program like this than to wait for the next unemployment check. Keeping active and part of society gives a big boost to one's spirits, as well as building experience.

Architects and Engineers put to work in creative manners to make the future better, is a much better way to spend a Trillion, than as a bonus to an overpaid investment banker. So hopefully the future of stimulus, is for creative works, and not what we have now....the opposite.

Nov 10 11:55 AM

[Al-USA:]

"
It was all a slogan, "build bridges instead of bombs". We are still dropping bombs in Afganistan, and we still aren't building bridges at home.
"

Exactly, Obama has been all talk and no "show" for the working class/middle class. His actions show that the primary concern of policy makers, Democrats and Republicans, are to safeguard the wealth and interests of the Financial Oligarchy, or banskers, the very same group responsible for the financial crisis which has precipitated the economic crisis for the American masses.

In short, the masses can expect no relief from the attacks on their livelihoods, increased taxes, decreased benefits, etc., until a third poitical party is formed, independent of the Democrats and Republicans, which does more than "spew" popular slogans while behind close doors writing legislation for the benefit of its oligarchic masters. What is needed is a third party for the masses of the American working/middle class.

Nov 10 03:16 PM

[User 340063:]

thank you for articulating the timeliness and benefits of a WPA approach to economic stimulus. I've had hopes for such a program since before the election, and I've been disappointed. But on the other hand, I am glad to be responding in this forum to the idea of such an approach!

Nov 10 03:42 PM

[Roger Knights:]

Here's what I wrote on a WPA-like idea in one of my Instablogs:

The gov't should offer to pay for home-improvement projects for home-owners, in exchange for a share of future profits on the sale of the house. There are certain desirable home improvements that wouldn’t require skilled labor, such as adding fencing, home security, and earthquake protection. Millions could be hired to do these tasks after a bit of videotaped training.

This technique could also be used to fund purchase and installation of insulation, attic fans, south-side awnings, white-painted roofs, and heat pumps. The US needs to cut its energy consumption, and a little governmental nudging is OK to get us there.

These initiatives would stimulate lots of economic activity; upgrade the country's housing stock; make life pleasanter for home-owners and their neighbors (who'd live in an upgraded neighborhood); reduce crime; and be a good investment for the gov't. in the long run. They would also be politically popular.

Nov 12 07:59 AM