Commentary on Dan Perin's "Damn the Torpedoes"
by Lloyd Agte
Dan is correct in his "Damn the Torpedoes" post advocating more pump priming by the Federal Government. He states: "The deficit can be managed by getting infrastructure projects going (Eisenhower’s Interstate Highway program, for example) and getting money back into the economic flow." Obama made a good start with the work projects and aid to the states, but there was such a conservative backlash about running up the deficit and a deliberate and successful dishonest conservative strategy to deliberately confuse bailouts with infrastructure investment that he pulled in his horns.
If we look back on the federal projects in the West we can see the long-term benefits gained by them. Coulee Dam, a Roosevelt "make-work" project, along with Hoover Dam and countless other dams in the West have been supplying us with power and irrigation for seventy years. (And it's "green" energy, but generations of dead fish stopped by the dams don't think so.) The CCC and the WPA built structures (Heyburn State Park in Idaho two miles from me) schools, community buildings etc. that the people are still using three quarters of a century later.
The dams on the Mississippi HAD to be built because private industry had over-harvested the timber to build the towns and cities along the Mississippi River. This destroyed the watershed and caused massive flooding. Did the private companies and corporations that caused the disaster come to the rescue? Of course not. That job fell to the Federal Government. When the BP oil disaster happened in the Gulf last summer, did everyone expect private industry to quickly solve the problem? No. Suddenly it became: "Fix this, Obama!" Today the right is still firing their torpedoes, calling the Gulf Oil spill "Another one of Obama's failures."
The federal government makes these massive infrastructure investments because private capital is unwilling to take the risk. But once the project gets built and private industry sees the economic potential, it starts screaming that the government should not be in the business of (take your choice) selling power, running highways, regulating drilling, building space ships and so on.
Capitalism expansion and contraction runs in unpredictable cycles. When a severe contraction hits, such as the greed-based last one caused by the financial industry, only the Federal Government has the capability of using existing funds or borrowing money to have a counter-cyclical effect. The states do not have access to these reserves nor do they have much borrowing power, so they tend to slash budgets, pulling money out of the hands of the people and thus become pro-cyclical, exacerbating the contraction problem.
But in this economic downturn, we still keep making weapons of mass and group and individual destruction. If these lethal devices are used they create massive damage to people, buildings, and all living plants and animals. They are devices of destruction, not building. And if they are not used they become obsolete soon and then the expense of housing or destroying them costs more money. In both cases, they create waste. Compare this waste with what is created with the money that government grants might put into a quality-built school, which might last for a hundred years, or a park. Or a hiking or bike trail. Or a public transportation system. Think of all the thousands and thousands of people who will use and benefit from such structures. Dan is right. Pump the money into America's infrastructure. It will be money well worth spending and something the next couple of more generations will thank us for.