John Henry: A Federally-Funded Jobs Program? Lessons from the WPA

By John Henry, Professor of Economics at UMKC.

UPDATE Comments are now working on this post. Readers, thanks for the heads-up!

Lambert here: This post is an important contribution to the debate, because the history of the WPA gives the lie to the oft-heard claim that “the government can’t create jobs.” It can and it has.

* * *

In the current debates surrounding various job guarantee programs (in association with the Chartalistor Modern Money perspectives), it might prove helpful to review some aspects of the Works Progress Administration (renamed in 1939 as Work Projects Administration). While the WPA was not a “job guarantee” program, it nevertheless points to a number of issues that are under current discussion, including those of the nature of the projects undertaken, impact on the larger economy, concerns surrounding bureaucratic impediments, etc. Let’s begin with an introductory statement pertaining to the political and economic orientation of Franklin Delano Roosevelt (and his Administration).

Roosevelt was not a progressive. He ran on a balanced budget platform, and initially attempted to fulfill his campaign promise of reducing the federal budget by slashing military spending from $752 million in 1932 to $531 million in 1934, including a 40% reduction in spending for veteran’s benefits which eliminated the pensions of half-a-million veterans and widows and reduced the benefits for those remaining on the rolls. As well, federal spending on research and education was slashed and salaries of federal employees were reduced. Such programs were reversed after 1935. And one might recall that Roosevelt attempted to return to a balanced budget program in 1937, just as the economy appeared to be slowly recovering. The result was a renewed depression that began in the fall of that year and ran through 1938.
Thus, the Roosevelt Administration was forced into progressive activism because of massive—and organized—popular discontent based mainly in working class and small farmer organizations. The union movement was rejuvenated through the formation of the CIO, farmers organized to prevent the forced sales of their properties (and this often included the threat of armed action), rent strikes were rampant, etc. Chicago, New York, other cities saw massive demonstrations. “Riots” shook the Kentucky coal fields. One must remember that the communist party was large (as these parties go), active, and popular. The specter of revolution was in the air and some politicians responded. Hamilton Fish Jr. instructed his fellow Congressmen, “(i)f we don’t give (security) under the existing system, the people will change the system. Make no mistake about that.”

The WPA was one of several programs developed to respond to this supposed threat. Initially, the Roosevelt Administration authorized the Federal Emergency Administration of Public Works in 1933 (renamed in 1939 as the Public Works Administration). The PWA allocated over $6 billion to private firms that actually undertook the large scale projects ordered by government. Dams, including Grand Coulee, hospitals, bridges (the Triborough Bridge and Lincoln Tunnel in New York City), etc.
In the same year, the Civilian Conservation Corps (ostensibly Roosevelt’s favorite such program) was organized. Exceptionally active in erosion control, reforestation, the creation of public parks, etc., the CCC hired 2 million young men over the course of its history. The fundamental difference between the CCC and the PWA was that workers on CCC projects were hired directly by the government. And this funding relationship served as the model for the WPA.
The WPA was under the direction of Harry Hopkins, a notable figure in his day. While the program was officially terminated in 1943, U.S. entry into WWII effectively ended its existence. On average through 1941, the WPA employed about 3 million people each month. If we include employees in the CCC and the National Youth Administration (a separate program under the WPA), total employment in government contracted work came to roughly 4.3 million per month. This represented 8-9% of the U.S. labor force. Originally, the WPA was an extension of the Federal Emergency Relief Administration—the first federally-funded welfare program in the U.S. One rationale for the WPA was that it was better to put people to work performing useful tasks rather than merely receiving assistance: off the dole and on the job.
A maximum work week was set at 30 hours, and pay was set at “the prevailing wage.” This latter standard raised some unintended humorous criticism. Senator Richard Russell of Georgia complained that: “In the State of Tennessee the man who is working with a pick and shovel at 18 cents an hour is limited to $26 a month, and he must work 144 hours to earn $26. Whereas the man who is working in Pennsylvania has to work only 30 hours to earn $94, out of funds which are being paid out of the common Treasury of the United States” (In Couch, 2008).
The WPA was not intended as a “full employment” program. Only one household member could be employed under the program (it was usually males), though one does find female heads of households so employed. It should also be noted that state and local governments were required to contribute 10-30% of the costs of the various projects undertaken. Over its life, total spending on WPA projects amounted to about $13.4 billion, roughly 2% of GDP over those years.
And what were those projects? Was this simply a “make work” program that made little difference in the long run? Or, was the WPA integral to the larger economy and its contributions socially useful? A truncated tally follows. (See below for a slideshow of projects under the WPA)
  • 560,000 miles of roads built or improved
  • 20,000 miles of water mains, sewers constructed
  • 417 dams built
  • 325 firehouses built; 2384 renovated
  • 5,000 schools constructed or renovated
  • 143 new hospitals, 1,700 improved
  • 2,000 stadiums, grandstands built
  • 500 landing fields; 1,800 runways (including participation in the construction of LaGuardia Airport, NYC)
  • State and municipal parks, including the foundation of the extensive California state park system.
  • 100 million trees planted
  • 6,000 miles of fire and forest trails created
  • Education: Through 1941, 1 million enrolled in adult education courses, 37,000 children in classes and nursery schools; 280,000 received music instruction, 67,000 art instruction.
  • Libraries were built. These were especially directed toward poor and rural communities.
  • Zoo buildings constructed
In addition to the above, one should note the WPA’s contribution to the cultural life of the country. Under the direction of Hallie Flanagan, the Federal Theatre Project mounted 1,200 productions including 300 new plays. Audiences were estimated at 25 million in forty states, many of whom had never before seen a play. As well, WPA programs included Federal Music, Federal Arts, and Federal Writers’ Projects. This latter program produced the most notable “Slave Narrative Collection,” consisting of 10,000 pages of interviews with former slaves, a continuing treasure-trove for researchers. Last, let us not forget the famous murals that were produced by artists hired by the WPA. These dot the country from post offices (though these were mainly funded by the Treasury Department through a grant from the government) to college buildings, to government buildings. Included in this array were those painted by Diego Rivera for the City College of San Francisco, Anton Refregier in the Rincon Annex Post Office, San Francisco, and Thomas Hart Benton in the Missouri State Capitol rotunda.
Let us now turn to some numbers and tell something of a story about some of the macro effects of the jobs programs.
YEAR
FEDERAL
GOVERNMENT
SPENDING
(BILLIONS $)
GROSS DOMESTIC PRODUCT
(BILLLIONS $)
INF
RATE
FEDERAL
DEFICIT
(BILLIONS $)
UNEMPLOYMENT
RATE
(ESTIMATED)
ADJUSTED
WAGE RATE
MANUFACTURING
(1923-25=100)
1930
4.0
91.2
-2.7
-0.9
8.7
8.9
92
1931
4.1
76.5
-8.9
0.1
15.9
15.7
78
1932
4.3
58.7
-10.3
1.6
23.6
22.9
66
1933
5.1
56.4
-5.1
1.8
24.6
21
73
1934
5.9
66.0
+3.5
2.1
21.7
16.2
86
1935
7.6
73.3
+2.6
3.0
20.1
14.4
91
1936
9.2
83.8
+1.0
4.0
16.9
10
99
1937
8.8
91.9
+3.7
2.6
14.3
9.2
109
1938
8.4
86.1
-2.0
1.2
19.0
12.5
91
1939
9.3
92.2
-1.3
2.1
17.2
11.3
100
1940
10.1
101.4
+0.7
3.1
14.6
9.5
108
1941
14.2
126.7
+5.1
4.7
9.9
6.0
—–
1942
35.5
161.9
+11
19.5
3.9
3.1
—–
Source: Historical Statistics of the United States
The first matter to note is the unemployment rate. Official estimates did not count WPA (or CCC) workers as employed. Rather, they remained on the unemployed lists as they were not working in private sector jobs. The adjusted rate includes these workers as working—as they were. This results in a roughly 6% differential and paints a much rosier picture of the effects of the WPA and other programs in reducing unemployment.
The second issue is that of the relation between government deficit spending and inflation. Observe that in the 1930-32 period, when private sector spending fell precipitously and government spending was flat, the economy suffered deflation and tumbling GDP—the worst possible development in a capitalist economy as the specter of a declining price level and GDP generates pessimistic “animal spirits” (à la Keynes). The growing federal government deficits of 1932-33 were not the result of increased spending, but declining tax revenues that resulted from declining incomes and spending in the private sectors. With increased government spending and accompanying deficits, GDP began to increase as did prices. But observe that in the heyday of the WPA, the CPI rose to a mere 3.7% rate: this is in the normal range for a capitalist economy and clearly does not represent “real” inflation, but merely rising prices which is necessary to induce more optimistic animal spirits. Indeed, though this is not shown, private investment was rising during this period. As well, with rising investment and rising employment (private as well as public), real wages also rose, reaching their 1923-25 level by 1936. (Here, I use wages in manufacturing as a proxy for economy-wide real wages, as most commentators focus on manufacturing, then a much larger portion of the economy, as a key indicator of economic health.)
We also observe that when the Roosevelt Administration returned to its balanced budget program in 1937, things deteriorated: GDP fell, unemployment rose, real wages fell, private investment fell (though not shown here), and deflation once again reared its ugly head. And, as is well known, with U.S. entry into WWII, government spending and deficits soared, but the economy finally recovered. Had the federal government spent as much in the 1930’s to generate useful, constructive activities, rather than destructive activities associated with war, it can be argued that the depression would have been over within a year, even with the financial debacle of the late 1920’s.
Last, let’s consider two standard complaints about government bureaucracies: they are too large, unwieldy, thus inefficient; and they are prone to “capture” by private interests, thus do not serve the “public good.” Dealing with the second issue first, I have no doubt that this is a problem in the present period at a minimum. If one puts industry pimps in charge of the various bureaus, if one perpetrates a campaign denigrating public service, if one treats “public servants” as slaves, then government bureaus are ripe for such capture. Indeed, an argument can be made that over the last 30 years that has been the objective of various administrations—Democrat as well as Republican. The public servants of the 1930’s seem to fit a different mold, at least in the main. If one reads about the self-sacrificing work of a Harry Hopkins, of a Hallie Flanagan, of the government employees in the trenches, a quite altered picture emerges. These people were, again, in the main, public-spirited, rather selfless, quite competent, and hard-working. We should not hypothesize about the behavior and character of people of different eras using the rather depraved standard of the current period. (See Quinn, 2008 for some insight into the character of WPA personalities.)
The other issue is that of the size of such bureaucracies. The WPA had a central administrative personnel of around 2,000 people (depending on month and year). Most of WPA employees were at the state and district offices where the projects were actually undertaken and the hiring of project employees took place. Again, depending on month and year, this number ranged from 15 to 35 thousand. The ratio of government employees to project workers—a more telling figure—ranged from 11 to 21 per 1,000 project workers, with the average running about 13/1,000 (Final Report of the WPA Program, p. 10). That is, less that 2% of the total number of workers in the WPA program consisted of administrative personnel. How would that ratio compare with, say, General Motors?
An examination of previous government programs such as the WPA assists in developing a clearer understanding of various versions of a job guarantee program, in both its positive and negative features. Obviously, the WPA was not such a program, but it points in that direction. Taking account of the differences in the eras of the 1930’s and the 21st century, what lessons can be drawn from previous experiments—and the WPA was an experiment—and what can current imaginations produce in the present period. As Keynes stated at the beginning of the Great Depression: “As soon as we have a new atmosphere of doing things, instead of one of smothering negation, everybody’s brains will get busy, and there will be masses of claimants for attention, the precise character of which it would be impossible to specify beforehand” (Keynes [1929] 1972, 99).

References:

Couch, Jim. “Works Progress Administration”. EH.Net Encyclopedia, edited by Robert Whaples. March 16, 2008. URL http://eh.net/encyclopedia/article/couch.works.progress.administration Federal Works Agency. Final Report on the WPA Program, 1935-43. Washington, D.C.: U.S.
Government Printing Office. 1947
Keynes. J. M. [1929] 1972. “Can Lloyd George Do It?” In Collected Works, Vol. 9. Pp. 86-125.
Quinn, Susan. Furious Improvisation. New York: Walker Publishing Co. 2008
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About Lambert Strether

Lambert Strether has been blogging, managing online communities, and doing system administration 24/7 since 2003, in Drupal and WordPress. Besides political economy and the political scene, he blogs about rhetoric, software engineering, permaculture, history, literature, local politics, international travel, food, and fixing stuff around the house. The nom de plume “Lambert Strether” comes from Henry James’s The Ambassadors: “Live all you can. It’s a mistake not to.” You can follow him on Twitter at @lambertstrether. http://www.correntewire.com

66 comments

  1. F. Beard

    I have no problem with generous infrastructure spending; let’s fix and spruce up the US with US Notes. But let’s not pay men to waste their time by say requiring them to use a shovel for bulldozer jobs.

    If the goal is to inject new money into the economy (so people can pay their debts to the counterfeiting cartel) and legitimate infrastructure spending is inadequate then let’s just send out bailout checks to the entire population and let THEM decide how to spend their time if there are not enough legitimate jobs to go around. The banking system has certainly cheated the entire population so restitution is in order.

    As for FDR, he did not save capitalism; he saved banking.

    1. Lambert Strether Post author

      At the 30,000 foot level: Government can create jobs. We’re really in “who controls the present controls the past” mode in the discourse. Joseph Goebbels would be proud. Heck, O’Brien would be proud.

    2. wunsacon

      So, do I write-in “F. Beard” at the poll? Or do you write-in “wunsacon”?

      We better sort this out now or else we’ll split our two votes and lose the election.

      1. F. Beard

        So, do I write-in “F. Beard” at the poll? Or do you write-in “wunsacon”? wunsacon

        I am doing exactly as much as far as politics goes as I ever will.

        (I keep waiting for the hemlock. Call it suicide by banker. ;) )

        1. Skippy

          More home work beard.

          Up from Eden: a transpersonal view of human evolution

          http://books.google.com.au/books?id=zy8-AAAAIAAJ&pg=PA172&lpg=PA172&dq=priests+the+first+bankers&source=bl&ots=oElnzHN_5c&sig=9hYcH209WMYc_0ZWbnkdQAkMU1k&hl=en&sa=X&ei=SBYUT–RAoqtiAeGt8Ew&ved=0CEgQ6AEwBg#v=onepage&q=priests%20the%20first%20bankers&f=false

          Skippy… the first banksters were priests, giving to god, everlasting self preservation thangy… eh. Ahh private issuance… bring back the good old days!

          PS. Triumph of the Will

          http://www.youtube.com/watch?v=vVrxhpLS4g4

          It was a thing I had to do
          It was a message from below
          It was a messy situation
          It was desire for a girl

          I’m not a wanker or a banker
          I’m not afraid to take a risk
          It is the thing females ask for
          When they convey the opposite

          Before I die, before I die
          Before I die I’ll get another piece of pie
          I’ll get another piece of pie
          I’ll get another piece of pie, if I have to lie

          It was a thing I had to do
          It was a message from below
          It was a messy situation
          It was a triumph of the will

          Before I die, before I die
          Before I die I’ll get another piece of pie
          I’ll get another piece of pie
          I’ll get another piece of pie, if I have to lie

          When the well cries out for water
          It is a need that must be filled
          It goes beyond the laws of nature
          It takes a triumph of the will

          1. F. Beard

            I’ll get another piece of pie, if I have to lie Skippy

            I do loves me some cherry pie!

            But I won’t lie to get it since the fate of all liars is the Lake of Fire.

            As for crooked priests and ministers:

            And then I will declare to them, ‘I never knew you; DEPART FROM ME, YOU WHO PRACTICE LAWLESSNESS.’ Matthew 7:23

          2. Skippy

            Priests were the original free-riders.

            Coercing the population to render toils fruits under afterlife threats.

            Skippy… feasts for the gods, yet toil for the people… nice.

    3. Jack Parsons

      So disagree! Think of makework jobs as investment in the workforce. What do we get out of making people lean on a shovel? Keeping them in the habit of getting up in the morning and go to work. And, we get trained foremen who can get a bunch of people to get up in the morning and show up for work. When the jobs come back, these people will be ready to fill them and we will have an economy again.

      These arguments make sense if you think the jobs are coming back, and that we will need workers who can remember how to get out of bed in the morning. If you don’t think the jobs are coming back, or in fact if you plan to keep the jobs from coming back, well… makework is a big waste, isn’t it?

      And even worse, the people will expect jobs to reappear instead of living in apathetic depression. Then! Very bad things will happen.

      1. F. Beard

        Think of makework jobs as investment in the workforce. What do we get out of making people lean on a shovel? Keeping them in the habit of getting up in the morning and go to work. Jack Parsons

        Your assumption is that unemployment is the fault of the population and not the bankers when the latter is clearly indicated.

      2. JTFaraday

        The jobs aren’t just magically coming back. That’s why people are going to need real things to do–that they might even (gasp!) want to do– at decent living wages, not minimum wage sh*t work that primarily serves as a means to lock them up and shut them up, while their lives go down the drain, just so the “one percent” can stay comfortable and liberals can pretend to moral superiority.

        Such a waste. There’s “conservative” waste and then there’s “liberal” waste, but waste is waste regardless of what political label you choose to slap on it.

        And government facilitated caste formation is not “liberal” in any political taxonomy that I’m aware of.

    4. Ralph Musgrave

      Good point by F.Beard about shovels and bulldozers. That point nicely illustrates a fundamental problem with WPA type schemes, which is thus. If these schemes involve large numbers of ex-unemployed (i.e. less skilled people) relative to capital equipment, permanent skilled labour, materials, etc, such schemes are condemned to inefficiency.

      On the other hand if they involve more normal ratios of the above factors of production, these schemes become indistinguishable from normal or regular employers. Which leads me to the conclusion that the ex-unemployed labour might as well be subsidised into work with EXISTING employers, as was the case with CETA.

      There was plenty wrong with CETA, but that’s the way to go rather than WPA type schemes.

    5. mac

      For years China did things with picks, shovels and baskets to keep people working. Maybe shovels are not a bad idea.

  2. Union Member

    Professor Henry,

    This is a very moving piece. As a regular NC reader (and devoted fan) you get inoculated to the shocking and unacceptable as routine, and forbearing the unethical and illegal as banal; but quelle surprise, there is hope!

    Thanks

    P.S. A big hope would be to see OWS be the good soil from which work like yours can take hold, and grow. From the New Deal to a New Politics (peaceful and democratic, sans the corporate statehood and personhood)

  3. psychohistorian

    This is an important part of a discussion that the people of the world need to have.

    At almost any “reasonable” level of consumption we don’t need the global labor force we have to produce what we “need”….hence the current race to the bottom.

    Unless we are going to commit some sort of genocide on the segments of the population that don’t fit the ongoing dislocations in the “needed” work force. we need as social policy to create and manage the ongoing usage of excess resources that may, but some won’t fit the needs of the public jobs that are developed…necessitating retraining.

    Ignoring this issue as social policy is stupid, IMO, as one of the 99%.

    Can we evolve our social structures to meet our current and future needs? Since we don’t get to tinker with the underlying structure very often I hope we build something that has some sort of evolving structure built in…..I always have been a dreamer.

  4. Jack M.Hoff

    Sure, Govt can create jobs without a doubt. The only question I have is who pays the tab? As corrupt as everything is done these days and with the prevailing work ethic, there wouldn’t be much done at all with huge expenditures out the door. Then the worst of it is that the money to pay would have to be charged to the workers kids with interest at some point down the road. I really do detest the libertarian approach to these matters, Their ‘got mine, fucku attitude’, but when they refer to the unicorn crapping out skittles, thats pretty much what you are proposing here. That is if corruption and the status quo were to remain as is. Now if everything hit rock bottom, then it’d be a good way to get things going again. But it’ll never work when you have a herd of overpaid management pigs at the trough to clean up those skittles as fast as they come out that unicorns backend…

    1. Woodrow Wilson

      “Govt can create jobs without a doubt. The only question I have is who pays the tab?” –

      I thought the same thing.

      I’d go even further to say, society of today is not what it was like in the 1930’s. We have an entire army of Citizens that would have no intention of working. Throw in the premise, that the program would be the result of a completely corrupt plutocracy to placate the masses.

      Until the theorhetical clowns and corrupt politicians solve the inabilitay to create enough jobs with population growth, where industrial growth is not infinite, it’s just a slow fall down the rabbt hole. Or, maybe the solutions in this plutocracy is not to solve the problems at all?

    2. F. Beard

      Then the worst of it is that the money to pay would have to be charged to the workers kids with interest at some point down the road. Jack M.Hoff

      Not at all. Read some Modern Monetary Theory. Soverign government debt is a near perfect money substitute and is thus even more inflationary than pure “money printing” since interest must be paid on it.

      The Federal government should fund all of its deficits with new money creation and never borrow again. As for the National Debt, it should be paid off as it comes due with new fiat too.

    3. Union Member

      Why talk all this silliness about Unicorns. Haven’t you looked through the photos of all those magnificent works of the Roosevelt era? That”s your proof!

      Then, especially, read carefully the text of the economists sign held up at the end, it begins: “I am a professor of economics who doesn’t tell fairy tales about the market to explain away social injustice, unemployment and income inequality…”

      btw: You ask how is this to be paid for? Fair enough: The Invisible Hoof in your make-believe economy is Aggregate Demand. That is how it will be paid for.

    4. Calgacus

      Jack M.Hoff:Who pays the tab? This was explained. The government. It would pay workers with its money = government debt. That is the only way (base) money, NFA can ever be created, has ever been created. By the government printing the money & handing it to someone.

      It would be very, very difficult for the new WPA to NOT spend the money much better than the government does presently, which is mostly just handing money to rich people, for nothing, in order to make them richer. Everybody else just lives off what trickles down.

      The worker’s children would not have to pay anything off. They would just live in a better world.

      Woodrow Wilson: We have an entire army of Citizens that would have no intention of working. What garbage. The same was said by the rich, patting their paunches, about the poor of the 30s. Historically speaking, today’s Americans have an incredible, off-the-scale “work ethic”. Could not be further from reality.

      Gavin: It could very easily be done under our current monetary system. Otherwise, how did FDR do it?

    5. Ralph Musgrave

      Who pays the tab? One answer is that the unemployed are for the most part being paid anyway: unemployment benefit. At least that’s certainly the case in European countries with relatively generous benefits.

      Also, as long as those doing WPA type work do something useful (as opposed to doing nothing on benefits), there is a net increase in GDP. Thus there is no net burden on the rest of the population.

      But of course the assumption that those on WPA schemes (after taking into account the bureaucratic costs of such schemes) actually do bring a net increase in GDP is very debatable. Plus the extent to which such schemes draw labour away from more productive regular employers needs to be watched carefully.

      1. F. Beard

        (as opposed to doing nothing on benefits), Ralph Musgrave

        Bad assumption! Just try being idle and see how long you can stand it.

        My brother lives off SSI (< $600/mo?) but is continually working from noon till sundown EVERY day maintaining my mother's property.

      2. Nikhil

        After looking at the data above why would there be any debate about the GDP effect of WPA. Its not even close, govt spending went up (via the WPA), GDP responds by increasing by an almost corresponding amount.

        Also it wasn’t inefficiently run. 11-21 govt employees to 1000 project workers. I have worked in the private sector my whole life. This seems pretty efficient to me.

        It makes me wonder if you read the article/looked at the data or you just found someone talking about the New Deal and WPA and your “MUST REPEAT PRIVATE SECTOR EFFICIENCY CANARD” robot program kicked in.

        BTW can we just put that Private Sector Efficiency Syndrome to rest. The people running the govt these days are pretty much the same people who at different times have ran our large companies and financial institutions. If anything they have ruined our country not made it more “efficient”.

  5. Gavin

    Jack,

    This couldn’t be done with our present monetary system, but it could be done with a credit system like the one given to us in our constitution.

  6. F. Beard

    Jobs, jobs, jobs. Enuff with the jobs!

    It’s money and a bit of land that will keep most people happily occupied. And they will work harder and smarter for themselves than they ever would for the Man even if he is Uncle Sugar.

    And it’s ludicrous, morally speaking, to offer the victims of THEFT jobs so they can earn (AGAIN!) what was stolen from them!

    C. H. Douglas’s idea of Social Credit makes more sense, morally speaking, than a Federal Jobs program.

  7. William Neil

    Thanks very much for this. Here was my own attempt at uncovering the forgotten legacy of the New Deal’s jobs programs, written in early 2008.

    March 27, 2008

    STILL SHINING, A BEACON OF HOPE FROM THE NEW DEAL

    ROBERT D. LEIGHNINGER JR.’S
    LONG RANGE PUBLIC INVESTMENT: THE FORGOTTEN LEGACY OF THE NEW DEAL
    (UNIVERSITY OF SOUTH CAROLINA PRESS, 2007)
    BOOK REVIEW FOR AMAZON.COM

    Emerging from the evening twilight of the Conservative Era is this gem of a book by Robert D. Leighninger, Jr., about what the New Deal of the 1930’s built, and how it was done. No matter which facet the reader holds up to examine – style, insight or inclusiveness, the work shines forth as a model of historical writing. It will also help illuminate a way out of our current troubles.

    Although I doubt the author could have known, since he worked on it for many years, present economic circumstances have set a dramatic stage for a book that should be read widely by policy makers and the general public – a setting for it as dramatic as the Red Rocks amphitheatre near Denver, Colorado, which the Civilian Conservation Corps, the fabled “CCC,” helped construct. After all, 2008 is the 75th anniversary of the inauguration of FDR (and the New Deal and the CCC – in 1933.) Since the great Wall Street crisis began in August of 2007, the “frame” used to describe the calamity in mortgages and the collapse of the “new financial architecture” has, over the months, increasingly taken us back to 1929-1933.

    The author has two main purposes for the book: to “uncover” the enormous physical reality that the New Deal built, and then to “begin a reappraisal of this investment.” But this is no mere exercise in list making. The first chapter, “Public Works in American History” gives us the big picture on what the government built in the 19th and early 20th century and the shifting ideological perspectives used to justify the activities – and how they were paid for. Then, chapter by chapter we are given gracefully written summaries of each of the major New Deal public works agencies, starting with the CCC. It could have been dry, like much of the “alphabet program” coverage in other texts, but it’s not: we get succinct and illuminating portraits of the major guiding personalities – from the well known Harold Ickes and Harry Hopkins to the lesser known Robert Fechner, who directed the CCC. And we get a sense of what made the architecture unusual (and outstanding, in some cases) for its time – and enduring, because much of what was built continues in public service today, three quarters of a century later.

    So what did they build? Here’s just a brief glimpse of the massive efforts: from the CCC: 46,854 bridges…3 billion trees planted; 204 lodges and museums…3,980 historic structures restored; from the Works Progress Administration: 572,000 miles of roads; 78,000 new bridges; 8,000 new parks; 226 hospitals; 2,700 firehouses….350 new airports and on and on for other agencies.

    Here’s one of my favorite passages, to give you a sense of the author’s style, a description of just one project from the 2nd chapter: “Monuments of our Spanish colonial heritage were returned to our notice by the CCC. La Purisima Mission near Lompoc, California, was lovingly rebuilt brick by brick using original adobe construction. Members of the company, ‘a bunch of Brooklyn toughs,’ cried when they left it.”

    The book has surprises for every reader, of every political persuasion. Try some of these on for what the New Deal left us: from the WPA: San Antonio’s River Walk; Timberline Lodge, Mt. Hood, Oregon; from the PWA: Central Park Zoo, Triborough Bridge in New York, the Cow Palace and Bay Bridge, San Francisco; at the Citadel military school in Charlestown, S.C., a chapel, a barracks building and officer’s quarters…; the Orange Bowl in Miami, Fort Knox, the Key West Highway; and yes, with a great deal of irony, the terminal building at Washington National (now Reagan) airport in DC; and the carriers whose names would be etched in memories of the Pacific naval war, USS Enterprise and Yorktown; from the CCC: the beginnings of Camp David and the full Skyline Drive and Blue Ridge Parkway, with some help from other New Deal programs. And on and on they go…places familiar to every ear…but whose origins seem to have been forgotten.

    There is no drop off in clarity in the second half of the book, with its chapters on the “appraisal” of what had been built, looked at through the focus of a surprisingly contemporary policy lens, as suggested by the titles: Economic Stimulus, Pubic Jobs, Federalism and the Paradox of Pork. Whether lay citizen, professional historian or economist looks at these chapters, they will not be disappointed. Leighninger tells us in the final one that since the 1930’s there have been only two other comparable public works projects, and both were justified by national defense rationales: Ike’s interstate highway system and the space program of JFK. He comments that “no other program of public building since then has involved the nation as a whole and taken place in the public eye. As local public works were split from a sense of national purpose, another division developed – a political one. Conservative leaders, while continuing to support defense spending, became increasingly hostile to domestic spending.” And even more hostile to the concept of public jobs, the title for Chapter 11.

    Chapter 11 ought to be required reading for the 2008 Presidential candidates, as well as the press corps which questions them so shallowly. Leighninger takes his New Deal job discussion right up to the present, covering CETA and Job Corps and subsequent green conservation corps “variations.” His most penetrating insight is this: “when unemployment is seen as everyone’s problem, its economic aspects take prominence” over its social ones, and public acceptance rises. “When unemployment is seen as a problem for certain groups only…seen…as different from the rest of us…” then public support vanishes. I don’t think I’ve ever read such a cogent and fluid public employment analysis done in just 14 pages.

    It’s a given that one of the attack lines from conservatives is that public works invite corruption – despite the fact the Hopkins and Ickes did a great job in making sure that these New Deal programs were largely corruption free. That’s a story in itself inside this book. And well told. The New Deal managed to give federal guidance, oversight and funding while preserving local input and direct participation for an amazing array of infrastructure projects, everything from water treatment plants to murals in new post offices. Comparing the sorry tale of federal involvement in Katrina and the Gulf Coast in 2005 to Hopkins’ and Ickes’ guidance in the 1930’s – I’ll take the old New Deal anytime.

    And that’s why this book is so important. It’s hard to pick up a major paper today in 2008 without encountering calls for increased infrastructure spending, much of it centered around a new green Apollo-type project to fight Global Warming, including a proposal by James Galbraith for a National Infrastructure Bank. Many are saying: enough with the pyramid schemes and hedge funds on Wall Street – give us the investments that actually build what we need. And on that note, here’s how the author closes out his remarkable book:

    “The New Deal, in a very short period of time, contributed a tremendous amount to the nation’s public life in the form of physical and cultural infrastructure. That investment paid dividends for many decades thereafter and in many cases is still paying back. That should be remembered in times when commitment to public life ebbs and belief rises that we simply cannot afford to invest. There was a time in our history when people found ways to combat despair by building for the future. The evidence is all around us.”

    Perhaps that time is here again.

    William R. Neil

    1. F. Beard

      “Monuments of our Spanish colonial heritage were returned to our notice by the CCC. La Purisima Mission near Lompoc, California, was lovingly rebuilt brick by brick using original adobe construction. Members of the company, ‘a bunch of Brooklyn toughs,’ cried when they left it.” William Neil

      I bet the descendants of California Native Americans cried too – in despair and rage.

      As an ex-Catholic I am not happy either. Let the Vatican spend its own money to rebuild its relics, not mine,

      But the broader point is this: Just give the population the restitution they justly deserve and THEY will decide how it should be spent. I’d bet that even most Catholics would choose to spend that money otherwise if it were given to them.

      1. wunsacon

        So true… Surely, some Catholics would rather donate the money to, for instance, Doctors Without Borders than rebuild an artifact of conquest and empire.

      2. William Neil

        Well, well, forgive me for not thinking of political correctness in this instance, it was far from my mind when I wrote this. For history, for culture, and for the need of the time – for jobs – would it have been better to have left the derelict structure, and, to make you happy, a plaque near the ruin with your sentiments?

        Better to have done what this program did, rebuild the structure and have a series of interpretations – or today – videos of the cultural battles you’re suggesting. What should the plaques say outside the Alamo – bet you could write a very long one – but how’s this: what should the cultural interpretation say outside “Riverwalk” in San Antonio: upon the intitial efforts of the New Deal, from FDR who saved capitalism, all these small businesses and restaruants now flourish, along this otherwise middling stream?

        1. F. Beard

          and for the need of the time – for jobs – William Neil

          Baloney. What was needed was MONEY in the hands of the banker’s victims – the entire population. Later, during WWII there was an unlimited amount of money to kill people. But none during the Great Depression to save people?

          from FDR who saved capitalism, William Neil

          Correction: FDR saved banking via government deposit insurance. Otherwise no one to this day would trust banks.

          Maybe FDR could do no more good than what he (eventually) did but we don’t have that excuse today.

          Forget the makework and charity for rundown Vatican missions; we can do far better with a universal bailout.

          1. different clue

            Of all the public works facilities still being usefully used which Mr. Neil mentions, how many of them are historic
            vatican missions? You’re just offended that Mr. Neil declines to carry your ideological baggage for you, and that he clearly failed to “hop” when you rang your “little bell”.

          2. F. Beard

            Of all the public works facilities still being usefully used which Mr. Neil mentions, how many of them are historic
            vatican missions?
            different clue

            That was a narrow point of contention, true. But I also made a broader point that the money should just be given to the population and THEY decide how it should be spent.

            You’re just offended that Mr. Neil declines to carry your ideological baggage for you, and that he clearly failed to “hop” when you rang your “little bell”. different clue

            I am offended that the victims have to work for what should be given to them – just restitution. I am offended that the welfare of the people takes second place to someone’s pet projects that they should dang well be funded privatily if at all.

            Roads, dams, public buildings, legitimate infrastructure, yes. And that should be funded all the time, not just during recessions.

            But let’s not use recessions as an excuse to fund our pet (normally unpopular?) projects. Just hand out money instead.

            So what is it Progressives? The welfare of the people first or your pet projects?

          3. F. Beard

            and that he clearly failed to “hop” when you rang your “little bell”. different clue

            Good one! As an altar boy, I used to ring the bells during Mass. I loved it when when we upgraded to the electric kind (I may have been austic).

            But no, I don’t seek followers. I just wish to help form and be part of a broad, anti-bank, pro-people consensus.

          4. F. Beard

            Dang spell checker sometimes just quits working! Make that “autistic”.

            I used to be an excellent speller. :(

          5. Skippy

            Again more home work.

            “Recorded history can be traced to Sumerian city-states including Uruk and Ur, possibly the birthplace of writing. Scribes scratched signs on damp clay tablets with pointed sticks. Initially pictographs or stylized representations, these became standardized into cuneiform writing (Latin for wedge, not a Sumerian term). The process may have been a continuation of the token system developed in earlier millennia.

            “These scribes were bookkeepers, the scratchings records of temple wealth, records of tribute based on a barter system.”

            http://acct.tamu.edu/giroux/first.html

            Skippy… Beard, we ain’t going back to the temple system, what ever happens. Your absoluteness is a tell… eh. Cults are hard to wash off, hard wiring, does not just vanish.

          6. F. Beard

            we ain’t going back to the temple system, what ever happens. skippy

            That’s what we have now! The god is Mammon and the banks are the State saanctioned/backed temples.

            I advocate freedom from the counterfeiters and usurers and you call it slavery.

            If everyone was like you skippy, I’d shrug and say “Go ahead and learn the hard way; maybe GD II and WW III will teach you what GD I and WW II apparently didn’t.”

          7. Skippy

            Always with the threats of doom, come the prophet. The world you pine for was the worst this world has ever known, no thanks.

            I’d rather put some crims in jail and clean the private sector out of the peoples government and work on carrying capacity based economics.

            Skippy… I’ll take a secular state over your beliefs any day. “The author of The New York Times bestseller The Stuff of Thought offers a controversial history of violence.

            “Faced with the ceaseless stream of news about war, crime, and terrorism, one could easily think we live in the most violent age ever seen. Yet as New York Times bestselling author Steven Pinker shows in this startling and engaging new work, just the opposite is true: violence has been diminishing for millennia and we may be living in the most peaceful time in our species’s existence. For most of history, war, slavery, infanticide, child abuse, assassinations, pogroms, gruesome punishments, deadly quarrels, and genocide were ordinary features of life. But today, Pinker shows (with the help of more than a hundred graphs and maps) all these forms of violence have dwindled and are widely condemned. How has this happened?

            This groundbreaking book continues Pinker’s exploration of the essence of human nature, mixing psychology and history to provide a remarkable picture of an increasingly nonviolent world. The key, he explains, is to understand our intrinsic motives- the inner demons that incline us toward violence and the better angels that steer us away-and how changing circumstances have allowed our better angels to prevail. Exploding fatalist myths about humankind’s inherent violence and the curse of modernity, this ambitious and provocative book is sure to be hotly debated in living rooms and the Pentagon alike, and will challenge and change the way we think about our society.”

            The Better Angels of Our Nature: Why Violence Has Declined

            http://www.amazon.com/gp/product/0670022950/ref=as_li_ss_tl?ie=UTF8&tag=richdawkfounf-20&linkCode=as2&camp=217145&creative=399373&creativeASIN=0670022950

          8. F. Beard

            I’d rather put some crims in jail and clean the private sector out of the peoples government and work on carrying capacity based economics. skippy

            Then be prepared to arrest every banker and every credit union member because banking as currently practiced is THEFT, particulary from the poor.

            As for me seeking to impose a non-secular state you pulled that one out of your ass. Stop thinking you can read my mind and start reading what I actually say before you hazard to speculate on my motivation.

          9. Skippy

            “Stop thinking you can read my mind and start reading what I actually say before you hazard to speculate on”

            No and your lack of definition has that effect, you lend yourself to the task.

            Seeking a non secular state was not a reference to your desires or will, just an observation from history based on your fundamentals. Projection on your part, see how it works now?

            Freedom[?], try mental freedom first, yet one still needs to validate any thought that would lay claim to fact[s. Material disclosure contract thing. Theft? How about the theft of a child’s mental ability? Too assert you know a thing, although out side your own mind… can not. Must be nice to employ vacuous verse out side of greater context and claim total validity ( is there an iapp for that? ). Yet here I am, a countenance to your opines with voluminous amounts of historical – anthropological et al evidence, peer reviewed, up dated upon new discovery, yet you dismiss, evade or ignore so casually.

            Skippy… always the victim beard, bad study skills will do that. Don’t worry though, your in fine company. Most politicians, company executives, and a huge slice of the population consume the mental energy drink offered these days. Checkered flag syndrome brand, gotta win thingy, prosperity[!!!]… lmao.

            PS. currency – monies are just standardized weight and measures (state – private) with in market based activity. Whom makes and maintains the standard[s does little to change the over all aspect of market based human interaction. The Market is still a Temple *all* must tithe too. ROFLOL.

          10. F. Beard

            PS. currency – monies are just standardized weight and measures (state – private) with in market based activity. skippy

            Baloney. Who ever heard of a weight or measure that was not constant in value? Yet the value of money changes continually.

          11. F. Beard

            Whom makes and maintains the standard[s does little to change the over all aspect of market based human interaction. skippy

            More baloney. The bankers, with their ability to create money – so-called “credit” – are robbing us blind, particularly the poor.

            Money creation is a problem in ethics, don’t you know?

          12. Skippy

            “Value” is like cheap sex, after the deed is done its not worth a bob, next? Seemingly we have yet to describe value, sustainability? Life – all things? Et al?

            I don’t give a shite about banks, its just camouflage anyway, its about incentive. You think handing out wads of cash (debt free) will make every thing swell. I’m hear to tell you its not, it will only make it worse. The signs are every where…shezz.

            Skippy… its about a species hell bent on destroying every thing in a deluded act of self grandeur.

  8. Eric Patton

    “The specter of revolution was in the air and some politicians responded. Hamilton Fish Jr. instructed his fellow Congressmen, ‘(i)f we don’t give (security) under the existing system, the people will change the system. Make no mistake about that.'”

    The above quote is key though. Without the “specter of revolution,” no jobs program will ever be forthcoming.

  9. wunsacon

    >> Roosevelt was not a progressive. He ran on a balanced budget platform, and initially attempted to fulfill his campaign promise of reducing the federal budget by slashing military spending from $752 million in 1932 to $531 million in 1934, including a 40% reduction in spending for veteran’s benefits which eliminated the pensions of half-a-million veterans and widows and reduced the benefits for those remaining on the rolls.

    Except for that last part, how/why do you say it is “not progressive” to want to balance the budget? Unbalanced budgets are unsustainable without sustained money printing, in which case the taxes are implicitly levied via currency devaluation. Why would you implicitly require “progressives” to sign up for that approach?

    1. F. Beard

      Unbalanced budgets are unsustainable without sustained money printing, in which case the taxes are implicitly levied via currency devaluation. wunsacon

      Not necessarily. If the new money creation rate equals the real economic growth rate, then the money will neither lose nor gain value.

      Plus, an appreciating money has problems of its own such as giving incentitives for hoarding rather than investing.

      But to each is own, which is why I keep harping on allowing genuine private monies for private debts. Much contention would thereby cease.

  10. mac

    In rural eastern kansas the wpa built some really nice “outhouses”. I suspect many of the current wizards never used one!

  11. Calgacus

    “The government can’t create jobs” is a BIG LIE. An insane lie. Something that everyone knows is not only false, but 100% the opposite of the truth.

    ONLY the government can create jobs. A job is money for work. Money is a creature of the state. ONLY the government can create its money. Where the hell does a “private-sector employer” GET the money to pay workers but from the government???

    1. F. Beard

      Where the hell does a “private-sector employer” GET the money to pay workers but from the government??? Calgacus

      Don’t the banks just endlessly loan us money (so-called “credit”) and the interest for the loans with little need for government spending? Don’t “loans create deposits”? Isn’t “credit” 97% of the money supply?

      1. Calgacus

        They can only do this because modern banks are basically government offices run for private profit. There is plenty of need for government spending, otherwise nobody could pay the interest. Bank money is government-backed money. There has to be a flow of government money, government credit, which the government-backed bank money leverages off of. Loans can only create deposits of standard, acceptable money if the deposit is backed at par by the government, and this only works well if the bank is regulated well, otherwise it truly is a criminal counterfeiter.

        Of course the private sector employer need not get the money directly from the government, just someone else further upstream, the employer’s customers & lenders. But there is always somewhere the buck stops. The gubmint.

        Having “genuine private money” is no solution, but just a name-change. It is just another name for private credit & banking. Underneath it all, there is really only one “monetary system” the human race has ever used, could ever use. Private credit, private monies are already legal. They would be stable, acceptable money to the extent they are backed by the government. Legal tender laws have no economic meaning, they don’t & never really did mean or say anything.

        1. F. Beard

          Having “genuine private money” is no solution, but just a name-change. Calgacus

          “Genuine private money” would entail removing ALL government privileges for the banks such as a lender of last resort and government deposit insurance. The government itself would provide a risk-free storage and transaction service for its fiat that makes no loans and pays no interest.

          Then the banks probably would shrivel up but “credit” is not the only form of private money. Common stock is an ideal private money form that requires no usury, no reserves, no deposit insurance and no PMs. All that is needed is capital, including human labor.

          1. Ralph Musgrave

            I agree with F.Beard. A good 90% of the money in circulation is private bank created, not central bank created.

            I certainly PREFER a system where the central bank has a dominant role, but if central banks didn’t exist, private banks would just take over and create money / credit as required. Every society that ever existed (apart from desert islands with less than three families in residence) has had a form of money.

          2. F. Beard

            but if central banks didn’t exist, private banks would just take over and create money / credit as required. Ralph Musgrave

            Not without deposit insurance and other government privileges.

            Banking is gambling; many people are not so inclined.

  12. rd

    There is a fundamental problem with the US trying to recreate the WPA or CCC.

    Environmental Impact Statements, various other stakeholder review processes, and numerous legal challenges make it very difficult to build new infrastructure or even do extensive repairs on old infrastructure quickly. What the WPA and CCC could do in a couple of years would generally take 5 years or more now just to get started. The Grand Coulee dam would have been started (if it even got approved) in the 1950s under today’s laws and regulations.

    Obama and Co. discovered this in 2009 when they discovered (to their amazement) that the only “shovel-ready” projects were some repaving, painting, sidewalk, and small bridge repair/replacement projects available. Due to budget constraints, many states and municipalities did not have major projects in the late permitting stages or on the shelf waiting to be built.

    We have a great state park near where we live that had much of its infrastructure constructed in the ’30s by the CCC. I would love to see a repaeat of that in many places, but sadly it is unlikely to occur even if Congress could agree to make it happen.

    1. F. Beard

      Do “restitution checks” to the entire population require an environomental impact statement? What about direct deposit?

      Paying off debt to the counterfeiting cartel, the source of our problems, requires just two things:

      1) Abolish the counterfeiting.
      2) Inexpensive fiat.

    2. Calgacus

      Rd: This isn’t much of a problem. The real problem is the lack of the old-fashioned American can-do spirit, which has moved to China, it seems. These laws & regulations were made by Congress, and can be unmade if they stand in the way of immediate necessity. Obama & Co. never saw a molehill in their way that they didn’t turn into a mountain, never saw a reason to not give into their pretend-enemies as soon as possible. Enviromental regulation is a good thing, but if it stands in the way of something like levees for New Orleans NOW, it is nuts. The US infrastructure is in a horrible state. Only a sick society could have let something like Katrina on New Orleans happen, and then used the damage to further prey on & rob the victims. Work done by JGers, labor-intensively, with less reliance on machines, might have a smaller environmental impact, be more “quick is beautiful”, partly allaying this concern.

      Of course there is some truth to what you say. The US and many other countries once maintained “buffer stocks” of as-shovel-ready-as-possible project designs for when there was a recession. Yet another casualty of the current dark age of economic thought.

      Sure, F Beard, restitution checks, relying on the private sector essentially, would be a good idea. Caging the bloodthirsty financial sector is imperative. But in any monetary economy, if there is private savings, and there always has been, for millennia, there will be purposeless, idiotic, unnecessary unemployment. Who is anyone to tell these unemployed people that can work, that need money to live, that they cannot? Non-monetary “primitive” societies do not have this problem, as Prof Henry well knows & has written about.

      A monetary economy without a government Job Guarantee is simply an insane idea. It is A saying to B : (1) You owe me & (2) I won’t let you repay me, so die. Aside from the fact that many MMTers are “godawful” (Mansoor) writers, making things much more confusingly complicated than they really are, a problem is that they are usually too timid in their recommendations, and not insulting and arrogant enough towards those mental midgets, the mainstream.

      1. F. Beard

        A monetary economy without a government Job Guarantee is simply an insane idea. Calgacus

        Then pay people for living. I find it to be a chore at times. :)

        Actually, it is money that is needed, not an employer of last resort. Talk about the MMT folks being too timid? What about yourself?

        Once one figures out that the banking system is a counterfiting cartel (and that ethical and practical alternatives exist) then the solution becomes radically obvious.

        But step by step. Now the MMT crowd is being forced to question the need for banks by their own logic.

        1. Raymond

          Not being an economist, I won’t pretend to know a whole lot about solutions to monetary considerations and the like. The IMF and World Bank is really a US begun banking giant who I think milks and bilks third world countries for their resources and screws them in the long run. The EU is doing it to Greece and Spain as they cannot print their own money and have to rely on the Euro, which is screwing them big time. But what I wanted to say in response was about how the student loan system that President Obama who did a good thing by revamping it, which took the middlemen, the banks out of the equation, as all they were was a gov’t welfare system paying the banks for their doing absolutely nothing except taking gov’t bucks while pretending they were doing something for students. I happened to be one of them who borrowed from my bank Maryland National, who without telling me about it, sold my loans to somebody else. Eventually they were calling in my loans while I was still in school, but the agreement was that I was not to start paying back until I finished school. It was a big mess as they would not listen and demanded payback which I could not afford even though I was working and going to school part time at the time. So, as I tried to pay some on it, they demanded higher payments I could not make and it ended up with a Payco collections agency who harrassed and hounded me at my job, telling co-workers what a flake I was and stuff like that. I said it was a mess didn’t I? It ended up a lawyer was hired to garnish my wages, remember I’m still in school here, but their demands were given precedent and being naive about the whole thing concerning my rights and all that, I probably ended up paying, after interest and penalties on 2 $2500 dollar loans about $9500 dollars. Anyway, sorry for going on and on, but banks to me are just profit generating conglomerates who are there to take anyone they can for all they’re worth. No longer are they providing a service to the citizen at all. Look at the small interest banks pay for the money they get from the Federal Reserve, and then loan it back to the gov’t and others at high rates of interest. I HATE BANKS AND THE WHOLE MONETARY SYSTEM AS IT DOESN’T WORK FOR THE PEOPLE IT WORKS FOR THE INVESTOR CLASS ONLY.

          1. F. Beard

            I HATE BANKS AND THE WHOLE MONETARY SYSTEM AS IT DOESN’T WORK FOR THE PEOPLE IT WORKS FOR THE INVESTOR CLASS ONLY. Raymond

            Actually, it works for the usury class (Investment is noble; usury isn’t) but yes I HATE BANKS (and credit uinions) TOO. Embezzlers they are.

    3. Ralph Musgrave

      Rd: You’re right. Every time there’s a recession, hoards of economic illiterates come out of the woodwork chanting “infrastructure”. As you rightly say, infrastructure schemes are singularly INAPPROPRIATE for dealing with recessions.

      1. Raymond

        Okay, and what is your illiterate response? Do you have the magic wand to make things better? Perhaps a magic silver bullet? Or do you think the wonderful financial “private sector” that got us into the mess in the first place is the answer and is going to come to the rescue, you know the ones who were bailed out by the people, the taxpayers? Please tell me, what should be done? Of course, you are not one of the illterates coming out of the woodwork with a different workable idea from “infrastructure” are you? Just askin.’

      2. Nikhil

        Ralph,

        Why are infrastructure projects INAPPROPRIATE? What data are you using to support this sweeping conclusion? Not history right? Because it has been pretty appropriate in the past. Is this new analysis that you have done? Can you please show it or point to someone else who has done this analysis?

        rd’s question brings up a good point one for us to consider. Why don’t you step up to the plate and give us “illiterates” something interesting to consider too?

    4. Nikhil

      There is a lot of work that can be done that doesn’t need an environmental impact statement. Child care, neighborhood watch and beautification, tutoring, arts and music education, sports leagues etc. I know these aren’t “manly” construction jobs but they are just as necessary. Also they exist in perpetuity. No need for “shovel-ready” when it comes to teaching someone how to play a scale or hit a curve ball.

  13. MarkMinter

    I would read this.
    http://www.cfeps.org/pubs/wp-pdf/WP10-Wray.pdf
    I am not spamming. I don’t have anything to do with this organization. Before I read it I had basically the same idea of money as most people, as least those with basic level college economics, mainly that money is created in the commercial banks. Depositors put money into a bank and the the bank loans out some fraction of that. The above article makes a reasonable case that governments create what is considered money by assessing a fine, a tax, or a fee that need be paid to the government and by stating in what form that payment need by made. Pieces of hazelwood were used for centuries and only discontinued in England in the 1840s. That were the term “Short end of stick came from”. The piece of wood was noted with the debt and broken in two with the debtor getting the shorter piece. When the government pays for goods or services rendered and they pay in that unit that will accept for payment of taxes, fines, or fees, then they create money. These pieces of wood were often issued and were treated as money by the population. The use of precious metal was to come later. Often the value donoted to the metal money was far greater than the worth of the money itself. The article disputes the idea that money is created in the commercial banks by saying that money that is loaned by banks is merely money that already exists and it being shifted around as reserves between banks. I did the math and it worked out that way. The paper was written July 2000 well before any popularity of alternative (non-chicago) economic theory.

    There are thousands of different sorts of jobs that could be down WPA style other than only shovel jobs like CCC or WPA. There are government IT systems, networks, system security that could be upgraded. Any project of this sort would employ a wide plethora of people that had or have this skills for work during re-systemization, and IT projects during 1990-2008. This certainly would fit into the idea of a few WPA administrators verses actual workers with a lot of commercial hardware and software bought. There are electric grid projects that could be done along with associated control systems. There is research that could be done at a the university level with grants. Traffic control systems could be upgrade to have cars use less energy because the lights are better timed and there are less traffic jams. Air traffic control systems, public transit, faster wireless networks and broadband networks and these are just from my limited imagination.

    There is too little money in the system right now. And too much debt to loan it. Any monetarist policy is having unintended side effects. There are lots of articles out saying the Quantitative Easing led to the increase price in oil because financial institutions ran to oil with the easy money or because of fears of inflation.

    I personally was part of a big WPA type project in the mid 1970s. I learn engineering, math, electronic, management, hierarchy, supply logistics, leadership, and received a sense of pride in myself, and after it was all over, I received money for University and continued to work as an engineer using what I learned during that project.

    It was called the US Marines. During the recessions of the 70s they increased enlistment and opened up areas on Parris Island that had laid dormant since the height of the Viet Nam war.

    If you want to be belligerent about this idea that fiscal policy is a decent tool to end this contraction, fine. But the solutions being offered are not working and maybe its time to do something different. You have a bunch of definitions in your heads about money, deficits, and are so afraid of inflation when it is deflation that is the problem no. The classic definition of inflation is too much money chasing too few goods. The prices of the key source of wealth, real estate are falling. Inflation or growth are the only acceptable ways to remedy the debt that exists today. I say start projects and print checks, don’t sell bonds, just do it. Some of the people will scream about it and yell about unconstitutionality and socialism and yada yada until they notice the price on their house going up, and their stocks going up, the company giving them a raise and their kids get jobs and have options.

    So cause a steady 4% inflation a year and use government projects as a way to give competition for labor to insure that private sector jobs get raises at the rate of inflation. Corporate profitability is at pre 2008 levels but they won’t hire.

    Like they said above. Government better do something or the people will do something.

    1. F. Beard

      The article disputes the idea that money is created in the commercial banks by saying that money that is loaned by banks is merely money that already exists and it being shifted around as reserves between banks MarkMinter

      That is narrowly true but bank money (so-called “credit”) spends just like real money and is the overwhelming component of the total money supply (reserves + credit).

      I say start projects and print checks, don’t sell bonds, just do it. Some of the people will scream about it and yell about unconstitutionality and socialism and yada yada until they notice the price on their house going up, and their stocks going up, the company giving them a raise and their kids get jobs and have options. MarkMinter

      Excellent point. Bring on the Greenbacks!

  14. different clue

    F. Beard,

    Thank you for your good-natured responses to my angry comment up above. I find the thought of just simply giving money to all the sheared sheep to be so radical that I can barely grasp it. It might work at its level, who knows?

    The idea of a fistfull of WPA 2.0 type pay-the-unemployed-for-useful-work programs is in tune enough with ancestral and vestigial impulses lingering in American public culture that it might be easier to get passed and signed if the ice-floes all grind together just the right way. The Puritan Ethic we all labor under requires something for something where non-rich people are concerned.
    And all kinds of highly-valuable make-work projects exist to be done. If the permissions are needed, then we need to get the permissions. With highways, roads, bridges, sewer and water systems in fast-forward decay all over the country, giving money to already-trained and skilled construction workers to do the work would help us preserve the physical infrastructure values we still have and are about to lose. It would not be frivolous. And what about restoration and maintainance of all those New Deal era trails and park buildings and everything all over everywhere which are dilapidizing as we dither? That all is the stuff which won’t be payed for even if our government gives each of us sheared sheep every bit of our stolen wool back for our own personal spending.

    1. different clue

      Oh, and . . . here’s a personal favorite vision of mine.

      Why not run fairly speedy strictly-passenger rail lines up and down the medians of every Federal Interstate Highway?
      As gas gets too expensive to burn for any driving beyond brute survival driving, and people still want to travel, there would be a whole new nationwide rail network for which We The People already own the rights of way.
      And they don’t have to be mythical High Speed railways like the one that recently had a catastrophic accident in China. They can be Fairly Speedy railways like the electric railway I and a tourgroup once took from Prague to Budapest in several hours without a bump the whole time and at speeds often close to 80-90 miles per hour, so far as I could tell.

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