Yesterday, Former Clinton Secretary of Labor Robert Reich wrote a piece for TPM Cafe titled The Mini Depression and the Maximum-Strength Remedy in which he argued that the only way out of the current mini-depression is a bold government infrastructure program:
So the crucial questions become (1) how much will the government have to spend to get the economy back on track? and (2) what sort of spending will have the biggest impact on jobs and incomes?
The answer to the first question is “a lot.” Given the magnitude of the mess and the amount of underutilized capacity in the economy– people who are or will soon be unemployed, those who are underemployed, factories shuttered, offices empty, trucks and containers idled — government may have to spend $600 or $700 billion next year to reverse the downward cycle we’re in.
The answer to the second question is mostly “infrastructure” — repairing roads and bridges, levees and ports; investing in light rail, electrical grids, new sources of energy, more energy conservation.
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Government spending that puts people back to work and invests in the future productivity of the nation is exactly what the economy needs right now.
The post triggered a round of thoughtful, meaty commentary from readers (one of the things that makes TPM Cafe a good hangout).
Here were my comments, reposted here so I can check back in four years and see if any of it came true:
Totally agree with everything you say. However, when it comes to the definition of ‘infrastructure’ — I think we should look beyond the classic ‘road-building’ concept.
I would look ahead 30-40 years, think what kind of society we want to live in and work our way backwards to today. What does the ideal look like? Say we’d like to see educated (and nourished) children, healthy people, and reasonably high employment. To get there, we would need good schools, a decent system of food production and delivery, accessible healthcare, and good local jobs. Whatever infrastructure goals we adopt today would have to prioritize based on those principles.
Let’s set the goal at 10,000 news schools, 10,000 new libraries, 10,000 day-care centers, 10,000 new neighborhood health clinics (staffed with people who live nearby), 10,000 parks, 10,000 new family farms who distribute their goods within 100 miles, and 100,000 new small business startups each with less than 100 employees (with tax breaks to encourage buying from supplies manufactured within 100 miles of each other). Too modest? How about 100,000 schools, libraries, etc.
Imagine all the support activity that this will generate across all levels of society. Forcing geographic proximity cuts down on energy use, wear-and-tear of the roadways, and builds local hives of self-supporting commerce. By reducing concentration of location-specific industries we make it so trained personnel can flow between regions and be assured that they can find jobs. We make it so the brand isn’t just ‘Made in the USA’ but ‘Made in Jackson County.’
This will go hand-in-hand with distributed green-power generation plants. If the power doesn’t need to be shunted across a nation-wide grid, you can make do with smaller generation facilities. The more local it stays, the less you lose in transit. Instead of large-scale power generation sources using polluting fuels, we have 10,000 local power plants that use renewable sources, are cost-effective, and can keep going for the rest of the century without ever running out of fuel.
Distribution (of energy, knowledge, manufacturing, commerce, etc) also gets us better fault-tolerance and built-in redundancy. It means that if something disruptive happens in one region, it won’t affect the whole country. Yes, you don’t get the economies of scale, but the goal is to jump-start the ‘distributed economy’ and build a vibrant commercial ecosystem, not to make cheap, low-margin junk that benefit only a few companies.
To be able to pull this off, we’d need training, communication, and good coordination. That’s where high-tech investment comes in. It’ll help spread the knowledge, boost efficiency, and push the benefits down to the local level. Let’s also remember that the Internet infrastructure was designed from the beginning for this sort of decentralization.
As an aside, I believe the so-called ‘Shock Doctrine’ can be harnessed for both good and bad. An emergency can be abused by those who want to acquire power or wealth, or used to ‘shock’ society out of complacency and past the petty objections of those who only care about their taxes.
We are clearly in an emergency. Where we go with it is largely up to those in charge and whether they have the vision to look ahead 30-40 years and act now. — fubar.
