Obama's New Deal is on a smaller scale
Its focus on smaller, shovel-ready projects precludes a grander vision.
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Moreover, the focus on shovel-ready projects could limit the impact on the nation’s jobless rate. In order to be shovel-ready, most projects have already been approved and hiring is already done. As a result, the stimulus package is likely to save jobs more than create new ones.Skip to next paragraph
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To some economists, the lesson from the New Deal is that public-funding packages aren’t enough – private investment is the key to turn around a recession. “Basically they’re going to shove too much money – more bad money – down a hole,” says Addison Wiggin, publisher of the Daily Reckoning website, which covers Wall Street.
Yet a glimpse at a handful of shovel-ready projects around the country shows that, at least in the Rocky Mountain towns and “blues belt” burgs where dirt moving and road milling has begun, federal money is renewing a sense of hope.
Built by New Deal money in 1933, the Route 17 bridge in Tuscumbia is literally crumbling, its concrete sloughing and iron spans rusting. The state had scheduled its replacement for 2012, but the federal infusion enabled the Department of Transportation to move it up by three years. The new bridge will span 970 feet and stretch 24 feet wide – hardly a modern-day Golden Gate Bridge.
The project may not be transformative, but 5,000 such highway projects around the country – all to be marked with newly created federal signage – can change both local and national dynamics, argues Tom Wright, a local county commissioner.
“Forty jobs is a huge percentage for this area,” says Mr. Wright. “Just driving by this project and seeing a guy you know driving a bulldozer is going to make you feel better.”
“You’re not going to have tourists standing in front of a mile of new blacktop taking each other’s picture,” says Mr. Berard of the House Committee on Transportation and Infrastructure. “But there’s a certain egalitarianism to having smaller projects being done in every state instead of only creating jobs in one or two places.”
After layoffs, one rehire
Tuscumbia surveyor Rocky Miller had to lay off nearly half of his 19-employee staff during the past year. Now, he’s been able to hire one back and hopes to rebuild his company at least in part based on the Osage River bridge project.
“I don’t necessarily agree with President Obama’s politics, but I do agree the stimulus money is important when it comes to infrastructure and putting people to work,” says Mr. Miller.
Questions remain about who, exactly, this money will put to work. “One assumption of the president’s employment estimates is that labor is homogenous, that if you have unemployed people they can do anything,” says William Beach of the Heritage Foundation, a think tank in Washington. “But we know that’s not true. Labor is heterogenous. I have a hard time understanding how the labor market is going to be elastic enough to respond.”