I wish the massive financial bailout money could be used to build and improve infrastructure. There doesn't seem to be a lack of money but it never seem to do anything useful.
If only there were some precedent we could look to where huge numbers of people were out of work and the government killed two birds with one stone by employing a lot of them on major infrastructure projects. And what if those infrastructure projects, like improvements to roads, bridges and national parks, were largely outside and thus relatively safe even in today's climate of Covid-19.
It seems like we might go into a depression... if only that had happened before and we could draw on those experiences instead of dithering and arguing while people can't pay their bills.
> The Public Works Administration program and housing was primarily designed to provide housing to white middle-class/lower-middle class families. The progressive aspect of it was that some projects were built for African-Americans as well. But it was explicitly segregated. And in many cases, it segregated neighborhoods that had never known segregation before. So this went on throughout the country. Of the...
> ROTHSTEIN: The second major one was the Federal Housing Administration, which was established in 1934, the year after the Public Works Administration. And the Federal Housing Administration is well known today by many people as an agency that would not insure mortgages for African-Americans. It redlined communities. That was a minor part of what the federal government - what the FHA did in order to segregate metropolitan areas.
Redlining was made illegal under federal law - i.e. by the government - in the 70s, not least because the private sector had absolutely no interest in doing anything to stop it.
Did government bureaucrats micro-managing the economy stop being racist in that time?
> Redlining was made illegal under federal law - i.e. by the government - in the 70s, not least because the private sector had absolutely no interest in doing anything to stop it.
Redlining was invented by the government! The term refers to markings on FHA maps. The FHA massively distorted the mortgage market by insuring mortgages, but refusing to insure mortgages in Black neighborhoods. That made such mortgages vastly riskier for private sector lenders.
Okay, call me naive but would we rather the government have done nothing? I understand racism still exists but you can't act like we haven't made any progress. Could you imagine the protests if segregation or something akin to it started now? I understand horrific actions have been made in the past, I understand there are still bad people in the government. Should we let that prevent us from doing anything to help people? What about people who die of hunger or homelessness? Millions and millions of Americans are in extremely difficult positions right now, my parents included. Should we tell those people we don't even want to try because we're scared of something that happened 90 years ago? Can't we progress? Can't we be better? We certainly can't if we never even give ourselves the chance.
> Okay, call me naive but would we rather the government have done nothing? I understand racism still exists but you can't act like we haven't made any progress.
The Black-white income and wealth gaps are as large today as they were in the 1960s: https://images.app.goo.gl/s1YD3sxKeuG289GfA. While the reasons for that are complex, New Deal programs that redlined African Americans, strengthened unions that excluded them, introduced segregation through the WPA into northern cities that hasn’t been segregated before, etc., played a significant role.
I’m not objecting to the government doing things. My objection is to OP’s invocation of the New Deal as the template for action. Last time we tried empowering white central planners to construct housing and infrastructure, they played out their prejudices in their decisionmaking to the detriment of non-white people.
There’s lots of things you can do that aren’t in the New Deal model. For example, if you’re worried about homelessness, instead of having the government build public housing (the New Deal approach) you can give people money to buy housing (the Nixon-Ford Section 8 voucher model). That’s what the government is doing now. It’s just giving people money and stabilizing the economy. (That’s also what every OECD country is doing.) It’s a better approach.
Sure, there were absolutely problems (though bear in mind you're addressing one program - there was also the TVA, CCC, and a bunch of others I could've told you off the top of my head when I was in US history in high school), but the point is it put unemployed people to work and helped stem the damage to the economy.
It's the best precedent we have for the situation we're in today, and it's silly to act as though it's not useful to draw on it now because it had problems. They're problems that are easily fixable, after all - it's very possible for us to create programs today that have similar positive effects on employment and the economy and just do them without the racism.
It's very easy to find fault with anything in history, but if that's all you try to do, you're going to miss out on a lot of really useful information.
> They're problems that are easily fixable, after all - it's very possible for us to create programs today that have similar positive effects on employment and the economy and just do them without the racism.
I disagree. The racism was a manifestation of the problems critics of the New Deal have with it: when you put government bureaucrats in charge of building things and running the economy, they inject their own biases and shortsightedness into the projects. We wouldn’t be building overtly racially segregated public housing today, but our bureaucrats still have plenty of biases to inject into their projects. (Listen to the podcast “Nice White Parents” for a good primer on how things like special language programs in schools become a way for wealthy, liberal, white parents to secure special resources in public schools for their kids specifically. Those are the same people that would be in charge of these New Deal 2.0 programs. E.g. you spend money for transit, and you have college educated white people spend billions building heavy rail through neighborhoods low income people can’t afford to live in, instead of shoring up the bus systems the overwhelming number of needy people actually use.)
The New Deal isn’t the only precedent we have. Look around at the world: everyone is doing basically the same thing we are. Bailing out airlines, providing increased unemployment benefits or payroll protection funds, etc. Instead of big, centrally planned projects, you inject money into the economy in a broad-based way with minimal bureaucratic discretion.
We've been injecting money into the economy in a broad-based way through PPP. It didn't turn out especially well, a lot of it went to large companies that didn't need it, and small businesses (largely restaurants) are going bankrupt in enormous numbers because it didn't help them sufficiently.
You're arguing that a New Deal-esque program is going to be problematic because it's inherently going to have issues in execution, but you're suggesting a solution that there's absolutely no reason to believe won't have issues in execution.
Problem is most unemployed people don't have the specialized skill set to contribute to these projects and those that do aren't unemployed. The unskilled labor these projects require has mostly been automated over the last 100 years by robotic tools like excavators.
Basically every problem we used to be able to throw manpower at now has similar automation and the same sorts of projects would now be done by far fewer people. Any modern new deal would have to look very different to the old one.
I won't even pretend to know enough about construction/infrastructure to know what's required to work on it, but there have got to be jobs that can be created that don't require technical skills. I've been reading that lots of people are now going to national parks because other stuff is closed, and they're leaving lots of trash - hire people to pick it up. Roads have potholes, and I can't believe that fixing those requires that specialized of a skill set.
And even for some of the things that are most efficiently solved with specialized skills and equipment, if there's a way to do them less efficiently by unskilled people, that's fine, since overspending on labor is totally fine if not desirable in this context.
> I can't believe that fixing those requires that specialized of a skill set.
No but it does require manual labor and a lot of people consider it beneath them these days to do that. Couple it with many people getting paid more to be on unemployment than they made while working and its a recipe for laziness.
Of course there's no single bridge building machine, but most of the work in bridge building is done by a collection of machines, usually with human specialists operating them. It's not the 1920's and most digging is done by an excavator instead of a human with a shovel, most cement is delivered by a truck humans mixing it onsite. As much as possible will also be prefab.
> There doesn't seem to be a lack of money but it never seem to do anything useful.
Well, at the federal level, there are two chambers of Congress and the Executive. Given that there's an election coming up in November, you may wish to do vote for the folks that you best think will change the situation.
> at the federal level, there are two chambers of Congress and the Executive.
Changing anything for the benefit of the masses through electoral politics may never happen again or will be too slow. The last time two times the US had aligned executive and legislative branches were the first two years of the Obama and Trump regimes. So much changes between elections that there's no way we can fix it through electoral politics, and we must find another way.
We cannot vote our way out of the immediacy of a pandemic or a constitutional crisis or an environmental disaster. Voting is just too slow help the masses.
There was an episode of Monty Python I remember. The premise was that in the late 1960s Hitler and his cronies, under assumed identities, were staying at an English boarding house in Minehead, Somerset planning "to get the band back together" via some local election. The TV audience could see through the ruse, but the other residents of the hotel were oblivious. The scene I remember was Mr Hilter ranting from a balcony to a few scattered locals. The bunting was red, don’t remember was the insignia was. As a local yokel was staring up blankly at Mr Hilter’s Germanic rant about the sovereignty of Taunton, Hilter’s crony, Ron Vibbentrop, sidled up to the yokel and, as an aside, told the yokel "He’s right, do you know that?"
Don’t know why, but that just popped into my head...
> The last time two times the US had aligned executive and legislative branches were the first two years of the Obama and Trump regimes.
And Obama managed to pass healthcare reform (ACA, "Obamacare", national Romneycare).
If Binden gets in, and the Democrats can control Congress (the Senate is if-y), then I would hope they do something about climate change (carbon pricing?) as it is an existential threat.
There's also the need about dealing from all the COVID fallout, but that a lot there could be done via the competent running of the government. Infrastructure needs spending and that would entail Congress, so that may be a #3 priority.
> And Obama managed to pass healthcare reform (ACA, "Obamacare", national Romneycare).
If the best that the Democrats could do while controlling the executive and legislative was pass a Republican health insurance plan, we're in deep trouble. It should be clear by now that neither party passes anything that will materially better the working class and the toiling masses.
> There's also the need about dealing from all the COVID fallout, but that a lot there could be done via the competent running of the government. Infrastructure needs spending and that would entail Congress, so that may be a #3 priority.
All this presumes that the problem is competency. The problem is that none of these things are profitable. In a system that runs on profitablity, there is no room for services that lose money.
If you look through the lens of profit, I argue that the people who are running the government are competent in enriching themselves and those corporations that prop them. Both parties oversee the direct transfer of wealth from the masses to the few. For as much (or little) we pay in taxes, the masses do not benefit as much as the überwealthy do: we do not have a significant safety net, we have no housing, no healthcare, no security. Everything that is required to live costs money. This affects the masses more than it affects the wealthy, because the wealthy can afford anything. I would like to add that Obamacare is insurance and not healthcare, so it still costs the poor a significant portion of the little wealth they have.
This is because one of our two political parties doesn’t believe that government spending should exist, and is iffy about the concept of government overall. Because of that, the only body able to respond to crises is the Federal Reserve, and the only lever they have is the money supply.
We’ve had multiple trillion dollars worth of infrastructure repairs we need to do and nearly sub-zero borrowing rates for the last decade, but the GOP has effectively blocked any efforts to enact any kind of actual fiscal policy. If any business out there’s leadership refused to take sub-zero rate loans to perform critical maintenance on their capital stock, they’d rightly be fired and probably sued.
Spending on infrastructure is Keynesian - genuinely Keynesian, not the faux-Keynesian of bailouts, which are often labelled Keynesian with various degrees of good/bad faith.
Keynesianism is absolutely taboo in a plutocratic neoliberal economy - possibly because it's a credible reason for increasing taxation. And there's nothing a plutocracy hates more than having to pay more tax.
As you point out, in rational terms this is self-harming nonsense. Countries need repairs and they also need physical infrastructure investment. The 50s saw the Interstate system, the 60s saw generous funding for computer and IT R&D as well as other basic science, but since Reagan public spending for the public good has become unacceptable - largely because it "costs money."
As if creating jobs and valuable physical infrastructure is somehow an unreasonable expense and not basic common sense.
> The GOP has no power in California, though, and that’s been true for over a decade.
The GOP could still block tax increases (including any tax rearrangement that included an increase in some aspect), because of the supermajority requirement, until the Senate class elected in 2018, which was significantly less than a decade ago.
> Unless I'm reading this[1] wrong, the California State Assembly has been a Democrat supermajority since 2011, and the Senate has been since 2013.
The relevant threshold is 27 (2/3 of 40 is 26.6...) seats in the Senate, 54 (2/3 of 80 is 53.3...) in the Assembly.
So in 2011 neither house has a supermajority (and, prior to a State Constitutional Amendment in 2010, a supermajority was required to pass a budget with or without tax changes), in 2013 Dems had supermajorities in both Houses which they lost for the 2015 session in both Houses, regained in 2017 by the 2016 election in both Houses, lost in the Senate by a recall in mid 2018, and regained by the 2018 elections for the 2019 session.
> Moreover, Democrats have only been one or two votes short of a supermajority in both houses since 1999.
No, up to 2 in the Senate and 6 on the Assembly short; and up until 2010 that meant Republicans, while, they couldn't pass anything on their own obviously, had a veto on the annual budget which thhey regularly held hostage to extract other concessions.
> So, I still think my statement is fair, that the GOP has no effective power in California, and that has been the case for two decades.
It's not; they've had a veto on tax policy changes that aren't pure cuts intermittently, on at least one house (which is all it takes) over the last decade, and a veto over the budget consistently for the prior decade.
Oh, and as well as a legislative veto on the budget they also held the Governor's office for much of that prior decade (the full years of 2004-2010), which gave them more power (especially because, unlike the President in the federal system, the Governor has a line item veto on the California budget.)
So, no, they haven't been without power in California for two decades (or even the original claim of one, but its much more ridiculous to now claim two.)
More to the point, California (both Constitutionally, and practically because of the market effect of being the issuer of the debt-denominating currency) borrow as freely and cheaply as the federal government.
They've been doing this by me. LA Metro actually finished digging up the street for a subway station about 7 months ahead of schedule (which I think is practically unheard of)
California has gotten a windfall in sales taxes from Amazon and Ebay in recent years when sales tax collection was forced. The money is always poorly spent.
I don't know in detail what California's budget is like (other than they've been in the whole lately?) But I personally view a lot of the issues with local and state government spending as being associated with bidding processes and the cost of e.g., infrastructure. I think California generally has the right priorities (roughly, education, healthcare, safety (although this could perhaps be reshuffled, see zeitgeist), and infrastructure). If anything I think they probably need to work to reduce costs in higher education especially and spend more on infrastructure (or reduce costs, but I think that'll be harder than in ed).
Much of the bailouts you're speaking of are loans, not grants. The very large exception is the Paycheck Protection Program, which will in most cases become grants to small businesses.
Given the need to institute social distancing, this is the only thing which is keeping hundreds of thousands of small businesses alive. Without the PPP, and other loans to large businesses, we would be seeing tens of millions of permanent job losses.
Much of this money was not spent, it was loaned. And without it the lasting economic effects would have been catastrophic.
I too would like to see additional spending on infrastructure, and I think we can afford it, but I find myself frustrated to see it framed as bailout vs. infrastructure. These financial lifelines are meant to keep our economy treading water while we necessarily social distance. They're not to save corporations from excessive speculation.
Speaking as a socal Californian, infrastructure isn't the problem it's that most of the state hates confronting reality. We'd rather raise minimum wage arbitrarily than admit we have a CoL problem, we invest in bike lane expansions while leaving buses to fight cars for space in most parts of our cities because "omg bikes are so eco friendly and Europe does it", and for some reason we hate high density housing even though rent is on the rise everywhere. We were supposed to have expanded our energy infrastructure already to make more use of natural gas which might have alleviated the need for rolling blackouts but instead we of course chased green energy projects that let people in the politically connected affluent regions pat themselves in the back.
It seems like we might go into a depression... if only that had happened before and we could draw on those experiences instead of dithering and arguing while people can't pay their bills.
Dare to dream, am I right?