Community Organizing

[Jester]

Ok, right. But, doing 1,000 construction projects will just suck up all the construction workers, and then require us to employ from the rest of the world to get them done. So much for stimulating the "American" economy.

Construction is one of the worst-hit sectors. The collapse of a housing bubble is bad enough, but add the lack of new investment projects, and that's a very large hit. If you've got evidence of foreign construction workers coming in in larger numbers than usual, I'd like to see it. My understanding is that, domestically, huge numbers are still unemployed.

So, yes. Stimulating the "American" (why the scare quotes?) economy by rebuilding its infrastructure, getting jobs for its construction sector during a construction crash, and getting money into the economy.

My understanding is that the bulk of the money went to states to shore up their unemployment insurance, and the crash of thousands (or hundreds of thousands) onto state run social systems. Next question is... What happens in 2010 when the states now have hundreds of thousands of hungry mouths to feed, no tax revenues, and no "stimulus" grist for the mill?

If this happens, and neither the unemployment nor the loss in revenue can be reversed, then America is simply a much poorer country than everyone thought, and everything will have to shift, from government spending to private behaviour. This wouldn't be a depression, it would be a structural shock, or perhaps the end of a long illusory era. I doubt that's entirely the case, given that production is way down in the "real" economy. Americans are no longer being hired to make cars, steel, homes, etc... that they were building just a year ago. The factories aren't bulldozed, the workers aren't de-skilled, so my guess is that increased demand will help put that all back together, and the fiscal consequences can be solved later, albeit not without considerable belt-tightening. Health care is one place to do that.

A reasoned plan would look at the regions of the country (Detroit, *cough*), and develop a strategy for retooling or invigorating the business sector that is hit.

Weren't you the one going into apoplexy over the government telling GM what to do?

If you have 10,000 unemployed software developers in Silicon Valley, you don't need 100 bridge construction projects to get them employed (they are unqualified).

Sure. But the formerly unemployed bridge builder can now keep paying for his home, and maybe that means he still has a computer, or can buy one. He is therefore a software consumer, and the demand for software goes up. As sales increase again, software developers can once again be put back to work profitably. Then they go on to buy stuff, and so on. In a case of a depression that has left productive capacity underused, getting anyone back to work helps get everyone back to work.

So, my synopsis is... This is a trillion dollar feel good show, and does practically dick to stimulate anything.

Credit is dried up, despite the Fed pursuing policies that would be, in ordinary times, massively inflationary. Anything that gets money out there and spent, even if it's just a stopgap measure to keep food on the table like UI, is going to help stave off deflation, which would be disastrous. Even in the total misinvestment scenario, which you seem to implying, that's still money keeping the economy from sliding into a new great depression.

But... What he did is let Pelosi and Reid throw a progressive socialist frat party. Irresponsible cantankerous left is as bad as irresponsible cantankerous right. What Obama should have done is... Lead!

Got a direction in mind?

What the people want is a responsible government who doesn't try to slip $500,000 worth of luxury airplanes (for Congress's fleet) into a defense appropriations bill. The people, who are beginning to starve, are wondering why their congressmen are taking multi-million dollar junkets to the antarctic by way of Hawaii, and the Great Barrier Reef. I dunno, its feeling an awful lot like those times when the aristocratic response was, "Then let them eat brioche." Congress' stellar low approval ratings for over 2 decades is indicative of their disconnect with the people.

Junkets, while great front page news, are of essentially zero budgetary consequence. You could replace the whole lot of them with people who lived like ascetic monks, and the fiscal situation would not improve by a single percentage point. Even the much ballyhooed pork projects don't explain more than a small corner of the problem. Fixing those things might feel good, but it wouldn't be near enough to fix the economy.

-Jester