I’ll Bite

Paul Krugman returns to his nostalgic yearning for the economic solutions of 75 years ago:

Seriously, what we’re looking at over the next few years, even with pretty good growth, are unemployment rates that not long ago would have been considered catastrophic — because they are. Behind those dry statistics lies a vast landscape of suffering and broken dreams. And the arithmetic says that the suffering will continue as far as the eye can see.

So what can be done to accelerate this all-too-slow process of healing? A rational political system would long since have created a 21st-century version of the Works Progress Administration — we’d be putting the unemployed to work doing what needs to be done, repairing and improving our fraying infrastructure. In the political system we have, however, Senator-elect Kelly Ayotte, delivering the Republican weekly address on New Year’s Day, declared that “Job one is to stop wasteful Washington spending.”

Okay, I’ll bite. What would a “21st-century version of the Works Progress Administration” look like? One that would actually reduce unemployment, I mean. So few people are involved today in infrastructure building (unless he means something different by infrastructure than roads, bridges, dams, etc.) that while support for concrete and blacktop infrastructure might have secondary benefits, it will have very little direct impact on unemployment.

Over the last 40 years we have made a transition from direct production to indirect production in this country. Far, far fewer people working in manufacturing, fewer laborers, miners, farmers. Lots more people working in fast food, retail, business services. I think a re-balancing would be desireable and beneficial but it’s going to take decades.

28 comments… add one
  • john personna Link

    As not quite an aside, I heard a claim that GM sells more cars in China than in the US these days, and makes 2/3s of its money overseas. If that’s true, it’s a new form of hollowing. It is like having management for a foreign corporation on US shores.

    (I’d see a Works Progress Administration as Workfare, something to keep people busy, as alternative to a straight dole. Certain sorts of infrastructure might qualify, but noting on a deadline.)

  • john personna Link

    Put another way, and probably not the way Krugman wants it stated, at what point do you stop extending unemployment, and just put them on workfare?

  • I can see the arguments in favor of requiring people work to receive benefits, especially under the present circumstances when job growth is inadequate. There’s a three word argument against such a requirement: Davis-Bacon wages.

  • john personna Link

    Wikipedia mentions efforts to repeal. I’d support that.

  • Brett Link

    A 21st century equivalent would probably be subsidies to hire U.S. citizen workers. They’ve tested out programs like that at the state level, including Texas.

    It might actually be one way to encourage employers to hire more “marginal” workers (in the sense that they tend to be the first cut and the last hired, and often have “disadvantages” like age).

  • Temporary subsidies below the actual compensation level of the employees in question will have little or no effect on employment. What it will do will be to increase the profit margins of companies that were going to hire anyway.

  • michael reynolds Link

    Deliberate inefficiency. Sure, we can spread more concrete with machines than we could by hand. But we could choose to do it old school. It’s better for people to work than not work, and we get a road or a dam or a bridge when we’re done. As opposed to getting what we get for unemployment payments which is nada.

    Then, there are the national parks, which are falling apart. It doesn’t take a lot of training to teach a guy to pick up trash, clear fallen logs out of streams, dig out trails, check in on campers, etc… In the end our national parks suffer less during these hard times.

    How about painting derelict buildings in blighted areas? The few surviving businesses benefit. Or hauling abandoned junkers away?

    You could put 100,000 guys to work on shrinking Detroit — stripping out old buildings, demolishing, cleaning up, re-seeding with grass or whatever.

  • PD Shaw Link

    i think michael has some good ideas, but Detroit may not be the answer. The city is downsizing, people are moving out; it may not be in people’s interest to stay in Detroit to demolish vacated buildings, etc. Plus where will they live?

    I thought Obama had talked about hiring the laid-off construction workers to refit old houses with energy-saving insulation, walls, windows, etc.

  • PD Shaw Link

    Local anecdote, the city zoo is having financial problems in this crisis, laying off a number of people. Zoo volunteers organized a day to pick up trash, repair signs, re-paint, etc. The union filed a grievance.

  • steve Link

    We have major infrastructure needs. A modern WPA would work on those projects.

    Steve

  • Icepick Link

    Put another way, and probably not the way Krugman wants it stated, at what point do you stop extending unemployment[?]

    At 99 weeks. That’s already been established.

    We have major infrastructure needs. A modern WPA would work on those projects.

    Riiight. Because those out-of-work mortgage brokers are going to be ready to jump into a motor grader and get that things working like that.

    Not to mention another fact – how are you going to get all of those highway construction projects green-lighted in anything under five years? Or power stations, or transmission grids, or rail lines, or anything else?

    I know of a project where a power company in the state has been trying to build a new sub-station to service a particular area. The power company has been trying to get the substation approved for almost TWENTY YEARS. The hold up? There is a rat that lives in that area that might be negatively impacted. It is a non-native nuisance species, but by God the full might and power of the environmental movement has come down to protect the goddamned rats. And the company can’t put the substation anywhere else for geographical reasons.

    Now how exactly do you expect to get enough projects green-lighted fast enough to put ten million people* back to work, even if they DID know what the hell they were doing on the job site?

    * Counting those working part-time because they can’t find permanent work, discouraged workers and those who have dropped out of the labor force (not to mention those trying to enter the labor force) that number really ought to be 20 million jobs.

  • john personna Link

    Really? Someone is suing to protect a non-native species? Where?

  • Icepick Link

    They’re not suing. They don’t have to. They speak to the right commisioner, or speak to the right person at Fish & Wildlife, or pretty much anyone in the Federal government.

    I’m not going to say anymore because the project actually isn’t getting public hearings. It’s been behind the scenes. Everyone involved is sick of the project at this point in time, even the consultants. (When consultants get sick of a paying gig you know it sucks.)

    But it doesn’t take much to find any number of similar problems for matters big and small. Look at the problem they’ve been having stringing new transmission lines across the Tehachapi/San Gabriel mountains in SoCal. The project was OK’ed in early 2007 (or earlier) and they’re just getting to the meat of the project now. And that’s a project that’s moving quickly because it’s being rammed through by TPTB in California along existing right-of-ways. (From here it seems like a rare fit of competence amongst Cal pols. Given the disaster they’ve made of the Central Valley, though, I’m willing to be convinced otherwise.)

    http://losangeles.cbslocal.com/2010/09/07/work-begins-on-desert-power-transmission-towers/

    Incidentally, I’m not seeing the number of jobs associated with building these new lines. (No, I’m not looking too hard.) But it’s hard to believe it’s that many people, or they’d be crowing about it in every article.

    This is an example of the kind of infrastructure work that needs to be done. Are those WPA programs really going to get unskilled people working to build the big towers and string high tension power transmission lines? No way in Hell, especially not going through mountains. (That work is dangerous enough in the flat lands of Florida.) Michael’s brilliant suggestion of deliberate inefficieny isn’t going to fly for this kind of work.

    Nor will it work for building the windmills. (I’ll have to ask my mother-in-law if the windmills work any more than they used to. Residents in Mojave, Tehachapi, Cal City and other local areas used to note that at least half of the windmills weren’t working at any given time.) Or the solar power plants in the desert. Or the nuclear plants that ought to be built. Or … or … or ….

    But Dave’s made this point over and over again, and many of the commenters here still don’t understand. So I don’t really think it matters.

  • michael reynolds Link

    No, deliberate inefficiency won’t work for power line installation. Unless we want really, really high turnover.

    But it works fine for slapping paint on an abandoned Newark storefront. Or for cleaning up a park in Cleveland. Or clearing a hiking trail. Or yes, spreading concrete.

    Stop looking at this as a matter of peak efficiency or profit. The point is that right now we pay a dollar in extended unemployment — in effect welfare — and get nothing much for it. I’m suggesting that paying a dollar for 50 cents worth of work is better than paying a dollar for nothing.

    As for out of work mortgage brokers not being willing to do the low-end jobs: I’m willing to do the low end jobs if that’s what’s required. I’m not eligible for unemployment. I’ve done those low end jobs, and if my gig dries up tomorrow — always a distinct possibility — I’ll try like hell to get a low end job to feed my family. Will an out of work kid book author tend bar or pull espressos or drive a cab? Damn right, and I’ll do a good job of it, too.

  • john personna Link

    So, a lot of words Ice, to say that no you don’t have a non-native species being protected? How much of the rest was bullshit as well?

  • john personna Link

    BTW, Tehachapi is an interesting case. If you drew a map and colored it for highest concentration of raptors (a migrational focal point) any guess where it would be?

    We may like the wind there, but we weren’t the first. And so it becomes a balance question. Or I hope a design question (how to build turbines the raptors avoid. whistles on the blades or something.)

  • Icepick Link

    Stop looking at this as a matter of peak efficiency or profit. The point is that right now we pay a dollar in extended unemployment — in effect welfare — and get nothing much for it. I’m suggesting that paying a dollar for 50 cents worth of work is better than paying a dollar for nothing.

    I’m not looking at it as a matter of peak efficiency or profit. I’m looking at it as a matter of what will work. ANY infrastructure worth building isn’t going to be done by clueless hordes. Not gonna happen. And before you spread the concrete you’d better make certain the ground has been prepped. And that work isn’t going to be done by clueless hordes either.

    As for out of work mortgage brokers not being willing to do the low-end jobs: I’m willing to do the low end jobs if that’s what’s required.

    You are completely missing the point, which isn’t whether or not they will do the jobs, but whether or not they have the skills and abilities needed to do the jobs. I don’t really want some life-long key-board jockey handling a concrete saw next to me. Or next to anyone, for that matter.

    I’m not eligible for unemployment. I’ve done those low end jobs, and if my gig dries up tomorrow — always a distinct possibility — I’ll try like hell to get a low end job to feed my family. Will an out of work kid book author tend bar or pull espressos or drive a cab? Damn right, and I’ll do a good job of it, too.

    No, you would not tend bar, or pull espresso, or drive a cab. Because you wouldn’t get those jobs, because they’re not hiring. Especialy not at your age. In November 2010 the state of Florida added 300 jobs. Just three hundred jobs. For approximately 1,100,000 unemployed workers. That’s 3,667 people for every available job. At those odds you’re only getting hired if you’re the boss’s son. And the local officials are crowing about what a robust recovery we’re experiencing in Orlando, what with the local U-3 rate only going up 0.6% in the last few months.

    So you aren’t getting hired, and thus it won’t matter what kind of job you would do.

    You smug rich assholes really have no idea how bad things are getting.

  • michael reynolds Link

    You keep talking concrete saws and I’m talking paint brushes.

    It’s not a question of what’s “worth doing.” That’s an assessment based on criteria that don’t have to apply. Again: so we pay more for some job than we’d pay under ideal circumstances. So what? We’re paying now for people to do nothing at all.

    What’s the value of nothing? It’s lower than the value of something. Is the value of slapping paint on abandoned storefronts nothing? No, it’s greater than nothing.

    If you give long-term unemployed something to do it will, 1) give us something of value, however slight, and 2) make it politically easier for politicians to support continuing those benefits.

    You smug rich assholes really have no idea how bad things are getting.

    You know what? That may well be true, and I’ll own that.

  • fasteddiez Link

    RE: Infrastructure projects

    There are about 2 million construction workers idled right now, are they not? That is, once you get the non shovel ready projects masquerading as shovel ready projects get through the regulatory process, which is itself running on empty, due to cutbacks.
    Icepick gets the construction biz!

    Also, here in Califas, most of the sweat equity construction/other jobs are being done by folks from down Mexico way. Cubicle rats need not apply.

  • Icepick Link

    So, a lot of words Ice, to say that no you don’t have a non-native species being protected? How much of the rest was bullshit as well?

    None of it was bullshit. But some it is privileged. There’s a lot that happens before everything becomes public.

    But it appears there’s a little more public info than I had thought. The project is a proposed station on Key Largo. Local conservationists have tried to stop the two acre site because it (allegedly) poses a threat to the Key Largo wood rat.

    http://www.fnps.org/smf/index.php?topic=88.0

    What you can’t find online is that the few rats they’ve found in the immediate area have actually been an “introduced” species called the black rat with color variation.

    http://myfwc.com/WILDLIFEHABITATS/Nonnative_GambianRat.htm

    http://myfwc.com/images/Animals/black_rat_2.jpg

    No doubt the Key Largo wood rat is in bad shape, even without the threat from Burmese pythons and Gambian pouch rats. But this project isn’t the problem. (I bet that many of the concerned environmentalists down there haven’t considered that their mere existence on Key Largo is at least as big a problem as the substation would be.) Or isn’t a big part of the problem as it would have been on an abandoned Army base – a base that was operational back when the rodent in question wasn’t anywhere near as endangered as it is now.

    But by mis-identifiying the specimens found (and thus protecting the non-native rats with the full might and power of the US government via the US Fish and Wildlife Service) the local environmental types have effectively killed the project. Including the part where the power company was going to implement a conservation project on Key Largo to restore necessary habitat for the KL wood rat to survive.

    Using incorrectly identified species to stop development has become a favorite tactic in Florida. A large development in south-east Orange County (google Innovation Way East before you call me a liar again, half-wit) was stopped last year in part because nearby residents stated that Florida panthers live in the area. Never mind that ALL of the experts testified that Florida panthers have not been seen in that area because their range doesn’t come within 30 miles of that area. And never mind that what evidence the residents provided proved that they had seen bobcats. (At least bobcats are native to the area.) None of that mattered.

    Nor was it the point anyway. The residents just didn’t want their own idyllic neighborhood to become overcrowded. THEIR lake-side neighborhood was built directly on top of what today would be considered sensitive wetlands, much more envrionmentally sensitive than the land to be developed. And the proposed project was actually going to restore some very sensitive wetlands that had been destroyed several decades ago for orange groves and cattle ranching. (On some land between the Econlackhatchee River and Turkey Creek.) The real point was just their own self-interest. Personally I was against the project because we don’t need more housing in this area right now.

    My larger point stands – overcoming environmental and other regulatory hurdles would make a massive nation-wide infrastructure improvement program impossible to implement in any time frame that would help the unemployment situation in this country.

    But what I want to know is this: Other than calling me (incorrectly) a liar, do you have any other point? Are you arguing that environmental regulations don’t hold up construction projects in this country? Is that your stated position?

  • Icepick Link

    What’s the value of nothing? It’s lower than the value of something. Is the value of slapping paint on abandoned storefronts nothing? No, it’s greater than nothing.

    What is the point in slapping paint on store fronts that are abandoned and will never be used again? There is NO value in that. At best it’s throwing good money after bad. (Not to mention that most storefronts these days are all glass. Maybe that’s just a Florida thing.)

    As for being a sop for politicians to extend UE benefits – well, they’re not going to extend them. 99 weeks and that’s it. There is NO pressure to extend benefits further. And the BLS will just define the unemployed away to keep the U-3 below ten percent, just like they have for the last 12 months or so. And no amount of paint is going to change that.

    Basically you whole jobs program is to get poor people to go around picking up your trash and slapping paint on that which you find distasteful. You’re little different than the Queen of Hearts.

    “We’re painting the storefronts red,
    we’re painting the storefronts red!

    “The queen
    She likes them red
    If she saw white instead
    She’d raise a fuss
    And each of us would quickly lose his UE compensation
    Since this is the thought we dread
    We’re painting the roses red”

    Nah, it doesn’t rhyme or scan.

  • Icepick Link

    Hey, here’s another issue with having those in UE compensation working at this in that – you may well run afoul of minimum wage laws. In Florida the maximum benefit is $275 a week*. At 40 hours that works out to about minimum wage. And that’s for the maximum benefit. For those making smaller amounts they won’t be able to work long before they’re making less than minimum wage.

    (Our new Republican over-lord/governor actually wants people on UE to have to do this kind of crap. I’m guessing he’s going to get around minimum wage requirements by calling it “community service”. You know, the same kind of stuff the felons get to do when they’re let out on parole. Nice equivalency there.)

    Also, are you going to re-imburse them for travel time? If your make-work job is thirty miles away they will end up spending a lot on gas going to and fro. A some point they won’t be able to afford their “benefits”.

    * Obama’s stimulus package added $25 a week to bring the total to $300.

  • Icepick Link

    fasteddiez, don’t forget that a lot of those 2 million consruction workers have worked building houses. While we know they’ll be fit enough (not much is worse than roofing in Vegas or Florida in the summer) and we know they can handle tools, they still don’t have the correct skills for anything other than basic labor building roads or bridges, much less power plants or laying transmission lines.

    And I’ve thought of the Mexican angle as well. Any program targeted at out-of-work home builders is going to help more Mexican citizens than American citizens. Targetting commercial real estate and road construction would probably flip the ratios around some.

  • Icepick Link

    All of this WPA talk is worthless anyway. Unless you’re intentionally TRYING to preserve and extend the wealth gap in this country it won’t really accomplish much.

    Say we DO paint the storefronts red. When we’re done they’re still shuttered. It doesn’t actually fix anything, or make a (God help me) proactive effort. You’re just hoping that by the time the storefronts are painted the economy will have magically repaired itself and that there will be jobs for these low-skill painters. (Because after several years of doing that they won’t have any marketable skills left.) Such a program is nothing but more extend-and-pretend.

    Anything short of major infrastructure work has no hope of actually rebuilding the underlying economy. (And I doubt that such a program by itself would do so.) And those kinds of projects are the ones that we (a) can’t afford anyway and (b) don’t have the proper personnel to do.

  • michael reynolds Link

    You’re just hoping that by the time the storefronts are painted the economy will have magically repaired itself and that there will be jobs for these low-skill painters.

    No. I’m saying that 1) surviving local businesses will do a bit better in a neighborhood that looks a bit less like a scrap heap, and 2) it’ll look prettier when we smug rich assholes drive past, and 3) if politicians can point a TV camera and say, “Look how pretty!” they’ll have a better shot at getting taxpayers to keep ponying up for welfare/extended unemployment.

    I’m not saying it cures the problem of 10% unemployment. I’m saying it helps to cure the problem of getting society to help out the 10% unemployed. And we get better looking cities, parks, roadsides, etc…

  • john personna Link

    Oooh. I thought from the first description that ‘the system’ was blocking on what everyone knew was a non-native species. That boggled my mind. That, instead, environmentalists were trying to find a native species to build a case around is unsurprising.

    In both law and public relations a threatened species works for them.

    Though, rats are rarely “charismatic megafauna.”

  • rats are rarely “charismatic megafauna.”

    You haven’t seen our rats.

  • john personna Link

    I should charge for straight lines like that.

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