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Sunday, September 05, 2010

That'll never fly here, or Why won't the Democrats meet the Republicans halfway?

Who said this? Obviously, some European socialist, like John Maynard Keynes or Karl Marx or Lenin. No patriotic American would ever extol the importance of spending on public works.

The idea of utilizing construction, particularly of public works, as a stabilizing factor in the business and employment situation has long been a plan of perfection among students of these problems. If in periods of great business activity the work of construction might be somewhat relaxed; and if in periods of business depression and slack employment those works might be expanded to provide occupation for workers otherwise idle, the result would be a stabilization and equalization which would moderate the alternations of employment and unemployment. This in turn would tend to favorable modification of the economic cycle. . . The first and easiest application of such a regulation is in connection with public works; the construction program which involves public buildings, highways, public utilities, and the like. . .

More than this, the economies possible under such a plan are apparent. When everybody wants to do the same thing at the same time, it becomes unduly expensive. Every element of costs, in every direction, tends to expand. These conditions reverse themselves in times of slack employment and subnormal activity, with the result that important economies are possible.

I am convinced that if the Government units would generally adopt such a policy, and if, having adopted it, they would give the fullest publicity to the resultant savings, the showing would have a compelling influence upon business generally. Quasi-public concerns, such as railroads and other public utilities, and the great corporations whose requirements can be quite accurately anticipated and charted, would be impressed that their interest could be served by a like procedure.

This was a speech by Calvin Frickin' Coolidge in 1927. You know, Republican Calvin Coolidge, President before Hoover? It wasn't even controversial. Economists going back to the 1600s had made the same point about public works spending when the economy is in a recession or depression. Yet since Reagan, we've moved so far to the right, to the point where any spending whatsoever by the government is deemed evil. Even Democrat Obama -- who more and more makes it look more accurate to call him an alleged Democrat -- doesn't have the guts to make a similar argument today. Too partisan. Heaven forbid.


Anonymous Anonymous said...

Obama facing a high probability of losing the Democratic majority on Congress finally put forth a paltry $50 bil fiscal policy (compared with $800 bil for the monetary oriented Stimulus Package). Fiscal policy should have been a part of the first stimulus and it should have been $200 bil. as should this proposal.
Doing either would kick GDP growth up in the 3% range and bring down unemployment to 7%. Too little, too late.

12:15 AM  

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