We are now at the end of year two of the Great Recession (December 2007-2009). To those who asked me after the near meltdown in September of 2008, I guessed that the bleeding of jobs probably wouldn’t end before this December. The bleeding has been slowing in recent months with the “good news” being that fewer jobs are being lost each month than were lost the month before.
A friend in Detroit recently wrote me: “I have survived five downsizings at Chrysler, and I think I’ll be here for a while. The Obama task force did a masterful job, and the Italian guy from Fiat is doing well so far… I think we’ll be good for a while, but if the economy and car sales don’t begin to climb more substantially in the next six months to a year then things could get dicey again.” If jobs continue to be lost, those car sales aren’t going to happen.
Since a jobless recovery is virtually no recovery at all, it is hard to understand why President Barack Obama and his administration have not focused more on job growth. They don’t even need to be as creative as they were in the Recovery and Reinvestment Act of 2009. (It was probably all those incentives for 21st century green technology that was the real cause of those Republican apoplectic fits over the stimulus package.) The Obama administration could reinstate three tried and tested programs that we know will work. That’s a conservative approach, by the way.
One is Franklin Roosevelt’s most noble achievement: the Civilian Conservation Corps, which created 250,000 jobs in 1933 and rose to 2 million jobs by the time the U.S. entered WWII at the end of 1941. The CCC employed young men between the ages of 18 to 25 at $30 per month with most of the money going home to their families. Their activities included reforestation, flood control, national parks, and much more.
The National Park Service will be celebrating its 100th anniversary in 2016. What better time than now to begin eliminating the backlog of repairs and renovations that has been piling up over the years, especially since the anti-park Reagan Era. Even the pro-environment, pro-park Clinton administration couldn’t get the necessary funding from a hostile Republican Congress in the 1990’s. The largest number of unemployed is the 16 to 24 age group (18 %, Sept. 2009). An updated version of the former CCC could do wonders for jobless young men and women and for our national parks. It would be far more constructive than Obama’s plan to send 30,000 more troops to Afghanistan. And it would be a wonderful birthday gift to us and to our future generations.
The second project is a national highways and waterways infrastructure program. We’ve been waiting for it ever since Katrina hit New Orleans and the Gulf Coast and ever since that Interstate highway bridge fell in Minnesota: There are several highway projects in Obama’s original stimulus bill but not nearly enough. Probably every state has specific projects that never seem to get accomplished.
Here in South Arkansas, we know what’s needed. Highway 167 needs to be four-laned from Ruston, LA, to Little Rock. There are several stretches where no work has even begun. The projected Interstate 69 (the NAFTA Highway that will stretch from Canada to Mexico) has “future corridor” signs up, but that’s all. El Dorado, Camden, and Magnolia would greatly benefit from that highway and so would the impoverished delta region of eastern Arkansas. Highway 82 should be, at the very least, three-laned with continuously alternating passing lanes all the way from Texarkana to Greenville, MS. The time for action on all these projects is now. They will create jobs today and economic growth now and in the future.
Thirdly, we should resurrect Richard Nixon’s successful program called “revenue sharing.” Not known for caring anything about domestic issues, Nixon surprisingly recognized that the federal government was very efficient at raising money and the state governments were more efficient at spending it. The states knew best what they needed, so the federal government should share in helping them fund their important programs.
Many states are now facing crises in revenue shortfalls due to the Great Recession. As a consequence, to maintain constitutionally-mandated balanced budgets, they are laying-off teachers and other state employees. That’s the worst thing they could be doing. Unemployment begets less spending, which begets more unemployment, which begets further losses of tax revenues, which begets more government layoffs; and the downward spiral continues. Bringing back Nixon’s excellent “revenue sharing” program could prevent additional layoffs and allow the states to rehire those victimized by the crisis.
You have to remember that all of these programs were successful before the presidency of Ronald Reagan, who championed the concept that government was the problem. Reagan cut taxes on the upper income brackets thereby limiting the federal government’s ability to raise money; he cut funding for the national parks; he cut funding for highway infrastructure; and he eliminated Nixon’s “revenue sharing.” His philosophy was that states should raise taxes at the local level if they needed or wanted new programs or projects or wanted to continue old ones. The result has been a steady 30-year deterioration of the nation.
The creation of jobs through a modernized CCC, a major national infrastructure program, and a new revenue sharing program would go a long way in bringing about a lasting recovery. Government spending for paychecks is preferable to government spending for welfare checks.
The danger is that President Obama will make the same mistake that Franklin Roosevelt made in 1937. The New Deal had been so successful from 1933 through 1936 that FDR hoped the recovery would continue without the government’s deficit spending. It didn’t work, and the country slipped back into recession in 1937-38. Deficit spending went against everything that FDR had ever believed, so he was never comfortable with it. However, he should have waited until the Great Depression was clearly over to try to end it.
Mr. Obama has seemed to have the same reservation, which would be good in normal times but not now. The bailouts of the banks and the auto industries ended the panic and the probable total economic meltdown. The stimulus package has been quite helpful, even though much of it is not scheduled to kick in until 2010. Consequently, President Obama appeared to become more concerned with the deficit than with job growth – until this December. Hopefully, pressure from the Democratic Congress, recent bleak job forcasts from the Federal Reserve, and the president’s recent forum on job creation have gotten him back on track. If not, the Great Recession may still become the 2nd Great Depression. Hopefully, he will utilize these lessons of history.
by David Offutt
A version of this essay was published December 12, 2009, in the El Dorado News-Times as a letter to the editor.