Yves Smith on Obama's Stimulus Plan
As someone looking for work himself, I’ve wondered about how I–at 47 years of age, and with no relevant experience–could possibly be employed on one of Obama’s infrastructure projects. I’m also very concerned about the environmental collateral damage of some of this. Not to mention the magic-like quality of how these projects are supposed to leap out of a planning stage to fruition.
Sunday, December 7, 2008
Obama’s Public Works Plan: Trickle Up Economics?
Folks, am just back from a quick turnaround trip to Vienna, which was educational and enjoyable (although I did not have the time to see a Van Gogh exhibition at the Albertina which reportedly has a large number of rarely-exhibited top quality works). Am on the verge of doing a face plant, so forgive me for being a bit terse.
Given that US infrastructure looks third-world by European standards, Obama’s plan to make it a focus of Federal stimulus/job creation spending sounds, at first blush, like a good idea. The money will be spent in areas that will improve productivity.
But will this massive rebuilding be effective as stimulus? Keynes stressed the the importance of a quick action to combat a big fall in demand. As much as Obama says he will move the program along quickly, I cannot see how large-scale hiring could take place in anything less than a year from now. Moreover, many of the newly or soon to be unemployed will not be suitable for this sort of work.