New Deal

The New Deal at 75: An Inspiration, Not a Blueprint

Joel Kotkin — Mon, 11 Aug 2008 01:57:40 -0400

Whatever your political perspective, Americans need to admire the New Deal for, if nothing else, its ambitious agenda. In a way unparalleled in the 20th Century, the New Deal left us a legacy of achievement – one that we can still see in big cities like San Francisco and small towns like Wishek, North Dakota.

The great genius of the New Deal lay not in ideology but in its pragmatism and practicality. People were out of work so it created jobs. The country’s infrastructure, particularly in the rural areas, was primitive, so it took on the task of modernization.

In some ways, this paralleled what was also being done under the Communists in the Soviet Union as well as under Fascists in Italy and under the National Socialists in Germany. This has led some conservatives, such as “Liberal Fascism” author Jonah Goldberg, to conflate the New Deal legacy with fascism. But this assertion is belied by the fact that we still live under a democratic and liberal political structure, one that by the 1980s had turned to oppose much of that legacy.

Yet I believe that even Ronald Reagan – himself once an avid New Dealer – would admit that the New Deal did much to expand America’s middle class. It did so not by promoting redistribution and welfarism or by moral cajoling – characteristics Mike Lind identifies with the more elite Progressives – but by practical actions that gave people the tools with which to build their own individual prosperity.

Economically speaking, it is also true that the New Deal failed to recreate prosperity (at least until the onset of the Second World War). But it cannot be denied that it literally brought light to large parts of the country – particularly the Southeast and the rural Great Plains – into the 20th Century. Among the New Deal’s great accomplishments, as Andy Sywak discusses, are its public works.A partial list of these accomplishments include:

• 22,428 road projects
• 7488 educational buildings
• Over 7000 sewer, water and other public buildings
• Employed over 3,000,000 workers earning who helped support 10,000,000 dependents
• Employed 125,000 engineers, social workers, accountants, superintendents, foremen and timekeepers scattered in every state and community

Ultimately, notes scholar Jason Scott Smith, the New Deal touched intimately the lives of more than fifty million out of a total U.S. population in 1933 of 125 million. Yet its legacy went well beyond the Roosevelt years, extending from Roosevelt and Truman all the way to Eisenhower, Kennedy, Johnson and, even to some extent, Richard Nixon.

As Sherle Schwenninger points out, The New Deal created the basis for the great, and widely shared, national prosperity of the post-war period. Through infrastructure spending, housing programs, the GI Bill and government-funded scientific research, the New Deal directly and indirectly helped make the United States the premier power on the world scene and by far its strongest economy.

America remains the preeminent country in the world, but there is a great, widely held belief that this status is slipping as other countries – China, Russia, Brazil, India – enact what amounts to their own New Deals. Our once vibrant middle class is under siege, our infrastructure is aging and even “progressives” seem more interested in promoting avant garde cultural values than in economic growth, upward mobility or maintaining technological excellence. Even in the field of conservation, a core value of the New Deal and progressive traditions, the focus is increasing less about preserving resources and open space for people, and more about how to preserve and insulate nature from the ill-effects of human carbon-based life forms.

Yet if we can be inspired by the New Deal, we can not simply repeat it. For one thing, our crisis today is less palpable and immediate, making it all but impossible to mobilize resources in the same way. At the same time, the public sector, small at the onset of New Deal, has already swollen to gargantuan size. The power of organized public employees, largely a non-factor in the 1930s and 1940s, threatens any government initiative by siphoning off too many local and federal resources due to their often extravagant demands in everything from salaries and work rules to pensions.

This can be seen in the morphing of the New Deal legacy in large cities including the greatest of all, New York. Under Mayor Fiorella La Guardia, a maverick Republican of the Theodore Roosevelt stripe, the city built new parks, playgrounds, swimming pools, roads, and sanitation systems with an almost messianic fervor. At one time, New York City was receiving one-seventh of all funds dispersed by the Works Progress Administration (WPA).

Yet La Guardia’s expanded city government, notes Cooper Union historian Fred Siegel, still operated under an efficiency-oriented progressive administration. La Guardia and his parks commissioner, Robert Moses fired political appointees and dismissed incumbents, leading some public employees to identify him with the Italian dictator Mussolini. Rejecting narrow ideology, La Guardia famously claimed: “There is no Republican or Democratic way to clean streets.”

La Guardia’s successors, in New York and elsewhere, did not stick to this moral and administrative rigor. The share government workers in New York’s workforce expanded from 10 percent in 1950 to over 17 percent in 1970s but with increasingly little accountability. If a new New Deal means a large expansion of the unionized public workforce, in New York or elsewhere, it will be largely doomed.

So as we admire the achievements of the New Deal, we also need to keep in mind the shortcomings that grew out of its success. That we need a new powerful commitment to infrastructure and economic growth is undoubted, but in pursuing this we need to make sure it does not serve primarily the public employee lobbies and the well-organized rent-seeking private interests.

New solutions, such as tapping abundant capital resources from both here and abroad, need to be tried out. And given the overconcentration of power already in Washington, and the spread of technical expertise to states and regions, a greater emphasis on locally based initiatives may work better this time around.

Yet in the end, American still requires some form of broad initiative to overcome its current doldrums. This requires the same kind of bold, innovative and pragmatic spirit characteristic of the New Deal that three quarters of a century later remains its most useful legacy.

Joel Kotkin is the Executive Editor of www.newgeography.com.

Other New Geography New Deal articles:

The New Deal & the Legacy of Public Works
New Deal Investments Created Enduring, Livable Communities
Progressives, New Dealers, and the Politics of Landscape
Public Investment, Decentralization and Other Economic Lessons from the New Deal
Emerald City Emergence: Seattle and the New Deal
Excavating The Buried Civilization of Roosevelt’s New Deall

Other New Deal sites:

New Deal Network (sponsored by the Franklin and Eleanor Roosevelt Institute)
New Deal Cultural Programs
California’s Living New Deal Project

Does a Big Country Need to do Big Things? Yes. Do We Need a Big Government to do them? No.

Roger Selbert — Wed, 09 Nov 2011 23:58:59 -0500

TV network MSNBC's left-leaning commentator Rachel Maddow has opened herself up to ridicule by the conservative blogsophere over her advert featuring the Hoover Dam. The thrust of the spot is that “we don’t do big things anymore” but that we should. But critics say the dam couldn’t be built today due to environmental opposition to exactly these kinds of projects. Indeed many in the Administration and their green allies are more likely to crusade for the destruction of current dams than for the building of new ones.

Both sides have their points.

Building the Hoover Dam was not uncontroversial, to say the least. But it has proven to be beneficial to millions of Americans (flood control, hydroelectric power, recreation, and water for homes, farms and factories). Truly, it has allowed the desert to bloom.

Public goods like dams are not excludable (their use is not limited to paying customers), so only government can provide them, right? Well, as economist Jodi Beggs points out, there is certainly a case to be made for private ownership of seemingly public goods. The questions to be asked are:

Do the benefits to society of these projects outweigh the costs?
Could private enterprise provide this good or service if the government did not undertake the project itself?
Is there a compelling reason to ensure that everyone have access to this good or service?
If so, is there a way to ensure access without wholly providing the good or service?

In support of the case for private ownership Beggs cites Dingmans Bridge, which provides a crossing of the Delaware River between Pennsylvania and New Jersey, one of the last private toll bridges in America. Ironic she should mention it, because for the past 40 years Dingmans Bridge was supposed to be deep under the water behind the Tocks Island Dam.

The Big Dam that Never Got Built

Although Tocks Island Dam was never built, 72,000 acres of land were acquired by the U.S. government, often by condemnation, including farms, homes, and businesses. Whole towns disappeared when people had to move away, including many historic roads and structures that featured prominently in the Revolutionary War. This land now constitutes the Delaware Water Gap Recreation Area, which I visited last August on my summer vacation. It was eerie, haunting, beautiful and amazingly empty on a warm summer’s day within a 90-minute drive from Manhattan (okay, maybe two hours).

Many of the condemned homes, farms and buildings still exist, abandoned. As I drove through the area I could not help but think something has gone terribly wrong here, but what? Is it a story of government incompetence or good intentions gone bad? Or perhaps a story of NIMBYism run amok to throttle progress, development and future opportunity for future generations?

The Tocks Island Dam Project had been under consideration even before the 1955 flood, which caused several deaths and immeasurable damage to the Delaware River basin. In 1965 a proposal was made to Congress for the construction of the dam. The Tocks Island National Recreation Area was to be established around the lake, which would offer recreation activities such as hunting, hiking, fishing, and boating. In addition to flood control and recreation, the dam would be used to generate hydroelectric power and to supply water to the cities of New York and Philadelphia.

There was much local opposition to the project. My sister and brother-in-law have been locals for over 40 years and I can tell you, it’s still a touchy subject. The dam was disapproved by a majority vote of the Delaware River Basin Commission in 1975. With the United States still funding the Vietnam War, financial considerations came to the fore. Also, the geology was questionable for what would have been the largest dam project east of the Mississippi River.

In 1992, the project was reviewed again and rejected with the provision that it would be revisited ten years later. In 2002, after extensive research, the Tocks Island Dam Project was officially de-authorized. But the heartache of dislocation remains.

What are the lessons of the Tocks Island Dam?

Well, if we apply Beggs’ qualifications, we find that the project’s benefits did not outweigh its social, political and economic costs. It would have been nice to know this before all that land was acquired, causing those homes, farms and businesses to be condemned and abandoned by force. Would the dam have prevented the recent damaging floods in New Jersey and Pennsylvania? No, the recent floods were off the Passaic River, not the Delaware. Have New York and Philadelphia experienced major water and/or electricity shortages in the past 40 years that the dam would have ameliorated? Not apparently.

So we are left with this: even with highest purposes, best intentions and smartest people, government tends to get things wrong. It is not just the law of unintended consequences, but the law of government efforts having the opposite effect of those intended.

What ever happened to Reinventing Government?

In 1992 the concerns over government debt, deficits and unfunded liabilities were national issues (sad, ironic and maddening, isn’t it?). So strong were these concerns that they drove a Presidential candidate, Ross Perot, to the largest vote ever received (nominally and percentage-wise) by a national third-party candidate since the Bull Moose Party of Teddy Roosevelt. After Bill Clinton won that election – largely because of the votes Perot took away from George Bush – the newly-elected President would famously say, “The era of big government is over.” Oh, would that it were so.

That same year saw the publication of a book by David Osborne and Ted Gabler, Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector. Oh, would that it were so. The most compelling concepts in that book (to me) were the privatization and contracting-out of government services – the transformation of government from the entity that provides services to the entity that makes sure needed services are provided.

What happened? The concept of reinventing government is still alive, at least on the local and state levels; David Osborne is still fighting the good fight with the Public Strategies Group, but as he writes, “Reinventing public institutions is Herculean work.” And at the federal level we have had orgies of spending, debt and deficits.

Of course, we still need to do big things: Keystone pipeline, anyone? How ironic the opposition to building big things comes from the political left, the greens. In contrast, big Labor generally supports infrastructure projects, but not universally and often with prohibitively expensive terms. One big advantage that FDR enjoyed – something rarely cited by progressives – was the lack of public employee unions.

Meanwhile, a whole generation of underemployed blue collar youth is coming up, with few prospects and little of the can-do ethic that once propelled us to do big things. The President recently bemoaned this too – citing the Hoover Dam and Golden Gate Bridge. What he does not realize is that, more times than not, big government is now more of a hindrance to, than an agent of, needed and desired change.

Dr. Roger Selbert is a trend analyst, researcher, writer and speaker. Growth Strategies is his newsletter on economic, social and demographic trends. Roger is economic analyst, North American representative and Principal for the US Consumer Demand Index, a monthly survey of American households’ buying intentions.

Dingmans Bridge photo by Charlie Anzman via Flickr.

How Liberalism Self-destructed

Joel Kotkin — Fri, 19 Nov 2010 11:20:51 -0500

Democrats are still looking for explanations for their stunning rejection in the midterms — citing everything from voting rights violations and Middle America’s racist orientation to Americans’ inability to perceive the underlying genius of President Barack Obama’s economic policy.

What they have failed to consider is the albatross of contemporary liberalism.

Liberalism once embraced the mission of fostering upward mobility and a stronger economy. But liberalism’s appeal has diminished, particularly among middle-class voters, as it has become increasingly control-oriented and economically cumbersome.

Today, according to most recent polling, no more than one in five voters call themselves liberal.

This contrasts with the far broader support for the familiar form of liberalism forged from the 1930s to the 1990s. Democratic presidents from Franklin D. Roosevelt to Bill Clinton focused largely on basic middle-class concerns — such as expanding economic opportunity, property ownership and growth.

Modern-day liberalism, however, is often ambivalent about expanding the economy — preferring a mix of redistribution with redirection along green lines. Its base of political shock troops, public-employee unions, appears only tangentially interested in the health of the overall economy.

In the short run, the diminishment of middle-of-the-road Democrats at the state and national level will probably only worsen these tendencies, leaving a rump party tied to the coastal regions, big cities and college towns. There, many voters are dependents of government, subsidized students or public employees, or wealthy creative people, college professors and business service providers.

This process — driven in large part by the liberal attachment to economically regressive policies such as cap and trade — cost the Democrats mightily throughout the American heartland. Politicians who survived the tsunami, such as Sen. Joe Manchin in West Virginia, did so by denouncing proposals in states where green policies are regarded as hostile to productive local industries that are major employers.

Populism, a traditional support of liberalism, has been undermined by a deep suspicion that President Barack Obama’s economic policy favors Wall Street investment bankers over those who work on Main Street. This allowed the GOP, a party long beholden to monied interests, to win virtually every income segment earning more than $50,000.

Obama also emphasized an urban agenda that promoted nationally directed smart growth, inefficient light rail and almost ludicrous plans for a national high-speed rail network. These proposals appealed to the new urbanist cadre but had little appeal for the vast majority of Americans who live in outer-ring neighborhoods, suburbs and small towns.

The failure of Obama-style liberalism has less to do with government activism than with how the administration defined its activism. Rather than deal with basic concerns, it appeared to endorse the notion of bringing the federal government into aspects of life — from health care to zoning — traditionally controlled at the local level.

This approach is unpopular even among “millennials,” who, with minorities, represent the best hope for the Democratic left. As the generational chroniclers Morley Winograd and Michael Hais point out, millennials favor government action — but generally at the local level, which is seen as more effective and collaborative. Top-down solutions from “experts,” Winograd and Hais write in a forthcoming book, are as offensive to millennials as the right’s penchant for dictating lifestyles.

Often eager to micromanage people’s lives, contemporary liberalism tends to obsess on the ephemeral while missing the substantial. Measures such as San Francisco’s recent ban on Happy Meals follow efforts to control the minutiae of daily life. This approach trivializes the serious things government should do to boost economic growth and opportunity.

Perhaps worst of all, the new liberals suffer from what British author Austin Williams has labeled a “poverty of ambition.” FDR offered a New Deal for the middle class, President Harry S. Truman offered a Fair Deal and President John F. Kennedy pushed us to reach the moon.

In contrast, contemporary liberals seem more concerned about controlling soda consumption and choo-chooing back to 19th-century urbanism. This poverty of ambition hurts Democrats outside the urban centers. For example, when I met with mayors from small, traditionally Democratic cities in Kentucky and asked what the stimulus had done for them, almost uniformly they said it accomplished little or nothing.

A more traditional liberal approach might have focused on improvements that could leave tangible markers of progress across the nation. The New Deal’s major infrastructure projects — ports, airports, hydroelectric systems, road networks — transformed large parts of the country, notably in the West and South, from backwaters to thriving modern economies.

When FDR commissioned projects such as the Tennessee Valley Authority, he literally brought light to darkened regions. The loyalty created by FDR and Truman built a base of support for liberalism that lasted for nearly a half-century.

Today’s liberals don’t show enthusiasm for airports or dams — or anything that may kick up some dirt. Deputy Assistant Secretary of the Interior Deanna Archuleta, for example, promised a Las Vegas audience: “You will never see another federal dam.”

Harold Ickes, FDR’s enterprising interior secretary, must be turning over in his grave.

The administration would have done well to revive programs like the New Deal Works Progress Administration and Civilian Conservation Corps. These addressed unemployment by providing jobs that also made the country stronger and more competitive. They employed more than 3 million people building thousands of roads, educational buildings and water, sewer and other infrastructure projects.

Why was this approach never seriously proposed for this economic crisis? Green resistance to turning dirt may have been part of it. But undoubtedly more critical was opposition from public- sector unions, which seem to fear any program that threatens their economic privileges.

In retrospect, it’s easy to see why many great liberals — like FDR and New York City Mayor Fiorello LaGuardia — detested the idea of public-sector unions.

Of course, green, public-sector-dominated politics can work — as it has in fiscally challenged blue havens such as California and New York. But then, a net 3 million more people — many from the middle class — have left these two states in the past 10 years.

If this defines success, you have to wonder what constitutes failure.

This article originally appeared in Politico.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University and an adjunct fellow with the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Photo: Tony the Misfit

Anger Could Make Us Stronger

Joel Kotkin — Sat, 21 Mar 2009 21:04:10 -0400

The notion of a populist outburst raises an archaic vision of soot-covered industrial workers waving placards. Yet populism is far from dead, and represents a force that could shape our political future in unpredictable ways.

People have reasons to be mad, from declining real incomes to mythic levels of greed and excess among the financial elite. Confidence in political and economic institutions remains at low levels, as does belief in the future.

The critical issue facing the new administration is finding useful ways to channel this disenchantment. We know popular anger can also be channeled in unproductive ways. It can serve to further a narrow political agenda – for example, Karl Rove's cynical exploitation of the "culture wars" – or stir up a witch hunt against both real and perceived "threats," as occurred during the McCarthy era. If this were Russia, there would be show trials and executions. We do not and should not do that – but we can still use populist anger to reshape our nation and make it stronger.

In this respect, the Obama administration, criticized justifiably as too radical on some issues, has been far too timid. It has squandered much of the stimulus effort on maintaining fundamentally corrupt, even sociopathic, institutions like AIG or Citigroup. By taking direction from establishmentarians like Treasury Secretary Timothy Geithner, one of the original architects of the Bush financial bailouts, the current administration has seemed as complicit in condoning and even rewarding Wall Street's transgressions as the last one.

Populist rage creates the political support for taking far bolder steps against Wall Street. A good first step would be to allow the TARP-backed giant banks to come under some sort of federal control, or bankruptcy process, effectively wiping out the holdings of the financial malefactors and decimating any hopes for future bonuses. The public could then sell the remaining assets to the many well-run community and regional banks that invest in local businesses as opposed to the arcane paper favored by the Masters of the Universe.

Radical financial reforms represent only part of the opportunity. China is using its stimulus to increase its competitiveness globally. So far, the Obama administration's economic strategy, if it has one, has been selling the public on the chimera that highly subsidized "green jobs" and good intentions will save the economy. It has also rewarded what my old teacher Michael Harrington called "the social-industrial complex," the massively growing education, health and social-service bureaucracy. President Obama needs to spend less time in photo ops at "green" factories and figure out how to drive the transformation of whole industries, like autos, steel, electronics and aerospace.

In this sense, of course, the New Deal – particularly the Works Progress Administration and the Civilian Conservation Corps – provides some models. These programs used the unemployed to create new dams, electrical-transmission systems and bridges that boosted the nation's productive power. Critically, such a program would target blue-collar workers – mostly male and heavily minority – hardest hit in the recession. As conservatives rightly note, the New Deal construction projects did not end the Depression, but they did give people purpose and skills as well as hope, while leaving us with a remarkable legacy of productive structures that inspire us with their affirmation of our national destiny.

Sadly, the political operatives running the White House today may prefer to use the popular mood primarily to service their key political constituencies and boost their poll ratings. If they do so, they will have squandered a unique opportunity to implement changes that would benefit both the country and the middle class for decades to come. Public outrage is a terrible thing to waste.

This article originally appeared at Newsweek.

Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

Obama's Other History

Jerry Sullivan — Sat, 31 Jan 2009 01:47:08 -0500

The coverage of President Barack Obama’s first days in office has been intense, to say the least. Yet it has still managed to overlook an historical comparison that is worthy of our consideration.

Obama took office just a few months after a stock market crash that left no doubt about the rugged shape of our economy. The ensuing decline has been swift and scary, leading some to talk about a possible fall into an outright depression.

Now consider Herbert Hoover, the president who took office just a few months before a stock market crash that signaled the Great Depression in 1929. Hoover remains a figure of historical disfavor to this day because of what he did -- and particularly what he didn’t do -- after the crash. He served nearly four years in the Oval Office as the Great Depression raged, continuing to view government’s role in the economy as largely limited. He offered no enormous economic stimulus plans or social programs. Clusters of tent cities occupied by the dispossessed of our land became known as “Hoovervilles.”

Then came Franklin Roosevelt, who immediately put enormous economic stimulus plans into action and launched a whole host of social programs.

Timing can be everything -- in politics, economic matters, and life in general.

Our timing might be just right with Obama because our economy’s nose-dive came just a month or so before the presidential election. Obama came to the job at a moment when he has a chance to move on our problems before they settle in to another Great Depression. What if Roosevelt had gotten a shot a few months after the stock market crash in 1929 instead of nearly four years into the mess?

Here’s another historical comparison worth noting: Hoover won election as a Republican in 1928 in part because of widespread prejudice against Roman Catholics, a sentiment that worked against New York Governor Al Smith, who ran as the Democratic nominee in the race.

There’s true irony in this piece of history, because Smith had recognized the shaky nature of the economy well before the crash that signaled the start of the Great Depression. The actions he took in New York during the 1920s could be viewed as a state version of what would become Roosevelt’s famous New Deal package of economic stimulus and social programs.

Bigotry ravaged Smith’s campaign, though. He might not have won in any case, but the anti-Catholic emotions that took wing in large parts of the populace, media and other parts of the power structure left him without a fighting chance.

Smith’s loss spelled a wait of nearly four years before the federal government became fully engaged in putting its might against the Great Depression. It was just a few months ago that Americans could have again allowed prejudice -- this time against African/Americans -- to override a presidential campaign. That might have led to another slow response to an economic crisis. It’s not a perfect comparison to match recent Republican nominee John McCain to Hoover, but the Arizona Senator has long favored smaller government, which is nowhere near what we saw from Roosevelt or are seeing from Obama.

Now here’s the hard part of this history lesson: There’s still plenty of debate among scholars and economists on whether Roosevelt’s massive government programs worked. The New Deal brought immediate relief to millions in dire straits, an invaluable record in its own right. But there is data to indicate that the programs ultimately failed to put the economy back on track. Indeed, the Great Depression didn’t really end until World War II led factories and farms to crank up production. Some would argue that the New Deal amounted to short-term fixes that did more harm than good over the long haul.

That leaves us to wonder whether the current plans to spend $700 billion to bail out banks and automakers -- and hundreds of billions more on roads and bridges -- will bring improvements that make such outlays worthwhile.

The effort will be made sooner rather than later, though, and that’s because Americans didn’t hold a fellow back from the highest office in the land based on prejudice this time around.

That’s real progress -- even if it’s the only progress we can claim for certain as we fight through our tough economy.

Jerry Sullivan is the Editor & Publisher of the Los Angeles Garment & Citizen, a weekly community newspaper that covers Downtown Los Angeles and surrounding districts (www.garmentandcitizen.com)

Corporate Sponsorship of the Golden Gate, the Ultimate Sign of Failed Infrastructure

Adam Mayer — Mon, 12 Jan 2009 00:00:57 -0500

The most anticipated tourist attraction in the city where I live, The Golden Gate Bridge, is a testament to the lasting utility of a well executed infrastructure project. The world’s most famous suspension bridge still serves as the critical artery connecting San Francisco to the bedroom communities of Marin County to the north, where much of the city’s workforce resides. Remarkably, this marvel of engineering was completed in the late 1930s – a time when the U.S. was coming out of the Great Depression.

The New Deal brought about an expansion of infrastructure that should inspire us. Yet nearly 70 years after its completion, the sobering reality remains: it’s difficult to imagine a project of that moxie being constructed today.

One indicator of the distance between then and now can be seen in the story of Doyle Drive – the one-and-half mile southern approach to the Bridge. In 1993, USA Today reported that the elevated portion of Doyle Drive is the 5th most dangerous bridge in America. After years of EIR studies and bickering amongst a myriad of stakeholders and governmental agencies, San Francisco voters in 2003 finally passed Proposition K, a sales tax increase ensuring the city’s funding for an upgrade of Doyle Drive.

Sales tax revenue generated from Proposition K is slated to cover only $67.9 million of the $1.045 billion estimated cost of the project. State and Federal funding has also been committed for the project, yet there is still $414 million of cost yet to be accounted for. Along with hopes of securing additional funding from the Fed, The Golden Gate Bridge District is responsible for providing $75 million for the Doyle Drive retrofit. To meet the cost of this and other projects, such as the addition of a suicide-prevention net, the Bridge District is seriously considering soliciting corporate sponsorship of the world-famous span.

The appalling fact that corporate sponsorship is on the table for one of the most iconic pieces of infrastructure in the modern world confirms the failure of the public sector in regards to maintaining an aging infrastructure. For the past few years, politicians at all levels of the government seeking office have beaten the drum of tax reductions in order to secure votes, only to find themselves with budget crises on their hands once elected. With city and state budgets strapped, local politicians often look to the federal government in order to help pay for repairing roads and other basic services, not to mention the huge pensions of public employees.

The other place local governments look for money to balance the budget is from the private sector. In many cities across America, elected officials have responded to these kinds of crises by partnering up with private enterprise to generate jobs and sales tax revenue by developing ‘convention and retail districts’. Oftentimes these developments will also include hotels, luxury condominiums and even sporting or arts venues. Even before the recent economic downturn, many of these developments were representing white elephants, sitting empty while the issues of sustained job creation and infrastructure repair remain unresolved.

Examples of infrastructure from the past, such as the ruins of Roman Aqueducts on the Iberian Peninsula and the dams of the ancient city of Petra in Jordan, remind us of the great lengths societies will go through in order to function more efficiently. Although today the concept of infrastructure is primarily associated with industrial economies and modernization in the developing world, the truth is that ever since the earliest agrarian communities humans have been building physical systems that harness the powerful forces of nature and make life more convenient.

Years from now, the built environment of America will provide one of the primary measurements for historians seeking to quantify 20th Century achievements. Today the vast networks of roads, bridges, ports, airports, power plants and water lines built in the U.S. over the past 150 years remains the standard for nations undergoing industrialization. Yet while other countries are busy catching up to the American paradigm, the U.S. system is falling behind. Entropy is setting in, and repeated policy failures prevent retrofitting and repair to take place at a mass scale.

With all the current hubris surrounding the “New New Deal” proposed by the incoming Obama administration, discussion about the fundamental role of infrastructure seems to be missing from the conversation. Primary focus about the infrastructure package remains on rapid job creation rather than long term economic health. New Orleans remains a grim reminder of how infrastructural failure can destroy an economy for good, and misplaced investments in convention centers and other ephemera have limited impact.

There has also been much press about a ‘green revolution’. While looking for cleaner alternatives to powering our society is an important issue, there is almost no acknowledgment that the most sustainable approach lies in fixing and updating what is already in place. Already, speculators are foaming at the mouth at what will end up probably being the next bubble – clean tech.

In the coming days, it will be critical that careful attention be paid to a basic approach to ensure that stimulus money is not squandered on pork. As state and local governments – as well as big business and special interests – vie for handouts from Papa Fed, the United States government must seek ways to allocate funds for maximum investment in future generations.

This is not to say such investments should not be bold and even beautiful. I know it’s possible every time I look at, or cross, the Golden Gate.

Adam Nathaniel Mayer is a native of the San Francisco Bay Area. Raised in the town of Los Gatos, on the edge of Silicon Valley, Adam developed a keen interest in the importance of place within the framework of a highly globalized economy. He currently lives in San Francisco where he works in the architecture profession.

Will we be over-stimulated?

Samuel R. Staley — Fri, 14 Nov 2008 01:49:16 -0500

Stimulus fever is in the air, and with the election of Sen. Barack Obama to become the 44th US president, it’s now reaching a fever pitch. US automakers have already made the rounds on Washington DC, meeting with Congressional leadership to generate political support for another $25 billion in government subsidy to avoid bankruptcy. Now, congressional leaders and some economists are clamoring for $150 billion to $300 billion in additional stimulus to goose the national economy – all this on top of the $700 billion financial services “rescue package” passed in October.

Harking back to the days of the Great Depression, many policymakers see transportation spending in roads, highways, and transit as an effective job creation program. Indeed, the American Association of State Highway and Transportation Officials has identified 3,109 “ready to go projects” worth $18.4 billion that could, in theory, produce 644,000 jobs.

That’s more than double the number of jobs that disappeared in October according to the U.S. Department of Labor. Unemployment edged up to 6.5% in October as the economy shed 240,000 jobs. The number of employed has fallen by 1.2 million workers since the beginning of the year. Meanwhile, wages for those with jobs increased an average of 3.5% over the last year, significantly lagging inflation (for urban consumers) of 5.3% during the same period. More than half of that fall occurred in September, October, and November.

These numbers embolden economists and pundits alike. Paul Krugman, writing in the New York Times, advises President-elect Obama to be bold and audacious in his fiscal stimulus:

“My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little. In short, Mr. Obama’s chances of leading a new New Deal depend largely on whether his short-run economic plans are sufficiently bold. Progressives can only hope that he has the necessary audacity.”

Krugman’s observation is an extraordinary statement because little evidence exists that this kind of discretionary fiscal policy has a meaningful impact on the economy. Alan Aurbach, one of the nation’s leading macroeconomic policy experts and an economist at the University of California at Berkeley, examined fiscal policy during the 1980s, 1990s and early part of 2000s and concluded:

“There is little evidence that discretionary fiscal policy has played an important stabilization role during recent decades, both because of the potential weakness of its effects and because some of its effects (with respect to investment) have been poorly timed.”

Where fiscal policy has been effective it’s been through “automatic stabilizers”– programs such as social security and unemployment insurance that maintain income levels regardless of current economic conditions. Of course, these programs are not discretionary—they are ongoing programs resistant to manipulation by politicians responding to the immediate political climate.

In short, a blanket infusion of cash through a one-time (or two or three) Congressional stimulus package(s) focused on transportation is not likely to be effective. This is true for a number of reasons. The key should not be how many miles of concrete we pour, or even how many jobs we create. Instead the focus should be on how much the investment creates a more productive and globally competitive American economy.

It’s true transportation spending will ramp up construction jobs, but these are temporary ones that provide little stimulus to the advanced service, information technology, and manufacturing jobs that are critical to the long-term growth of the US economy. In addition, construction jobs tend to be seasonal, hardly the type of job creation that builds long-term economic expansion.

More substantively, the transportation needs of a globally competitive, service-based economy differ fundamentally from those of the industrial economy that benefited so much from federal highway largess in the 20th century.

In the 1950s, transportation investment was rather straightforward. Mobility was relatively low and restricted. Most households owned a car, but usually just one. Most households lived close to where they worked and walked to meet their daily needs. Typically, the wife stayed home, dropping the husband off at the train or bus station to take mass transit into work, picking him up at the end of the day. Many families could afford to allow one spouse to stay at home.

A national transportation infrastructure program was relatively easy to identify during this period (even if it was politically controversial): connect major urban cities to create a unified economy, keep freight moving, and ensure workers could get to their places of employment. An Interstate Highway System linking the Central Business Districts of major cities, complete with beltways to shuttle employees and through traffic around these centers, created a highly efficient hub-and-spoke highway network.

Today’s travel environment is far more complex, and doesn’t lend itself to the hub-and-spoke system. Current travel patterns point to a transportation network that should focus on improving point-to-point travel in a dynamic economy, more of a spiderweb than a hub-and-spoke network, as Adrian Moore and I point out in our new book Mobility First: A New Vision for Transportation in a Globally Competitive Twenty-first Century.

In an era of customized travel, massive infusions of funding into a transportation network designed for the industrial era won’t be effective. Moreover, the legislative process is likely to be far less efficient at allocating transportation funds in a meaningful way without a system that allows travelers and highway users to determine what projects get the highest priority. What politicians or even federal planners think is important may not be to travelers. Only by adopting the latest and newest technology to gauge user willingness to pay, most usefully through electronic tolling, can the right projects be put in the right place at the right time while also ensuring a sustainable funding stream for the road network.

Perhaps not surprisingly, economists Clifford Winston and Chad Shirley, writing in the Journal of Urban Economics, estimate that the return on investment to highway spending has fallen from 15% in the 1960s and 1970s to less than 5% in the 1980s and 1990s. They suggest one reason for the decline in productivity impacts has do with the fact that the highway system is already built out. Another reason is that federal transportation policy often targets unproductive investments – such as “Bridges to Nowhere” – rather than high-priority items, reducing transportation spending’s effectiveness at boosting overall economic growth.

All this suggests that blanket spending on transportation projects may not have substantive long-run impacts on the economy. In fact, it could work against job creation and productivity if the added spending reinforced a transportation network that is already poorly suited to the needs of a modern, 21st century services-based economy.

Douglas Elmendorf and Jason Furman, writing for the Brookings Institution, report that infrastructure spending has a lackluster record for boosting short-term economic growth. The focus should be elsewhere. For example, we should look more to the longer-term impacts of investments that actually increase productivity and competitiveness.

Infrastructure should be seen, then, as a way to boost the speed of information and movement of goods, not as a quickie jobs program. Congressional leaders and urban planners should keep these cautionary points in mind as they ponder the need and efficacy of yet another stimulus package.

Samuel R. Staley, Ph.D. is director of urban policy at Reason Foundation (www.reason.org) and co-author of Mobility First: A New Vision for Transportation in a Globally Competitive Twenty-first Century (Rowman & Littlefield, 2008).

Excavating The Buried Civilization of Roosevelt’s New Deal

Gray Brechin — Wed, 13 Aug 2008 01:20:15 -0400

A bridge crashes into the Mississippi at rush hour. Cheesy levees go down in New Orleans and few come to help or rebuild. States must rely on gambling for revenue to run essential public services yet fall farther into the pit of structural deficits. Clearly we have gone a long way from the legacy of the New Deal.

The forces responsible for this dismantling are what Thomas Frank calls “The Wrecking Crew,” the ideological (and sometimes genealogical) descendants of those who have waged war against Franklin Roosevelt’s New Deal since its birth 75 years ago. Few today articulate any vision of what Americans can achieve together because “the public” is the chief and intended casualty in that long war.

Those whom the mass media routinely refer to as conservatives better know themselves as counterrevolutionaries against what FDR wrought. Ronald Reagan proclaimed that government is the problem as he made it so. Almost two generations after President Roosevelt’s death, President Reagan and his conservative surrogates depended upon the amnesia of those who know little about what the New Deal did and what it still does for them to undo parts of its legacy.

I was not much more enlightened when I began what became the California Living New Deal Project four years ago. I thought that — with a generous seed grant from the Columbia Foundation — photographer Robert Dawson and I could document the physical legacy of the New Deal in California. Since the New Deal agencies were all about centralization, I thought, I would find their records neatly filed back in Washington at the National Archives and Library of Congress. I was wrong on all counts.

I discovered, instead, a strange civilization buried beneath strata of forgetfulness, neglect, and even malice seventy-five years deep. Aborted by the Second World War FDR’s sudden death, then covered with the congealed lava of the McCarthy reaction, the half dozen or so agencies that had created the physical and cultural infrastructure from which grew America’s post-war prosperity left few accessible records of their collective accomplishments. So many-pronged and multitudinous was the Roosevelt administration’s onslaught upon the Depression that even FDR’s Secretary of the Interior and head of the Public Works Agency (PWA), “Honest Harry” Ickes, admitted that he could not keep track of it all.

With the help of hundreds of photographs scanned at the National Archives and other collections, journal articles of the period, historical surveys, mimeographed WPA reports, as well as local historians and other informants, an indispensable matrix of public works was revealed to me. Most of our urban airports and rural airstrips, it now appears, began as projects of the WPA and CCC (Civilian Conservation Corps), while California’s many community colleges are similarly New Deal creations. (Between two illustrated talks I recently gave to large audiences at Santa Rosa Community College, Professor Marty Bennett led the first New Deal tour of a campus almost entirely built by Ickes’ PWA.) Committed to public education in all of its manifestations, the WPA and PWA built and expanded literally hundreds of schools throughout the state to replace older buildings that were seismically unsafe, inadequate, or nonexistent. Most are still in use.

The availability of plentiful and cheap labor as well as PWA grants and loans made the Bay Area one of the most desirable regions in the country by giving it a vast network of public parks and recreational areas. A WPA report on that agency’s accomplishments in San Francisco noted that WPA workers had improved virtually every park in the city: that now appears to be true of most older towns in California where federally employed workers left a legacy of handsome stonework, public stadia, tennis courts, golf courses, swimming pools, baseball diamonds, and restrooms but few markers. Other federal employees built a network of all-weather farm-to-market roads enabling growers to get fresh produce to towns and tourists to visit every corner of the state. Still others completed and expanded public water supplies and electrical distribution systems as well as sewage treatment plants that, for the first time, insured the majority of Americans safe and plentiful drinking water.

As the scale and extent of that often forgotten civilization grew ever larger, cataloging and mapping it fast outpaced my organizational and technical skills. With the joint sponsorship of the California Historical Society, the California Studies Center, and the Institute for Research on Labor and Employment (IRLE) at UC Berkeley, the California Living New Deal Project morphed into an unprecedented collaborative effort to use informants throughout the State to inventory and map what New Deal agencies achieved and to suggest what might have been. In particular, I am grateful to the IRLE Library whose staff maintains and continually expands the CLNDP website with input from research assistants and informants.

The Roosevelt Administration and those it brought to Washington envisioned a collectively built America whose immense productive capacities could benefit all. A profusion of splendid public spaces such as Mount Tamalpais State Park’s Mountain Theater and the Santa Barbara Bowl would, they believed, make citizens and community of a polyglot populace. Together with a plethora of well-built public schools, libraries, post offices, parks, water systems, bridges, airports, hospitals, harbors, city halls, county courthouses, zoos, art works and more, New Deal initiatives spread the wealth and enriched the lives of uncounted Americans.

In his last State of the Union address, FDR’s firm and confident voice enunciated the need for a second bill of economic rights that would ensure everyone a modicum of freedom, a freedom that his country promised but so often failed to deliver. If extended worldwide, Roosevelt suggested, that Bill of Rights could short-circuit future wars such as the one still raging as he spoke. “Necessitous men are not free men,” he told the nation, a condition afflicting the vast majority of people today.

Gray Brechin is a Visiting Scholar at the U.C. Berkeley Department of Geography and the Project Scholar of the California Living New Deal Project. He is the author of "Imperial San Francisco: Urban Power, Earthly Ruin" and, with photographer Robert Dawson, "Farewell Promised Land: Waking from the California Dream."

Emerald City Emergence: Seattle and the New Deal

Richard Morrill — Wed, 13 Aug 2008 01:10:13 -0400

Seattle voters, if not the city’s newspapers, were strong supporters of Franklin Roosevelt and the New Deal in the 1930s and 1940s. As in many parts of the country, New Deal programs had a profound effect on Seattle and Washington state.

Seattle was a city dependent on industry and trade, and was hard hit by the Great Depression. The most famous and highly visible manifestation was the creation of a large shantytown worker settlement called Hooverville, spurred by the Unemployed Citizen’s League located on city land just south of downtown (where giant football and baseball stadiums are now!). The city burned it down after a week, the workers rebuilt it, the city burned it down again, and it was again rebuilt, this time with tin roofs. It was occupied until the end of the Depression. Its first mayor was a Jesse Jackson, who served as liaison to City Hall. A special census of 1934 counted 632 residents in 490 dwellings.

Even before then, Seattle and the state of Washington were already infamous for their radicalism, having spawned the only general strike in the nation’s history (1919), and the Centralia and Everett massacres, (1916, 1919) in which company goons fought with IWW (International Workers of the World) workers. Seattle also had an early history of public ownership, notably municipal power starting in 1902.

Not surprisingly, then, the prospect of federal-sponsored programs, jobs and some constraints placed against the perceived excesses of Big Capital was highly appealing and resulted in huge victories for Roosevelt and the Democrats in 1932, 1936 and 1940. In 1916, Anna Louise Strong, a communist, was elected to the Seattle School Board. Indeed, James Farley famously referred to “the 47 states and the soviet of Washington.” Seattle and Washington’s most successful and powerful political leader, Warren Magnuson, began his congressional career in 1936 from Seattle’s first district, and remained an unreconstructed New Dealer until his retirement from the Senate in 1981.

Another powerful figure was Dave Beck, who took over the local Teamster’s Union in 1936. Beck played a critical role in forging a less confrontational relation to capital than the more radical Harry Bridges of the Longshoremen.

Within the City of Seattle and suburbs, the WPA left an enduring legacy: bridges and retaining walls and drainage systems, parks and playgrounds, roads and trails, sewers, recreational facilities and programs, sewing for the needy, airports, streetcars, low income housing, and programs for musicians, artists and writers. For example the Federal Artist Project employed the well-known artists Kenneth Callahan and Morris Graves.

New Deal activities across the rest of the state were even wider and larger in scope. The greatest New Deal project by far was the Bonneville Power Administration, the Bureau of Reclamation’s construction of dams along the Columbia, culminating in the giant Grand Coulee Dam that drove the development of the Columbia Basin irrigation project, the nation’s largest. Seattle City Light’s J.D. Ross became the first director of Bonneville Power.

The WPA and the CCC (Civilian Conservation Corps – also known as the “forest army”) also completed hundreds of less spectacular but amazingly successful and lasting projects in the national forests and parks, and communities across the state. Perhaps most amazing was the government’s direct sponsorship of several rural utopian communities.

Today, although the real liberal voices of the New Deal era are now gone, the Seattle region remains somewhat “left” by national standards. But its radical, egalitarian soul has been largely lost. In 1975 Seattle was one of the nation’s most egalitarian cities, a legacy of the New Deal and its powerful, well-paid blue collar economy. Today it is now one of the most unequal!

Of course, this does not stop the local establishment and media from viewing itself as “progressive.” In 2008, there are no Republicans on the Seattle City Council, and no Republican from any Seattle district and few that hail from suburban districts in the Washington state legislature.

But the meaning of “progressive” today is utterly foreign to what it connoted in New Deal days. The metropolis is very highly planned, under the Growth Management Act, but the goals and policies are entirely by and for the affluent professional class: subsidies of opera houses, stadiums, replacement of public housing by “integrated developments” with high shares of market rate units. There’s an unfortunate concentration of transportation investment in astoundingly expensive rail transit, which would mainly serve affluent commuters to downtown Seattle and a density-oriented strategy to replace single family homes, many smaller homes from the ‘20s and ‘30s, with miles of family-unfriendly apartment towers. It all boils down to encouragement of drastic gentrification, with wide displacement of the poor and minorities to suburbs south of the city, and tight urban growth boundaries, resulting in severe housing price inflation, while preserving “open space” for 20 acre suburban estates! And, I believe, the most regressive tax structure of all 50 states.

One has to wonder what the New Dealers back in the 1930s and 1940s would think of our proudly “progressive” Seattle politics today. Likely not much.

Richard Morrill is Professor Emeritus of Geography and Environmental Studies, University of Washington. His research interests include: political geography (voting behavior, redistricting, local governance), population/demography/settlement/migration, urban geography and planning, urban transportation (i.e., old fashioned generalist).

The photo is of a retaining wall built by the WPA at the Cascade School in Seattle. Courtesy of the Seattle Municipal Archives Photograph Collection.

Public Investment, Decentralization and Other Economic Lessons from the New Deal

Sherle Schwenninger — Tue, 12 Aug 2008 03:35:46 -0400

The first lesson to be learned from this earlier era is that a large middle class requires an economy that generates a broad base of jobs paying middle-class wages. The New Dealers were not opposed to "rigging" the labor and financial markets to achieve this result. New Deal progressives believed the economy should exist to serve society, not the other way around, and that the government has a duty to shape the economy to meet middle-class aspirations. A high-wage, middle-class society would, in turn, be good for the economy: living wages would not only ensure adequate demand for the economy but in so doing would spur new investment and productivity growth, creating a virtuous circle of rising living standards.

The belief of New Deal progressives in an economy that could create good middle-class jobs stemmed in part from their resistance to large social welfare subsidies to individuals, on the grounds that this would encourage an unhealthy dependence on the state. Moreover, even though they favored progressive taxation, New Dealers were skeptical of a society dependent upon the permanent redistribution of income. The principal goal of many New Deal programs was not to relieve the conditions of poverty -although they often did so - but to build physical and human capital that would allow people to escape permanently from poverty.

Thus New Dealers emphasized government programs that expanded education, spread property ownership, invested in America's common physical and knowledge capital, and seeded the industries of the future. It was not perfect, in large part because it preceded the civil rights revolution and thus left out millions of African-Americans, but it did build the largest and most secure middle class America has ever known.

Today we see the consequences of a much different way of thinking about the economy and society. Over the past two decades we have been told that globalization is an immutable force and that we must bend to its demands, embracing the agenda of free trade, financial deregulation and less progressive taxation. The best we can do, we're told, is to let globalization run its course and compensate the losers, even though no amount of new social welfare measures could compensate for the loss of millions of good-paying manufacturing jobs. Thus, without any real debate, America's political elites have chosen for us a highly stratified, low-wage society with great costs to our middle-class way of life and to our productive economy.

The second New Deal principle is about achieving a high-wage economy and at the same time more widely distributing the capital and skills for wealth creation. The principal policy tool the earlier generation used was massive public investment and public building. The public investment programs they pursued not only created many new middle-class jobs but also laid the foundation for a more productive economy, which led to even more middle-class jobs.

Agencies like the Tennessee Valley Authority in the 1930s and '40s were followed by even more extensive public investment initiatives in the postwar years. From 1950 to 1970, the government spent more than three percent of GDP on public infrastructure alone. It built everything from highways to schools, power systems to parks.

Throughout the New Deal era, public investment was America's way of enacting industrial policy. It was understood that public investment paid for itself many times over. The GI Bill alone generated returns of up to $7 for every dollar invested. And because it generated returns to the economy and society, New Dealers in the postwar period were not afraid to raise taxes or to borrow in order to ensure adequate levels of public investment. And borrow they did, even though the national debt was a much larger percentage of GDP than it is now.

For the past few decades, however, we have made a very different choice. As concerns over the budget deficit have grown, and as tax-cutting mania has taken hold, we have cut back on public investment. Since 1980 we have devoted less than 2 percent of GDP to public infrastructure and have allowed federal spending on basic research and development to decline as a percentage of GDP as well. As a result, a backlog of public investment needs – clogged roads and ports, collapsing bridges and levees, uneven broadband access, an antiquated air traffic system, an undersized energy infrastructure - has begun to cut into our economic growth and undermine our efficiency.

A third principle of middle-class America that the New Deal offers us relates to the concentration of power and capital. Earlier progressive reformers distrusted such concentrations. Not only did they threaten democracy, they also warped the economy and distorted consumption and investment. Government therefore must be a strong countervailing force to big business and oligarchic power, and must be organized so that it cannot be captured by one economic group at the expense of another or the general public.

The New Dealers were particularly concerned about the power of Wall Street and the financial community. They feared a national credit system that was dependent on Wall Street bankers, whose interests were not always aligned with the needs of homeowners, farmers and small and medium-sized producers. They therefore sought to democratize capital by creating myriad credit institutions that would ensure that all regions and sectors of the economy had access to capital. They created a variety of federally subsidized credit programs to enable people to construct homes and start businesses and to allow states and municipalities to build schools and modernize infrastructure. It was here that the New Deal was most creative – combining a strong federal state with the local and regional decentralization of capital and the local and regional control of these programs and institutions.

As with other first principles of a middle-class America, we have seen a reversal of priorities over the past few decades, as big financial institutions have again asserted their influence over the economy and economic policy. The new power of Wall Street has been evident in its successful push for financial liberalization and deregulation, in the emphasis accorded the deficit and concerns about inflation as opposed to full employment, and until recently in Washington's preference for a strong dollar, which favors financiers over real producers. This triumph of Wall Street over Main Street has been responsible in part for the hollowing out of the tradable-goods sector and for the asset bubbles and predatory lending that have wreaked havoc on the economy. Indeed, one of the first things the New Deal would have us do is re-regulate the financial system and put the interests of the productive economy over those of Wall Street.

In all these respects, whether it be high wages, public investment or the decentralization of financial power, the New Deal succeeded because it changed the way the economy worked. And it did so by marrying progressive reforms with Americans' preference for independence, whether from government subsidy or big-business paternalism. This is the enduring lesson of the New Deal.

Sherle Schwenninger directs the New America Foundation's Economic Growth Program and the Global Middle Class Initiative. He is also the former director of the Bernard L. Schwartz Fellows Program.