Krugman: Why not a WPA?

[Kurt_and_Hunter]

Paul Krugman
November 6, 2009, 10:44 am

Why not a WPA?

A question I’m occasionally asked at public events is, why aren’t we creating jobs with a WPA-type program? It’s a very good question.

As it is, job-creation efforts are generally indirect. Tax cuts and transfers in the hope that people will spend them; aid to state governments in the hope of averting layoffs. Even infrastructure spending is routed through private contractors.

You can make a pretty good case that just employing a lot of people directly would be a lot more cost-effective; the WPA and CCC cost surprisingly little given the number of people put to work. Think of it as the stimulus equivalent of getting the middlemen out of the student loan program.

So why aren’t we doing this? Politics, of course: government is the problem, not the solution, even when it is, you know, the solution, and cheaper than running things through the private sector.

Still, it might be worth discussing whether we shouldn’t try to include an, um, public option in stimulus, too.


http://krugman.blogs.nytimes.com/2009/11/06/why-not-a-wpa/

A DU post on a similar theme: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8736424&mesg_id=8736424

[Skink]

1. Green power Grid would be a good start.

Managed by the Government. The internet started as a means for the army to communicate. this could be seen as national security.

[salguine]

3. The utility companies would never allow it. We know who says "jump" and who says

"how high" in Washington.

[Phx_Dem]

2. What is WPA?

[HamdenRice]

5. "Works Progress Administration" -- during Franklin Roosevelt's New Deal

The federal government directly set up agencies that directly hired people and put them to work, rather than giving grants to local and state governments.

There were several reasons Roosevelt did this. For one thing, Keynesian spending to end a depression was still a new concept, and not all states were on board. In fact, many states had little governmental structures to fund, so the feds had to create it. Also, the progressives in the Roosevelt administration wanted to bypass some southern states that would not spend employment money on African Americans.

The WPA built a lot of infrastructure to put people back to work. In the cities, the WPA also hired writers and artists. For example, it hired writers at first to write tourism guides about each of the states, and many famous writers kept a roof over their heads that way, but eventually WPA also supported theater groups. Richard Wright, iirc, was a WPA writer at one point.

Artists were hired to paint murals, and many of the great murals in public spaces that date to the 30s were painted by WPA artists.

The WPA hired photographers to document the depression's effects, and the famous depression era photographs by people like Dorothea Lange (the famous image of the farm woman and her children) were WPA photos.

[Phx_Dem]

6. Great. Thank you.

[Thothmes]

14. Didn't the SCOTUS declare WPA unconstitutional?

[HamdenRice]

18. I don't think so

Forgive me for being lazy this morning and not even googling this, so this is off the top of my head. Take it with a grain of salt.

Iirc, the FDR administration initially proposed a very far reaching New Deal that was a lot more like socialism, including extensive price controls. That was struck down by Scotus.

But you have to keep in mind that Scotus was extremely conservative, and most of their rules of law would not stand today. They basically struck down almost any regulation of business. There were a few justices who railed against what Scotus did, most notably Oliver Wendell Holmes, Jr., who despite being weirdly conservative himself in some ways, did not believe it was the court's role to prevent democratically elected legislatures from doing what they decided to do. Iirc, he wrote sarcastically that the Constitution does not enact Mr. Herbert Spencer's theories (Spencer being a conservative British economist of the 1800s.)

FDR came back with a scaled back New Deal, which was also struck down. At that point, FDR stated that the size of the Scotus is decided by Congress. the 9 justices is just a matter of congressional statute, not of the constitution, and that he would expand the court and appoint modern thinking justices.

The press and right wing went crazy and FDR backed down. But the conservative justices, realizing how unpopular they were, resigned. The press catchy slogan was "a stitch in time saves nine." FDR then appointed several progressive justices.

In 1938, the court decided a routine business regulation case, Caroline Products. A clerk to one of the justices wrote a footnote, footnote 4, about when the court would examine business regulation and when it wouldn't, and what the court was interested in reviewing. It basically said that legislatures could regulate business with very little court oversight, but that legislatures could not discriminate on the basis of race, religion or national origin; could not restrict civil liberties; and could not restrict the political process through racist policies like poll taxes.

Footnote 4 became the most famous footnote in Supreme Court history and opened the way to civil rights, civil liberties and voting rights cases, while giving congress free range to regulate the economy through the New Deal.

[Dr Fate]

4. Our Blue Dog Masters would never allow something so "socialist"

And the DLC would call it "far left."

Not gonna happen.

By the time any of them even warm up to something even remotely like this, Republicans will be back in power.

[prolesunited]

7. I've long said this is the way to go

We could get something for the money put out and give people the dignity of work. The WPA program has left a lasting legacy.

[Sebastian Doyle]

8. Krugman must be listening to Mike Malloy

Mike was saying this even before the 2008 election, that a WPA type of project should be one of the first things Obama did as President. Certainly would have done a lot more for real Americans than all the money that ended up as bonuses for Goddamn Sucks billionaires.

[rug]

9. Because it would not first be filtered through the banks.

[Tippy]

10. I think it is ........ "a great idea...." n/t

[PurityOfEssence]

11. Because it's anti-corporatist!

Obama is PROUD that 90% of the stimulus money is being disbursed through private industry. It's VERY hard to believe anymore that this isn't what he prefers and is just a sop to the yahoos who want to call him a gummint-lovin' commynist. He seems to truly believe this.

Who cares that a stimulus should, by definition, be immediate? Who cares that the money should go as directly as possible to individuals who will, in turn, spend it immediately? Who cares that ridiculous amounts of money will be siphoned, drained, soaked, wicked, and gulped off by private enterprises in the process of disbursing this money? The important thing is that it SEEMS like private enterprise is NECESSARY in every single last human endeavor, and to also show that they'll be the heroes in this moment of our peril.

The way this is being done is like giving an emergency room patient a form to fill out for some adrenalin, when the best method is to administer a shot right there on the spot.

Pay unemployed engineers and software developers $1,000.00 a week to tutor seniors, kids and others on the internet and how to use personal computers. They'll stave off their own personal disaster and also SPEND the money.

That's just one of many simple, effective and immediate ways to ease us through this.

The price of individual failure is just too great; that's one of the reasons why I'm a liberal, and one of the reasons conservatives disgust me so. We're all in this together, dammit.

[Cha]

12. Something on that

order in the new century.

[TexasObserver]

13. Recommend

[Blue_Tires]

15. because middlemen businesses and contractors would be cut out

and there would be NO way they'd allow that...

still, its a great idea regardless...i used to have a book of WPA post office murals...wonderful stuff..

[babylonsister]

16. Not so fast...

http://www.tnr.com/blog/the-stash/should-government-be-creating-jobs


WPA Revisited: Should Government Create Jobs Directly?

snip//

Putting aside the standard concern about central planning, there are some unintended consequences that could come with a modern WPA. This 1990 paper by Robert Margo points out that the long-term unemployed with Depression-era WPA jobs were more likely to be unskilled, and when economic conditions picked up, were less likely to get back into the private sector:

The results indicate that employment growth had an insignificant (though negative) effect on the probability of holding a long-term job with the WPA; thus the long-term unemployed on work relief were not very responsive to improved economic conditions. Long-term unemployed not on work relief, however, were responsive to improved economic conditions -- the incidence of long-term unemployment, among persons not on work relief, was significantly lower in states with higher-than-average rates of employment growth.

So what happens if we create a new WPA, employment growth resumes, and there are large numbers of WPA-type workers who don't want to give up their jobs? What makes our era different than the Great Depression is that we (hopefully) won't have a war-driven employment boom to help encourage people to leave public works jobs. You could argue, as David Leonhardt and Noam do, that some other sort of employment boom could be coming. But for the pessimists like me, a creakier job market would mean that it'll be relatively more attractive to an unskilled worker to hold onto a WPA job than to take on riskier private-sector work. Would lawmakers then decide to terminate the program and send these workers back on unemployment? Do we transition these workers into some sort of new long-term social security program? Or do we just keep the WPA for good?

[polichick]

17. imo it's a great idea and I recall people talking about it when the first stimulus bill...

...was being written. Dems have to stop being frightened of the names the other side calls them.

We are all still enjoying WPA structures all over this country ~ it's the perfect time for green energy and infrastructure projects.

Instead, we're just extending unemployment benefits ~ spending the money anyway without giving people jobs.

[QC]

19. President Snowe would never allow such Bolshevism! n/t

[DailyGrind51]

20. Reagan's dad was a New Deal WPA worker!

"Reagan, an actor turned politician, a New Dealer turned conservative, came to films and politics from a thoroughly Middle-American background—middle class, Middle West, and small town. He was born in Tampico, Ill., Feb. 6, 1911, the second son of John Edward Reagan and Nelle Wilson Reagan; the family later moved to Dixon, Ill. His father was a shop clerk and merchant with Democratic sympathies. It was an impoverished family; young Ronald sold homemade popcorn at high school games and worked as a lifeguard to earn money for his college tuition. When his father got a New Deal WPA job, the future president became an ardent Roosevelt Democrat."

http://www.infoplease.com/ipa/A0760624.html

[Yavin4]

21. Building Quality Skill Sets Is The Key To A Successful WPA

If we had a WPA wherein folks would learn and develop new skills, then it would be worth it. IOW, we could build a WPA for technology and research, then yes, it would be worth it.

You cannot build a middle class economy around low skilled jobs.

[TexasObserver]

22. While admirable, that's not realistic, IMO.

We need a WPA program to put to work all those laborers who can't get work because construction is impinged. They are workers who can't read, or can't read well, or don't want to read well, or hate schools, or can't learn well in schools, or just like to use a hammer or a shovel in their work. They don't need changing. They need work, and that's what WPA gave them.

BOTH of my grandfathers worked for WPA in the Depression. Two families two thousand miles apart, headed by my grandparents, and having a total of 11 children in those families. Two died in the 30s from poor nuitrition and illness. But the fathers got work, because the WPA existed.

We need programs that deliver jobs now to people who need them. They don't have to be great jobs, but they do need to put workers to work.

Your idea is great for longer term, however.

[Yavin4]

23. Sorry, But No One Is Going To Pay Middle Class Wages for Low Skilled Workers

The truth of the matter is that no employer is going to pay someone a middle class wage if they cannot read and comprehend well, and once the WPA job would be over, they'd be right back in the same bad economic position as before.

In fact, most middle class paying mfg and construction jobs require reading, comprehension, and mathematical skills, esp. knowledge of statistics for sampling and quality purposes.

It may have been great for your grandparents, but the times have changed.

If you want middle class paying jobs, you have to have higher skill levels. The only way a WPA program would work is if they also upgraded the skill levels of the workers.

[TexasObserver]

24. No one suggested we are talking about middle class wages.

As I said, the problem is employment now, not restructuring society along lines you think are preferable.

WPA is exactly what we need.

We have programs to help people learn trades.

[Yavin4]

25. In That Case, I'd Rather Extend Unemployment Benefits and Give People Educational Stipends

to re-train for new jobs instead of giving them make work temp jobs which don't solve any problems. Vocational training in nursing, electronics, plumbing, etc. is far more preferable than having them plant trees.

[TexasObserver]

26. It should not be one or the other, but both.

Jobs such as WPA put people to work now. They need income, and they need work they're trained to do.

Others may want to train, and we need programs for them, too.