This morning's activity was a Campaign for America's Future-sponsored speaker series about public investments that included a number of interesting folks, including Representative Keith Ellison and economist James Galbraith. Predictably enough, both speakers discussed the importance of increased investment in infrastructure to rebuilding the economy and rebuilding our country. (Here's an EPI report [PDF] talking about what that would look like.) While the numbers are large -- and getting larger -- the economic crisis makes them extremely necessary. I'll also have a post -- with graphs! -- that explains why it won't be a huge deficit problem, either.
Galbraith's keynote speech was quite good, dealing with the causes of the economic crisis and what kind of work needs to be done to fix it. Some of the ideas are familiar -- a moratorium on home foreclosures for example -- and others more novel, like lowering the medicare aid entrance age to 55, which would move health care costs of the books of corporations like GM and onto the public roll. He also suggested increasing social security benefits and state-federal revenue sharing, two approaches that have not been used since the era of that dreaded liberal, Richard Nixon.
"I have already spent somewhere in the range of $400 to $450 billion without breaking a sweat," he said at one point in the discussion, "I tell you it won't be enough. ... Suspend half the pay-roll tax. Let the government pay it for the next five years. ...This is not a time to be nervous about big numbers. Let's now look beyond this year and ask what we have to do going forward. [What is required is] Public action on a sustained as well as substantial and speedy basis."
He also raised an interesting point I hadn't heard before on the subject of Amity Shlaes and other New Deal revisionists (for an authoritative video smackdown, see here). Referencing Richard Cohen's column today, Galbraith mentioned that the problem with Shlaes research is that she deliberately does not include public employees in her unemployment figures. Which is to say, she says the New Deal failed because it didn't lower the unemployment rate, and she can say that because she doesn't count all of the people hired by the government for public works projects as employed. Galbraith observed that, "Those who got up to work on the Tri-Borough bridge for years were very much under the illusion they were employed. And it was not a bridge to nowhere."
Bad news: None of the members of congress present, nor any that I've spoken to, are optimistic about passing anything before January 20.
--Tim Fernholz
UPDATE: The inimitable Eric Rauchway writes to note he's been on the Shlaes beat for sometime, and has a more comprehensive assessment of the revisionist approach to the New Deal, including the gaming-the-numbers explanation I hadn't heard before today. Shows what I know ...
