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Today's TTR wants you to know more about arguments against the stimulus, why transit investment is a good idea, who's screwing up the manufacturing sector, and how to make the U.S. more competitive in the global market. Read on:
- The right rebukes the stimulus. The Heritage Foundation calls the package that Obama will sign today "a reckless approach to governance," adding, "Never have we seen a bill more cloaked in secrecy or more withdrawn from open public exposure and honest debate." (I wonder if they felt the same way about the PATRIOT Act, domestic wiretapping, etc.) Of all the provisions in the bill, Heritage is most riled up by the increase in welfare funding, claiming that it will undo the "successful" welfare reforms of the mid-1990s. Heritage's preferred alternative, Senator Jim DeMint's "American Option," is based solely on cutting taxes (and we've all seen how well that has worked). Meanwhile, the libertarian Cato Institute has taken out a full-page ad in many national newspapers signed by economists who reject Obama's assessment of the consensus within the discipline around the need for massive federal investment in the engines of economic growth. (However, more economists' names appear on a letter sent to congressional leaders in November, sponsored by the Center for Economic and Policy Research advocating a major stimulus package.) -- MK
- The discreet charm of transit investment. In light of the debate over the soon-to-be-signed American Recovery and Reinvestment Act, it seems appropriate to revisit some of the economic arguments for large-scale investments in public transportation. As the American Public Transportation Association -- a coalition of local transit authorities and private-sector stakeholders -- recently reported, increased funding for mass-transit projects and research will not only create over a million jobs in the next few years but will also greatly enhance the long-term sustainability and productivity of our economy. For every $10 million invested in public infrastructure, businesses are thought to see an increase of $30 million in sales. APTA estimates also show that individuals can save around $8,000 annually just by prioritizing public transportation use over personal vehicles. Beyond the immediacy of short-term stimulus, development of modern transit systems will reduce our dependency on oil while simultaneously limiting carbon emissions; U.S. public transportation saves around 37 million metric tons of CO2 annually. There are signs that the American public is warming to the concept – transit ridership in the third quarter of 2008 increased by 6.5 percent over ridership rates a year before. Greater investment and accessibility will only further that trend. -- JL
- Unions, it's not their fault. The Economic Policy Institute released a study last Friday debunking the typical explanations for America’s declining manufacturing sector. The usual story goes something like this: greedy unions are bleeding our domestic corporations dry with unreasonably inflated wages, making their employers uncompetitive in today’s globalized economy and provoking capital flight. But Josh Bivens argues that blue-collar workers are one of the few factors not dragging down the U.S. manufacturing economy. Our workers are paid less and produce more than most of our rivals, which should give us a leg up on the competition. Instead, U.S. manufacturing is being undercut by the “grossly overvalued U.S. dollar” that forces up the price of American goods overseas while keeping foreign-made goods cheap at home. Since 1999, the disproportionate value of the dollar has created a 10 to 16 percent competitive labor disadvantage for U.S. industry when compared to the previous decade. Other detrimental factors include the astronomical costs of American health care and managerial pay that is 134 percent higher than the wages of the workers they supervise. -- JB
- Healthy competition. Brookings Institute's Competitiveness Initiative released a policy paper this month containing 20 ideas for bolstering American competitiveness in the global economy, divided into four categories: infrastructure, people, ideas, and a green transformation. Its focus is on spending, particularly in infrastructure and economic security (including health and unemployment insurance), that can enhance long-term competitiveness and boost aggregate demand and job creation in the short run. It also calls for longer-term improvements in education and skills training, research and development, and effective strategies to reduce greenhouse gas emissions. -- MK
--TAP Staff
