One of Mitt Romney’s laugh lines from last week’s Republican convention was the “advice” that college students who can’t find work should start their own businesses—but not by having the bad manners of borrowing from banks or government loans, but by “borrowing” money from their parents. This obviously is indicative of just how far removed Romney is from the reality of most Americans. Not everyone has parents are in the top one percent of wealth, like the Romney household. Nor do they have the notion of seeking investment capital from landed El Salvadoran expatriates waiting for right-wing death squads to kill-off all the impoverished trouble-makers. Of course, following Romney’s own route to wealth is beyond the means of most Americans; those who make it “big” the right way (as opposed to the Right Way) do so by actually creating useful products that people want—something that Romney did not do. And as we pointed out before, Romney’s record as governor shows that his “experience” as a “businessman” served the state of Massachusetts ill, hovering just above the bottom in GDP and job growth for all states during his term—even Mississippi experienced significantly greater recovery from the 2002 recession.
One of the charges against the Obama administration is the poor economic and jobs growth, but unlike Romney’s term as governor—when the rest of the country was experiencing five times the GDP growth rate of his state—the rest of world is doing fairly poorly or even significantly worse, which doesn’t help the U.S. economy, but should give one pause to consider the effects of Republican proposals. According to World Bank estimates, for 2012 the Euro Zone is expected to have negative GDP growth of -0.3 percent. In 2013, it is expected to have only 0.7 percent growth. On the other hand, the World Bank expects the U.S. to have an overall GDP growth rate of 2.4 percent in 2012, and slightly higher rates in 2013 and 2014. The fact is that high-income, high-cost countries are expected to have lower growth rates than low-income, low-cost countries, and the reasons should be fairly obvious; it is also why the tax and budget slashing that the Republicans propose to do will likely have a net negative effect on the economy.
The Republicans are employing the “It’s the economy, stupid” argument to propel themselves to the White House and control of Congress, although you have to wonder who are the “stupid” ones when they merely propose returning to the policies that created this mess in the first place. Back in 2008, Obama did propose to do something to kick-start job growth, mainly a mini-version of FDR’s Works Progress Administration—which employed 8.5 million people in the construction of more than 650,000 miles of roads, 125,000 public buildings, 75,000 bridges, 8,000 parks and 800 airports. Unfortunately, a disproportionate amount of the 2009 stimulus package were tax cuts for middle and lower income workers; the problem with that is that if you were on the lower-end of the wage scale, you hardly noticed it. Although public works grants in the stimulus package did create jobs, its long-term impact was stunted by its short duration and lack of funding.
And it isn’t as if infrastructure improvement could not be a bonanza in job creation today. On their website “infrastructurereportcard.org,” the American Society of Civil Engineers provided these grades for the current state of nation’s infrastructure:
Aviation D
Bridges C
Dams D
Drinking Water D-
Energy D+
Hazardous Waste D
Inland Waterways D-
Levees D-
Public Parks and Recreation C-
Rail C-
Roads D-
Schools D
Solid Waste C+
Transit D
Wastewater D-
Overall Grade: D
The ASCE estimates that it will cost $2.2 trillion dollars to upgrade the nation’s infrastructure, and no doubt this would be money well-spent—especially since the nation’s economic and civil viability ultimately depends on functional infrastructure. It all sounds like a lot of money and a lot of work—and a lot of jobs, income, consumerism, tax revenue and GDP growth. Naturally, the Republicans are opposed to any such notion, preferring that the non-job-creating rich keep their money all to themselves. This is “patriotic?” I think not.
The media, of course, pays almost no attention to this, save for the anecdotal disaster, yet the state of the nation’s infrastructure is a ticking time bomb that no one seems to notice until a water main erupts, a gas line explodes, the tap turns brown, roads crumble, and bridges collapse. But this is only a part of what falls under the category of infrastructure; it encompasses the entire edifice that supports civilization, including schools. Private industry in particular depends upon the maintenance of infrastructure, but does private industry build and pay for the infrastructure it relies on? No. It expects government to look after these “issues.”
We may look to the past to show us how government can actually function better than private industry to address the nation’s needs. The Tennessee Valley Authority, begun in the FDR administration, is an example of how government can get things right. Not only did its massive building projects create tens of thousands of new jobs that exist even today, but under federal-control the TVA has produced electric power more efficiently and at far lower rates for millions of customers than privately-owned companies. Private utility companies complain about “unfair” competition due to the lack of a profit motive in the TVA’s operations, but wouldn’t it be wonderful if the same principle could work with the health care system? People may claim the WPA and TVA was a “socialist” boondoggle, but the reality was not only did they create jobs, but did an immeasurable amount of good for nation. We need to go back to what worked, instead of “depending” on private industry and choosing to be reactive—the aftermath of Hurricane Katrina is typical of this attitude. People choose to sit on a ticking time bomb—ignorant of the fact that as in the case of health care, preventative steps are much less costly than a full-blown disorder.
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