President-Elect Barack Obama announced Saturday that he plans to revive the economy and create jobs by upgrading roads, schools and energy efficiency in the greatest public-works initiative since the interstate highway system in the 1950s.
His announcement was in response to news of more than a half-million American job losses last month. He reportedly offered no price estimate. As the Associated Press observed, “The president-elect’s address never once used the word ‘spend,’ relying instead on ‘invest’ or ‘investments,’ and pledging wise stewardship of taxpayer money in upgrading roads and schools, and making public buildings more energy-efficient."
Hmm. “Invest” in government spending… Echoes of Bill Clinton? Absolutely. One of Clinton’s first acts in 1993 was to push a package of public works money through a Congress controlled by his own party. Sounds familiar indeed. The current thinking by transportation policy advocates is to convince the government to put up about $65 billion to jumpstart mostly highway projects.
Part of me wants to say “great!” We have plenty of highway projects that are overdue and underfunded. And heck, that’s something government should actually be funding anyway. Apparently, when the economy needs a jumpstart that message gains a little more traction. It’s called Keynesian economics. Printing money for the government to put people to work, get inflated dollars circulating and take advantage of the glut of unemployed laborers to build enormous public projects like the Hoover Dam or a fleet of warships.
Still another part of me says “ONLY $65 billion when they’re talking about up to a trillion in stimulus overall? How many broadband routers can you get for the other $935 billion? Sixty-five billion is less than one-tenth what Congress gave the Treasury Secretary to hand over to failing lenders (which was just the beginning of the bailout bonanza).
So let’s just try being honest with ourselves. With most Americans’ wealth tied up in their homes, their mutual funds and 401Ks and their cars – all three representing sectors that don’t seem to be boding too well for our economy at the moment – a stimulus package of just about any size is unlikely to have much effect, in my opinion.
What’s at stake is ultimately the strength of our currency, our creditworthiness and the solvency of our public and private institutions. We haven’t been through this scenario as a country before. But there is a lesson from history I would like to mention. It’s a paradox that can be summed up in two words: “Guns” and “Butter”.
The idea is if you’re a country in a state of war, deficit spending can actually help an economy to some degree, as in World War II. But the other end of that equation requires a generation of frugal depression babies scrimping and rationing and buying war bonds, not clamoring for social assistance. Lyndon Johnson tried to fund his new “Great Society” welfare programs while fighting a war in Vietnam, and the era of chronic federal deficits began. The Cold War was no exception, as social spending continued to increase with military spending. While Clinton spent his so-called “peace dividend” by cutting the military in half, at least deficits got under control when tax receipts rose. With the second Bush Administration it was back to guns and butter with Iraq and Afghanistan and new prescription drug benefits.
Governors like Arnold Schwarzenegger have chimed in supporting economic stimulus. "To stay competitive globally, the time to repair and modernize our nation’s infrastructure is now," the Governor said in a joint statement.
I’m not saying the Governor doesn’t understand basic economics (although Obama might have one up on him with the whole “don’t raise taxes during a recession” drill). And he certainly knows how important infrastructure is — we’ve at least borrowed a lot to try to help fix transportation, and we heard some promising statements about performance-based infrastructure, or public-private partnerships.
But all that aside, my frustration with the Governor stems from his jealously guarded “green” persona that not only touts global warming dogma, but that also has apparently prevented him from using his vast executive powers ’till now to streamline environmental regulations that have stymied public and private projects that are vital to job creation, transportation, even public safety, for years.
In addition to signing legislation like AB 32 — which will drive most cement companies out of the state (largest tax producers in my district), or SB 375, which will redirect precious highway dollars from my suburban semi-rural and rural district to build trains in Los Angeles — the Governor’s green bureaucracy has stalled or killed all kinds of vital enterprises. But now that renewable energy is all the rage, even though the market incentives to support them are in full retreat, the Governor’s office is here to help.
The Governor’s latest proposal is to streamline renewable energy projects and increase the state’s renewables portfolio from 20% in 2010 to 33% by 2020. The idea is to maximize development of solar, some wind and a little geothermal in my district – the Mojave and Colorado Desert areas of Southern California. Yet no consultation took place with me, the local elected official who represents more of these lands than any other. As someone who has been working with multiple federal and local agencies for, oh, 15 years, to try to get the West Mojave Habitat Conservation Plan approved for the federal and private lands in the 9.5 million acres of the Mojave closest to the urban centers of the Antelope and Victor Valleys, I have found the state Department of Fish and Game to be the main obstructionist.
But with “renewable energy” we finally have an activity that seems politically popular enough to get some help cutting red tape with Fish and Game, whose purpose is, ironically, protecting the environment. As the Governor’s office announced recently: “The CEC (California Energy Commission), DFG (Department of Fish and Game), U.S. Fish and Wildlife Service and the U.S. Bureau of Land Management signed a Memorandum of Understanding to establish a coordinated approach with our federal partners in the expedited permitting process. This coordinated approach will significantly reduce the time and expense for developing renewable energy on federally owned California land, including the priority Mojave and Colorado Desert regions.”
And by the way, “on federally owned land” means the proponents don’t have to buy it – they can lease it for pennies on the fair-market dollar. And my constituents don’t get property tax revenues because it’s federal land. This is also tantamount to competing with the private real estate industry. I would welcome most of these projects with open arms if they were on private land.
So now that our State Government thinks renewable energy is so important, let me ask this: What about all of our roads, highways, bridges, shopping centers, flood control facilities and countless other critical projects that have been stalled for years by the arrogant and unaccountable Department of Fish and Game?
What else about running a state rises to this level of importance, where you feel a need to limit my ability to have a say in where 1,000-square MILES of solar panels should be put up in what’s left of the Desert. That is, after all of the military base expansions and endless new wilderness designations drive most of the general public, mining, filming, tourism and recreation out?
If you care to learn more, I have posted the Governor’s Executive Order and press release here.