Monday, September 06, 2010

Awaiting Obama's Labor Day proposals

The White House has previewed the major message of President Obama's Labor Day message - an infrastructure spending initiative to create jobs and build long term productivity. That preview is probably 95% of what we will learn today apart from the inspirational rhetoric that will accompany it.

This should be a welcome initiative on all fronts but of course it will not be. Our infrastructure is desperately in need of both rebuilding and new development. Job creation from an infrastructure bill would directly impact industries that have been distressed. If both current employment opportunities and long term competitiveness can be addressed in one major initiative, why would it be opposed.

There are the usual answers to that question of opposition as well as some with merit:
---The Republicans will oppose anything that Obama does in general and especially just prior to the November elections.
---The obsession with the negative implications of deficit spending will be focused on, and questionable trade-offs to fund the initiatives will be suggested by both parties.
---The infrastructure spending portion of the 2009 stimulus bill was for the most part a bust. It was a small percentage of the overall stimulus allocation. Projects may have been "shovel ready" but the shovels either were not available or had to approved through the tedious bureaucratic gauntlet of fed, state, and local governments with politicians to feed at every step of the way (the one project followed here, a bridge rebuilding in Danville, Virginia, had its groundbreaking last month, 18 months after funding was approved).
---Infrastructure spending in the 2009 stimulus bill was weighted heavily toward "green initiatives" that were promoted by the Administration. These green initiatives were to some extent in the R&D phase with a long tail to any significant employment growth or societal benefit. They were, generally speaking, not near term stimulus even though their intent is laudable.

We wait and will see. Nothing will happen prior to November, but post-election 2010 could provide a chance. If the pork gets spread evenly enough and the intent is explained well enough, almost everyone in Congress but Ron Paul might secretly want this bill.


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