It took a decade to get out of the Great Depression; and for all the good New Deal programs, it was really only the massive government stimulus of World War II that did the trick.
Let’s skip the ten years and the mega-war – indeed, let’s skip the depression – by having an equally massive government stimulus now (no need to wait ten years) focused not on building tanks and planes but windmills . . . and on retro-greening our residential and commercial building stock, digitizing our medical records, modernizing our schools, rebuilding our roads and bridges, and – most important of all* – dredging our waterways.
Instead of a Manhattan Project for the bomb, a Manhattan project for abundant, clean, cheap energy.
(Have you noticed that, in our lifetime, communications and computing power have become all but free? You can call China on Skype for free. You can put the entire computing capacity of NASA circa 1969 on your lap for $600**. Imagine the economic impact of similarly cheap energy.)
In mobilizing to win World War II, the National Debt soared from around 40% of GDP to 121%. It will soar again now – and we start in a bind because the debt is already high relative to GDP. Just 30% when Reagan took over, he and the Bushes leave us close to 80% now.***
But we also start with some advantages.
- First, we’ve learned a lot from the Depression.We know, among other things, not to go protectionist or to try to balance budgets.
- Second, we have excellent shock absorbers already in place – FDIC insurance to avert bank runs; food stamps, welfare, Medicare, Medicaid, unemployment insurance, Social Security and the minimum wage to lessen the suffering and preserve some minimum income floor to bolster consumption.
- Third, it is fundamentally more productive to be greening buildings than to be blowing them up. So it actually might require less expenditure (and surely less horror) than World War II.
This is the big picture. We need to declare war on our inefficiencies – be they in energy, manufacturing, education, transportation, or health care – and mobilize to conquer them.
Who cares what it costs, so long as we have the man-and-womanpower unemployed and available to get the job done? Did anyone stop to figure out what defeating the Nazis would cost? It just had to be done. (As sensibly as possible, to be sure, but done.) And it ended the Depression.
*Long-time readers may get this joke.
**I pulled that factoid out of the air , but I bet it’s true.
*** Though it’s been a positively grand time to be rich and powerful.
Quote of the Day
Capitalism without bankruptcy is like Christianity without hell.~Frank Borman (ex-Eastern CEO)
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