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Wednesday, July 18, 2012

A Modest Proposal

“Most economic fallacies derive from the tendency to assume that there is a fixed pie that one party can gain only at the expense of another.” — Milton Friedman

In the 1930’s, during the Great Depression, the Roosevelt administration turned to the use of taxpayer’s money to reduce the unemployment rate. In 1932 when Franklin Roosevelt was elected the unemployment rate was 24 percent. After spending billions on public works programs and creating agencies like The Works Progress Administration (WPA) and The Public Works Administration (PWA) the rate had declined to 17%.

The Works Progress Administration (renamed during 1939 as the Works Project Administration; WPA) was the largest and most ambitious New Deal agency, employing millions of unskilled workers to carry out public works projects, including the construction of public buildings and roads, and operated large arts, drama, media, and literacy projects.

It fed children and redistributed food, clothing, and housing. Almost every community in the United States had a park, bridge or school constructed by the agency, which especially benefited rural and Western areas.[citation needed] The WPA's initial appropriation in 1935 was for $4.9 billion (about 6.7 percent of the 1935 GDP), and in total it spent $13.4 billion.

At its peak in 1938 it provided paid jobs for three million unemployed men (and some women), as well as youth in a separate division, the National Youth Administration. Headed by Harry Hopkins, the WPA provided jobs and income to the unemployed during the Great Depression in the United States. Between 1935 and 1943, the WPA provided almost eight million jobs. Full employment, which emerged as a national goal around 1944, was not the WPA goal. It tried to provide one paid job for all families where the breadwinner suffered long-term unemployment.

The WPA was a national program that operated its own projects in cooperation with state and local governments, which provided 10%-30% of the costs. WPA sometimes took over state and local relief programs that had originated in the Reconstruction Finance Corporation (RFC) or Federal Emergency Relief Administration (FERA) programs.

Liquidated on June 30, 1943 as a result of low unemployment due to the economic boom of World War II, the WPA provided millions of Americans with jobs for 8 years.[6] Most people who needed a job were eligible for at least some of its positions.] Hourly wages were typically set to the prevailing wages in each area.[8] However workers could not be paid more than 30 hours a week. Before 1940, there was very little training to teach new skills, to meet the objections of the labor unions.

The Public Works Administration (PWA), part of the New Deal of 1933, was aFort_Peck_Dam_(Fort_Peck_Montana)_Spillway_01 large-scale public works construction agency in the United States headed by Secretary of the Interior Harold L. Ickes. It was created by the National Industrial Recovery Act in June 1933 in response to the Great Depression. It built large-scale public works such as dams, bridges, hospitals and schools. Its goals were to spend $3.3 billion in the first year, and $6 billion in all, to provide employment, stabilize purchasing power, and help revive the economy. Most of the spending came in two waves in 1933-35, and again in 1938. Originally called the Federal Emergency Administration of Public Works, it was renamed the Public Works Administration in 1939 and shut down in 1943.

The PWA spent over $6 billion in contracts to private construction firms that did the actual work. It created an infrastructure that generated national and local pride in the 1930s and remains vital seven decades later. The PWA was much less controversial than its rival agency with a confusingly similar name, the Works Progress Administration (WPA), headed by Harry Hopkins, which focused on smaller projects and hired unemployed unskilled workers.

The PWA headquarters in Washington planned projects, which were built by private construction companies hiring workers on the open market. Unlike the WPA, it did not hire the unemployed directly.

More than any other New Deal program, the PWA epitomized the progressive notion of "priming the pump" to encourage economic recovery. Between July 1933 and March 1939 the PWA funded and administered the construction of more than 34,000 projects including airports, large electricity-generating dams, major warships for the Navy, and bridges, as well as 70% of the new schools and one-third of the hospitals built between 1933–1939.

Streets and highways were the most common PWA projects, as 11,428 road projects, or 33% of all PWA projects, accounted for over 15% of its total budget. School buildings, 7,488 in all, came in second at 14% of spending. PWA functioned chiefly by making allotments to the various Federal agencies; making loans and grants to state and other public bodies; and making loans without grants (for a brief time) to the railroads. For example it provided funds for the Indian Division of the CCC to build roads, bridges and other public works on and near Indian reservations.

The PWA became, with its "multiplier-effect" and first two-year budget of $3.3 billion (compared to the entire GDP of $60 billion), the driving force of America’s biggest construction effort up to that date. By June 1934 the agency had distributed its entire fund to 13,266 federal projects and 2,407 non-federal projects. For every worker on a PWA project, almost two additional workers were employed indirectly. The PWA accomplished the electrification of rural America, the building of canals, tunnels, bridges, highways, streets, sewage systems, and housing areas, as well as hospitals, schools, and universities; every year it consumed roughly half of the concrete and a third of the steel of the entire nation.

Some of the most famous PWA projects are the Triborough Bridge and the Lincoln Tunnel in New York City, the Grand Coulee Dam in Washington state, the longest continuous sidewalk in the world along 6½ miles of Bayshore Blvd. in Tampa, Florida, and the Overseas Highway connecting Key West, Florida, to the mainland. The PWA also electrified the Pennsylvania Railroad between New York and Washington, DC. At the local level it built courthouses, schools, hospitals and other public facilities that remain in use in the 21st century.

While these programs had their critics they did provide valuable and lasting infrastructure assets. I am not so positive about the funding of the arts programs as most of artists, writers, musicians, and photographers involved in the program were communists or fellow travelers. Some of the critics compared Roosevelt’s progressive public works programs with those of Mussolini in fascist Italy and Adolph Hitler in National Socialist Germany. Both of these dictators used public spending to create full employment. Mussolini had his corps of fascist workers who built massive public works projects like draining the Pontine Marshes and building new towns. Hitler established the Reichsarbeitsdienst (RAD) to provide labor for agriculture and civic construction projects including the building of the Autobahns

It is difficult for me to harshly criticize the Roosevelt administration for initiating these public works spending. The national economy was in big trouble and with almost one –quarter of the workforce unemployed there was a real threat of socialism or communism sweeping into power. Also the nation benefited from the improvements in the infrastructure, especially in roads, electrification, flood control, sewer and water, and irrigation.

With this in mind I have a proposal for President Obama to reduce our national unemployment. Taking into consideration that most of our major infrastructure has been built and we now require only maintenance and upgrades. We don’t need to subsidies artists, musicians, and those in the entrainment industry, they are doing just fine. What we need is a program for unskilled workers who can’t seem to find work in the service or fast food industry. We need low skilled construction jobs.

With the president’s belief that only government can create jobs and that we all owe any success we have to government or a teacher I think he will jump right in to this proposal.

I call my proposal the Earth Supply and Renewal Project. Here is how it would work. First, our excavation specialists insert their shovels into the ground and remove the soil. This presents the problem of an existing hole in the earth, creating a dangerous situation that could lead to hazards, including but not limited to tripping, falling, and bodily injuries.

Then there is the renewal process. At the Earth Supply Division, professional backfillers will be trained to renew the soil in place of the existing hole, restoring the earth to its original condition.

Some folks say we’re just digging ditches and filling them back up again. But it’s about more than that. It’s about jobs.

Just think of the business opportunities this government program will create.Screen Shot 20120717 at 110724 PM First we have the shovel makers. The government will set the standards for the size of the shovels making them at three-fourths the size of a conventional shovel yow old buy from your local Ace Hardware store. Of course two types of shovels would be needed. Firstly a spade to remove the earth and then secondly a flat-end shovel to scoop up the earth to fill in the ditch. We will also need picks to break up the hard ground.

Second we would have the trainers who would no doubt require a college education in civil and construction engineering. This would help them pay off their student loans.

Third we would have the environmentalist, biologist, and botanists who would select the locations for each project so as not disturb the desert tortoise or the woolly daisy.

Finally we would need the inspectors to make sure the unskilled earth movers were doing the proper job.

Of course the unions would be involved to make sure all of the workers joined unions like SEIU and received prevailing wage, health care, and a pension.

I can’t take full credit for this proposal. I have to give a tip of the hat to James O’Keefe writing in for his Project Veritas idea. O’Keefe’s purpose was to expose union corruption as he wrote:

“That’s the setup. O’Keefe’s Project Veritas then takes this newly-created non-existent company – a company dedicated to digging and filling holes – and asks for help from local union bosses to help move subsidies for Earth Supply and Renewal through legislatures. After all, they argue, even if we’re just digging ditches and refilling them on the taxpayer dime, at least we’re creating new union workers.

And, unbelievably, the union bosses are only too happy to help. They couldn’t care less about wasting taxpayer dollars. And that’s precisely what they say.

John Hutchings, director of the Laborers’ International Union of North America (LIUNA) New York State Laborers’ Organizing Fund (NYSLOF), explains:

Right now it’s all about jobs. It’s awful hard for anybody to vote against like a jobs bill right now …

He agrees that even if there are sites where this ditch digging and filling has no environmental program, legislators will decided, “it’s a jobs program for the laborers.” And when some of the Earth Supply and Renewal “employees” explain that they literally dig a ditch, then fill it up again, Hutchings says, “It sounds like, it almost is exactly the same as where we were with Green Jobs, Green New York.” Green Jobs, Green New York was a $112 million state plan that was designed to create environmentally-friendly jobs. And it was sponsored, in large part, by unions.

Anthony J. Tocci, business manager of the Local 601 for LIUNA AFL-CIO, goes even further. He says that he’d be willing to help find public funds just to dig and fill ditches:

Hey, if people are willing to give you money, if people will give you the money, that’s fine.

And Hutchings adds:

You know, the Green Jobs, Green New York, between us, a lot of it is bullshit… even if it’s bullshit, I think as long as people are working, that’s not bull, you know what I mean?

Tocci and Hutchings say that this is just the sort of stuff that happened under FDR in the 1930s with the Works Progress Administration. “They dug the roads up, put ‘em back!” says an animated Tocci.

Says Tocci, “You just wanna get the money. Then you figure out afterward.”

Hutchings then explains the economic theory behind all of this:

Well, I think, I think the key thing is, even if it’s bullshit, I think as long as people are working, that’s not bull, you know what I mean? Then you’re doing a service. If there are people working, there are people paying taxes, there are people paying goods, there are, you know what I mean… You’re doing right by the economy… anything that brings work into a community is a plus…

And, of course, the union benefits. Says Hutchings, “It’s a win-win for everybody. Everybody understands that part of it.” Especially the unions, who will be including “employees” of Earth Supply and Renewal in their collective bargaining from now on.”

Two read the rest of O’Keefe’s article and watch the video click here.

Once the Earth Supply and Renewal Project gets underway other special interest groups will no doubt get into the act. The Audubon Society and Burpee Seeds will lobby for trees and flowers to be planted in the ditch and the ditches dug alongside of roads. They will argue that this will beautify the nation in the same manner as Lady Bird Johnson’s Highway Beautification Plan did in 1965.

I am positive that President Obama and his progressive masterminds in his administration will enthusiastically adopt this proposal. It will create “shovel ready” jobs that will dramatically increase his chances for reelection. Of course he will gave to appoint a czar of hole digging.

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