Posts Tagged ‘New Deal’


Special mention



Special mention

December 21, 2016 189094_600

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We often forget how important New Deal programs were for unemployed workers then, and what a legacy they left for us today.

One of those programs was the Civilian Conservation Corps, which cut ski trails in New England (such as Nose Dive, above, which can still be enjoyed on Mt. Mansfield in Vermont):

From 1933 until 1942, the C.C.C. deployed almost 3 million unemployed men between the ages of 18 and 25 across the nation to plant trees, hew trails and build roads, bridges and park structures. Workers lived in camps run by the Army, were clothed and fed, and received $30 a month. Communities across the country benefited from new state parks and infrastructure.

The program also helped catalyze the nascent ski industry in the United States. Many New England ski resorts were built around trails first cut by the C.C.C. “In the scope of what the C.C.C. did, it was a real drop in the bucket,” said Jeff Leich, director of the New England Ski Museum. “And yet you think about Cannon, Wildcat, Stowe and what that’s meant for the economy of the region.” The winter tourism industry they helped spawn remains an important source of revenue throughout Vermont, New Hampshire and the Berkshires.

I’m now going to have to go in search of some of those trails.


Special mention

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You’d think that, in the midst of the Second Great Depression, government employment would be increasing.

But it’s not. It’s actually shrinking.

It’s shrinking at the state and local levels, as can be seen in the chart above. And it’s shrinking at the federal level, as can be seen in the chart below:

Clearly, mainstream economics and politics in the United States have moved backward—back to a time before Keynes and before the New Deal.

Sometimes, in order to make sense of the current situation, it’s useful to consider the path that was not taken.

For example, there are many different ways of creating jobs for the tens of millions of people who are currently unemployed and underemployed in the United States. Of these, the Republicans only suggest one strategy: cutting taxes. Obama’s proposal combines tax cuts with additional spending on infrastructure. Neither strategy can hope to create the number of jobs needed now, let alone the additional jobs necessary for new entrants into the labor force.

In a new report [pdf], Philip Harvey demonstrates both that the existing strategies fall far short of what it is necessary and that an alternative exists: direct job creation.

There is, in fact, a far less expensive way to create jobs than the strategies adopted so far to combat the Great Recession. This alternative approach doesn’t require us to wait for the economy to recover in order to put people back to work. It puts people back to work as a way of nourishing the recovery. It’s a strategy for producing a job-led recovery rather than the jobless recovery we have been experiencing so far.

The recovery strategy described in this report is conceptually simple: Create jobs for the unemployed directly and immediately in public employment programs that produce useful goods and services for the public’s benefit. What this does for the unemployed is obvious. They get decent work while they wait for the recession to run its course. But in addition to this direct job creation effect, the strategy can simultaneously deliver a fiscal stimulus to the economy that is comparable in its indirect job creation effect to the types of stimulus spending included in programs like the ARRA.

The strategy of directly creating jobs makes much more sense than what the Republicans and Obama are suggesting, or what will likely get passed in Congress. It has been tried before, under the New Deal, and it worked (although, even then, more could have been done).

Think how different our experience of the Great Recession would be today if the $787 billion Congress allocated to the ARRA in February 2009 had been used instead to fund a direct job-cre- ation program. Enough jobs could have been created immediately to reduce the unemployment rate to its pre-recession level, and the rate of unemployment could have been kept at that level ever since, while businesses sorted their way out of the economic mess in which the recession left them. Two years later the private sector still would have a long way to go before it could replace all of
the jobs lost to the recession, but jobless Americans would not have been forced to wait for that to happen in order to restore a semblance of normalcy to their lives. President Roosevelt was not re- elected by landslide margins in 1936 and 1940 because the New Deal ended the Great Depression. He was reelected because the New Deal helped people survive the depression. It gave them a better present, and that gave them both hope and confidence in a better future. The proposal ad- vocated in this report could perform the same function today.

The question is, why isn’t such a strategy being seriously considered today? Why isn’t some relatively small portion of the surplus available in the United States being utilized to directly hire the millions of workers currently in need of a job? The answer to that question—the reasons for the path not taken—will tell us a lot about the current situation in the United States.