Wednesday, July 28, 2010


Do we need a new WPA?

There were two conflicting news items this week. I heard them both on the radio. One item was a result of recent public opinion polls. The poll results showed that President Obama's handling of the economy is not popular. He is losing the support of Americans on the issue. The other item was a report by some economists. That report stated that the government's policy of stimulating the economy had produced good results. Although we are in a recession, it would have been much more severe except for the massive stimulus.

Of course, there isn't any real disagreement between the public and the economists. The economists are saying that, although things are bad they would have been much worse if the stimulus hadn't occurred. The public is saying that no matter how good or how bad the recession is, ten percent of us have lost our jobs and we can't find work and we're pretty damned mad about it. We blame the President, the most powerful man in the world, for not doing a lot more to bring back our jobs and the good times we used to experience.

Some liberals have argued that we really need to repeat the policies of the 1930's. In those days the federal government used borrowed money to fund various work projects, carried out under various acronyms such as WPA, PWA, and CCC. Some of these projects were simply make-work projects. Others produced useful and long-lasting results. An example dear to me and to many engineers was the calculation of accurate tables of functions: sines and cosines, bessel functions, and others. The last time an effort was made to calculate such tables occurred in France during the reign of Napoleon. Regardless of the merits of the actual work done, these jobs were temporary. After the economy recovered and jobs in the private sector were again plentiful, these work projects were ended.

Conservative economists argue against such a program because the jobs would be temporary. What is needed, they argue, is a program designed to create new permanent jobs. The stimulus program isn't creating enough new jobs to lift us out of recession.

Both arguments make sense. WPA type jobs are not permanent. Unless permanent jobs can be created in the private sector, the temporary jobs will have done no good after they are terminated. There is a matter of timing and extreme involved. We believe that, in time, the private sector on its own will recover and new jobs will come into being. If the private sector is left to itself, that process of healing may take a decade. For the ten to twenty percent of people out of work, that's much too long to wait. They will either starve to death or start a revolution.

Can the government do anything to speed up the process of creating new private sector jobs? In the 1930's the process was speeded up only because of the outbreak of war. The government created whole new industries, particularly to build the airplanes and ships and tanks and weapons needed to fight the war. After the war the airplane manufacturers proceeded to supply the new and growing air transportation industries with the airplanes needed. That particular option is not open. There may be another whole new industry that the government could support. The question is, what is it?

For the present, I leave that question to you, my readers.


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