Can Obama Turn Things Around?

There is nothing anecdotal about the North American infrastructure crisis. This is a well know issue that has been in a crisis state for well over a decade. Was that Fox news that you heard that on?

http://www.asce.org/reportcard/2005/index.cfm

Here are some more relevant facts:

"CENews.com Editor's Comment | Posted: Wednesday, December 31, 2008

The impact of infrastructure investment
Shanon Fauerbach, P.E.

...The American Association of State Highway and Transportation Officials conducted a survey of all 50 states and the District of Columbia and found that there are more than 5,000 "ready-to-go" projects (meaning they could be under contract within 180 days) worth $64 billion. If funds were provided, these projects would support an estimated 1.8 million American jobs.

Likewise, a recent survey by the American Public Works Association identified more than 3,600 ready-to-go local infrastructure projects that, if funded by an economic recovery package under consideration, would provide a stimulus for the ailing economy. Totaling more than $15 billion, these "shovel-ready" projects could begin within 90 days and would generate an estimated 532,764 jobs."
http://www.cenews.com/article.asp?id=3441

This, otoh, is mostly anecdotal. Clearly care needs to be taken to ensure that the right projects are chosen, and that they are executed properly, but this is the case under any circumstances. And again, if you have no faith in governments then you have no faith in democracy. It may well be that you do not believe in democracy, but that's a separate issue that I think may be clouding this one a bit for you.

 

Exactly, Obama needs to buy into the system and trust his ummmm country-mates.

 

Of course, when Reagan took office, monetary policy wasn't up against the zero lower bound like it is today. In fact, the Fed's constrictive approach during the Carter years helped to cause the recession. It's a lot easier to stimulate the economy when you have the ability to simply lower interest rates, as was done in the early 80s. Now, we're in a deepening recession without that ability (since the Fed has already lowered rates to zero), so Obama does face problems that could be more severe than the problems that Reagan faced when he took office.

 

2 million people on The Mall will help with the legislative part.

And here's a sweet new web site: http://www.whitehouse.gov/

 

I think comparing unemployment to 1980 is a bit misleading now too.....I think the amount of underemployment in 2009, as opposed to unemployment, due to much more prolific use of contract and part-tiime workers since 1980 makes the jobs picture look rosier than it actually is. (the underemployment numbers were like 12-13% last reading)

 

this is garbage analysis. You don't lower the interest rate when you have high inflation. Try harder

 

I don't know if I would believe those reports, after that highway bridge in Minneapolis collapsed and killed all those people, a few years ago. I remember the news saying there were other bridges in even worse condition.

 

Again, as rocketsjudoka has posted, that bridge collapsed due to a design flaw, not lack of maintenance.

 

Obama won't do ****.

 

Interesting that you would post that. Just 7 months ago, ASCE's infrastructure targets were:

We could meet those targets for less than a tenth of the proposed stimulus package. But the package isn't about building good infrastructure. It's about making work.

 

Link for that quote.

 

Link please! I suspect that you are looking at something out of context. Again, the infrastructure crisis has been a major issue in the civil engineering community for many, many, years. This is not new. I remember hearing about it ten years ago, well before this downturn, or even the preceding boom. Again, there was a very large amount of work done in the decade or two following WWII, and most of that work has come to the end of its design life within the last couple of decades. The current crisis is largely a function of us having done a huge amount of work within a relatively short period of time, and then having had it all wear out in a short period of time. There is nothing new here, and these are certainly not make-work projects. Again, do a search on "aging infrastructure" and see for yourself.

 

The post right below it. Do the math. The Federal infrastructure budget for 2008 was ~$70 Billion (remember those quaint times last year when that was a lot of money), to meet ASCE's July 2008 targets, *total* Federal infrastructure investment over 5 years would be $371 Billion.

By defending this package, I don't think you understand the magnitude of the the numbers. Again, the current Congressional proposal for additional infrastructure spending in two years is more than the entire cost of the Interstate Highway System over the 35 year life of that project. For that kind of money, we should get bridges to Hawaii with free fuel along the way.

 

Here is that whole paragraph:

“As part of its continuing adjustment and refocusing of strategies, ASCE recently fine-tuned its infrastructure targets. The Society seeks an increase of at least 3 percent in constant dollars per year in total public and private funding for infrastructure from 2009 through 2015, with the understanding that progress is to be measured not just in dollars but also in innovative policy approaches that lower the need for new construction. ASCE also seeks to significantly improve the grades meted out in its 2005 Report Card for America’s Infrastructure (www.asce.org/reportcard/2005/index.cfm) by 2017.”
http://pubs.asce.org/magazines/ascenews/2008/Issue_07-08/article1.htm

And note that the very first line in that report is, “ASCE estimates that $1.6 trillion is needed over a five-year period to bring the nation's infrastructure to a good condition.” What you see here is the difference between what is needed and what they reasonably expected governments would be prepared to spend at the time.

Governments have long been putting off dealing with the infrastructure crisis and gambling that when the critical failures occurred they would happen on someone else’s watch. It would have been very expensive to repair the levees in NO before the Katrina, for example, and government after government refused to do it because of the cost. Presumably they hoped that when the critical storm did come, and hundreds were killed by the failures of the levees, that the blood would be on someone else’s hands. I wonder if that’s a consolation for them now. Governments have not been responsible managers of our infrastructure because they have not done the needed repairs and upgrades. They have not spent enough money up front, and it has cost us all much more in the long run. Imagine if someone ran a refinery that way, hoping that it wouldn’t blow up and slaughter the neighbourhood until the next manager took over. Now, however, is a perfect opportunity to correct past wrongs and to get the work done, and to stimulate the economy at the same time. We still need to take care to choose the most important projects, and to only use qualified contractors, etc., but there is really no excuse not for not ramping up this work and getting a good chunk of it done, and employing millions of people in the process.

 

This, coming from the guy who blamed the festivities in DC for yesterday's drop in the stock market?

You can lower interest rates after you've lowered inflation by using high interest rates. When Volcker did so (using a federal funds rate of over 20%), he caused the recession that helped lose Carter the Presidency. Even after the worst of the resulting short-run contraction had subsided, the US still faced somewhat high unemployment (as we do today). However, they also had very high interest rates, giving them an option (lowering rates) that we do not have today, as we have already lowered rates to zero.

So, while President Reagan was the beneficiary of a Fed chairman who had the courage to fight inflation (along with a convenient breakdown in OPEC), setting the stage for an eventual recovery, President Obama is going to have to work to solve the problems we face today by relying more on fiscal policy. In other words, Reagan's challenge was in some ways simpler than that which Obama faces, and Obama is going to have much more power and responsibility over how quickly and fully the economy can recover from the current crisis.

 

There's more to infrastructure than just bridges and roads. We need Drinking Water, power grid modernization(especially in California), wastewater treatment, dams(ticking timebombs), solid waste(we have to put the trash somewhere), etc...

 

Wow, I'm very sorry that your community suffered that terrible loss. I need to learn more about what happened and the apparent design flaw. I'm afraid that I haven't been reading the right journals for a while and am a little out of touch with this kind of news. There are so many checks and double checks that it seems almost impossible that errors like this could happen, but they do happen from time to time. Sometimes they are uncovered before disaster strikes:
http://en.wikipedia.org/wiki/Citigroup_Center#Engineering_crisis_of_1978

And most unfortunately sometimes they aren't.