by Aaron Klein
As yet unanswered is, from where will the funds for the 21CSC programs come? Also unknown is how much of a crossover there will be with the proposed 21st Century Civilian Conservation Corps and those operated by the 21st Century WPA.
And, will there be any crossover between these and the several corps outlined in the Emergency Jobs to Restore the American Dream Act (discussed below), now included in the Restore the American Dream Act for the 99 percent?
CORPS, CORPS, AND YET MORE CORPS
Yet another grand progressive spending scheme—the Restore the American Dream for the 99% Act—was introduced December 3, 2011. A product of the Congressional Progressive Caucus, it would enact, if passed, yet another jobs bill, the Emergency Jobs to Restore the American Dream Act of Rep. Jan Schakowsky (D-IL).65 Schakowsky is “an outspoken progressive, one of the leftmost members” of the Democratic Caucus. Like Barack Obama, she has been supported throughout her political career by the Democratic Socialists of America, the socialist New Party, the AFL-CIO, AFSCME, and the SEIU.66
Schakowsky originally introduced her Emergency Jobs Act in September 2011. It was sent to the Committee on Higher Education and Workforce Training on November 18.67 About the same time on September 7, 2011, the same day Senator Lautenberg introduced his 21st Century WPA Act, Rep. Keith Ellison (D-MN) introduced another version of Schakowsky’s bill, called the Emergency Jobs Now Act. It was also referred to the committees, where it remains as of this writing.68
Schakowsky’s Emergency Jobs Act would create seven new “corps” spending $100 billion to create 650,000 new jobs: School Improvement Corps (400,000 construction and 250,000 maintenance jobs to fix American schools); Park Improvement Corps (100,000 jobs for youth between the ages of 16 and 25, to improve our nation’s parks); Student Job Corps (250,000 part-time, work study jobs for eligible college students); Neighborhood Heroes Corps (300,000 teachers, 40,000 police officers, 12,000 firefighters); Health Corps (40,000 health care providers, including physicians, nurse practitioners, physician assistants, and health care workers); Community Corps (750,000 jobs including energy audits and conservation upgrades, urban land reclamation and addressing blight, public property maintenance and beautification, housing rehabilitation, and new construction); and Child Care Corps (100,000 jobs in early childhood care and education).69
In early March 2009, the Center for American Progress along with eighty labor, environmental, civic, and policy groups proposed a Clean Energy Corps. But it appears that this corps is similar to Schakowsky’s Community Corps.70
Yet another progressive cabal, the Clean Energy Corps Working Group—which included representatives of the Apollo Alliance, Center for American Progress Action Fund, Center for Economic and Policy Research, COWS (Center on Wisconsin Strategy), and Green For All—recommended combining “job creation, service, and training to combat global warming.” These groups also wanted the new corps to be led by President Barack Obama and administered through a new executive-level Energy Security Council comparable to the existing National Security Council. Corps workers would supposedly apply energy-efficient measures to over 15 million existing buildings. The retrofit would be financed by borrowed money, a federal revolving loan fund, with the loan wondrously paid back from savings in energy bills.
The School Improvement Corps program in Schakowsky’s bill is also known as Fix America’s Schools Today (FAST!). FAST! was developed by another alphabet soup of progressive groups: the Economic Policy Institute, the Center on Budget and Policy Priorities, and the 21st Century School Fund.71 Several of the new corps would result from direct-hiring programs targeting “youths in high unemployment areas; idle construction workers who could be deployed on school refurbishing projects; and laid-off police, firefighters, teachers and health care workers.”72
But as one commentator saw it:
The bill is a scream of frustration at the president’s failure to make life better for angry voters who will soon decide whether lawmakers like Schakowsky get to keep their jobs…. America became an economic superpower because of wealth-creating industry, not because the Federal Government decided to become an employment agency.73
And who will pay for all of Schakowsky’s corps?74 Michelle Chen put it this way in the August 2011 edition of the socialist journal In These Times:75
The financing of FAST!, as outlined in Schakowsky’s jobs proposal (and possibly in a parallel plan to be floated by the Obama administration) is an open question. But the EPI suggests a funding formula based on the needs of individual school districts and estimates of how many jobs would be generated and how much energy would be saved.
Schakowsky claimed it will all be paid for through separate legislation creating higher tax brackets for millionaires and billionaires, eliminating subsidies for Big Oil, and loopholes for corporations that ship American jobs overseas.
But, the commentator continued:
The bill uses the “fully paid for” approach to funding. To Republicans, this means spending cuts. To Democrats, it means a tax increase. Schakowsky proposes that we take $227 billion from the unjustly enriched to resurrect the ghost of FDR.76
AND A VETERANS JOBS CORPS
In his 2012 State of the Union address, Obama also called for a Veterans Job Corps “that will help our communities hire veterans as cops and firefighters, so that America is as strong as those who defend her.”77 Obama proposed putting U.S. veterans returning home from the wars in Iraq and Afghanistan to work rebuilding roads, national park trails, and other public works projects, in an effort to cut the unemployment rate among veterans, according to Brian Koenig in the New American.78 However, even without the president’s scheme, the jobless rate for veterans serving post-9/11 fell significantly in January 2012 to 9.1 percent, while the jobless rate for veterans separated from active duty since the 2001 terrorist attacks is down from 13.3 percent in December and from 15.2 percent a year ago, in figures reported by Army Times.79
In case there is any doubt that a second Obama administration would try to implement a 21st Century version of FDR’s 1930s New Deal programs, Secretary of the Interior Ken Salazar put it explicitly in those terms: the $1 billion program that would put an estimated 20,000 veterans to work “restoring habitat and eradicating invasive species, among other activities,” Salazar said, is reminiscent of FDR’s “Tree Army.”80
When one looks back at the legacy of the Civilian Conservation Corps, we take great comfort that those who take on these kinds of activities will leave a lasting legacy for the United States.
WHERE DOES THIS LEAVE THE UNIONS?
We are ultimately left with this question and many more. Will Lautenberger’s 21st Century WPA be unionized? How about Kaptur’s 21st Century Civilian Conservation Corps and all of Schakowsky’s corps? Will they be unionized, too? And how about those returning and unemployed veterans? Will they find themselves part of a unionized Veterans Job Corps?
And finally, how could these massive government-owned-and-operated entitlement schemes be paid for by taxing only the rich?
6
BLUEPRINT FOR A NEW ECONOMY, NATIONAL INFRASTRUCTURE BANK
NO ONE OWNS the deplorable and dangerous state of today’s American economy other than Barack Obama.
The new president promised, in his inaugural address, “action, bold and swift, and we will act—not only to create new jobs, but to lay a new foundation for growth.”1 Just ten days earlier, on January 10, 2009, the U.S. unemployment rate had hit a 16-year high—7.3 percent (a number we envy today). Obama soon claimed his record three-quarters-of-a-trillion-dollar “stimulus plan” would create or save 3–4 million jobs, nearly 90 percent of which would be in the private sector. He also assured Americans that the “stimulus” would keep unemployment from rising above 8 percent.2
Jobs saved or created? In presidential rhetoric, but not in reality. The $787 billion “stimulus” had only “created” an anemic 150,000 jobs by June. Still, Obama’s silk-tongued staff promised an additional 600,000 would be sa
ved or created by late summer.
“Of course, the inability to measure Mr. Obama’s jobs formula is part of its attraction,” William McGurn wrote in the Wall Street Journal.3
Never mind that no one—not the Labor Department, not the Treasury, not the Bureau of Labor Statistics—actually measures “jobs saved.” As the New York Times delicately reports, Mr. Obama’s jobs claims are “based on macroeconomic estimates, not an actual counting of jobs.” Nice work if you can get away with it.4
Former Bush economic adviser N. Gregory Mankiw added: “[T]here is no way to measure how many jobs are saved. Even if things get much, much worse, the president can say that there would have been 4 million fewer jobs without the [$787 billion] stimulus.”5
The reality—as opposed to the rhetoric—was shockingly worse. A mere four months after Congress approved the “stimulus,” by June 2009, the economy had lost nearly 1.6 million jobs and unemployment officially hit 9.4 percent.6 Speaking at an August 2009 rally in Virginia for State Senator Creigh Deeds, the Democratic candidate for governor, a petulant Obama told critics to just “get out of the way” so his administration could clean up the economic “mess” Republicans had left for him.7
I don’t want the folks who created the mess to do a lot of talking. I want them to get out of the way so we can clean up the mess. I don’t mind cleaning up after them, but don’t do a lot of talking.8
Fast-forward three years. In his 2012 State of the Union address, Obama was still talking about acting, talking about creating new jobs, and talking about another new foundation for growth:
I want to speak about how we move forward, and lay out a blueprint for an economy that’s built to last—an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values. This blueprint begins with American manufacturing.”9
What is this blueprint? What is Obama’s basis for “American manufacturing?” Why, old wine in new bottles—more and more of the same legislation, regurgitated from years gone by.
NOT JUST ANOTHER STIMULUS: A NATIONAL INFRASTRUCTURE BANK
Let’s state right up front: as proposed, a national infrastructure bank, or NIB, wholly owned by the U.S. government, would be a veritable klondike for corruption, presenting unlimited opportunities for politically motivated mischief, not to mention fraud, waste, and abuse beyond the wildest dreams of the most corrupt crony capitalist—regardless of what President Obama and the progressives pretend.
Federal spending on infrastructure projects has a “long and painful history of pork-barrel politics and bureaucratic bungling, with money often going to wasteful and environmentally damaging projects,” wrote Chris Edwards, director of tax policy studies at the Cato Institute, in October 2011.10 The federal government should not be in the infrastructure business, Edwards added. While there are “plenty of examples of the downside of federal infrastructure,” the histories of the two oldest infrastructure agencies—the Army Corps of Engineers and the Bureau of Reclamation—show that “state governments and the private sector are best equipped to provide it.”
Also, as Edwards and Peter Van Doren explained in December 2008, “the main problem with government infrastructure spending is the lack of efficiency.”
More roads and transit capacity may or may not make sense depending on whether the benefits exceed the costs. One sure way to find out is to have private provision and user charges. If users are not willing to pay the costs of extra or newer capacity, then calls for taxpayer involvement probably imply subsidy of some at the expense of others rather than efficiency.
Additionally, the U.S. would be bucking a global trend to shift infrastructure responsibility to the private sector in favor of centralizing more bureaucratic control. Edwards and Van Doren continued:
While America debates higher government spending on infrastructure, governments on every continent have sold off state-owned assets to private investors in recent decades. Airports, railroads, energy utilities, and many other assets have been privatized. Heathrow airport in London is privately owned and operated. Air-traffic control services are fully private in Canada. In Italy and France, limited access highways are private concessions funded with toll revenue. In many areas, the U.S. is a laggard in the world on private infrastructure provision.11
So just when Europeans and Canadians—not to mention some of America’s states—have been privatizing the infrastructure business, President Obama and progressive Democrats continue to push a national infrastructure bank.
The avalanche of waste—not to mention funds simply unaccounted for—already thrown away in the original “stimulus” bill pushed through by Obama and the Reid/Pelosi Democrats will take years to uncover. From the Chevy Volt and Solyndra to a $100 million train station renovation in Delaware named after Vice President Joe Biden—these are just the tip of the failed first “stimulus” iceberg. But the creation in a second Obama term of a national infrastructure bank—with taxpayer-funded capitalization at $60 billion just for starters—besides being a hideously inefficient way to address a legitimate problem, would concentrate ever more power in Washington while creating a giant cesspool for government cronyism and corruption.
Already, while on the 2008 campaign trail, Obama was pushing a National Infrastructure Bank. In a February 13, 2008, economic policy speech at the General Motors assembly plant in Janesville, Wisconsin, Obama said,
For our economy, our safety, and our workers, we have to rebuild America. I’m proposing a National Infrastructure Reinvestment Bank that will invest $60 billion over ten years. This investment will multiply into almost half a trillion dollars of additional infrastructure spending and generate nearly two million new jobs—many of them in the construction industry that’s been hard hit by this housing crisis. The repairs will be determined not by politics, but by what will maximize our safety and homeland security; what will keep our environment clean and our economy strong. 12
By the end of the first year of his presidency, with the enormous “stimulus” already passed, the leading progressive think tanks were already clamoring for more. A briefing paper of the Economic Policy Institute—Street Smart—Reforming the Transportation Budget Process—noted how many different versions of an infrastructure bank were being proposed, and their similarities. All the proposed NIBs, EPI found, would finance “transportation infrastructure, housing, energy, telecommunications, drinking water, wastewater, and other infrastructures.”13
All attempts, thus far, by progressive Democrats to pass National Infrastructure Bank legislation have failed. Their attempts to address the “infrastructure crisis” by creating a national infrastructure bank date back to at least the 1980s. Harvard economist Herman B. Leonard, in his 1986 study, Checks Unbalanced, described it this way:
Never the most exciting of subjects, infrastructure nonetheless claimed top billing in the public finance spotlight as deterioration in basic public service systems—highways, bridges, waterways, ports, mass transit, water, sewers—became increasingly obvious.14
At the time, there was “dim prospect for improvement,” in Leonard’s judgment, as this came into collision with “tremendous fiscal pressure on federal, state, and local governments as grass roots movements to limit taxes and spending gained hearings at state and federal levels. The result was declining levels of public investment and rising levels of public attention, official oratory, and media comment.”15 A contemporary estimate of the national cost of infrastructure improvements came from economists Pat Choate and Susan Walter. Between $2.5 and $3 trillion would be required (as of the 1980s) “to prevent the further deterioration of public services.” And, as Leonard pointed out, (in the early 1980s) this was roughly equal to one year’s gross national product. Leonard proposed “annual public investment levels … between 5 and 10 percent of the GNP.”16
But more accurate national estimates, Leonard admitted, were those prepared by the Congressional Budget Office—which “reflected a more conservative definition
of what constituted ‘need’ than did earlier figures.”17 Moreover, Leonard described well the overreach of national bank “solutions”:
Proposals for infrastructure banks generally agreed on financing but differed on everything else, like the degree of federal control that should be exercised in selecting projects and setting engineering standards. Little interest was shown in specifying the operational details of the banks’ functions. The proposals were a reflex response to insufficient infrastructure spending, and they were intended to increase it sharply.18
This “reflex response” of a big, fix-it-all government infrastructure bank has now persisted over nearly four decades.
THE NEW PUSH FOR A NIB
One of the leading progressive think tanks—the New America Foundation—set forth its vision of a federally capitalized and controlled national infrastructure bank in a June 2008 policy brief—Financing America’s Infrastructure: Putting Global Capital to Work.19 While NAF’s funding comes from a plethora of progressive funders and foundations, NAF claims its views are in the “radical center,” and its focus is on promoting “a New Deal for the 21st Century.”20
According to the NAF paper’s authors, Heidi Crebo-Rediker and Douglas Rediker, the source of many of their ideas is legislation proposed by U.S. Rep. Rosa DeLauro’s (D-CT) in 2007 to create a National Infrastructure Finance Enterprise.21 DeLauro is one of the (at present) seventy-five members of the Congressional Progressive Caucus; it was she who introduced the National Infrastructure Development Act of 2007 (H.R.3896). Supporters for a similar DeLauro bill, introduced in 2009, included the U.S. Chamber of Commerce, the SEIU, the AFL-CIO, and the Campaign for America’s Future.22
