economics

March 14, 2010

Nostalgia for New Deal Job Plan

Filed under: Uncategorized — ktetaichinh @ 4:17 pm
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By LOUISE RADNOFSKY

The specter of a long period of high unemployment is reviving interest in an old idea: The Works Progress Administration, which put millions to work during the Great Depression.

The United States Conference of Mayors is citing President Franklin D. Roosevelt’s New Deal programs as its members push for more infrastructure money to go directly to local governments. They are pointing to the legacy of programs like the WPA to bolster their case that such direct public-sector job efforts can work when mayors run them.

Associated PressWorks Progress Administration construction workers in Pennsylvania in 1936. The Roosevelt program was one of several that employed millions during the Great Depression.

CWA

CWA

“A lot of the infrastructure in Schenectady was funded with WPA funds in the 1930s and you can still see the WPA stamp in the sidewalks, in the parks, in the pools,” said Brian Stratton, mayor of the city in central New York state during a recent visit to Washington to lobby lawmakers. “That is what we need to come back to America’s cities, that’s what Schenectady needs, that’s what all of our cities need.”

Douglas Palmer, the mayor of Trenton, N.J., describes the mayors’ proposals as a “New Deal for the metro economies.”

The Civil Works Administration, created during a lunchtime meeting in November 1933, put 4.3 million people to work 10 weeks later on roads, schools, parks, playgrounds and athletic fields, according to Bonnie Fox Schwartz, a historian of the program. Roosevelt’s better-known WPA and Civilian Conservation Corps employed millions more and left durable monuments all over the country.

The White House is skeptical, Republicans in Congress say the government should be spending less on jobs programs, not more, and some economists say it isn’t clear New Deal ideas would work in today’s economy.

But the mayors say they are ready to hire large numbers of their constituents very quickly to carry out road repairs, graffiti-cleanup and sewer enhancements—”much like the CCC programs,” according to Robert Duffy, the mayor of Rochester, N.Y. They say that they can move fast because they aren’t encumbered by as much red tape as federal agencies.

“The last thing in the world that we need is another jobs bill where, a year later, we’re talking about how many jobs they’ve created,” said Bill Ferguson, a longtime lobbyist for local-government clients.

White House officials noted the New Deal took place in a different world, one without environmental impact statements, complex calculations to determine prevailing wage scales for workers, or extensive public reporting on the use of funds.

Some economists are also dubious of whether a massive expansion of government-funded jobs could work.

The impact of the New Deal remains hotly debated, as experts disagree on whether Roosevelt’s policies shortened or prolonged the Great Depression

Even if that issue is set aside, “you have to remember we’re starting from a very different position than we were in the 1930s,” said Steven Davis, a professor at the University of Chicago Booth School of Business. “The government is just enormously larger and that has implications for what the right thing to do is.

Write to Louise Radnofsky at louise.radnofsky@dowjones.com

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