Will the Stimilus Work?
In today's NY Times, fascinating article written by LOUIS UCHITELLE entitled "Maybe it Can't: A Trap in Obama's Spending Plan". The article traces the history of previous public investments relative to the upcoming stimulus package and whether this proposal will work. Of note is the importance of private investment. As stated in the article: (tracing the history) Perhaps with that in mind, Mr. Obama evoked as an illustration of his plan's breadth not the desperate 1930s, but the prosperous 1950s and '60s. That was when President Dwight Eisenhower and Congress set out to build the Interstate System of highways – a gift to an expanding auto industry and to trucking that also linked the country, encouraging all sorts of other investments. But there is a big difference between Eisenhower's era and Mr. Obama's. By 1950, the Depression's gloom had been banished by the common effort of World War II, followed by immense postwar demand for American production. Road building was just one public investment that set off huge private outlays. The space program stands out; so does military spending, which spurred computer development and created the Internet. And Medicare, born in the 1960s, became intertwined with private medicine. Such symbiotic successes prompted a French journalist, Jean-Jacques Servan-Schreiber, to issue a warning to Europe in 1968. In "The American Challenge," a best seller, he wrote that "the government official, the industrial manager, the economics professor, the engineer and the scientist have joined forces" to support American economic growth, and that the juggernaut would soon reduce Europe to an American colony. He was wrong. Europe outpaced the United States in its embrace of public-private symbiosis. And now Mr. Obama proposes, in effect, to restore the formula in this country. We have advocated supporting public private partnerships and indeed it is time to embrace more.