Obama’s New Old Deal

Obama invokes both FDR and Eisenhower in his new program.  Ike built the interstate highway system in the 1950s as a national-defense measure, which most people forget today.  The grid of north-south and east-west highways and bridges didn’t get built as a jobs program, but as a way to ensure that American military equipment could move rapidly to the borders of the nation in case of attack.  It had the salutory side effect of enhancing mobility for Americans, most of whom only had one generation of car ownership at the time.

The key difference between Ike and Obama is that America could afford that public works project, and its need went further than creating public-sector jobs for political purposes.  We hadn’t sunk ourselves into tens of trillions in future entitlement liabilities or trillions of existing debt from previous public-works projects.  We faced an existential threat from the rise of Communist nations who had already begun invading other nations to expand their sphere of influence.  Eisenhower saw how critical roads and bridges had been in Europe during the war and wanted to ensure that America was prepared for the worst.

Now, with the federal government deep in debt, unwilling to address an entitlement disaster, and throwing hundreds of billions of dollars at private enterprises in a vain attempt to rescue them from their own bad management and labor practices, Obama wants to create a new WPA to renew American infrastructure not because it’s needed as much as Obama needs to ensure his re-election.

The original WPA should serve as an object lesson for us now.  It was bureaucratic, inefficient, and since it served mainly as a work-to-welfare program, had almost no way of disciplining its employees to improve production.  The massive resources it ate could have been much more efficiently utilized by the private sector, which could have produced higher-quality work at a lower price.  That has been the lesson of privatization in infrastructure that we have seen in Minnesota with the St. Anthony Bridge project and the rebuilding of Southern California freeways and overpasses after the 1994 Northridge earthquake.

Furthermore, Obama’s plan falls outside the scope of government in a big way.  The federal government should work on interstate highways and its bridges, and state governments should remain responsible for their transportation infrastructure.  However, it’s not the government’s business to order health-care providers to put medical records on the Internet.  In the first place, many of them already do — mine included — due to pressure from consumers to provide the service.  It didn’t take Obama, a village, or a government bureaucracy to demand it.  Second, some people may not want their medical records on the Internet, which is why my provider has it as an opt-in program.

None of this comes as a great shock, though.  While Obama has given some indications that he doesn’t intend a massive shift to the Left on defense and foreign policy, his economic plans have always favored statism, class warfare, and a striking ignorance of history and reality.  Recreating the WPA and proposing even more massive spending programs in the face of our precarious financial condition and debt load finds its equivalent only perhaps in the apocryphal fiddling of Nero while Rome burned.

Obama Plans Largest Public Construction Program Since 1950s...

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That leaves the latest bright idea from Congress: a broad, federally mandated restructuring of the Big Three in exchange for financial help. Congress would in essence become the Big Three's uber-manager, telling them how to become profitable again.

Excuse us, but are we supposed to believe that the same Congress responsible for next year's estimated $1 trillion deficit can profitably run a market-sensitive company like a car manufacturer?

Or that the same Congress that sat on its hands as the financial meltdown unfolded and helped create the mess will know how to financially restructure America's highly complex auto business?

None of the rest, from committee chairman Chris Dodd on down, has any private-sector experience to speak of, apart from brief stints at law firms. Fact is, Congress isn't equipped to run anything.

The Big Three are burning through $6 billion a month, so $34 billion won't last long. Chapter 11 bankruptcy, or something like it, would at least let them get out from under costly union contracts.

Given union opposition, this is highly unlikely. But as Lynn Lopucki, a bankruptcy law expert who teaches at Harvard and UCLA, told Bloomberg, about 77% of all billion-dollar companies survive bankruptcy. Others just sell their businesses.

Those are better odds than congressional mismanagement would offer. Chapter 11 would also force the automakers to change their business model and maybe even fire their CEOs. Best of all, it would keep Congress from meddling further in the marketplace.

Photoshop: David Lunde

My nominee for worst case of Palin Derangement Syndrome ever:

Please make sure you don’t turn into one of these.

The Truthers are out there.

Alas, Trutherism thrives on both the left and right. Which brings us to the spate of lawsuits challenging President-elect Barack Obama’s U.S. citizenship. On Friday, the U.S. Supreme Court considers one of those suits filed by New Jersey citizen Leo Donofrio, who maintains that Obama is not a “natural born citizen” because his father held British citizenship.

There may be a seed of a legitimate constitutional issue to explore here (how is the citizenship requirement enforced for presidential candidates, anyway?) And at least Donofrio concedes that Obama was born in Hawaii. But a dangerously large segment of the birth certificate hunters have lurched into rabid Truther territory. The most prominent crusader against Obama’s American citizenship claim, lawyer Philip Berg (who, not coincidentally, is also a prominent 9/11 Truther), disputes that Obama was born in Hawaii and claims that Obama’s paternal grandmother told him she saw Obama born in Kenya.