In a blog post on Talking Points Memo today, Obama economic adviser Robert Reich talks about what it’s going to take to get out of the “mini-depression”: more spending by government, “the spender of last resort” when consumer spending slows and investors are shy.
Government will have to spend “a lot,” Reich argues, $700 billion in the next year alone (many big rescue plans come these days with $700 billion price tags; I don’t know why that seems so often to be the magic number). And the spending will have to be, mainly, on infrastructure:
…repairing roads and bridges, levees and ports; investing in light rail, electrical grids, new sources of energy, more energy conservation. Even conservative economists like Harvard’s Martin Feldstein are calling for government to stimulate the economy through infrastructure spending. Infrastructure projects like these pack a double-whammy: they create lots of jobs, and they make the economy work better in the future. (Important qualification: To do this correctly and avoid pork, the federal government will need to have a capital budget that lists infrastructure projects in order of priority of public need.)
Some of Obama’s critics on the right have predicted that he will be another Jimmy Carter. His own transition team has been reading about FDR’s first 100 days. But to me he looks more like a 21st century Dwight D. Eisenhower in civies.