Wise words from David Brooks today on the problems with "economic stimulus packages":
The Federal Reserve can effectively stimulate the economy. There are certain automatic government programs, like unemployment insurance, which also do it. But the history of the past century suggests that politically designed, ad hoc stimulus packages rarely work.
Often they get the timing wrong; they come too late to do any real good. Often they get the pressure points wrong; the economy is simply too complicated for lawmakers to know where to apply the stimulus patch. Almost always, they get psychology wrong. When you give people a chunk of money in the midst of economic turmoil, they don't spend most of it. They save it.
Even so, Brooks argues in favor of "a long-term investment in the country's infrastructure":
Create a base-closings-like commission to organize federal priorities (Congress has forfeited its right to micromanage). Streamline the regulations that can now delay project approval by five years. Explore all the new ideas that are burgeoning in the transportation world - congestion pricing, smart highways, rescue plans for shrinking Midwestern cities, new rail and airplane technologies. When you look into this sector, you see we are on the cusp of another transportation revolution.
Sign me up! Small problem, though: What guarantee is there that federal spending on infrastructure will actually be spent on new roads and highways? Isn't it just as likely that the folks in charge of Brooks's commission, or Obama's national infrastructure bank, will funnel the money to "light rail" and other transportation projects that nobody uses? Environmentalists and NIMBY activists will oppose government spending on pavement. But they'll support additional spending on mass transit systems that will do little to lighten the burden on suburban and exurban commuters. The pro-pavement constituency is, sadly, small in comparison.
Congress could write-in guarantees to spend the money on new road construction and bring in private companies to build new toll roads and highways. But if you think that's likely to happen without a major fight, I have a bridge I'd like you to help me build in Brooklyn.
