There’s a part of me that can’t help wonder what a radical return to the New Deal might do for our country in the current financial crisis and looming recession. Simply (overly simple, I know) what would be the effects of $700,000,000,000 put into the restoration of the U.S. and global infrastructure: roads, hospitals, bridges, schools, public art, digital information channels, and so on? One can imagine that putting everyone who can work to work would have several effects. People could pay their bills, including their mortgages and reduce their credit loads. People could buy things which generates more economic activity, including a restoration of our ability to generate wealth in countries who efficiently produce goods and services of high quality. Banks who have high investment in retail banking would immediately benefit and would worry less about lending to each other, since their repayment would no longer be a matter of fantasy or wishfulness.
This is a pipe dream, of course, as long as the “economic rescue” is in the hands of those who believe that the critical element of economic recovery is in the financial sector. Those would be the ones who have been recruited into the rescue army of the Fed Chairman and the Secretary of the Treasury. As an outsider with very limited knowledge of economics and a very shallow familiarity with balancing my checkbook (I’ll explain what a checkbook is later, children), I make no claim to expertise.
However, I suspect that the natural human tendency to believe in the importance of our part of any job may affect the approach taken. Even if some bankers got us into this situation, they are probably certain that only bankers can get us out. Also, even though trickle-down economics doesn’t appear to be supported by the evidence (a recent report shows that the U.S. has the 4th worst wealth disparity in the west). We are probably not ready to try “trickle up” as our main remedy yet.
I suppose the main point has to be that no one is going to get us out of this unless we all get us out of this. While it is a lot of fun taking blame potshots at people who are not in the room with me, I’m reasonably confident that all the stuff my parents taught me about hard work, frugality, building trust, and creating things that last (like a real legacy) are still worth pursuing. My mother was born in the midst of the Great Depression and she learned early that nothing great is built on greed. Everything of value is built on a commitment to leave more than I take.