Battles with Integrity

Professor Reich (former Secty. of Labor) wrote a post on his blog about the necessary priorities for the coming administration, specifically economics. He writes that since the economic downturn (mini-bagel, not a Great Bagel) is consumer based--which is to say that as consumer wages have failed so far to keep up with costs, consumers have eventually run out of money to spend--that the consumer economy won't improve unless those consumers actually get the money to start spending again. Since consumers account for 70@% of the economy, and investors aren't spending until the consumers will, then the government has to be the kick-start for the economy.

His rather Keynesian idea is that the way to fix the economy is to use government debt to give money to consumers in the form of infrastructure jobs. We should spend lots on infrastructure (you remember those crumbling roads, bridges, levees, ports, and trains?) which will have dual benefit of boosting the economy and making the economy better in the future (by way of better infrastructure).

It's elegant in its simplicity. There's more, but Prof. Reich does it better than I, so read the link above. Funny enough, this spring in Prof. Reich's class, I was tasked with putting together a public policy plan, and it was just this.