Public Works Projects

by Marcia Clemmitt, February 20, 2009

Do they stimulate the economy more than tax cuts?

To battle the Great Depression, President Franklin D. Roosevelt put millions of unemployed Americans to work on New Deal projects such as repairing roads and building cabins in national parks. To stimulate today’s ailing economy, Congress has enacted a $787 billion package that includes tax cuts and spending on infrastructure, including expanding highway and rail systems and weatherizing buildings. But many conservatives argue that government spending does not create jobs and merely diverts money from the private sector, which they call the only true engine of job creation. Meanwhile, infrastructure experts worry that if federal public-works dollars are spent too quickly, the money will go to eco-unfriendly projects, such as additional highway lanes that encourage fossil-fuel use and suburban sprawl, rather than to more future-oriented “green” initiatives like expanding rail and public transit and upgrading the electrical grid to accommodate alternative power sources.

* Will federal spending on public works create jobs?
* Does infrastructure construction strengthen the economy?
* Is the Democratic public-works spending plan too big?

For a more in-depth summary, see the Overview of this week’s report.
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Overview from the issue on Public-Works Projects (2/20/2008)

by Marcia Clemmitt

Matthew Sinkovec, a truck driver for an excavation company in northeastern Ohio, used to have plenty of work hauling materials to home-construction sites. But as the economic crisis battered the Cleveland area, work dried up.

“Instead of four jobs lined up, I’d get one and then wait for another,” he said. Eventually, “the bottom just fell out,” and he was laid off last November. Now, he mostly stays home, trying to conserve money, and hopes to find another construction job before his unemployment checks end. “I try not to think about this lasting too long,” he said. “That is a real scary thought.”

The construction business was among the first to slow drastically as the United States entered a recession in December 2007, but most other industries now also have slowed – with accompanying layoffs. In January 2009 alone, 598,000 people nationwide lost their jobs, the biggest monthly total since 1974. And in some places, net job loss has been a long-term phenomenon. Hard-hit Ohio, for example, has lost nearly a quarter of its manufacturing jobs since 2000 and 5 percent of its jobs overall.

In response, President Barack Obama and congressional Democrats developed the American Recovery and Reinvestment Act and declared the so-called stimulus package their first major legislative priority of 2009. Enacted by Congress on Feb. 13 and signed into law by Obama on Feb. 17, the act is designed to pump additional demand for goods and services into the economy, partly by creating jobs and retooling infrastructure for the future. It is “the most sweeping economic recovery package in our history . . . putting Americans to work . . . in critical areas . . . that will bring real and lasting change for generations to come,” Obama said.

Parts of the bill’s economic-stimulus provisions are familiar – tax cuts and boosts in aid programs such as unemployment benefits and Medicaid. But it’s the first major economic-recovery plan to include federal spending for public works like highways and energy-efficiency upgrades for buildings since President Bill Clinton proposed, but ultimately dropped, such a proposal in 1993.

Conservative analysts and most congressional Republicans were quick to denounce the public-works spending provisions as a waste of taxpayer dollars that won’t help the economy.

“We have no evidence from recent or distant history” that public-works spending creates jobs or spurs the economy, says Ronald D. Utt, a senior research fellow at the conservative Heritage Foundation. The Obama plan is partly modeled on the Depression-era job-creation initiatives of President Franklin D. Roosevelt’s New Deal. “I don’t know that that many people were ultimately employed” by those 1930s programs, Utt says.

Obama says the programs will benefit the economy both in the current recession and long term. For example, grants to weatherize homes – modifying them to reduce energy consumption – will “immediately put people back to work,” he told CBS News. “And we’re going to train people who are out of work, including young people, to do the weatherization. “Not only are you immediately putting people back to work, but you’re also [helping] families on energy bills and . . . laying the groundwork for long-term energy independence.” Other projects would repair highways, create high-speed rail systems and make public buildings energy-efficient.

A stimulus package similar to the one Congress approved should create between 3.3 million and 4.1 million jobs over the next two years – around 1.3 million of them from public-works programs – according to Christina Romer, chair of the White House Council of Economic Advisers, and Jared Bernstein, chief economist for Vice President Joseph Biden. More than 90 percent of the jobs created will be in the private sector, about a third of them in construction and manufacturing.

Nevertheless, the plan can’t possibly create enough jobs to offset the losses the economy is suffering, Romer and Bernstein caution.

About 11.6 million people were unemployed in January – 4.1 million more than a year earlier – and job losses are expected to continue into 2010, according to the U.S. Bureau of Labor Statistics.

Our $15-trillion-per-year economy has taken at least a 5 percent hit – $750 billion – in the demand for goods and services that keeps business humming, says James K. Galbraith, an economist and a professor of government at the Lyndon B. Johnson School of Public Affairs at the University of Texas, Austin. “Infrastructure is not going to make up a $750 billion to $1 trillion hole in economic activity,” he says.

Infrastructure experts also caution that the country’s longtime neglect and underfunding of infrastructure maintenance and planning means that some public-works projects will suffer some delay before they’re up and running.

“Up to a point, public works are a good way” to stimulate job creation, says Richard G. Little, director of the Keston Institute for Public Finance and Infrastructure Policy at the University of Southern California. However, in the present workforce we don’t have the welders, the heavy equipment operators and other skilled workers we need, he says.

“A stimulus package with real sticking power should support training in the construction trades for the vast number of young and underemployed people for whom college is not the career solution,” Little said.

The key question for many is whether infrastructure spending that creates jobs quickly can also be visionary enough to strengthen the nation and economy long term.

Public-works spending can contribute toward stabilizing the economy in the short term, depending on how quickly the money can be spent, “but, much more important, the public works of today will redefine how we live in the future,” says Galbraith, noting that the Interstate Highway System launched by President Dwight D. Eisenhower in the 1950s created America’s suburbs.

When it comes to federal infrastructure spending, “forget about stimulating the economy over the next year,” says Robert P. Inman, a professor of finance and economics at the University of Pennsylvania’s Wharton School of Finance. “The rewards should be found in the project itself,” and, ideally, the benefits should be national, he says.

For example, “if you give money to Pennsylvania to invest in education, their kids will be more productive, and they’ll end up living everywhere in the country,” benefiting the whole nation, he says. In the best-case scenario, the dollars would go to inner-city and other poor schools, he says, thus aiding a cause “that we value but that wouldn’t have received help otherwise” – a good test for the worth of government spending, he adds.

There’s tension between projects that will give local economies a quick boost and those that would best serve future needs, says Anthony Shorris, a fellow at the liberal Century Foundation think tank and former executive director of the Port Authority of New York and New Jersey. “The fastest thing to build is a new road, but it’s the opposite of everything we want” in the long run, producing more sprawling development and more carbon-emitting automobiles, he says.

“If the wrong things are done, they may do damage with this [stimulus] bill,” says John Norquist, president of the Congress for the New Urbanism, a Chicago-based nonprofit that promotes walkable environments and sustainable development.

“It’s crucial to think beyond the current crisis,” says Guian A. McKee, an associate professor of history at the University of Virginia. “What do we want the structure of this economy to be 10 to 15 years from now? Do we want mass transit, alternative energy?” If so, then it’s time to focus on such projects, he says. “While we need the shovel-ready stuff for the crisis, we shouldn’t neglect the long-term things,” he says.

At present, though, “we haven’t really developed a vision of the 21st-century U.S. economy, so we don’t know what infrastructure we need to support it,” says Armando Carbonell, a senior fellow at the Lincoln Institute for Land Policy, a think tank in Cambridge, Mass. To create a vision for the transportation system, for example, “we need to know where the current system breaks down” and stymies important travels, he says. For example, highways and air travel are congested and frustrating in the Northeast Corridor, so we know that providing a rail alternative is a good possibility, he says.

“You need the target, and you need the vision, because tomorrow is going to be different from today,” Carbonell says.

“If we’re going to have an infrastructure feeding frenzy, make sure government builds public works that will make us more productive as a nation,” such as roads, bridges, mass transit, integrated information technology in public industries like health care, and military recapitalization, said New Hampshire Sen. Judd Gregg, top-ranking Republican on the Senate Budget Committee. “This is about bringing the nation out of this recession in a manner that makes us more competitive in the international market.”

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Homeland Security

Is America safe from terrorism today?
By Peter Katel, February 13, 2009

Following the Sept. 11, 2001, terrorist attacks, the U.S. government created the Department of Homeland Security, giving it stepped-up power to shadow and detain terrorism suspects. Then-President George W. Bush credited these measures — and intelligence and military operations abroad — with preventing new attacks on U.S. soil in the nearly eight years since 9/11. But some intelligence experts argue that the new department failed to coordinate the nation's many turf-conscious intelligence agencies, and that continued U.S. military pressure has rendered Osama bin Laden's al Qaeda terrorist network incapable of mounting new attacks within the United States. Moreover, jihadist cells that have wreaked havoc in Europe lack counterparts in the U.S., where Muslims are far less alienated, experts say. Still, the danger of a new attack remains. According to an emerging school of thought, Americans should learn to live with the possibility of an eventual attack, rather than expecting government to eliminate all danger.

• Does al Qaeda remain a danger within the United States?
• Is the Department of Homeland Security set up effectively to spot potential threats?
• Is the United States focusing anti-terrorism resources in the right places?

For a more in-depth summary, see the Overview of this week’s report.
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Overview from the issue on Homeland Security (2/13/2009)

by Peter Katel

The attackers struck in the last days of November 2008. With terrifying precision, shooters in five two-man teams moved from target to target, unleashing lethal bursts of automatic weapons fire in the train station, an upscale restaurant, two luxury hotels and a Jewish cultural center.

By the time the terrorists had been killed or captured three days later, 173 people had been slain.

The massacre occurred in Mumbai, India, but 7,800 miles away, New York City Police Commissioner Raymond W. Kelly couldn't help but notice some troubling parallels. Mumbai, he told the Senate Homeland Security Committee in January, is “the country's financial capital, a densely populated, multi-cultural metropolis and a hub for the media and entertainment industries. Obviously, these are also descriptions of New York City.”

In the post-9/11 world, Kelly's job is to make such connections. But among Americans in general, beset by foreclosures, job layoffs and other manifestations of the global economic meltdown, terrorism fears have diminished in the years since the Sept. 11, 2001, attacks on the World Trade Center and Pentagon.

“There may be a false sense of security in the United States because we haven't been attacked in seven years,” says Bruce Hoffman, a professor at Georgetown University's School of Foreign Service and former scholar-in-residence for counterterrorism at the Central Intelligence Agency (CIA).

Indeed, while the Mumbai attacks seem as distant from the United States as South Asia itself, Hoffman and others view Mumbai as a wake-up call for the United States.

The attacks have been linked to Lashkar-e-Taiba (LeT), or the “Army of the Pure,” a Pakistani group with deep connections to Pakistan's intelligence service. LeT seeks to force India to cede Kashmir to Pakistan, which, like Kashmir is majority Muslim. The group shares longstanding ties with Osama bin Laden's jihadist group al Qaeda, which carried out the 9/11 attacks.

While the daily fear that gripped Americans after Sept. 11 may have faded, the nation nonetheless has remained on high alert ever since, its security infrastructure extensively strengthened.

Creation of the Department of Homeland Security (DHS) the year after the attacks reflected officials' certainty that further terrorist strikes were imminent. Since then, increasingly intense airport screenings provide constant reminders of danger, along with warnings by terrorism experts that the United States' 361 ports and long borders leave the nation vulnerable.

“America's margin of safety against a WMD (weapon of mass destruction) attack is shrinking,” a blue-ribbon congressional commission reported in December, pointing specifically at Pakistan and the jihadist groups flourishing there. “Were one to map terrorism and weapons of mass destruction today, all roads would intersect in Pakistan. . . . Trends in South Asia, if left unchecked, will increase the odds that al Qaeda will successfully develop and use a nuclear device or biological weapon against the United States or its allies.”

Bin Laden is doing his best to keep fears alive. Five days before Barack Obama's Jan. 20 inauguration, a recording released by bin Laden said the new president was “inheriting two wars, in which he is not able to continue, and we are on our way to open other fronts, God willing.”

Thought to be holed up in the mountainous tribal-ruled belt of northwestern Pakistan, bin Laden and his top commanders — notably Ayman al-Zawahiri, an Egyptian doctor who is considered al Qaeda's second-in-command — remain America's No. 1 counterterrorism targets. As Defense Secretary Robert Gates told the Senate Armed Services Committee in January: “We will go after al Qaeda wherever al Qaeda is.”

Still, some veteran terrorism analysts say bin Laden's network no longer commands the funds, communications facilities nor technical expertise necessary to plan and carry out a major attack in the United States.

Marc Sageman, a former CIA officer in Pakistan, notes that the London subway and bus attacks in 2005 mark the last effective al Qaeda action outside Asia or Africa. “There has not been a single fatality from al Qaeda or an al Qaeda-linked group in the West since July 7, 2005,” Sageman, now a consultant to the NYPD's counterterrorism division, told a Washington conference sponsored by the Cato Institute think tank in January.

Another longtime expert on al Qaeda, Peter Bergen, noted recently that intensive investigations since 9/11 failed to uncover a single al Qaeda “sleeper cell” in the United States or any operatives on immediate missions. “While a small-bore attack may be organized by a Qaeda wannabe at some point, a catastrophic, mass-casualty assault along the lines of 9/11 is no longer plausible,” said Bergen, a journalist and a fellow at the nonpartisan New America Foundation, who interviewed bin Laden in 1997.

John Mueller, an Ohio State University political scientist, has been arguing for several years that U.S. officials have vastly exaggerated the extent of terrorism danger to the United States. “It's looking more and more that 9/11 was an outlier,” says Mueller, author of a 2006 book on terrorism. “Even if you assume that U.S. protection measures are 90 percent effective, that would mean that some al Qaeda agents would have been caught entering the United States. The fact that the government can't find any means that al Qaeda isn't trying.”

Even experts who question the need for some security procedures call Mueller's position extreme. Al Qaeda and its allies “would kill you if they could,” says James Jay Carafano, director of the conservative Heritage Foundation's Kathryn and Shelby Cullom Davis Institute for International Studies. Minimizing terrorism threats would be risky, he argues. “If you get a cold and just ignore it, then you get pneumonia and die.”

However, experiments conducted last year by journalist Jeffrey Goldberg suggest that domestic aviation security, at least, wouldn't stop terrorists. Goldberg got on a flight from Minneapolis-St. Paul to Washington with a forged boarding pass, no driver's license and a coat (in summertime) over an Osama bin Laden t-shirt. A security supervisor let Goldberg through. “ 'All right, you can go,' ” he said, pointing me to the X-ray line. “ 'But let this be a lesson for you.' ”

Transportation Security Administration (TSA) Director Kip Hawley previously told one of Goldberg's key sources, security guru Bruce Schneier, that the agency's intelligence service effectively spots potentially dangerous passengers before they reach airports. “Our intel operation works closely with other international and domestic agencies,” Hawley told Schneier.

Other intelligence experts argue for paying close attention to the shared jihadist roots and operational ties between al Qaeda and LeT, the apparent Mumbai attack mastermind. “Bin Laden was an early supporter of the group and provided some of the initial funding,” writes Bruce Riedel, a former CIA expert on Pakistan now at the Brookings Institution think tank. He has noted that the first major al Qaeda operative arrested after 9/11, Abu Zubayda, was nabbed in an LeT safe house in Islamabad.

Riedel, author of a recent book on al Qaeda, predicts that Mumbai sets a pattern for future attacks. “I think this will become a role model for terrorists around the world,” he told the German news magazine Der Spiegel. “You will see the copycat phenomenon where others will try to imitate what has just happened in Mumbai.”

Some say it's an easy model to adapt. “In Mumbai, the terrorists demonstrated that with simple tactics and low-tech weapons they can produce vastly disproportionate results,” Brian M. Jenkins, a terrorism analyst at the RAND Corporation think tank, told the Senate Homeland Security Committee. Their weapons, he noted, amounted essentially to a 1940s-era arsenal — rifles, pistols and grenades.

By attacking a non-aviation transportation hub, the attackers reinforced another warning by many terrorism analysts — jihadists' adaptability. “I think what Homeland Security has done well up to this point is to prepare defenses to respond to the last attack,” says Roger Cressey, transnational threat director for the National Security Council during the Clinton administration. “If you look at TSA, it's more focused on aviation than on any other element of transportation.”

Many other terrorism experts point to al Qaeda's apparent obsessiveness about aviation and highly symbolic targets. Sept. 11 provided the clearest example. In addition to the hijackers aiming at the World Trade Center and Pentagon a fourth plane apparently had targeted the Capitol or White House. It crashed in Shanksville, Pa., after passengers rushed the cockpit.

In fact, jihadists had tried toppling the towers once before, exploding a bomb in the garage in 1993. After fast police work rolled up nearly the entire network of conspirators, counterterrorism expert Hoffman warned that the danger hadn't passed.

“The fact there haven't been any more attacks doesn't mean we're out of the woods,” he said. “Terrorism doesn't work in a predictable fashion.” He was speaking in 1994, seven years before 9/11.

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This New Report: The Obama Presidency

By Kenneth Jost, January 30, 2009

Can Barack Obama deliver the change he promises?

As the 44th president of the United States, Barack Hussein Obama confronts a set of challenges more daunting perhaps than any chief executive has faced since the Great Depression and World War II. At home, the nation is in the second year of a recession that Obama warns may get worse before the economy starts to improve. Abroad, he faces the task of withdrawing U.S. forces from Iraq, reversing the deteriorating conditions in Afghanistan and trying to ease the Israeli-Palestinian conflict. Still, Obama begins his four years in office with the biggest winning percentage of any president in 20 years and a strong Democratic majority in both houses of Congress. In addition, as the first African-American president, Obama starts with a reservoir of goodwill from Americans and people and governments around the world. But he began encountering criticism and opposition from Republicans in his first days in office as he filled in the details of his campaign theme: “Change We Can Believe In.”

* Is President Obama on the right track in fixing the U.S. economy?
* Is President Obama on the right track in Iraq and Afghanistan?
* Is President Obama on the right track in winning support for his programs in Congress?

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