Friday, October 08, 2010

The states' anti-Keynesian experiments

It's beginning to feel a lot like 1937 these days.

Companies added 64,000 jobs last month, after having added 93,000 jobs in August, the Labor Department reported Friday. But over all, the economy shed 95,000 nonfarm jobs in September, the result of a 159,000 decline in government jobs at all levels. Local governments in particular cut jobs at the fastest rate in almost 30 years.

“We need to wake up to the fact that the end of the stimulus has really hit hard on local governments,” said Andrew Stettner, deputy director of the National Employment Law Project. “There is much more of a slide in the job market than what we really need to clearly turn around.”

Exhibit #1, hack ideologue Chris Christie, who has decided his state needs neither jobs nor a working infrastructure...Oh, nor the federal money intended to pay for it.

The largest public transit project in the nation, a commuter train tunnel under the Hudson River to Manhattan, was halted on Thursday by Gov. Chris Christie of New Jersey because, he said, the state could not afford its share of the project’s rising cost.

Mr. Christie’s decision stunned other government officials and advocates of public transportation because work on the tunnel was under way and $3 billion of federal financing had already been arranged — more money than had been committed to any other transit project in America.

The governor, a Republican, said he decided to withdraw his support for the project on Thursday after hearing from state transportation officials that the project would cost at least $2.5 billion more than its original price of $8.7 billion. He said that New Jersey would have been responsible for the overrun and that he could not put the taxpayers of the state “on what would be a never-ending hook.”

In scrapping the project, Mr. Christie is forfeiting the $3 billion from the federal government and jeopardizing as much from the Port Authority of New York and New Jersey. The state may also have to repay the federal government for its share of the $600 million that has already been spent on the tunnel.

The tunnel, which would have stretched under the Hudson from North Bergen, N.J., to a new station deep below 34th Street in Manhattan, was intended to double the number of trains that could enter the city from the west each day. The project’s planners said the additional trains would alleviate congestion on local roads, reduce pollution, help the growth of the region’s economy and raise property values for suburban homeowners.

The tunnel was also supposed to provide jobs for 6,000 construction workers just as some other big transit infrastructure projects in the city, like the Second Avenue subway, were winding down.

Instead, the contractors hired to dig the tunnel will soon start laying off workers.

I would be stunned except that Christie has shown nothing but contempt for the people of New Jersey since he began his campaign.

Krugman concludes thusly:

So this was a terrible, shortsighted move from New Jersey’s point of view. But that’s not the whole cost. Canceling the tunnel was also a blow to national hopes of recovery, part of a pattern of penny-pinching that has played a large role in our continuing economic stagnation.

When people ask why the Obama stimulus didn’t accomplish more, one good response is to ask, what stimulus? Leaving aside the cost of financial rescues and safety-net programs like unemployment insurance, federal spending has risen only modestly — and this rise has been largely offset by cutbacks at the state and local level. Many of these cuts were forced by Congress, which has refused to approve adequate aid to the states. But as Mr. Christie is demonstrating, local politicians are also doing their part.

And the ideology that has led Mr. Christie to undermine his state’s future is, of course, the same ideology that has led almost all Republicans and some Democrats to stand in the way of any meaningful action to revive the nation’s economy. Worse yet, next month’s election seems likely to reward Republicans for their obstructionism.

So here’s how you should think about the decision to kill the tunnel: It’s a terrible thing in itself, but, beyond that, it’s a perfect symbol of how America has lost its way. By refusing to pay for essential investment, politicians are both perpetuating unemployment and sacrificing long-run growth. And why not? After all, this seems to be a winning electoral strategy. All vision of a better future seems to have been lost, replaced with a refusal to look beyond the narrowest, most shortsighted notion of self-interest.

Short-sighted indeed. Christie could have railed against cost-overruns, union rules, construction delays, etc., all the while benefiting from the largess of other federal and regional agencies and watching New Jersey's construction workers go back to work

But what it does do is make Republican operatives swoon and Christie dream of the Oval Office.

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Anonymous Anonymous said...

But at the same time you wouldn't dare mention what "fraction" state spending is to federal, and how that "calculates".

Probably because you are reading off a crib sheet and wouldn't know economics if it smacked you in the face.

9:23 PM  
Blogger John said...

I don't see how the "fraction" of state spending is to federal and how that "calculates" "relates" to my "argument" that laying off thousands of teachers, cops and firemen, and killing a major transportation project of which the state's money was a "fraction" of the federal contribution isn't doing a whole lot to lower unemployment.

True, I wouldn't know "economics if it smashed [me] in the face. Wasn't trained in the dismal science to be sure. I kind of rely on Nobel Prize winners to help me understand the crib sheet I get everyday from Libtard Central. But having experienced the every day con that administrations like Christie's represent for several decades now, I can sure see ideological cruelty when that smacks me in the face.

But thanks for the contribution, Anonymous.

3:41 PM  

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