Barack Obama estimates his economic stimulus plan will create or save as many as four million jobs over the next two years. Obama's economic advisors say 678,000 of those jobs will be in the construction industry and 408,000 of the jobs will be in manufacturing, two sectors that have been hit hard by the recession and financial system meltdown.
Critics of Mr. Obama's plan have pointed to its lack of details and questioned whether it will provide enough government spending to turn the economy around. A recent New York Times article, for example, questioned the size of the proposed stimulus package, and took note of the fact that no one knows whether fiscal policy works or not. The article noticed that Christina Romer, Obama's chief economic advisor, had previously argued that monetary policy is the most powerful force in economic recoveries and that "fiscal stimulus generally acts too slowly to be of much help in pulling the economy out of recessions."
The view that monetary policy can halt a recession has been discredited by a number of prominent economists, including Paul Krugman, and, apparently, as Mr. Obama's chief economic advisor, Ms. Romer has lost her faith in monetary policy. So we, Keynesians all, will soon stumble through the darkness like a long line of blindfolded clowns, chanting: I believe in fiscal policy, and in the multiplier, and in the accelerator, world without end, amen.
And, Lo, money will be spent. On mining and construction. On manufacturing. On all of the things in Table 4 on page 8 of the 14-page economic analysis, provided by Mr. Obama's economic advisors: Job Creation Of Recovery Package By Industry.
The Congress, together with the executive branch and state and local governments, will decide over the next two years exactly how the money will be spent, but it doesn't matter how the money is spent, as long as it provides enough income to enough people to stimulate aggregate demand and raise the expectations of enough consumers and businesses to create positive feedback, i.e., economic growth. As Mr. Krugman has pointed out correctly, Keynes himself thought it might be better if government spent money on useful things, but it would work just as well if government buried sacks of money at the bottom of mines, filled the mines with municipal garbage, then paid the private sector to dig the money up.
Rising expectations is what we want. Sustainable rising expectations. Expectations of employment, income and profits. We need to know that a lot of money is going to be spent, and we need to know it will be spent long enough to get the American economy growing again.
I have a proposal. Since it doesn't matter what we spend the taxpayer's money on, let's spend some of it on things that will never get done otherwise. Let's take a big chunk of that stimulus money and do some things that need to be done that nobody wants to do. The kinds of things it's impossible to do in ordinary times. The kinds of things we know we should do, but know we never will.
Fresh Kills dump on Staten Island is the largest landfill in the world. It is so full of toxic waste and chemicals that just the liability inherent in trying to remove and relocate that poison waste makes cleaning up Fresh Kills an impossible project for anyone except the Federal Government.
So, let's put Fresh Kills on the list. Let's take some of that stimulus cash and clean up Fresh Kills and other landfills across America. Then, even if fiscal policy doesn't work as quickly or as completely as we hope it will, we'll have gotten something real and lasting out of this tragic time.