Obama’s earliest measures should be devoted to delivering practical help to individuals, families, and communities. That will both relieve economic suffering and establish him as a leader, as well as moderate the recession. By spring 2009, we will need an immediate recovery package in the range of $200 to $300 billion, and not primarily in the form of tax cuts. That money will be needed to extend unemployment benefits; deliver money to states and localities whose falling revenues cause them to cut services in a recession; and provide the first installment on a long-term effort to rebuild public infrastructure, with an emphasis on both deferred basic maintenance and efficient renewable energy. Such public outlays can also speed development of technologies that will improve America’s competitiveness and provide such twenty-first-century basics as universal broadband service.

The public works funds could be combined with an increase in job training subsidies to reduce bottlenecks in the supply of skilled workers. For example, retrofitting homes and offices for energy efficiency, building on pilot programs already operating in some small cities, could be a quick source both of good jobs and local economic stimulus. This would also yield savings on America’s energy bill—which would reduce our trade imbalance and put more money in consumers’ pockets.

As of early August, when this book was going to press, Obama has offered three versions of this kind of public outlay, each getting bolder as the crisis has deepened. In a speech last April, he included:

    A National Infrastructure Reinvestment Bank that will invest $60 billion over ten years and generate millions of new jobs. We can’t keep standing by while our roads and bridges and airports crumble and decay. We can’t keep running our economy on debt. For our economy, our safety, and our workers, we have to rebuild America. And we need to invest in green technology. We can’t keep sending billions of dollars to foreign nations because of our addiction to oil. We should be investing in American companies that invest in American-manufactured solar panels and windmills, and in clean coal technology. That’s why I’ve proposed investing $150 billion over the next ten years in the green energy sector.

This is exactly what’s needed, but the scale should be bigger. Later he proposed a second stimulus package of $50 billion, of which $30 billion was to be tax cuts. That was far too feeble.

Then, on July 31, after his economic summit meeting and the Labor Department’s announcement of higher unemployment, came stronger medicine. Obama proposed $25 billion for a “State Growth Fund to prevent state and local cuts in health, education and housing assistance or counterproductive increases in property taxes, tolls or fees.” The fund would also fund home heating and weatherization assistance. Second, he proposed another $25 billion for a Jobs and Growth Fund to replenish the highway trust fund, prevent cutbacks in road and bridge maintenance, and fund new fast-tracked projects to repair schools. All of this, he said, would “save more than 1 million jobs in danger of being cut.”

This proposal was a welcome down payment on an idea that progressives have been proposing for three decades—a “ready-to-go” program of standby anti-recession investment in public infrastructure. The idea is that localities can qualify in advance for preapproved projects, which can then be launched on relatively short notice. When recession strikes, the federal govern¬ment would release the funds, with the money divided among localities according to a formula. With the economy in serious trouble and a $1.6 trillion infrastructure backlog, this program is probably necessary for several years, and should be continued as an ongoing standby measure.

In the first phase, federal public works outlay could begin delivering badly needed public funds and decent jobs within as little as ninety days—money to repair and refurbish roads, bridges, mass transit, parks, schools, and public buildings, or to prevent cuts in state and local budgets. Gearing up a planning system for a more expansive second phase should take about six months. During the Depression, Roosevelt got money flowing in a matter of weeks. Later, the Public Works Administration not only delivered tangible public improvements and good jobs but also created a local planning system in which proposed projects were discussed and debated by citizens, who played a role in setting local priorities.

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