Exasperated, FDR did an end-run around Ickes and set up the Works Progress Administration (WPA) under Harry Hopkins. WPA spent its money quickly and on projects involving little overhead or preparation. My mother got a WPA job teaching English to foreigners. Virtually all the WPA funds were spent in the fiscal year and the stimulative effect was immediate.
But in opting to go the Ickes route, Obama will find that he leaves a legacy of important contributions to our national infrastructure, but little in the way of real economic stimulation.
While a WPA-type approach might hasten the ameliorative impact of the stimulus package, Obama still faces the conundrum that most of those who get extra paychecks as a result of his spending will use the money to climb out of debt. In the '30s, credit cards didn't exist and consumer debt was very limited. Most people lived paycheck to paycheck. Extra money equaled extra spending. But now that most consumers will use money to pay down their debts, not to spend it, demand-side stimulation has its limitations. But Obama's ideology won't allow him to indulge in tax cuts "for the rich," which might work to get us out of the depression faster.
Dick Morris and Eileen McGann
Dick Morris, a former political adviser to Sen. Trent Lott (R-Miss.) and President Bill Clinton, is the author of
2010: Take Back America. To get all of Dick Morris’s and Eileen McGann’s columns for free by email, go to
www.dickmorris.com