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an independent newspaper EDITORIALS
The Great Depression that wasn’t Fact and fiction in the campaign debate on the economy P
OLITICAL DEBATE is not the same thing as fair debate, as the current discussion of the U.S. economy and President Obama’s efforts to repair it illustrates. Amid a
bruising, polarized election campaign, the presi- dent claims credit for both saving America from another Great Depression and laying the basis for future prosperity. And Republicans blame the stubbornly high unemployment rate entirely on him, asserting that it is but a prelude of misery yet to come. What would an objective analyst conclude? Mr. Obama is right that the Great Recession was well under way when he took office in Janu- ary 2009. He is also right to claim credit for the fact that it did not get much worse. The presi- dent’s policies, including the $814 billion 2009 stimulus bill, the Treasury Department’s bank stress tests, foreclosure prevention, and the bail- out of General Motors and Chrysler, propped up demand for goods and services when the private sector could no longer do so. Whatever their defi- ciencies, for an economy in free-fall these in- terventions were the equivalent of a parachute. Some caveats are in order: First, much depend- ed on the Troubled Assets Relief Program (TARP), for which Mr. Obama must share credit with his predecessor, George W. Bush. Second, the Federal Reserve’s near-zero interest rates and massive
A billion here,
a billion there Very nice, but not nearly enough for Virginia’s ailing road system
L
IKE MANNA from heaven, an audit of the Virginia Department of Transportation or- dered by Gov. Robert F. McDonnell (R) has unearthed buckets of cash — $1 billion or
more — sitting in the department’s accounts and ready to be spent on badly needed maintenance and construction projects. The money should pro- vide a badly needed shot in the arm both for the commonwealth’s ailing road system and for its shaky economy. That’s great news. The even better news is that once Mr. McDon- nell was done slashing the previous Democratic administration for its supposed mismanagement of transportation funds, he told a plain truth: This money is a drop in the bucket and will hardly make a dent in Virginia’s long-term transporta- tion needs. Better yet, Mr. McDonnell pledged — at last —
to unveil a real, ongoing and serious transporta- tion plan — read: new revenue — at the end of this year in time for the legislative session starting in January. “I’m not by any stretch of the imagination say-
ing . . . this will take care of the problem,” the gov- ernor said. In response to a question a few min- utes later, he added: “Our problems are far greater [than the audit can solve]. We have needs in the tens of billions of dollars in the next decade, and that’s why we’re putting together some long-term ideas.” The governor understands that Virginia has done nothing to find new revenue for transporta- tion in a quarter-century. He was smart to order the audit, and not only because it will get more money flowing into projects faster. More impor- tant, it removes the political argument, made by his own Republican allies, that the state cannot possibly seek new transportation funding until it’s certain that existing money is being well spent.
By its own estimates, the state needs an addi- tional $100 billion over the next 15 years to build roads, rails and bridges. The “discovery” of un- spent funds in this or that account — especially when much of the money was already committed to contracts that had simply hit minor delays — is not a transportation fix. Nor is the possibility of $450 million (at a generous estimate) in a one- time windfall that might materialize if Mr. Mc- Donnell wins the coming fight over his proposal to privatize the state’s liquor sales. As for unspent money identified by the audit, it comes in several categories, some disturbing,
bond purchases probably did even more than the administration’s policies to prevent a crash. In fact, the National Bureau of Economic Research said last week that the recession technically end- ed in June 2009, before the bulk of the stimulus spending. Nor is Mr. Obama or his economic policy to blame for the economy’s inability so far to resume robust, job-generating growth. The economy faces a painful, protracted process of deleverag- ing. Households and companies must work off a huge overhang of debt built up during the boom, and they can’t resume spending and investing in the meantime. That deleveraging will hamper growth for — well, for as long as it takes. Govern- ment efforts may ease deleveraging, but to the ex- tent they succeed, it is generally by postponing the day of reckoning and making it more expen- sive when it inevitably arrives.
think that the pluses eventually will outweigh the minuses, if the government exploits the legisla- tion’s cost-bending potential — but for now the minuses include a more uncertain business cli- mate that may have retarded investment. Finan-
I
n other respects, Mr. Obama’s leadership may have slowed recovery. Like any such massive effort, health-care reform had both benefits and costs, not all of which can be foreseen. We
cial regulatory reform, too, was necessary but has roiled business decision-making in the short term. Thanks to poor design and avoidable red tape, the stimulus plan did not produce as much bang for the buck as it could have. The water and transportation departments of Los Angeles, for instance, have so far created just 55 jobs with $111 million in stimulus money, mostly because of bu- reaucratic obstacles to spending the cash. In short, Mr. Obama, his predecessor and the
Federal Reserve have succeeded in soft-landing the U.S. economy. The benefit is obvious: no Great Depression II. Equally clear is the price we paid: a massive conversion of accumulated private-sector liabilities into federal obligations. The question now is what policies can deliver America from the debt-burdened stagnation that looms dangerously. Clearly, part of the answer lies in a structural shift from engines of growth that government policy long favored but that are now exhausted — such as housing and financial ser- vices — to more sustainable sources of jobs and income. Too often, though, Mr. Obama speaks as if “green” industries can sprout wherever Washing- ton subsidizes them. Republican cries for massive cuts in capital gains and other taxes seem no less fanciful. Instead of this partisan impasse, the country needs a serious debate about its long- term economic challenges.
TOM TOLES
SUNDAY, SEPTEMBER 26, 2010
LETTERS TO THE EDITOR
dletters@washpost.com
Hard times, hard choices and gratitude Regarding the Sept. 20 front-page story “That
nest egg is feeling fragile”: Something is going to have to change. With peo- ple in their mid-20s saddled with student loans and unable to find decent jobs, it is hard to imagine that they will be able to pay for their children’s educa- tion when college tuitions for children born today are estimated to be $175,000 for public schools and $365,000 for private colleges. Among my recent graduate peers, the thought of being able to save money for anything seems a too- lofty goal. We are too busy treading water and try- ing to pay back our own loans to worry about whether we can afford to get married, have children or pay for our children’s education. A college educa- tion is a good thing to have — but maybe not for $200,000. We either need to better prepare high school stu- dents for entering the workforce straight out of school or subsidize the costs of higher education to make it feasible.
JOHN ARTHUR, Morristown, N.J.
I read with disappointment in Dan Balz’s Sept. 22
“The Take” that President Obama’s messages just aren’t getting through, even to his supporters. I am retired and, like many people, I lost a signifi-
cant fraction of my retirement savings in the recent financial crisis. However, I owe much gratitude to the members of the administration who were cou- rageous enough to take unprecedented measures to keep the crisis from sending the country into a de- pression much more severe than the recession in which we find ourselves. Tens of millions more peo- ple could be out of work and untold hundreds of bil- lions more in savings could have been lost if the ad- ministration had not taken the series of actions it did over many months. Why don’t we realize that other business had to wait while this national priority was dealt with? How is it possible that we forget so quickly that we have been saved from a financial meltdown and a prolonged depression? I don’t know about others, but I thank the president and his team for pulling our bacon out of the fire.
JOHN J. HUDAK, Columbia Defending the UAW pensions
Regarding the Sept. 18 editorial “The pension puzzle”: The United Auto Workers strongly supports the Delphi salaried workers getting their pensions. The UAW will always support any workers in
their efforts to win justice when they are being un- justly treated, as the Delphi salaried workers are now. It is disappointing, however, that rather than simply supporting these workers’ quest for win- ning justice, The editorial tried to use this as an op- portunity to criticize the UAW for fighting for and protecting our members’ pensions. It is important to state the facts. The reason the hourly workers were treated better is that the UAW had the foresight to negotiate the pension guaran- tee when General Motors spun off Delphi; the sala- ried employees did not have anyone representing their interests and thus did not negotiate any protection. If GM’s hourly pension plan had been terminat- ed, as the editorial suggested, not only would the Pension Benefit Guaranty Corp. have been saddled with an enormous liability but, under federal law, the federal government would also have been lia- ble for picking up at least 65 percent of the health- care costs for retirees ages 55 to 65. The bottom line is that it was far cheaper for the
federal government to permit the GM pension plan to continue than to have taxpayers absorb the pen- sion and health-care costs. It was this financial consideration — and not any political calculus — that drove the administration’s decision. We hoped The Post would have praised the UAW for winning justice for our members and simply advocated, as we do, for equal justice for the Delphi salaried workers.
BOBKING, Detroit
some not. Faced with plummeting state transpor- tation dollars over the past two years and un- certain federal ones, the previous administration of Gov. Timothy M. Kaine increased its reserve funds for road-building. This was a deliberate and probably prudent policy to ensure that large and long-term construction projects, once started, could be fully paid for. Reducing the reserves now comes with some risk, as state officials themselves acknowledged. They (and the audit) believe that it’s an acceptable risk given the pressing need and favorable conditions — low interest rates, eager contractors. Fine.
T The impending Gray Era
Fred Hiatt’s balanced analysis of where D.C. school reform stands after the mayoral primary [“School reform after Fenty,” op-ed, Sept. 19] boiled down to this: While voters were turned off by Mayor Adrian M. Fenty, they haven’t turned against reform, but “school reform nonetheless lost” because presumptive may- or-to-be Vincent C. Gray “will have to think twice, and twice again, before tak- ing on the unions that gave him important campaign support.” This conjecture about Mr. Gray’s anticipated
If he wants to succeed, Vincent Gray should think of himself as a one-term mayor.
deference to the Washington Teachers’ Union seemed to assume that his mind-set, like that of all blinkered politicians, includes the subcon- scious notion of running for another term. In that case, the union in 2014 will sternly measure his performance against the promises that led to its support in 2010. Wouldn’t it be nice, rather, to imagine Mr.
Gray rejecting this knee-jerk political state of mind and instead opting to make some un- fettered history? Mr. Gray should apply his obvious talents to improving the woebegone school system with- out reference to the political force of any group offering him advice. One useful approach is to think about himself as a one-term mayor. He will be, let’s face it, 68 years of
age when he takes office. From a very personal perspective, I can tell
him that at 72, he will have lost a couple of steps, particularly after the four-year whirlwind into which he is about to plunge. He should tell himself (but nobody else, of course; who fears a lame duck?) that if there is to be a Gray Era, it needs to be inaugurated now, in these four crucial years, without regard to future elections or any constituents other than the chil- dren whose futures he holds in his hands. BERNARDRIES, Washington
he more damning indictment of the Kaine administration is that it also sat on funds for smaller projects and even for mainte- nance and failed to tap available federal
money for those projects. In the fiscal year that ended in June, for instance, the state spent less than half the roughly $840 million it allocated for maintenance projects. It also spent less on main-
tenance that year than it had in the previous fiscal year, even though the allocation had increased by $51 million. This is unacceptable, and also inexplicable;
after all, no one stole the money, and there are no serious allegations of fraud. Given that this cash was sloshing around the transportation depart- ment, it’s galling that Mr. Kaine ordered the closure of rest stops along Virginia’s interstate highways, for a paltry saving of $9 million. (Mr. McDonnell ordered them reopened.) Was it just incompetence that led to money going unused, or did the layoffs and departures of more than 20 percent of the state’s transportation department leave it ill-equipped to manage the money it had? Give Mr. McDonnell credit for good instincts as
a steward of state funds. But the real crucible for his administration will come in a few months when he rolls out his “long-term ideas” for trans- portation funding. We hope they include a sizable, reliable and ongoing stream of new revenue to fix a problem that has been left to fester since 1986.
The writer is president of the United Auto Workers. The NCAA’s sickle-cell sense
The Sept. 20 front-page story “Colleges mandate sickle cell testing” was interesting but also dis- appointing. Here is a disease that is carried by blacks more commonly than whites. Under the pro- posed program, all athletes would be tested. Those who test positive, regardless of skin color, would be monitored closely to prevent possible death from the disease. They would not be prevented from par- ticipating, merely monitored.
But instead of applauding the NCAA for this ac- tion, some are expressing concern that identifying someone with this disease could be discriminatory. Should we not test women for cervical cancer be- cause identifying it may be discriminatory? Is test- ing men for prostate cancer discriminatory? If I had children who had the remotest chance of
carrying this disease, and they were interested in playing sports, I would take them to be tested my- self. We as a society have to stop worrying about the social consequences of something that keeps us healthy.
LOCAL OPINIONS 3Join the debate at
washingtonpost.com/localopinions
MARK R. LINDON,Woodbridge
I learned that I had sickle cell trait a few years ago ABCDE
EUGENE MEYER, 1875-1959 • PHILIP L. GRAHAM, 1915-1963 KATHARINE GRAHAM, 1917-2001
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Editorial Page Editor JACKSON DIEHL
at age 39, when my wife and I were tested after Flori- da’s mandatory neonatal screening discovered the trait in my newborn (porcelain-skinned, red-haired, blue-eyed) son. Here are the total repercussions of that knowledge:
With a slightly more gradual and cautious train- ing and conditioning regimen, there is zero obstacle to my son one day becoming one of the world’s elite athletes, if he has the drive and ability. But if we had never learned that he has sickle cell trait, one day he might have dropped dead on the first day of prac- tice.
When you weigh such trivial costs and infinite
benefits, screening is a no-brainer. JOHN J. SCIORTINO, Kensington
d
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