The Carter Gilson Report

Nobel Laureate Paul Krugman has what may be among the most important columns about the negatively-aged Obama administration to date:

Barack Obama should learn from F.D.R.’s failures as well as from his achievements: the truth is that the New Deal wasn’t as successful in the short run as it was in the long run. And the reason for F.D.R.’s limited short-run success, which almost undid his whole program, was the fact that his economic policies were too cautious.
…
This history offers important lessons for the incoming administration.

The political lesson is that economic missteps can quickly undermine an electoral mandate. Democrats won big last week — but they won even bigger in 1936, only to see their gains evaporate after the recession of 1937-38. Americans don’t expect instant economic results from the incoming administration, but they do expect results, and Democrats’ euphoria will be short-lived if they don’t deliver an economic recovery.

The economic lesson is the importance of doing enough. F.D.R. thought he was being prudent by reining in his spending plans; in reality, he was taking big risks with the economy and with his legacy. My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.

In short, Mr. Obama’s chances of leading a new New Deal depend largely on whether his short-run economic plans are sufficiently bold. Progressives can only hope that he has the necessary audacity.

FDR nearly failed because he didn’t go far enough.  That’s almost blasphemy, but it’s true.  Obama needs to do more, and do it fearlessly.

A new WPA based on a new power infrastructure is a first and necessary step.  Our current power grid is not just prone to failure but vulnerable to an attack.  It was just a few years ago that most of the eastern seaboard was shut down by a single outage, and we haven’t fixed it enough since then to avoid the same thing happening again.

Also, a new power grid could more efficiently transfer electricity generated from new sources.

This would need to be coupled with a reinvestment in physical infrastructure, the roads, bridges, railroads, waterways and other ways that we get our selves and our stuff from place to place.  It’s been 50 years since the last major project, the Eisenhower highways, and Obama has indicated that this is something to invest in.

These two projects alone would generate many jobs and a lot of revenue which would then fund more structure reinvestment.  America has been in a terrible accident, but we can rebuild her.  We have the technology.