7.28.2009

Is this a case of the stimulus working?

I was sent this article from today's NYTimes about one Tennessee county where stimulus money has actually put people back to work. Much of the program is based on the New Deal philosophy of the WPA and CCC - basically, get people a paycheck now, not later.

An excerpt:

Rather than waiting for big projects to be planned and awarded to construction companies, or for tax cuts to trickle through the economy, state officials hit upon a New Deal model of trying to put people directly to work as quickly as possible.

They are using
welfare money from the stimulus package to subsidize 300 new jobs across Perry County, with employers ranging from the state Transportation Department to the milkshake place near the high school.

As a result, the June unemployment rate, which does not yet include all the new jobs, dropped to 22.1 percent.

“If I could have done a W.P.A. out there, I would have done a W.P.A. out there,” said
Gov. Phil Bredesen of Tennessee, a Democrat, referring to the Works Progress Administration, which employed millions during the Great Depression.
...

Over all, two-thirds of the new jobs are in private sector businesses, which are reimbursed by the state for the salaries of eligible stimulus workers. Some, in retail, might be hard to sustain when the stimulus money runs out in September 2010. Other businesses say the free labor will help them expand, hopefully enough to keep a bigger work force.
...

“This job here is not a permanent fix,” he said. “We still need some kind of industry to look and come into Perry County. But for right now we’ve got hope, and when you’ve got hope, you’ve got a way.”


I have been a big critic of the stimulus bill and the bailouts, but if we the goal was to put people back to work as fast as possible - especially doing meaningful work, not busy work - then I think Tennessee is doing things right. The stimulus bill, for all the glowing rhetoric behind it, doesn't stimulate or repair or recover anything. It doesn't contain systemic reform and too much of the money gets spent long after people have lost their jobs.

As the story points out, or at least hints at, the stimulus is not a permanent fix. We needed to look at the bill as a pressure dressing or a turnicate applied to a wound. We were bleeding jobs and needed to stop the bleeding. Putting people back to work quickly - as in Tennessee - would then buy us time to address the systemic problems with the economy. What was passed, however, didn't do that. We just wanted to pass something to make ourselves feel better.

I do have a question, though. Is this really the stimulus working? Is this - what is going on in this Tennessee county - an appropriate role of government in desperate economic situations?