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Go Home Not Doing Enough

POLITICS JANUARY 9, 2009

Not Doing Enough

BY JOHN B. JUDIS

Does Barack Obama understand the seriousness of the economic crisis? Yesterday, he laid out his economic agenda, and it was filled with all sorts of important exhortations and proscriptions. He appropriately condemned the “anything goes” policies of the last administration. He declared that government is now the solution to our woes, not the problem. Still, I worry that the president elect is underestimating the problem he and the country faces.

We may not simply be facing a steep recession like that of the early 1980s, from which we can extricate ourselves in a year or two, but something resembling the Great Depression of the 1930s. For starters, the current crisis is global, which means that one part of the world can’t lift the other out of its misery; everyone will go down together, which is what happened in the 1930s. Secondly, the downturn has combined an unusual decline in the real economy--employment in durable-goods manufacturing fell by 21.9 percent from 2000 to 2008--with a financial crash precipitated by the bursting of the housing bubble. The bubble resulted from an attempt to sustain growth and employment in the face of an underlying decline, which, too, is what happened in the late 1920s.

Over the past six decades, policymakers have used some tactics from the Great Depression to quell recessions--such as spending on roads and bridges to create jobs, transferring payments to raise consumer demand, and infusing money into the credit system. But these stopgap measures, which are at the heart of Obama’s recovery program, may prove inadequate.

 

There’s much to like in Obama’s plan. But there are two important ways he may have to go further. Most economists agree that what finally pulled the U.S. out of the Great Depression was military spending for World War II. Some liberals argue that if the Roosevelt administration had not abandoned a Keynesian stimulus strategy in 1937-38, the U.S. might have gotten out of the depression without a war. But in 1936, unemployment was still at 16.9 percent; by 1942, after two years of war spending, it was 4.7 percent, strongly indicating that it was war spending that did it. I am not suggesting that the United States start a world war in order to solve the world’s economic problem. But I am suggesting a strategy that could be called the fiscal equivalent of war.

It would consist not merely of updating or repairing the nation’s infrastructure, but in undertaking massive new investments that would expand the scope of American industry, and address other urgent problems in the process: global warming, over-reliance on petroleum, and the need to revive America’s domestic manufacturing capabilities--not just to provide jobs, but also to provide tradeable goods that can reduce the country’s current account deficit.

One area that is ripe for such investment--and that is not, from what I have seen, a declared priority of the Obama administration--is high-speed rail. Amtrak’s Acela trains--the closest thing we have to one--average less than 100 mph between Washington D.C. and Boston, whereas trains in Western Europe and Japan go more than twice as fast. Many of them also run on electricity. They would be the most energy-efficient and quickest means of getting between places like Boston and New York, or Los Angeles and San Francisco. But they would require a massive investment. For instance, installing high-speed rail in the Northeast corridor could cost about $32 billion, while California’s high-speed rail system would require up to $40 billion. A system that would address the other areas of the country could easily raise the cost to the hundreds of billions. The House transportation and infrastructure committee has currently proposed $5 billion in stimulus funds for intercity rail--not even a down payment on what it would cost to convert the U.S. to high-speed rail.

Investing in high-speed rails would be very expensive, but unlike tax cuts--the benefits of which can be siphoned off in the purchase of imported goods--the money spent would go directly to reviving American industry and improving the country's trade balance. That doesn’t just mean jobs creating dedicated tracks or new rail stations: Though the U.S. abandoned train manufacturing decades ago to the French, Germans, Canadians, and Japanese, this kind of production could be undertaken by our ailing auto companies or aircraft companies--if the federal and state governments were to place orders. And building trains that would run on electricity would be a paradigmatic example of the “green jobs” that Obama often touts.

Though a massive investment in high-speed rail brings its own set of complications, it’s worth keeping these kind of examples in mind when one hears from the Obama people that they can’t find sufficient infrastructure projects to fund. The question I would pose is this: Are we not at some point going to have to go beyond repairing roads and bridges in our conception of public spending and public works, and contemplate the kind of ambitious industrial expenditures that the country made on war production in 1941?

 

The second arena that needs radical action from Obama is international. One reason that the depression of the 1930s endured and deepened was because the international monetary system, which had been based on gold, broke down; and one reason that the world economy enjoyed reasonable prosperity between 1945 and 1971 was because the International Monetary Fund--created as part of the Bretton Woods system in 1944--ensured a measure of international monetary stability. Countries controlled their capital inflow and outflow, and the IMF oversaw--if imperfectly--surpluses and deficits, and devaluations and revaluations. Currency exchange was regulated by nations, not by private companies or speculators. And the only country that ran a large surplus after World War II--the United States--took it upon itself to spend much of it helping the other countries to revive their industries.

Since 1971, the breakdown of Bretton Woods has given way to a perverse anti-system that combines floating rates, fuelled by speculation, and behind-the-scenes currency manipulation by counties like China and Japan that don’t want their exports priced out of foreign markets. The result, as Martin Wolf and others have argued, has been decades of financial crises, which began on the fringes of the system but have now engulfed the center. This system, which features huge surpluses in China and Japan, and huge deficits in the United States, has not proven viable, and is breaking down right now. If China is “losing [its] taste for debt from the U.S.,” as a recent New York Times story reported, the U.S. will have trouble financing its deficit expenditures. Interest rates will go up, investment will go down, income will sink, and more Americans will be out of jobs; on the other side of the Pacific, China will be able to sell less goods to the U.S., its investment will fall, its workers will be jobless, and so on. It’s not a pretty picture.

What’s needed, it appears, is a new international system that will prevent the kind of global imbalances that are plaguing the current system. Like Bretton Woods worked initially in practice, it will place the onus of regulating these imbalances on countries running surpluses, not deficits. It would also permit countries to develop economic strategies without fearing that speculators would create a run on their currency. Larry Summers and Tim Geithner are well-suited to work out the details of such broad reform, but Obama has yet to make this a priority within his economic policy. The U.S. also needs to begin working on its own strategy to reduce its current account deficits. That may require not only very large government subsidies to manufacturing industries, but also some currency manipulation of our own to get the price of our goods competitive with those produced in Asia.

Obama is certainly right to abandon the “anything goes” mentality of the Bush administration and to promote an $800 billion stimulus program. But to reverse to current economic collapse, the new administration may have to go even farther than this in the direction of a fiscal equivalent of war and a new Bretton Woods.

John B. Judis is a senior editor of The New Republic and a visiting scholar at the Carnegie Endowment for International Peace.

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76 comments

How sustainable is building lots of high-speed rail though? Are there currently enough or potentially enough commuters for it to be self-supporting? And will upgrading to high-speed rail save us money in the long run? I like the rationale for completely overhauling our health care system because there's a very good argument that a large upfront cost now will reduce costs down the road. Does the same apply for ordering new trains?

- Andrew F

January 9, 2009 at 2:23am

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Your writers haved failed to understand the contentlessness of Obama and Axelrod. Axelrod is Obama's Cheney. We may see an amazing fast exposure of your poor performance during the elections. Not even necessary to wait until January 20th. Even Bush may make more sense to me than Obama.

- WakeUpTNR

January 9, 2009 at 3:43am

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Proscriptions? Er, don't you mean perscriptions?

- Bob

January 9, 2009 at 3:58am

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We're in debt, so let's spend a lot more to get us out of debt. Ponzi America.

- Diogenes

January 9, 2009 at 5:47am

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I absolutely love how 'experts' like Mr. Judis firmly believe that the President Elect may not quite 'understand' the severity of the economic crisis confronting us. Right. He just doesn't get it. He may not be quite bright enough to understand the nuances of the whole celestial host of economic anvils dropping on our heads. Only those with the correct gnosis, like our good man Mr. Judis, really understand the nature and scope of the problem. Our President Elect is just some naive babe in the woods, lacking any 'real' sense of the economic problems that surround him. Mr. Judis. Enough. Honestly. Your hubris (and your seemingly long-term disdain for everything Obama has done over the last two years as candidate and now President Elect (which I am sure still rankles when you think on it) is showing in a most unseemly manner. You have seen the the prologue of the play, and have declared the entire show shallow and without meaning. What powers of prognostication. What amazing ability to know far more than the economic folks surrounding Obama. Clearly Geithner, Summers, Volcker, Reich, and others are not as intelligent, or as understanding of the situation, as our good Mr. Judis. Yes, sir. Obama really screwed the pooch by not turning over everything dealing with the economy to the one man who 'understands'.

- K. Grant

January 9, 2009 at 8:34am

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I'm not sure how high-speed rail is going to revive industry, since it's only used for passengers. The $32 billion for high-speed rail in the Northeast doesn't include the cost of buying real estate, which, I'm guessing, would be pretty expensive. In addition, planes travel twice as fast as the fastest train. Isn't it time to put away the toys, Mr. Judis?

- Alan Vanneman

January 9, 2009 at 8:50am

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haven't read the article -- but am getting very tired of the misuse of the word "enormity" as in this headline. The author means, no doubt, immensity or enormousness. Editors, anyone?

- ajreader

January 9, 2009 at 8:54am

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I can't fathome any good reason that any newspaper, even right-wing filth like this, would be so conlficted on thier front page just to make two stabs at the new president rather than one. This headline reads that Barrack isn't doing enough for the economy, because he dosn't understand it. A few top stories down the list, and we find an article complaining about the huge spending plan Barrack is looking to implement, to deal with the economy. You can't have your cake and eat it too pigs. He can either be not doing enough for the economy, or he can be wrecklessly spending, not both. Isn't it clear at this point that the only institution capable a restoring faith in the economy is the GOVERNMENT, and that if we allow the economy to try and balence itself, we're going to find ourselves in the next great depression?

- Lyle D

January 9, 2009 at 9:09am

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Osama al Kini - a leading Kenyan mercenary of Al-Qa'eda was assassinated in Northern Pakistan. Any chance that he was related to the Kenyan clan of Obama Sr.?

- IntegrityForEver!

January 9, 2009 at 9:23am

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Not doing enough? Last I checked, Obama isn't even President yet. I agree that the stimulus plan isn't perfect, but let's take sight of the big picture here -- it's one bill. If Mr. Judis's criticism of Obama is that he didn't address every problem with the world's economy in one fell swoop, then it is a silly criticism indeed. These are complex, long-term problems we're dealing with, and no single bill is going to solve everything. It will take a sustained, coordinated effort -- through not just legislation, but regulation, enforcement, and cooperation with our economic partners abroad. The stimulus plan is a START; nothing more, nothing less. Further action will be needed, and I'm sure further action will be taken. In the meantime, the Left needs to calm down and realize that the lofty aspirations we have for President Obama need to be reined in just a bit. Give the man time to do -- or even be sworn into -- his job.

- S.D.

January 9, 2009 at 9:32am

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A high-speed trans-national freight and passenger rail system, along with single payer national health care system, should be the centerpieces of US domestic policy for the next decade. Laborers, engineers and managers will build the US high-speed rail network thereby creating new jobs with sustainable living wages. The US rail network should be fueled sustainable environmentally responsible energy. (This could include upgrading our national electricity delivery grid). A new transportation network fueled by nuclear power reactors, US natural gas and solar and wind power farms would give rise to a new national energy production and delivery network, thereby addressing many of our climate and sustainable energy concerns. The US interstate road network (which was government sponsored and run) petroleum based energy network worked fine in the 1950's but is simply unsustainable and impractical for the next 100 years. The US high-speed rail network should go from New Orleans (our nation's most vital deep water port city) north to Chicago and then east to New York and West to California. Coastal network from San Diego to Seattle and Miami to Boston would also be built. Tributary high-speed rail networks should serve commuters to vital urban centers. We are now a car-based nation; we should become a high-speed rail based nation. A national health care system should heavily leverage currently available information technology to gain efficiency and effectiveness in primary care delivery. Nurses and physician assistants should be allowed to assume primary care responsibilities in community based government health care centers. Nurses and physicians assistants can be trained through government sponsored education programs taught at community collages throughout the United States. Each of these solutions is technology and politically viable. We need government to provide leadership in bringing these ideas to the market place and involve private industry in making these ideas viable, efficient and effective. What we should not do is continue our reliance on excessive and wildly inefficient and ineffective military spending and propping up the petroleum states that feed our addiction to cheap petroleum and consumer goods produced by extraordinary wage imbalances. What made the United States the greatest country on earth was a commitment between public and private sectors to allow the market place of ideas to produce the most efficient and effective products and services that addressed our national requirements. But these ideas, most specifically, automobiles for everyone and cheap petroleum based energy along with military spending, have morphed into intractable political obstacles to the new and necessary ideas of the next century’s social imperative of sustainability. Let’s move forward with a new national transportation network, a new national energy production industry and new, world-class health care delivery network. Yes we can!

- James Kittle

January 9, 2009 at 9:48am

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A high-speed trans-national freight and passenger rail system, along with single payer national health care system, should be the centerpieces of US domestic policy for the next decade. Laborers, engineers and managers will build the US high-speed rail network thereby creating new jobs with sustainable living wages. The US rail network should be fueled sustainable environmentally responsible energy. (This could include upgrading our national electricity delivery grid). A new transportation network fueled by nuclear power reactors, US natural gas and solar and wind power farms would give rise to a new national energy production and delivery network, thereby addressing many of our climate and sustainable energy concerns. The US interstate road network (which was government sponsored and run) petroleum based energy network worked fine in the 1950's but is simply unsustainable and impractical for the next 100 years. The US high-speed rail network should go from New Orleans (our nation's most vital deep water port city) north to Chicago and then east to New York and West to California. Coastal network from San Diego to Seattle and Miami to Boston would also be built. Tributary high-speed rail networks should serve commuters to vital urban centers. We are now a car-based nation; we should become a high-speed rail based nation. A national health care system should heavily leverage currently available information technology to gain efficiency and effectiveness in primary care delivery. Nurses and physician assistants should be allowed to assume primary care responsibilities in community based government health care centers. Nurses and physicians assistants can be trained through government sponsored education programs taught at community collages throughout the United States. Each of these solutions is technology and politically viable. We need government to provide leadership in bringing these ideas to the market place and involve private industry in making these ideas viable, efficient and effective. What we should not do is continue our reliance on excessive and wildly inefficient and ineffective military spending and propping up the petroleum states that feed our addiction to cheap petroleum and consumer goods produced by extraordinary wage imbalances. What made the United States the greatest country on earth was a commitment between public and private sectors to allow the market place of ideas to produce the most efficient and effective products and services that addressed our national requirements. But these ideas, most specifically, automobiles for everyone and cheap petroleum based energy along with military spending, have morphed into intractable political obstacles to the new and necessary ideas of the next century’s social imperative of sustainability. Let’s move forward with a new national transportation network, a new national energy production industry and new, world-class health care delivery network. Yes we can!

- James

January 9, 2009 at 9:49am

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John, now I agree that Obama should lower the FIT (Bush's tax cuts, unfortunately, didn't do their job, or weren't necessary for stimulating consumer spending), but I think tax cuts this time may need to be massive, deep and broad, in large part to offset huge tax and fees increases at the state and local level. I shudder to think what may happen when California (my state) raises the sales tax from 8% to nearly 10%! Too small a federal rate cut would be met with skepticism at best. The extra dollars retained would not stimulate consumption, and sales taxes would chill consumer spending even more. I see no reason why designing and building trains, street cars and buses is simply a nonstarter. A similar idea in the 70s was a disaster and set back schedules to replace old equipment in cities by nearly a decade. Not a pretty picture.

- tomeg

January 9, 2009 at 9:50am

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"Many of them also run on electricity." Or basically all of them. What do you think the Acela runs on, Puppy Juice?

- rail

January 9, 2009 at 10:19am

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Good article. The current approach to the economic crisis facing the world is to put Humpty-Dumpty together again: re-establish credit and give tax rebates so that consumers can go out and buy more stuff. But the stuff is made overseas, and we cannot continue to borrow and spend. Judis is correct in that the current crisis resembles very strongly that of the Great Depression, and that something like Bretton-Woods, which was ended by Richard Nixon, must be re-established. The difference between now and then, was that the U.S. has shifted from creditor to debtor nation, and the emerging market countries, plus Germany and Japan, are now running surpluses. Recommended reading: The World in Depression, 1929-1930, by Charles Kindleberger.

- David Sattinger

January 9, 2009 at 10:23am

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If only more members of Congress could take a trip on Shanghai's Maglev train, the resulting jealousy would go a long way to help investment in public transport. (Always appeal to base motives to rouse our government to action.)

- Janice Moulton

January 9, 2009 at 10:37am

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Oh. My. God. He is not even president yet and you're already faulting him for things he may or may not do and whether he's taking a responsibility (which he isn't actually responsible for yet) seriously enough? How much free time do you have on your hands?

- pgbsan

January 9, 2009 at 10:42am

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I see no reason to think Obama doesn't understand the seriousness of the economic crisis. I don't see where Mr. Judis gets this. While he makes some good suggestions, his tone of timorous anxiety sounds like my mother used to when she warned me about going out without a jacket: "You could catch your death..." Obama hasn't even taken office yet. He's surrounded himself with serious people. The biggest problem he's going to face, at least in the short term, is Republicans in Congress who see it as their duty to oppose him along partisan lines. Hopefully, the leadership qualities we all believe he possesses will steamroll over these obfuscators. Our time is better spent, rather than wringing our hands, in harassing our congresspersons into allowing Obama to work his agenda.

- JimBob

January 9, 2009 at 10:47am

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I live in Tokyo, and one of the best things about living here is the incredible public transport system. The expertise of Japan's heavy machinery makers in train car design and production expertise was honed via decades of experience. I doubt if a high-speed train built by GM or Ford could match a Japanese model in terms of design, energy efficiency, reliability, and maintenance costs. Some sort of JV could be formed, but given how much of an edge the Japanese/European makers have in this field, they would invariably be the dominant partner. Perhaps a major gov't commitment to high-speed rail would create enough market scale in the US to entice a Japanese or European maker to agree to partner with a US manufacturer on favorable terms.

- High speed rail

January 9, 2009 at 10:51am

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Another overlooked infrastructure project -- overhaul New York's JFK airport. It's terribly antiquated. Most airports were refurbished and expanded in the '90's. JFK is still stuck in the '60's It would be a big an expensive job, but it would provide for a lot of employment.

- mlp

January 9, 2009 at 11:31am

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Please say more about the decline underlying the housing boom. Isn't it the decline in our manufacturing sector, which has been happening since the 1970s?? Wasn't the dot com boom sitting on top of that decline as well??

- Sandy Grant

January 9, 2009 at 11:34am

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High-speed rail and railroad electrification are both sensible ideas that have a near-zero chance of happening in the United States. I don't know why for sure, but a lot of people in this country are downright batty in the intensity of their hostility to passenger trains. Bill Richardson fought tooth and nail to establish an 80MPH passenger train -- imagine, 80 whole miles an hour! -- in New Mexico between Albuquerque and Santa Fe. It was the only good thing he did there and people hate him for it. When the route into Santa Fe proper was being debated (the original AT&SF line went a few miles to the east), folks who lived on the 1-acre ranchitos on the outskirts of town whined that it would spoil their "rural lifestyle." Years ago, when a railroad applied to start using a dormant line in West Des Moines that had since been built up around, for trains that would creep through at 10 miles per hour a couple times a day, the neighbors freaked. One noted, "we have women living here who are pregnant!" Maybe passenger trains are too socialist or European or something for American conservative types. Maybe it's because train travel implies not-cars -- although air travel doesn't seem to excite the same passionate opposition. And the neocons seem to forget that their goddess (irony intended) Ayn Rand found trains heroic; railroading, including first-rate passenger service, was a good enough calling for Dagny Taggart, her greatest heroine. Mark Reutter puzzled over this in "The lost promise of the American railroad" in the Winter 1994 Wilson Quarterly and suggested that it might have been some post-WWII backlash over the association in people's minds with trains and servicemen leaving for the front. Whatever it is, it's deeply ingrained in the American psyche and not likely to change soon. And among all the things I've heard in Obama's comments about infrastructure rebuilding, the word "railroads" was absent. Having never mentioned the subject, can he plausibly bring up it up now, even if he wants to? I doubt rail is even on his mind.

- Metzengerstein

January 9, 2009 at 11:39am

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Great article. But what was not said is that all the the problems mentioned were the result of the conservative movements desire to return to the past and live like it was the gay nineties. No regulation and greed is good were the mantras. They got their wish and we now have end result the bust at the end of the boom. As mentioned it is time to re invest in this nation and make patriotism something that also covers what we make and stand for and not that we can kick another nations butt. We just discovered that we can't even do that didn't we? We should also be taking a long hard look at what the pentagon spends and see if we can end the reign of fear in this nation.

- Andrew Menard

January 9, 2009 at 11:50am

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Very well put. It's long past time for us to start improving our rail network towards European standards. If the incoming President and Congress can't grasp this glaringly obvious opportunity to help the environment while stimulating the economy, it will be extremely disappointing.

- Darwin Roberts

January 9, 2009 at 12:01pm

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The USA is starting to resemble the late Qing Dynasty at this point, clinging to outmoded institutions and doing things the same way over and over and expecting different results. We need a revolution in core areas that currently drag but could invigorate our economy: education, health care/medicine, new businesses. How about instead of the same old putting more PCs in the classroom so we can "compete with kids in Beijing" we turn our educational system on its head. What is the point in encouraging youth to go deep into debt to get a traditional BA? A trained pipefitter can get work and support a family. A new grad with a BA in the "liberal arts" can stand behind a cash register (maybe). A national health care system could relieve the financial burden of our employers and foster numerous new businesses for services and products. High speed rail - absolutely. Why not put back the street car networks in our cities? And build subways? Bigger Chinese cities will within one generation all have major subway systems. The positive economic impact of a subway system is demonstrably visible in the DC metro area, San Francisco, to give just two relatively new examples. What is definitely missing from Obama's big recovery speech was any real change.

- Sinomania!

January 9, 2009 at 12:09pm

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In 1940 we had about 8.1 million unemployed (14.6% unemployment rate) If in 1942 we had 4.7% unemployment rate, the back of my envelope says that the number of unemployed is about 2.6 million. What the author seems to be forgetting is that by 1942 about 4 million people had been drafted, so three quarters of the decrease in unemployment was a direct result not of "increased military spending" but of simply removing 7% from the work force and tasking them with destroying Europe (with significant help from Germany). The increased military spending - in all it's glory - maybe reduced unemployment by 2.5 percentage points. These numbers don't even account for those voluntarily enlisting into the war machine.

- john

January 9, 2009 at 12:13pm

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Good summation of the problem. I'm hoping that Obama, whose been at least one step ahead of the rest of us since his announcement to run, is on top of the international situation and the need to greatly increase our manufacturing industries. My speculation is that he knows that he couldn't throw another $50 billion or so into the pot right off - that it would have to be a multiphase attack. Stabilize to create the needed trust and confidence to be able to enact the sweeping changes needed. I have to believe this; otherwise I wouldn't be able to get out of bed in the morning for the despair.

- Lori

January 9, 2009 at 12:19pm

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I suppose we need openly Marxist academics like Mr. Judis to help offset the more radical free market types who feel that government has absolutely no role in the larger economy. It appears that Mr. Judis is nursing spirited notions that the American public is ripe for anti-free market, government-controled economic policy, and I'm afraid that he will be quite disappointed to find that said public has no more interest in a Bolshevik revival than they do a return to outdoor plumbing. The problem was not the speculators, Mr. Judis, but the absense of the regulators to conduct the match.

- ClavUK

January 9, 2009 at 12:51pm

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People seem to discount the effect the draft after our entry into World War II had on unemployment. Obviously, when you send millions overseas to fight a war there will be fewer fighting for jobs at home. Government basically took over the economy after we entered the war. Factories were converted to war production. People weren't encouraged to spend. Their spending was rationed on certain goods. Everybody became productively employed in the war effort. What we need to do today is get everyone productively employed on jobs that will increase our productivity and that will result in a useful work product that will sustain our economy. That is what the stimulus should attempt to accomplish. It shouldn't be about encouraging Americans to spend. We are doing the right thing now by increasing our savings. In the longer run this will provide private capital to finance a healthy economy without running up huge deficits. The government spending projects in the stimulus program will all be accomplished by private businesses, nursing them back to health. The one area we need to cut back drastically is the fraction of GDP now coming from the finance industry. Churning the money supply for profit, and using debt to increase returns is not productive. It's how bubbles are built and why they crash. It's also time to put government in charge of essential services, not provide them, but administer them at the national level. Health and retirement insurance should be a national project. We all need them and the private sector has shown that they cannot provide them equitably. Our private health insurance system has directed resources to expensive procedures that only the wealthy can afford at the expense of basic care for everyone. And the present crisis has shown that private retirement programs that are dependent on the performance of markets are not reliable.

- Elwood Anderson

January 9, 2009 at 2:04pm

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"Investing in high-speed rails would be very expensive, but unlike tax cuts--the benefits of which can be siphoned off in the purchase of imported goods" ... Interesting quote, but wrong. Almost all of the know-how (people) and technology (manufacturing jobs) for this type of project will come from abroad ... alas, just like taxes, we'll be giving money to Japan, and the Europeans, who have experience building these infrastructure projects.

- Marco Lugon

January 9, 2009 at 2:14pm

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Judis your opening points are very simplistic and vague as to what is happening in the economy, the republic needs to stick to politics and leave the sophisticaed issues to the Wall Street Journal or Investors Business Daily.

- Karl

January 9, 2009 at 2:28pm

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Proof reading is needed. I do not believe China is a countie. And surely we do not want to reverse to economic collapse do we. These errors in the last three paragraphs indicate extra attention to the end of longish articles.

- nusnt

January 9, 2009 at 2:41pm

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The Great Depression saw unemployment levels of 25% and GDP contractions of 20+%. The globalization of the crisis is the big difference. The reason we arn't seeing those apocalyptic numbers this time is that foreign trade and capital movement is open and the government is not threatening to nationalize industry. It is Obamas centrist hackery that will save us from the New Deal Great Depression...

- Mick

January 9, 2009 at 3:06pm

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Your comments and suggestions are certainly among those considerations that must be addressed for the possibility of economic re-growth and a sustainable society. However, I feel that your premise (and, in fact, your heading) suggest something that you cannot know. Barack Obama and his administration have not even been sworn in, so to suggest that he isn't doing enough is premature. Your ideas, while important, are not original, and I can't imagine they would be excluded by, or unknown to the President-elect and his staff. I suppose my objection is mostly toward your seeming attempt to jump the gun and offer ideas that may or may not be under consideration, or will be addressed once the new administration is in place. Give them a chance to actually exist before saying they may not be doing enough. We are all charged with considering and doing more than we have, thus far. Criticism should be constructive and based on real information and policies. Even as we are embroiled in myriad international difficulties that threaten the very core of a civilized humanity, I am heartened by the work that I see being done at this early juncture. I don't recall such a level of preparation--at least visible to the public--from any recent incoming administration. We must support, watch and assist in the very difficult process of making things better for all of humanity.

- Marian George

January 9, 2009 at 4:06pm

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Bad writer, bad grasp of economics and history. It's a sad state of affairs when someone can get paid for yammering incoherantly.

- Lucretia Bourgoise

January 9, 2009 at 4:27pm

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He bought his daughters a Wii at the time when VAST numbers of Americans cannot pay their RENT. Disconnected? Yeah. A BIT.

- Tom

January 9, 2009 at 4:27pm

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America will be fine, none the wiser, in 4 years. And Obama will conveniently get all the credit for an upturn in the economic cycle. The best a president can do is stand aside while the market works. A president has, at best, a 10% effect on the economy for better or for worse. We have a market crash once every 10 years. This one is particularly nasty but cyclical nonetheless.

- jwl2672

January 9, 2009 at 4:31pm

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Investing in infrastructure to create jobs does nothing. Lower taxes, folks. Lower taxes and let the private sector determine what needs to be built and what doesn't. If there's no demand for a high-speed rail (and there really isn't), then it's just more wasted government money. www.smellytourist.wordpress.com (STINKING UP WASHINGTON)

- SmellyTourist

January 9, 2009 at 4:59pm

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Judis is sounding the alarms. How surprising.

- ralphnelle

January 9, 2009 at 5:00pm

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The basic point is correct and we could add major environmental cleanups-- the great lakes, the gulf, the chesapeak bay etc. to the list. But the government can also change the rules and encourage the private sector to respond-- without any spending. Much tougher standards for coal plants would force capital spending. Raising the minimum wage to 10$ would do more for consumption than a tax rebate. Limiting credit card rates to 8% (the cost is now less than 1%) would prevent credit card companies from derailing any stimulus. Taxing gas and heating oil would provide revenue to states and encourage the private sector to make investments in alternative energy and more efficient homes and businesses.

- john henry

January 9, 2009 at 5:00pm

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Sinomania has the right idea, but unfortunately it probably won't work here in the U.S. Not because of "hostility" on the part of the masses- because of the inevitable meddling by government officials. My home state of Ohio has been fighting over a "light rail" system for the last decade. The major stumbling block is that the state's Democratic mayors, specifically those of Columbus, Cleveland, a n Cincinnati, want a system that is essentially a private train so they can squire big contributors back and forth to Cleveland Browns games, Cincinnati Bengals games, Columbus Crew games- and of course fundraisers. Columbus' mayor maintains that his personal favorite pie-in-the-sky pipedream, a streetcar system that would allow him to permanently ban automobiles from the city center area, can not only handle the additional local traffic, but can form the "core" of an intercity light rail system. Being a politician, and not an engineer, he does not understand the fundamental differences between a city bus-type system and even a high-end, low-volume intercity "VIP taxi" system, let alone between the latter and a full-on, serious Shinkansen/TGV-type system. Not just in terms of technology, but in terms of cost. Which he, and his cronies, want the people of the entire state to foot the bill for. As for the belief that such an all-electric system will ever be run even partly by the Holy Duality of the ecologists, Wind and Sun, forget it. Ohm's Law , the weather, and the fact that the sun only shines on a given plot of land about 12 hours out of every 24 makes this dream even more impossible than streetcars morphing into serious long-range people movers. If they're serious about such transit systems, the country's new leaders needs to bite the bullet, tell the "Greens" to grow up, stop dismantling hydroelectric dams to "make rivers wild again", and also go nuclear. Period. Dot. Anyone who does not understand this, and the other engineering issues involved, is too ignorant of the subject to have an opinion. Unfortunately, most of the policy makers who are pushing this idea apparently fall into precisely that category. clear ether eon

- eon

January 9, 2009 at 5:29pm

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I for one would use hi-speed trains as opposed to air travel. I have had some pretty unpleasant coast-to-coast flights! I'd much rather have a train car to sleep in! 3000 miles divided by an 8 hour trip averages 375 mph. Sure it will take a few hours longer than that, but the comfort and lower stress would be worth it. Also, this ain't a bad article compared to others criticizing obama's economic outlook. of course he is not president yet! others I have read seem to be republicans whining, jealous and envious, trying to find their "voice" of criticism, but not getting there.

- odysseus14

January 9, 2009 at 5:31pm

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Let's take a look at another problem that the Obama plan doesn't solve, and in fact makes worse. Today, we are paying over 350 billion dollars each year in interest on the national debt. Obama's infrastructure investments will balloon that number as the debt rises. I agree that we will probably have to go farther into debt to solve our current problems. But that needs to be done as quickly and as cheaply as possible, then we need to start running balanced budgets and paying off our debts. Imagine if that 350 billion were in the hands of consumers who would spend it, or in the hands of companies who would invest it in research. It would be a $350 billion stimulus package EVERY YEAR. As for high-speed rail, the problem with that in America is the distances involved. Even a 200 MPH train would take 15 hours from New York to LA, and that's non-stop and no slowing down. With stops, it would probably take 24 hours or more. Compare that with 5 hours in the air, and you can see why it's not going to work. You can get from one end of France to the other in less than 700 miles. At 200 MPH, that's 4 hours, six with stops. Taking a plane, assuming one layover, would take about the same amount of time. And that's the key. It's not distance, it's not speed, it's not cost. it's TIME. If a rail system can get me to my destination in roughly the same amount of TIME, I'll take it. But if a flight will save me an hour or two, then I'm going to fly. And so will you. What we need is an investment in light commuter rail in major metro areas that don't have it yet. That will help us stop urban sprawl, get people out of their cars, unsnarl traffic, save gas, reduce our dependence on foreign oil, and lower our #1 source of greenhouse emissions. I think THAT's the best bang for the buck.

- Chredon

January 9, 2009 at 5:32pm

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As everyone looks back to our depression and post-depression history, we overlook the most important things that caused WWII to be our "stimulus" package. First and foremost, we made an incredible investment in productive assets during the war. Tools and training that carried us well past the rest of the world after the war. It is important to distinguish between tools and "stuff". As neat as high speed trains and such are, the real test of their value, once they are built, is the extent to which they increase our productivity. Surely they have some value, but for all the punditocracy's drooling over China's high speed infrastructure, they are starting from nothing. We can, after all, manage to find a way to get from New York to Washington in spite of the primitive options now available to us. How much productivity will be added by getting into a 200 mph train between those cities? Neat, for sure? Worth the cost? I don't know. The other aspect of the WWII Stimulus package was that workers deferred immediate comfort, pleasure and gains for a larger objective. And, even on meager wages, managed to invest in the country (war bonds) and companies. Our current leaders still cling to the belief that we can get out of this mess without placing some of our immediate needs on the back burner. That is simply not what happened last time around. We will not spend our way out of this. The routine is work, defer short term gratification, invest and THEN thrive.

- mrdon

January 9, 2009 at 5:43pm

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Tom - at least Obama was spending his own money on the Wii, not like Laura Bush and her $500,000 White House china, which you and I paid for.

- Chredon

January 9, 2009 at 5:52pm

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One thing Obama will not have available to him are the combined gold reserves of the old British Empire and the various governments in exile that were transferred to Canada for 'safekeeping'. Precious little of that gold left North American shores. Most of it, along with a continuing debt, was left behind in the US and Canada. So unless Obama can find somebody to buy cars, trucks, planes, tanks and ships at the rate Roosevelt was selling them in WW2, and have them fronted with gold, real estate transfers and a 50 year debt repayment plan he is going to have a heck of a challenge. I can pay my son a million farkels to shovel my driveway. If he doesn't like the price then I will print 10 million farkels. I will then charge him 9 million farkels rent. None of which has anything to do with the real economy involving trade of goods and services outside our own little house. Unless the US becomes a trading nation again, and not just a consuming nation it won't matter how many farkels you float internally. The more you print the more people will demand for anything with intrinsic value - like oil, gold, food, water.....

- Chris

January 9, 2009 at 6:06pm

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As I understand it this is only the first of possibly multiple stimulus measures. The current proposal probably has about $265 billion for infrastructure. The next round should not only include $72 billion for super high speed rail (maximum speed 225 MPH) in the Northeast and California but we should also consider super high speed rail projects for the Midwest and the South. The benefits to air quality and increased energy independence would be enourmous and it has been estimated that for every dollar spent on super high speed rail we would save over $2 by reduced need for airports and highways. Imagine being able to travel from New York to Washington in less than an hour and a half at less cost than an airplane and no hassle getting in or out of an airport. And while we're at it we should consider "Big Broadband" (100 Mbps). Japan already has it universally. To do our entire country it would take about $100 billion but the economic benefit from the hugely increased download and upload speeds would really take us into a new IT era. In fact Mr. Judis' bold plan reminds me of what they said about King Casimir the Great of Poland. He "inherited a nation made of wood and left one made of brick."

- Mark A. Sadowski

January 9, 2009 at 6:12pm

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The North Carolina DOT has successfully developed rail travel between Raleigh and Charlotte. It is well received and financially self supporting. I suspect this is one infrastructure area that would be well received in many states and bring environmental bonuses too.

- NCSenior

January 9, 2009 at 6:20pm

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Automobile ownership and use are a sign of wealth and with the car's mobility, a sign of independence as well as individuality. Remember all those drive-inn theaters, malt shops and a piece of urban sprawl to call your own, as well as all the other car centered conveniences that sprung up in the 50's. Those were an outgrowth of those feelings. We won the war, therefore we should enjoy the spoils, the results of the wealth we'd earned. The downside is the enormous cost in either loan payments or when finished paying, maintenance and fuel. And since that time, fuel has taken a much larger portion of that bill. Cars worked fine when fuel was cheap, but now that prices will continue to climb over the longer haul, it makes sense to scale back their use and reduce the cut they take from our wallet. I used to live where I could take public transportation to my work. As a result, I always had extra money (which could be invested among other things). Being the cheap-skate that I am, I'd like to return to those days.

- jet

January 9, 2009 at 6:44pm

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I just hope the jobs program benefits American Citizens and not just the Contractors and Illegal aliens! We really need the infrastructure and construction jobs without E-verify so we can put the millions of Illegal Aliens back to work, so they can send money home to support Mexico! The contractors can get paid at union scale, charge the tax payers union scale, hire Illegals at slave wages, pocket the different s, and hit the tax payers for both their wages and the billions in cost to educate their many children, provide medical and welfare. Sounds like the same old scam, reward the Rich and the invading horde of illegals Aliens and soak the tax payers that have obeyed the laws, paid the taxes and fought the wars and built this Nation! You would think the Politicians would be content with just outsourcing all the jobs that are possible but No they want to bring in Slave labor ( while ignoring Article IV Section IV of our Constitution against invasion, the rule of Law, and their Oath of office) to take the jobs that cannot be outsourced! To add insult to injury they make the American citizens still working pay billions in extra taxes to educate, provide medical, welfare and jail cells for the invading horde that are taking our jobs and driving down our standard of living! While keeping busy Robbing, Raping and Killing American citizens at an rate that Bin Laden can only dream about! The Democrats love the millions of Welfare votes. The Republicans love the slave labor for their Pay Masters in the Chamber of Commerce and business. So there is little or no hope for American citizens and the future viability of this nation as we know it. We can see Sam Huntington was right in his book Clash of Civilizations if we will only look and be rational. But too many are not prepared for logic or rational discourse and resort to hurling racist insults. If we are realistic and look at the havoc caused by the millions invading Hispanics on our communities, culture, crime, economy, welfare and standard of living the only conclusion possible is that no Nation can withstand or assimilate Millions of citizens from another culture! That does not want to assimilate but come here for the jobs and welfare while keeping loyally to their home countries! This Nation is changing to the very same type of culture and society the invading millions have created, built and sustained for 100,s of years and are now fleeing in their own Countries! One has to only look at Calif. which is basically an Bankrupt state that cannot afford to provide Welfare, Schooling, Medical etc. for millions of Criminals and uneducated peons from Mexico! The future is an over populated, Spanish speaking third world Nation that is an Cesspool of Corruption, Crime, Poverty and Misery modeled on Mexico!

- blac saint

January 9, 2009 at 6:57pm

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As if we even knew how to build high speed trains! I wouldn't even get on a high speed train built by American union labor. Amtrak is so miserable, I wouldn't trust them to run it. A better idea is to put Amtrak out of business and give their right of way over to the new bus lines that keep popping up all over the place and provide a much more convenient and cost effective intercity service.

- Jeff

January 9, 2009 at 6:59pm

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Lyle D. you are are an idiot. If you think the New Republic is right-wing then you should put yourself out of our misery. Otherwise, watching you lefties discuss economics is like watching a group of plumbers discuss brain surgery...hilarious and sad all at the same time. Stick to making fun of Christians and apologizing for rapist...its what you libs do best.

- Jason

January 9, 2009 at 8:26pm

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"all the the problems mentioned were the result of the conservative movements desire to return to the past" uh-huh. and the current problems relating to credit/housing had nothing to do with deliberating lowering standards in lending so poor people with no credit could buy homes with loans they couldn't afford was not a Bush invention. it started in the late 70's and was expanded by Democrats (and some Republicans) seeking to get poor people into homes and by Republican big business (and some Dems, like Rubin) seeking easy profits. Not to mention the normal business cycle. I didn't hear any Dems arguing to stop the easy lending.

- JohnB

January 9, 2009 at 8:32pm

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Andrew F: And will upgrading to high-speed rail save us money in the long run? I like the rationale for completely overhauling our health care system because there's a very good argument that a large upfront cost now will reduce costs down the road. Does the same apply for ordering new trains? Saving money is not the main purpose of high-speed rail, although it's a minor benefit. The trains are also about creating economic stimulus through infrastructure spending, which builds value for American citizens. Federal investments like building interstate highways and the development of the Internet save costs in some ways, but are more about enabling value creation (highways: transport, trade; Internet: trade, new forms of communication, you name it).

- jvill

January 9, 2009 at 9:13pm

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Three words: Broken. Window. Fallacy. The government cannot create jobs, it can only divert money from the private sector into the public sector. You can't spend $1 trillion on a "jobs creation" program without first robbing the private economy of $1 trillion. Keynsianism was discredited decades ago.

- Patrick

January 9, 2009 at 11:01pm

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It isn't pro-scrip or per-scrip, it pre-scrip

- karl

January 9, 2009 at 11:52pm

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There's nothing like a World War to end a country's economic woes, as long as it's the winner. And there are plenty of werewolf and vampire regimes out there we could go after - North Korea, Iran, Saudi Arabia... The list is endless really. And all of them together aren't nearly as bad or formidable as the old Axis of WWII. Peace is definitely coming for all of us. It's called the grave. Meanwhile, while we're alive, we could slay a lot of dragons and get rich doing it too. War is part of life. To shun it completely is nothing more than laziness.

- Dolmance

January 10, 2009 at 12:13am

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Since when can you spend your way out of debt/bankruptcy even if you are the government? In short Oblahma is just promising more of the same big government socialism that the current admin is locked into. (The "bailout" was just grand theft robbery of the taxpayer in favor of the Wall Street thugs and banksters.) Keynsianism is bankrupt. Socialism doesn't work and more taxes/printing money to spend on infrastructure jobs will prolong the recession, if not turn it into a depression. Government spending needs to be cut, not increased and the Fed Reserve which funds both the government and the investing/housing etc. bubbles, needs to be abolished.

- Bob S

January 10, 2009 at 1:26am

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Lynn D: You are an idiot without a shred of understanding of how a modern economy functions. You voted for socialism, I hope you get it good and hard!

- David Kielek

January 10, 2009 at 2:56am

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Why can't we simply have another Great Depression?The last one was fine for people who had enough money to buy a house.If the government doesn't stop interfering,housing will drop to its Adam Smith level.Then,millions will be able to afford homes.Quit trying to maintain the status quo.

- Tom Dockery

January 10, 2009 at 4:11am

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First of all high speed train service will not work in the U.S. In the late 1800s, trains could go 120 mph. Now the trains in the U.S. are closer to 50mph-80mph. What happened? First of all trains make a lot of stops. Where I live there are train stations about 30 minutes apart and they stop for about 20 minutes. So there is a lot of speeding up and slowing down and not a lot of cruising speed. Second there are a lot of bends. That too means that there is a lot of slowing down and speeding up. High speed trains need to go in a straight line. Straighting out the tracks will cause a massive eminent domain outcry that will be much stronger than train supporters. Third tracks tend to be unsafe generally because of people trying to off themselves or cross them in an unsafe matter. Everytime there is a death or crash, the line is shutdown for days or weeks. Speeding up the trains will just create more crashes and more damaging crashes. So it's not technology that is keeping the trains in the U.S. "slow," it's the enviroment in which they operate. Second creating debt to get out of debt is an unworkable idea. One needs investors to do that. When talking about several trillion dollars, eventually the investors dry up or cash in. Then what? Create money and therefore hyperinflation which would cause a bond dump and a bigger problems? Are we now going to call massive deficit spending stimulus packages now, because that's been going on for decades and the economy still goes up and dow regardless. Third this package and building package is suppose to go on for 2-5 years. Then what? Most of his plan is to prevent layoffs rather than help the unemployed. People will be moved from building houses to building schools and bridges. At best it's a stop gap which will have to be extended after all this stuff is built. Four this does not stop the private debt problem. There is something like $57 trillion (a number I've read from the press) in private debt including in housing and business in just the U.S. Credit card debt alone is in the trillions of dollars. Obviously people were spending and now they have to pay it all back. Five there is a massive stimulus package on the way since that is what the Democrats are calling government debt now. That money will come from Social Security, Medicare and Medical with a high of something above $60 trillion (combined) by 2040. Don't worry about unemployment since 10s of millions of baby boomers will be 65 within the next 20 years or so. Somebody will have to take their place.

- Greg D

January 10, 2009 at 5:10am

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I like your idea of rail for three reasons: 1. It's a way to focus enormous sums of money - very large numbers of people are rallied to attain the same goal 2. It creates something visibe and useful - very large numbers of people can see it, feel it, use it, and take pride in it. 3. It can be done with excellence - very large numbers of people can use it to measure America's ability to a remarkable goal. This crisis is real in its impact, abstract in understand its origin and and how to defeat it. It is a cancer. Obama must show us what it is and defeat it, in a big, dramatic way. He must slay the dragon for us to regain faith in our institutions.

- fougasseu

January 10, 2009 at 7:13am

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merriam-webster approved "enormity" to connote size; it explicitly dismisses the "enormousness" claim. You may disagree, but there are clear grounds on which TNR's editors might reply.

- christopher miller

January 10, 2009 at 9:48am

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This man needs to get the Nobel prize for common sense. American steel, American wood, American trains, American everything that goes into building the trains as well as labor, what an idea.. Sad our government is to stupid to see the logic of such a plan. Maybe if we just hand the congress stock in every new company that would be formed to build this rail system they might be inclined to vote for it. Maybe if we gave the contracts to the defense & oil companies the congress would vote for it. Maybe Obama would have the courage to use executive power to just authorize it. (Just ask Bush & Cheney how to get it done) Maybe maybe there is hope for this country after all, maybe.... Marty

- Marty

January 10, 2009 at 11:54am

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I think it is instructive that Judis ignores the point of Bretton Woods: to prevent a collapse of world trade via beggar-thy-neighbor policies. The point was to prevent competitive depreciation to pursue temporary trade advantages. Of course Judis wants trade restriction, note that we should not buy the high speed trains but produce them ourselves. By the time these high speed trains are completed we will be dealing not with the next recession, but the one after that.

- Barry Ickes

January 10, 2009 at 12:08pm

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The author seems to be living in the past, before the U.S. indebted itself irrevocably. With the world already showing signs of turning away from buying our debt, just where would the funds for this envisioned rail network come from? Face it....we're broke and the credit card is maxed out.

- BMore

January 10, 2009 at 1:52pm

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We need to start making our own things again. Until we have factories making real stuff again we are just spinning our wheels. About the only areas left that really create wealth in our country now are farming and mining. That works for a 3rd world country, but, will not support the material lifestyle we have become accustomed to.

- Bill Perney

January 10, 2009 at 3:32pm

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I wish I had your optimistic view that this economic melt down is cyclical. I fear the only cycle here is the "end of empires" one.

- Bill Perney

January 10, 2009 at 3:35pm

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President-elect Obama's grasp of the seriousness of current economic conditions is of less concern to me than is author John Judis's grasp of the difference between the average and top speed of trains. In particular, while Amtrak's Acela averages only 80+ mph between Boston and Washington, it does achieve a top speed of 150 mph at some poinst between Boston and New York City. And while it is true that European, Japanese and Chinese trains reach speeds over 200 mph, the average speed of those trains is considerably less than 200 mph. A very important reason why U.S. train top speeds are slower that that of non-U.S. built and operated trains is the vastly greater capital investment in rail passenger services in those other nations as compared with the U.S. Few travelers, however, are really much concerned with the potential or actual top speed of a train; most are concerned with how many minutes, hours or days the trip will take and how comfortable they will be while aboard the train, plane, bus, automobile or whatever conveyance. Thus an average speed of 80+ mph on Amtrak's Acela is vastly better than an average auto or bus speed of under 50 mph, but not quite as good as the average speed of an airplane trip (that must include ground connection and airport delay time along with actual travel time).

- J. Howard Harding

January 10, 2009 at 3:45pm

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What Mr. Judis, and most other current 'experts', who love to make comparative references to the 'Great Depression' and our current financial woes, fails to mention is that both events were preceded by a lengthy period of total control of all three branches of our government by conservative Republicans. And conservatives controlled most of the financial centers of the world from 1920 through 1930 outside the U.S.A. then, too.

- C. Davie

January 10, 2009 at 4:27pm

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A couple of Forum contributors have questioned how building improved intercity rail services will provide any long term economic benefit to the country. May I sugeest a few? First, Bombardier Corp -- Amtrak's single largest supplier of passenger equipment and the world's second largest passenger train builder -- is seeking to expand its manufacturing capacity in the U.S. simply because this country is showing real interest in expanding rail passenger services. 2.Travel by rail (urban or intercity) is far more energy-efficient than is any other mechanized means of mobility. 3. Rail service can be powered by electricity which can be generated by a wide variety of non-fossil fuels, thereby reducing U.S. demand for imported petroleum. This switch would thus help reduce the volume of pollution generated by U.S. travel. 4. Expanding passenger rail travel capacity would also benefit U.S. freight railroads by either adding parallel trackage to the existing rail network or moving passenger services off the freight tracks to separate passenger-only tracks. 5. Providing excpanded rail transportation is not a one-time activity. Maintaining any added service will require a steady supply of equipment maintenance and repair, and of replacement equipment. All these activities will provide sustained employment, most of which cannot be shipped of-shore. 6. Much of the increased rail equipment manufacturing capacity could be housed in exsting but closed automobile factories and employ many of the same people now being layed off by the auto industry. 7. Much of the construction required to build new rail lines is similar to the constrction needed to build new highways, so rail service expansion can provide jobs for those who might otherwise face unemployment due to decreased new highway construction. Finally, to those who expect rail passenger service -- or any other form of mechaized passenger transport -- to be self-sustaining, forget it! Never has been; never will be. Currently, ALL forms of transportation operations are heavily subsidized. Amtrak and urban public transit subsidies are typically single line items in federal state and/or local budgets, while aviation and automobile subsidies are buried in dozens of budget line-items at every governmental level. In reality, operations of commercial passenger aviation, automobile transportation,Amtrak and urban transit are about equally subsidized -- around 30 to 35%. If everyone had to pay at the point of use 100% of the full cost of mechaized mobility, we would become a literally stagnant nation, unable to move anything or anybody anywhere. There is a social value to mobility, shared by us all regardless of how much each of us travels. Alleged "subsidies" pay for that social value, even granting that some such subsidies may be disproportionate to the social value received from one or another mode of travel.

- J. Howard Harding

January 10, 2009 at 4:29pm

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Just more brain-dead liberal nonsense

- Dale F. Ogden

January 10, 2009 at 9:32pm

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John, I'll go you one better on the new Bretton Woods. Given some of the attempted economic weight-throwing across the pond in the last few months, what if Sarko and Merkel get together (whether or not Brown ponies up), and the EU beats Obama to the punch on calling for a new Bretton Woods, not just in the abstract, but scheduling a specific conference, with invites?

- Power101

January 10, 2009 at 10:59pm

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Good article. Everyone forgets that the nuclear WWIII will clear the decks and wipe the money changers and druggie fools off the Earth. Then a new and better world will be built by those left. Most comments I have read here are just insane dreams of dope smokers.

- tj33

January 11, 2009 at 12:46pm

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You are all right, everything costs too much, is too difficult, will offend someone, may take a long time, and might require some sacrifice or concentrated effort. Best to just curl up in a ball and die.

- Mike

January 19, 2009 at 6:51pm

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Yes, it's a shame the U.S. gave up train production .. How can an intl monetary system based on gold break down? No, I disagree with this. Monetary systems are only good in peacetime but come war .. it has its own set of rules. Indeed, there were two books, one for rules of war and the other for peace .. and of course that for war was much thicker seen countries then were more often than not at war with each other. I very much like countries taking care of their own capital, not businesses. A state has to be a state. Now China is keeping its currency artificially low we know this. This particularly is an interesting picture. "Interest rates will go up, investment will go down, income will sink, and more Americans will be out of jobs; on the other side of the Pacific, China will be able to sell less goods to the U.S., its investment will fall, its workers will be jobless, and so on. That sounds a lot like what brought us (as in, the world) into the Great Depression. Like now it had originated in America. Like then everyone was making money .. and that is impossible because when someone is making money another is losing it. That's the way the markets work. And following from this, how an economy works .. more people you have working creating resources, boosting the economy .. but for those ppl to get their salaries from somewhere, without investment .. therefore less income .. less purchasing power (or money to spend at all for that matter) ... But we don't necessarily have to buy from China. In fact, until they get their quality controls up, or in place at all, I don't understand why we were subjecting our children or pets to lead painted toys or melamine contamined foods, respectively. Or both in the case of the latter. I'm not suggesting currency manipulation .. isn't that what the Fed already sorta is? but, if it is needed to level the playing field .. Fight fire with fire. Right? There is no reason an American worker cannot be competitive if the playing field is leveled (John McCain) Well, what is the difference b/ween a fiscal war and an actual war? No, really. The two are interrelated. Granted, economic and fiscal do not mean the same but .. I don't know if I like a new Bretton Woods. Keynesian economics may be outdated .. and the current system is based on that ... but the system is fine. Like McCain said it was avarice, personal greed that had run amock on Wall St.

- Timber Wolf

January 20, 2009 at 4:33am

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