Obama Stimulus Plan: Good Start, But Much More Is Needed

Barack Obama outlined his stimulus plan Saturday, touching on themes that he first outlined in a major economic address delivered almost a year ago at a General Motors plant in Janesville, Wisconsin. The fact that the plant where he spoke will close this month provides a glaring illustration of how vital it will be to rapidly implement both the president-elect's broader plan and the auto-industry bailout -- which Obama strongly, and wisely, supports.

Much of the job creation that is likely to result from the plan Obama outlined Saturday will be in the construction sector, which has been especially hard hit by the slump in new home construction and the stalling out development initiatives in many parts of the U.S. The latest federal jobs report puts the number of unemployed construction workers above the 1.2 million mark, for a 12.7 percent unemployment rate in the industry.

The president-elect will still have to come up with plans for other sectors of the economy -- including an industrial plan and a new approach to trade policy -- if he is serious about stimulating the sort of job growth that is needed.

But Obama's focus on construction is smart, and useful.

Construction work is less likely to be outsourced and more likely to pay union-scale wages. Money paid to construction firms and workers tends to circulate rapidly in local economies.

And if Obama gets his way, there will be a lot of construction going on: He's proposing "the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s," as part of a push to create 2.5 million jobs in relatively short order. (Price tag: Start around $400 billion and move upward.)

Most of the jobs that are likely to be created will be in traditional construction work -- restoring bridges, roads, schools and public buildings -- while a lot of the rest will employ workers from the construction trades in projects to retrofit government buildings and schools to make them more energy efficient and wiring schools, hospitals and other facilities so that access to the internet can be dramatically expanded.

No surprise, then, that some of the highest marks for Obama's plan are coming from the union that has been in the forefront of pushing for federal investment in infrastructure renewal and green job creation: the Laborers' International Union of North America (LIUNA)

"The plan that President-elect Barack Obama laid out today will put millions of Americans back to work building our roads, bridges and schools and creating the foundation for a new green economy," says LIUNA president Terry O'Sullivan. "It is exactly the leadership we hoped for when Barack Obama promised LIUNA members earlier this year that he would be the "build America President."

When was the last time a president-elect, be he a Democrat or a Republican, been hailed for proposing "exactly" what organized labor was looking for? Here's a hint: Labor did little celebrating when Bill Clinton or Jimmy Carter laid out their initial economic plans, even though both men took office during times of economic turbulence.

So Obama is off to a good start.

But, remember, this is only a start. Getting the construction industry working is important. But there is more work to be done to renew basic manufacturing, farming, small business and other job-creating and family-sustaining sectors of a badly broken economy.

Comments (35)

1. i find it rather depressing i'm the first to comment on a blog posted at 9:42 am saturday night...

   the government will have to spend lots of unreal money on serious infrastructure and restructure with an eye on becoming a scientificly advanced and productive innovator. we have the marketing to compete and need FAIR trade.

   investing.

   Posted by ibbleblibble at 12/06/2008 @ 9:45pm

2. I hope Obama can get all these jobs that are so badly needed, I wish he was in office so he could start his plans right away. Jan 20th seems such a long way away. If we have to spend more money on achieving it, then I say go for it...jobs are desperately needed to get the economy working again. Obama will do what he has to do, no doubt it won't please everybody...but hey, who will be the President.

   Posted by Caj at 12/06/2008 @ 10:28pm

3. Obama's infrastructure program is largely window-dressing on an imploding economy. He and his minions are having wet dreams about handing out hundreds of billions in no-bid contracts to politically connected companies, a long-standing practice among The One's mentors in the Windy City, who have developed it into a high art indeed. Moreover, many of the construction jobs created will go to illegal immigrants--a key Dem constituency given that most (white) Americans will not vote for Dems even in the face of BushCo insanity and so the Dems have no choice but racially engineer America into a Third World failed state. All those illegals will of course be wiring their salaries south of the border to another failed state rather than bothering to spend it to help the gringo economy. American citizens can at least enjoy the new roads and bridges as they walk to the soup kitchens from their Bushville/Nobamaville shanty towns.

   Buy American, hire American.

   Posted by feinfein at 12/07/2008 @ 04:31am

4. Great. Sounds a bit like the good old union days in Aussie viz 1 hole, 1 shovel to dig, 1 shovel to lean on and 10 men waiting their turn on the shovels.

   Posted by amelber at 12/07/2008 @ 05:17am

5. Posted by feinfein at 12/07/2008 @ 04:37am

   Boy, talk about doom and gloom, things have been bad for the past 8 years, but can't you have little faith in the future??? You can't assume because we had one useless President, that the new one is going to be as bad...NO ONE could be that bad!!! As I said before, give Obama a chance whether you voted for him or not...the man is owed that surely. He doesn't profess to be a miracle worker and let's face it he has one hell of a mess to clean up before this country will start getting back on track.

   Posted by Caj at 12/07/2008 @ 08:07am

6. he'll do JFK did........really, really cut taxes, especially at the higher-income range!----Posted by HAPPYLonghorn at 12/06/2008 @ 11:42pm

   Oh, so you want to go back to the top marginal tax rates of John Kennedy?

   Okay...1964, it was 77% on incomes over 400,000.

   Tell ya what, let's be generous an go back to the 1985 REAGAN tax brackets!

   Come on HAPP, a conservative like you COULDN'T complain about going back to Reaganism....uh....could you?

   Posted by Mask at 12/07/2008 @ 08:19am

7. Basic Manufacturing? Heavy equipment, like that used for building roads and bridges, is one of the few products that are still 'Made in USA'.

   Farming? If anything, we need to cut subsidies for agricultural commodities, like cotton, that are produced at lower cost in developing countries.

   Small Business? Obama's tax cut for the workers will do more for small business than any handout. Tax cuts do work, but only those (like Billy Clinton's) directed at families who need the money for food, clothing and shelter. Cutting taxes on the wealthy has done nothing but create asset bubbles.

   Posted by samcrossett at 12/07/2008 @ 08:26am

8. I think the wealthy are doing very nicely thank you and they don't need anymore help. I've nothing against anyone who has worked hard and if that has made them very wealthy, good luck to them. I do feel however those on the lower end of the scale are probably also working very hard and they could do with some help. You can't equate someone who has maybe two or three jobs and still can't make ends meet to someone who has millions in the bank....and they require a tax break...I don't think so!!!! The need for greed in this country during the Bush years has been overwhelming...the average working person has always been at the bottom of the list.

   Posted by Caj at 12/07/2008 @ 10:03am

9. William Ayers to be nominated for head of department of Transportation? Read more at, http://stopthepresses2.blogspot.com

   Posted by stopthepresses2 at 12/07/2008 @ 10:18am

10. Was wondering what it might be like to be a modern doctor transported back to a 17th century medical "convention." Imagine trying to converse with "doctors" certain that Galen's theory of humors were state of the art. Where alchemy and chemistry were the same thing. Where bleeding was an advanced medical technique. Where would you begin to have a scientific conversation with these "doctors?" With intelligent men full of conviction about a complex beautifully constructed system of thought that was built entirely on false assumptions. Men who's social status, whose income, and whose very lives were invested in this system. Men who felt that they were intellectually superior, advanced beyond other men. But men who talked only with each other. Men who were adept at manipulating the formulas and language of a system that was completely (in retrospect) even ridiculously wrong. How would you start? What could you say?

    How to answer John Nichols?

    And others like him. People who are smart and silly at the same time. Like trying to have a serious intellectual conversation with Marxists or Evangelicals. Worship of Obama and of leftist economics borrows from both. It's sad to think of how many fine minds have been wasted on both. But once you invest in the underlying assumptions its hard to break out of the hot house these systems create.

    Here's a start, John:

    You cannot "stimulate" one industry without "destimulating" another. Tax funded or inflation funded the monies that stimulate one industry can only be had by defunding another industry or the entire economy - poor and rich. At best it's a zero sum game. When played by government it's always corrupted by political favoritism and the inevitable inefficiency of government. A negative sum game. Does not benefit families.

    Posted by tellittrue at 12/07/2008 @ 11:57am

11. Tellittrue certainly has a point. Inflation funding of FIRE (Finance, Insurance, Real Estate) and war profiteering has indeed defunded the real economy.

    Tax funding of infrastructure will indeed defund those non-productive sectors that have prospered from the redistribution of wealth from the workers to the wealthy and well-connected.

    But if such a re-alignment doesn't benefit families, then how does one explain the unprecedented prosperity of the 1990s?

    Posted by samcrossett at 12/07/2008 @ 12:34pm

12. I truly hope that, "The Senator's", plan actually becomes fact. The chances are slim that the CNBC vacuous idiots and the less well known Bloomberg shills will agree and sell it to the dumbed down United States populations. The ten percent that own 8o percent of American wealth are going to put on a well funded fight "epic battle" as John Edwards stated it. I watched Friedman this morning with Bob Sheiffer, Where did he get his education? I suspect that the mass population of American labor stands as much chance of getting a chance of participating in making a living wage as John Edwards did in winning the Presidency. "The Senator" is wrong, we do have two Americas. There is the 10 percent global corporate gluttons in their well protected gated communities and the rest of us. Why is the myth still out there that auto workers take home 73.00 an hour and that foreign car companies are not subsidized? Where is our great American investigative journalism? If a well informed electorate is essential to democracy we are in deep doodoo.

    Posted by julien38 at 12/07/2008 @ 1:19pm

13. Posted by tellittrue 12/07/2008 @11:57 am

    Just as ignorant, self styled "surgeons" of several hundred years ago pridefully wore smocks covered in blood as a status symbol-the more blood, the more admirable-so todays doctors gather in spotless garments at their conventions & with the majority holding a mindset just as deadly.

    These modern physicians loaded with knowledge & technological advancement are just as deadly as those of ages past in that the majority of them either would or prefer to deny care to millions because of social status. Money talks, the poor walk.

    Posted by Sorelish at 12/07/2008 @ 2:14pm

14. That's the whole point I think Obama

    wants to make is that we are "one" America....unfortunately right now that is not the case. We have a lot of "have's" and so many more "have not's"...that does need to be changed, of course there will always be those who are at the very top and that doesn't mean we should have so many more on "barely getting by St" though. Every working person deserves a decent living wage, I don't care what kind of work they do...and I don't believe in these CEO's being given humungous bonus's when the workers below are barely getting by. All those high wages at the top need to be trimmed considerably, if they expect their workers to live on a pittance they should try it and see how the other half live!!!! All this sounds so simplistic, which I know it isn't', but I do hope these extortionate CEO wages etc can be curbed and the average worker get their wages increased.

    Posted by Caj at 12/07/2008 @ 2:25pm

15. Magic will end up doing by following his Econ Team's `advice'! Posted by HAPPYLonghorn at 12/07/2008 @ 3:26pm

    I take it by using the word Magic.. that is a snide comment targeted at Obama!!! I don't regard anything he does or will do as Magic at all...anything he tries to do at least will have the American people's interest at heart. There will be no quick fix to any of these problems he will inherit thanks to the Bush administration. How quick to judge a man even before he's been sworn into office...but that is happening on a regular basis so it's not surprising

    Posted by Caj at 12/07/2008 @ 3:59pm

16. Posted by Caj at 12/07/2008 @ 3:59pm

    No Caj, don't you get it? The Great God Reagan MUST be vindicated in the end! Reaganomics HAS to be right! I mean, it did SOOOO well in the 80's after all, only taking it to its logical conclusion will being about the paradise on earth that will destroy forever the evil of socialism! /snark

    Posted by yutsano at 12/07/2008 @ 7:57pm

17. Posted by HAPPYLonghorn at 12/07/2008 @ 3:26pm

    Fine, HAPPY....how about (adjusted for inflation) we go back to the glory days of Reagan (1985) and use THAT top marginal rate.

    You, uh, do know what it was under "The Man Who Saved America With His Tax Cuts"....right?

    Posted by Mask at 12/07/2008 @ 9:52pm

18. The mega-losers hanging on to the Bush tax cuts... They're here, now. Powerful, huh?

    Posted by winyahn at 12/07/2008 @ 10:17pm

19. I wonder who will get these basically construction jobs. It is true that the construction industry, through subcontracting, was mainly taken over by illegal immigrants, working for far less than any union wage. Unemployed, legal Americans should get these jobs. And they should pay a living wage.

    Posted by jonnirae at 12/07/2008 @ 10:42pm

20. Your relative youth leads you astray more than you can imagine! What Reagan did was make a fundamental change away from Big Gov't and thus unleashed "morning in America"! Demographically, the Baby Boomer (college-educated) couples were also on the cusp of entering their higher-earning years and Reagan's Econ gurus (Arthur Laffer and David Stockman) recognized how important it was to reduce the high marginal rates......and what a Morning they unleashed! You better hope your generation will have that chance....and you might, IF Magic becomes a supply-sider! Trickle down works! Posted by HAPPYLonghorn at 12/07/2008 @ 11:38pm

    Actually, what President Reagan did was grow government spending (as a % of GDP). Government spending under Reagan was the highest since World War II. In 1980, President Carter's last year, government spending was 21.7% of GDP. In 1981, 22.2%; in 1982, 23.1%; in 1983, 23.5%, which was the post-war high. So much for smaller government under Reagan.

    Paul Volcker's tightening of the money supply to wring inflation out of the economy was the primary economic change that unleashed the "morning in America" economic growth, after putting us through a fairly deep recession. Although he was the Fed chairman throughout much of the Reagan era, Volcker was actually a Carter appointee.

    Lastly, if trickle down worked, real median wages should have increased. According to the Census Bureau (http://www.census.gov/hhes/www/income/histinc/p36w.html), the real median income of full time white male workers was $45,941 in 1980 and $44,985 in 1990, after 10 years of Reagan/Bush "trickle down" economics. The data doesn't support that "trickle down" theory.

    Posted by stichmo at 12/08/2008 @ 01:19am

21. Trickle down works!

    Posted by HAPPYLonghorn at 12/07/2008 @ 11:38pm

    My Grandaddy used to say "Trickle down economics is a lot like the terrible affliction called Salslickum, where you pee down your leg and it rots out the sole of your shoe".

    At least you spout your ignorance with exuberance. Is that what they teach you at the "Rush Limbaugh School of Right Wingnutting"?

    Posted by chaoszen at 12/08/2008 @ 01:44am

22. Posted by stichmo at 12/08/2008 @ 01:19am

    In my experience it seems to do little good where HAP is concerned when it comes to relating facts. He is not the least bit interested in the facts. If you notice in his posts and the way they are constructed he doesn't even believe the things he says.

    He sold out and lost his soul a long time ago.

    Posted by chaoszen at 12/08/2008 @ 01:58am

23. Too bad for the Reagan fetishists, no one is in a position to invoke Reagan's voodoo economics.

    Remember George Bush 41. "Read my lips, no new taxes." Bush had to go back on that promise. It probably cost him the election, but he had to do it.

    Regardless, what would anyone consider the past 8 years? I can't recall Bush 43 raising taxes on the rich. In fact part of the incessant drone these days is how Bush 43's tax cuts (for the wealthy) need to be extended. So, Bush 43 cut taxes and deficit spending skyrocketed. I'd say that trickle down didn't work.

    Posted by koroviev at 12/08/2008 @ 05:09am

24. Remember all of my warnings over the last several months about how Obama was doomed to failure due to his supporters' unrealistic expectation? Well the election is only a month behind us and already Obama is a collossal failure. ***************************************************

    http://online.wsj.com/article/ SB122833189150076359.html

    MSNBC Anchor Frets: Why Hasn't Obama's Election Ended Terrorism?

    File this one under "Deluded Expectations." During MSNBC's coverage of the terrorist attacks in Mumbai, India, on Nov. 27, daytime anchor Alex Witt seemed frustrated that the election of Barack Obama 23 days earlier -- and the accompanying "global outpouring of affection, respect, hope" -- had not caused an end to terrorist violence.

    Talking with correspondent John Yang, who was covering the Obama side of the story, Witt conceded that while "you certainly can't expect things to change on a dime overnight....There had been such a global outpouring of affection, respect, hope, with the new administration coming in, that precisely these kinds of attacks, it was thought -- at least hoped -- would be dampered down. But in this case it looks like Barack Obama is getting a preview of things to come." ...

    It almost seems like a parody of liberals' blind worship of Obama to actually expect that The One's election would mean terrorists hanging up their bomb belts, peace around the world, lions lying down with lambs, and so forth.

    Posted by Darin_the_Big_Fat_Troll at 12/08/2008 @ 08:19am

25. Posted by HAPPYLonghorn at 12/07/2008 @ 11:38pm

    HAPP, two easy, simple questions-

    1. Did we have an economic boom under Reagan beginning in 1983-1984, under the top marginal tax rates he initiated?

    2. What WERE those top marginal income tax rates?

    Posted by Mask at 12/08/2008 @ 09:21am

26. Posted by Darin_the_Big_Fat_Troll at 12/08/2008 @ 08:19am

    Darin, don't you think it's a LITTLE silly to declare "Obama is doomed to failure" (quote, verb modified)...

    six weeks BEFORE he's even Inaugurated?!?!???

    Posted by Mask at 12/08/2008 @ 09:23am

27. It almost seems like a parody of liberals' blind worship of Obama to actually expect that The One's election would mean terrorists hanging up their bomb belts, peace around the world, lions lying down with lambs, and so forth.

    Posted by Darin_the_Big_Fat_Troll

    No one has stated that Obama can solve everything over night and all this "the one" sarcasm is just typical of the right who had such faith in Bush and we all see where that has got us!!!! It is pure ignorance to start making these assumptions that by Obama getting elected all "the terrorists would hang up their bomb belts"...how pathetic!!! Obama is at least open to talking to other nations, unlike Bush who was bomb first and ask questions later merchant, we don't need that kind of leadership anymore....well, I say leadership, I don't really think that is the word I would use either!!!! Did anybody in their right mind think for one minute because Obama got elected all this activity would stop....what drugs were they taking if they did!!! We all know that the right are blaming Obama for everything already and he's not even sworn in as yet....they wouldn't know a smart, intelligent man if they met one as they never had that in Bush that's for sure. Still, they will have to live with it, we've endured Bush and his sad administration for the past 8 years....time for new smarter leadership.

    Posted by Caj at 12/08/2008 @ 09:39am

28. Obama's plan is fine provided the work actually goes to US Citizens and legal Resident Aliens FIRST. You're always going to have a percentage of illegal workers because contractors don't always play by the rules. But work and decent wages are always a good thing for an economy. Let's roll up our sleeves and get busy.

    Posted by gwats1957 at 12/08/2008 @ 10:15am

29. Posted by Caj at 12/08/2008 @ 09:39am

    The Right is still trying their "The Left think Obama is the Messiah" canard.

    I always found it humorous that the conservatives thought the best attack line on Obama was ..."He's too popular!!!"

    LOL

    Posted by Mask at 12/08/2008 @ 10:29am

30. "Trickle down works!"

    Certainly depends on your definition of "works". If you mean increasing inequality, lower wages, and other various problems for the majority of the country, then yes, I'd say it "works".

    Posted by Psychocandy at 12/08/2008 @ 10:37am

31. The Right is still trying their "The Left think Obama is the Messiah" canard.

    I always found it humorous that the conservatives thought the best attack line on Obama was ..."He's too popular!!!"

    LOL

    Posted by Mask at 12/08/2008 @ 10:2

    I don't remember any of us calling him The Messiah anyway do you?? I should say being "too popular" is a good thing compared to "not even close to popular" like Bush.

    Posted by Caj at 12/08/2008 @ 10:38am

32. At least "The Senator" is talking value adding work instead of staring at a computer screen, and by some magic making something. We are decades away from recovering the America our parents left us, by trusting idiots that told us that we could ship all our industries out of country to China and we would all be better off by re educating to become greeters at Walmart. The great global lie of service and information technologies.This morning I stared at my computer screen for three hours and I still can't play the guitar. Our great corporate media has told us that GM workers make 73.00 an hour when in truth is they make 28.00 an hour, and Toyota and Honda are subsidized by their sponsoring states and parent countries by billions. .Ok Bill Gates and Warren Buffet are billionaires, but 700,000 kids went hungry this year, nearly five million citizens are without health care and many of those are one sickness away from death. When do we stop saying its ok for people to wade up to their arm pits in sewage, because they live in New Orleans. The class war is over and the wealthy have won. 10 percent of them own 80 percent of the countries wealth.

    Posted by julien38 at 12/08/2008 @ 11:17am

33. This morning I stared at my computer screen for three hours and I still can't play the guitar.

    Posted by julien38 at 12/08/2008 @ 11:17am

    Gee, I stared at my computer screen for about an hour yesterday and learned two more chord progressions and two new songs on my guitar.

    Are you using the right programs?

    Posted by chaoszen at 12/08/2008 @ 11:49am

34. To chaoszen: sure you did, must have been one of those air things!!!

    Posted by julien38 at 12/08/2008 @ 5:09pm

35. Posted by julien38 at 12/08/2008 @ 5:09pm

    Well actually it is a Gibson SG. And I wish at times it was one of those air things. Gibsons are a bit on the beefy side..

    Posted by chaoszen at 12/08/2008 @ 11:02pm