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James Pinkerton – July 06, 2009

Make no mistake, the economic crisis and Obama’s failure to create real jobs with his stimulus package means we’re looking at this president’s Katrina.

The economy is shaping up to be Barack Obama’s Katrina. If President George W. Bush was blamed for his slow response to Hurricane Katrina in 2005 — there was plenty of blame to go around, of course, but the disaster was on Bush’s watch–then Obama will get the blame for his slow response to the current recession. The difference, of course, is that Katrina afflicted a city and a few states, while the recession afflicts the whole country.

Unemployment is 9.5 percent and rising fast, certain to go higher than 10 percent. And what is the federal government doing about it? Not much. And so House Republican Leader John Boehner makes a good point when he asks, “Where are the jobs?”

On Sunday, Vice President Joe Biden said that the Obama administration had “misread” the economic indicators. So what are they likely to do about it? More of the same–which is to say, not much.

The problem the Democrats have–and come to think of it, the country has it, too–is that even if you want to build something, you can’t do it. That is, you can’t do it without plowing through years’ worth of lawyers and environmental-impact-statement-writers, nor without enduring endless hearings and lawsuits where every last NIMBY gets a whack at the project. And so even before this terrible recession, America’s capacity actually to build anything–build a highway, build a bullet train, build a power plant — had been crippled.

So piling on new money does no good, because the old money hasn’t been getting spent. Getting spent, that is, on bricks and mortar and technology, as opposed to lawyers and consultants. In the past, “stimulus” was a way to put blue collars and hardhats back to work. Yet now, the only people being stimulated are white-collar lobbyists and litigators.

To be sure, Obama’s federal government will spend a lot of money. The feds are asking for $3.5 trillion for fiscal year 2010, and that’s not counting the $787 billion “stimulus” package, as well as trillions in funny-money income transfers to big banks–including such improbable “banks” as General Electric, parent company to NBC, MSNBC, and CNBC–through shadowy organizations, such as the Federal Reserve Bank and the Federal Deposit Insurance Corporation.

But all that money is pushing the wettest of wet noodles–because governments, surrounded as they are by Greens and NIMBYs, can’t do anything.

On May 27, more than three months after President Obama signed the American Recovery and Reinvestment Act of 2009 into law, USA Today reported that a grand total of $2 million of stimulus money had spent in Michigan, the hard-hit state with the nation’s highest unemployment rate. That works out to 21 cents per Michigander. How much stimulus is that?

And just this morning, The Big Money reports that only $55 billion of the $400 billion in non-tax-break stimulus money has been spent. Jobless Americans might ask: What are you waiting for? Indeed, every American might ask the same question. Because all Americans would benefit from new roads, new train tracks, new windmills–anything at all.

Democrats are starting to notice that the fiscal contraption of government leaks more fuel than it burns. “We’re disappointed,” House Majority Leader Steny Hoyer on “FOX News Sunday.” We’re looking at ways to get the money out more quickly.

Well yes, that would be a good idea. And so Democrats might learn from their own past. Confronted with 25 percent unemployment in March 1933, here’s the agenda that Franklin D. Roosevelt set for the country in his first inaugural address:

“Our greatest primary task is to put people to work . . . treating the task as we would treat the emergency of war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our national resources.”

But of course, it’s deeds, not words, that matter, and FDR and the New Deal delivered. In his 1990 book, “Our Country: The Shaping of America From Roosevelt to Reagan” Michael Barone offers one of the best overviews of five decades of recent U.S. history. Barone recounted the effectiveness of the New Deal in combatting unemployment. By January 1934, less than a year after Roosevelt took office, the Civil Works Administration employed 4.25 million people, fully eight percent of the national labor force. In fact, over the entire course of the the Depression, unemployment peaked in the month that Roosevelt came into office.

Was there waste, or fraud, or abuse in all this New Deal spending? Sure. But there was also a huge renaissance in public works around the country, from the Triborough Bridge in New York to the Golden Gate Bridge in California. And New Deal programs such as the Rural Electrification Administration and the Tennessee Valley Authority literally lit up (as well as cooled) life for tens of millions of Americans.

Conservatives were horrified, of course, but most Americans cheered. Not only was Roosevelt re-elected three times, but the Democrats kept control of both houses of Congress all during the 30s and well into the 40s. And by the way, during the 30s and 40s, America built up the industries that not only won World War II and the Cold War, but also created the consumer abundance that we enjoyed for decades thereafter.

So something must have gone right for New Deal Democrats.

By contrast, today’s Democrats are not really interested in building things. They are demonstrably more interested in bailing out banks, and keeping environmentalists happy. Bankers, of course, deal in intangibles; they make money without regard to where physical goods are manufactured–although bankers know that goods are likely to be cheaper in China, so that’s their preference. And the environmentalists, of course, oppose just about everything. Thus we have the “green-green alliance” — green as in the color of money, and green as in Greenpeace. Together, these allies are working to pastoralize the United States. We can create meadows and forests, but not jobs.

And if that’s the goal, so what if unemployment rises? So what if the real economy contracts? That’s a small price to pay for elite Democrats, who hold those other, non-productive green objectives closer to their hearts.

Thus the “cap-and-trade” legislation, which passed two weeks ago in the House of Representatives, is a perfect exemplar of the modern Democratic mindset: The green environmentalists are happy, because carbon-based energy production is restricted, and greenback-minded Wall Streeters are happy, too, because traders will make billions trading trillions’ worth of funny-money carbon contracts.

But there is a catch: People don’t have jobs now, and they won’t get them in the future if Obama spends money that doesn’t stimulate–and then seeks to choke what remains of the productive economy through environmental regulation.

And that, surely, is that a misreading of what the American people will vote for in 2010 and 2012.

This is Obama’s Katrina. You heard it here first.

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