Shovel-ready?

Mr. Obama is addressing the accelerating loss of jobs, announcing countermeasures in the form of massive public works projects. This is what he calls for in his video presentation, which you can view in its entirety below.

1. Make public buildings more energy-efficient.


2. Make the largest investment in infrastructure since the creation of the interstate highway system. As an incentive for this to be done quickly, states will be under a "use it or lose it" deadline.


3. Modernize and upgrade school buildings.This will include making them energy-efficient and filling them with new computers.


4. Expand broadband access.


5. Expand the use of technology in health care by putting medical records on-line.

I believe these are sensible and necessary investments in any case and I think it is wise to take advantage of the current broad political support for government stimulus to get them rolling. However, by themselves, I do not think they will be sufficient, nor do I believe their deployment will produce the immediate jolt that is sought.

We hear the term "shovel-ready" used to describe the numerous projects that state and local governments are said to have in queue. The implication is that as soon as funding is made available, large swarms of workers, presumably composed of unskilled laborers, skilled tradespeople, engineers, and managers, will be immediately put to work, with dirt being dug, concrete being poured, and cranes silhouetting the sky. In reality, these projects will unfold much more slowly, in some cases over months, in others over years. Many, if not most, will be subject to bidding, meaning that specifications will have to be drafted and sent to potential vendors who will in turn have to invest time and effort in developing their proposals. Then the bids will have to be reviewed, vendors selected, and orders negotiated. The chosen vendors will then have to engage in detailed design, developing the plans and drawings necessary for the construction phase. Finally, "work" as imagined in the popular mind will begin.

In other words, the effects of these investments in terms of new job opportunities will build slowly over time. Again, there's no doubt that these will have a positive long-term effect and I hope more like them will be announced as well. But if the goal is to jump-start the economy from the bottom up, I think they will need to be supplemented with other measures that will boost confidence and help overcome the shock and anxiety of dropping asset values and rising unemployment. Examples that come to my mind:

• Dramatic expansion of unemployment benefits


• Large short-term tax cuts for lower- and middle-income people


• Short-term moratorium on foreclosures