In fact, the Mayor of Las Vegas has a plan to create a museum dedicated to organized crime, the so-called Mob Museum. How will he pay for it, you might ask? Certainly a museum dedicated to the mob could find some rather creative ways of financing construction, right? No need. You see, the Mayor's crew doesn't operate with baseball bats and hired muscle, they use the real source of power in the country, the government.
That's right, the Mayor wants to build the museum using funds from President-elect Obama's proposed stimulus plan. The Mayor described the project as, “absolutely falling within the four corners of what President-elect Obama is trying to achieve.” His criteria appear to be mainly that it is a construction project that is ready to begin work. I am not sure how it fits in with Obama's stated goals of making federal buildings more energy efficient, building the information technology infrastructure of the future, digitizing medical records, creating jobs in renewable energy.
The Obama camp will undoubtedly point out that this idea came from the Mayor, not from Mr. Obama or one of his aides. But the Obama campaign was one that relied on the dispersed efforts of groups throughout the country, they heralded this as one of their major strengths. Why should the pork barrel spending of the Obama administration be any different?
Grass-roots pork is not what I have in mind when I think of the government using spending to lift us out of the economic morass. Ultimately though, this type of frivolous spending is unavoidable with the Keynesian approach to recovery that were are currently undertaking. You know, the one where the federal government throws money at one problem after another. The theory being that if enough money is thrown at enough problems, eventually things will turn around. As ever, I am not convinced this will work (see here, and here).
Over the weekend, the LA Times included this piece, which has a brief history of the Keynesian approach, but makes clear that what we are about to do dwarfs all previous attempts by governments to spend our way out of economic collapse. The scariest part of the article though, is not that we are fulfilling some vision of financial salvation (Obama's or otherwise) but that we are embarking on this program for lack of a viable alternative, or, really, any alternative. It ends on this chilling note:
The fundamental argument for the huge stimulus has little to do with analysis of past plans or economic theories. What's driving it is the fact that the U.S. and most other countries are in a largely unforeseen and terrifying mess.It's not unreasonable to compare the current state of affairs to being lost in the woods. Our problem is that on the way in, we ate all of the bread crumbs we were supposed to leave behind to mark our trail. I am not sure it matters that we are now going to start dropping crumbs the size of loaves of Wonderbread. After all, there is only one ending to the story when you find yourself alone in the woods with the Mob, and it is not a happy one.
Other than waiting for the problem to burn itself out, the new administration sees few alternatives but to return to Keynes and stimulus.