Tuesday, January 13, 2009

Is the Mob Museum An Offer We Can't Refuse?

I've never seen a single episode of the Sopranos so I had to fall back on The Godfather, which once reigned supreme as the answer to pop culture's mafia obsession. Even though the classic film may have been pushed aside by the gang from HBO, it seems our desire for all things related to organized crime continues unabated.

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.

Other than waiting for the problem to burn itself out, the new administration sees few alternatives but to return to Keynes and stimulus.
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.


Steve said...

Last Sunday's 60 Minutes program had a very enlightening segment (to me, at least). It reported how the price of gasoline is directly related to speculators (commodities). When the price of gasoline hit its all-time high (last year?), there was also an all-time high supply of gasoline. The oil-producing nations had virtually nothing to do with the price we were paying at the pump, it was the speculators holding paper on futures (I believe it said that Bear Sterens was one of the biggest). When an executive of this huge investment company was asked how big his operation was, he replied they were like a flea on an elephant. And when they went broke all the traders that got laid off had immediate job openings offered them because they "knew how to do it". I'm afraid this is but an example of how things are not going to work in the future as they have in the past. Despite the govt. attempt to stimulate the economy there are those who "know how to do it"; i.e., bilk the public by trading, speculating, and betting on paper what in the real world (us)should be getting. There is going to have to be more than monotary spending, there is going to have to be monotary reform to get rid of the thousands of fleas on the elephants back.

Anonymous said...

Wow, the author of this 'article' should do some research.

Fact is, no stimulus money is going being sought to build a Mob Museum. That is a rumor which was started when Oscar Goodman made a joke about 'wouldn't he like to get his hands on some' stimulus money and then some old Republican in DC used it in a speech to make his own tired point.

The Museum is funded by $35 million in bonds that the City already owns, plus several million more in financing the City raised. In other words, no stimulus money. Get your facts straight!

SLS said...

Hey Jer,

Me thinks the rude comment above protests too much! I didn't know you had descendants of old Scarface himself reading your blog!

Who else in their right mind would spend 35 million dollars, stimulus money or not, on a Mob Museum! Aren't there needy people who need health care or food or SOMETHING in Las Vegas that this money could be better spent on?

This country is going to hell for sure...

PS We are ALL well aware that the Mob Museum is not going to be funded with stimulus money. However, LV should not get ANY stimulus money at all if they have 35 million sitting around with nothing better to do. It's the same as those AIG bonuses..."oh, we weren't going to us the bailout money for the bonuses...we were going to use OTHER money for that"....YEAH RIGHT! What a joke!