Yesterday, he announced something he forgot to mention during the campaign: A massive public works effort that he says "will mean 2.5 million more jobs by January of 2011."
Obama didn`t put a price tag on his plan, but one reasonable estimate (mine) is "a hajillion dollars."
"We`ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels; fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead."
It`s unclear whether Obama realizes he`s pulling our leg about getting gigantic environmentalist fantasy projects going in just 24 months. Nothing happens that fast anymore—precisely because of all the environmental laws and regulations. Huge wind and solar farm projects are mostly going to employ lawyers, bureaucrats, and environmental impact consultants for the next several years. But those are the kind of tax-eaters who make up Obama`s political base. So, to Obama the master politician, that`s not a bug, it`s a benefit.
What Obama could do fast is what he`s watched Chicago Mayor Richie Daley do for two decades: hand out huge amounts of money to resurface roads … badly.
In Chicago, traffic is terrible for half of each year because of all the snow and ice. And the other half of the year, traffic is worse—because of all the crews employed by major campaign contributors using technologically obsolete gunk to filling potholes that will reappear in a decade, about one-fourth of the time that road repairs in Europe last.
To the Chicago Machine, however, the short-lived crumminess of the repairs is all part of the plan.
The real issue posed by Obama`s proposal: will he follow the precedent set by the New Deal`s Works Progress Administration (WPA) in limiting employment on his public works projects to United States citizens?
The WPA started in 1935, a period when there was little immigration because of the 1921-5 cut-off and the Depression. When the economy turned down in 1937, the Democrat-dominated Congress restricted it to American citizens (n.b. citizens, not even legal residents):
"In 1937 Congress, following a trend already established by the states, declared that all programs of the Works Progress Administration (WPA) would be closed to aliens. The "citizens-only" policy of the WPA extended even to companies that fulfilled government contracts; corporations such as General Motors fired those whom they perceived as foreigners to keep from losing lucrative government business."[LATINO AMERICANS, IMPACT OF THE GREAT DEPRESSION ON, Macmillan Reference USA, 2004]
Otherwise, Obama`s public works spending will merely draw in millions of foreigners, just as the late Housing Bubble did.
As you`ll recall, the rich, powerful, and influential relentlessly lied to us throughout this decade about how illegal aliens were crucial to the economy because they would do "the jobs that Americans just wouldn`t do." O Of course, it turned out that we didn`t need—and couldn`t afford—the McMansions and granite countertops that the illegal immigrants were employed to build.
Nor could we afford the illegal aliens. In fact, it`s hardly a coincidence that the states with the most illegal immigrants, such as California, Nevada, Arizona, and Florida, set off the great crash of 2007-2008. We deluded ourselves with the dogma that diversity was prosperity, but, in truth, no matter how profitable it was for employers who socialized costs while privatizing profits, importing millions of grade school dropouts was always a losing proposition overall for our modern economy.
Moreover, during the Housing Bubble, blue-collar Americans in dying cities like Detroit and Cleveland largely missed out on the chance to move to places like Las Vegas for construction jobs—the illegal aliens would work for less.
During the Bubble, huge sums of money flowed out of the United States as remittances. The Washington Post reported in 2006 at the peak of the Bubble:
"A report released yesterday by the Inter-American Development Bank estimates that immigrants living in the United States will send $45 billion to family members this year …"[Immigrants Sending $45 Billion Home, By Krissah Williams, October 19, 2006]
Remittances to Latin America shot up during the Housing Bubble, both because so many immigrants were employed in construction, and because so many took out dubious mortgages that they have since defaulted upon.
Remittances finally started falling early this year. The Dallas News reported:
"Other Mexican officials said the decline is a reflection of the worsening U.S. economy, particularly in the area of construction. The U.S. construction industry accounts for about 20 percent of jobs for Mexicans living in the country, according to the [Mexican] central bank."[Remittances To Mexico See Biggest Drop In 13 Years, By Alfredo Corchado, March 7, 2008]
These remittances deprived the American economy of the celebrated Keynesian "multiplier effect" on construction spending that you will hear so much about from the Obama administration this week as they rationalize their spending plan.
The idea has been around longer than Keynes, as Jerry Pournelle noted recently:
"As Abraham Lincoln once observed, if he buys a coat from New England, he has the coat and the money remains in the United States where it can be taxed. If he buys it from England, he has the coat."
What you likely won`t hear from Obama, however, is that if you pay an American to fill potholes, he`ll spend the money in America, where other Americans will then spend it some more. If you pay a Mexican, however, he`ll send a lot of the money back to Mexico.
Mexico, with its population of 110 million (just counting those still resident within its borders), is unquestionably going to go in the tank economically in 2009 because it depends upon remittances, oil, and American tourists. So if Obama fails to close his infrastructure jobs to non-citizens, there will be another rush to America by unemployed Mexicans.
Obviously, the highest priority way to reduce unemployment in the United States is to encourage non-citizens to go home, as America did during the Great Depression. (There was actually net emigration in the 1930s.)
It`s better for all concerned: after all, Mexico is a much cheaper place to be unemployed. (This is a financial-crisis friendly version of what VDARE.COM calls the "Sailer Scheme"—my 2005 proposal that all troublingly unassimilated immigrants should simply be bought out)
But because that makes the most sense of all the ideas out there, you`ll hear about it the least – except here on VDARE.com.
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