In 1933, the Congress of the United States created the Tennessee Valley Authority. Its purpose was to turn the Tennessee River Valley region from the poorest, least developed areas in the nation into one much more stable and prosperous. Today, its mainly known as a producer of electricity, but it was the civil construction and economic development projects which are in many ways its greatest legacies.
The Depression hit the Tennessee Valley hard, and there was little capacity for the local governments and citizens to dig the region out of its slum. Rather than wait around and hope that private development would some day end the suffering and bring prosperity, the government of the United States resolved to take direct action itself. At great cost, but with great effect, the land was reborn anew and its people were traded hardship for opportunity.
Theory: The US needs a new TVA, maybe several
Unfortunately, the decades since the TVA's establishment has seen neither the end to Tennessee Valley type problems nor the establishment of new such projects. In fact, the TVA itself has been successfully demonized by the American political conservative establishment, and that tarnished image has kept it a sole success ever since. But with a little will and focus, its still possible to see such a rebuilding repeated.
I will point out here that power generation is not my primary concern, after all the purpose of TVA fundamentally was not to create a power company. Today, power plants are the aspect of the TVA which survives, but it was overall infrastructure development which the region needed most, and which led to its recovery. Jobs programs, job training, improvements to local education, and the introduction of more advanced technology turned an impoverished populace into formidable workforce. Today's projects would be focused on those strengths.
Which areas need this? Look around your local state, look for cities with many more empty houses than full ones, many more empty industrial lots than full ones. Look through some web pages about the Katrina-devastated gulf. Look at Guam outside of the military base the DoD is rebuilding. All over the US there are places where the local governments simply don't have the cash to do what needs to be done, and private entities would rather go somewhere else that's prepared for them, or offering large incentives, than spend the money themselves.
No doubt, I've by now infuriated the "small gov" or more accurately "States/cities/people other than my own can take care of themselves" crowd. And they do have ammunition. Some states have managed to get some projects going, Arizona's SRP being notably capable on the water and power side of the coin. But the problem is that those projects which have been a success have been far too few and far too limited. Most of those states without aren't simply going to wake up tomorrow and establish their own project, they don't have the money or resources to raise it.
The US Federal Government, however, is well suited to these projects. It has access to far more financial resources, its has organizational resources second to none, and it has a template for success, the old TVA. Sure, "your Tax dollars" might go to benefit someone else, if you choose to perceive it in that light. But if you can't choose to believe your personal cash is going to a project you approve of more, try to imagine what millions of more jobs, billions of more dollars in the economy, and a reborn housing market would mean for you.
Friday, January 25, 2008
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4 comments:
I left a comment last Saturday morning...but it's not here....
Stuck in the moderate cue? Lost in the spam filter?
Just curious. I can repost it if you'd like.
Looks like its lost in la-la land, go ahead and repost if you'd like.
Thanks! I hate it when that happens...here it is:
With the very low Nationwide unemployment (and you’ll never reach zero), it’s an issue of why? to me.
Any given region may have low employment, but is that specific region ripe for a large scale project that will use federally collected dollars that will have national level impact?
I could see a major initiative for alternative energy, in that in a region (that has the resources, be it sun, water or crop waste, etc) that would be the beginning point for the work to re-engineer the power grid of the country as a reasonable idea because it, like the Interstate development, would spread out and benefit a large percentage of the population.
To take billions and funnel them into a small area, which is down on it’s luck is a misuse of my money. If an area is suffering, then it should be incentive to look ahead and get to work making a new industry to revitalize their area.
Examples include: The massive base closures after WWII, and then again the sweeping changes to the “footprint” of the military in the mid-90s. Many communities, which had made an entire living off the presence of a military base and the payroll of the servicemen, as well as the services they could provide for the base, are still doing well. Charleston, SC is a recent example. Greenville, SC is one from the 70s, Newport, RI has been there, too.
Unemployment is no where near what it was in the Depression, so why do you think it’s right for the Federal Government to move money from one area of the country to another?
I recently finished reading “Fresh Water Submarines.” While it is a book about building submarines on the surface, it is actually a great story about the Manitowoc Shipbuilding Company and how it kept itself viable from it’s formation in 1902, through the depression, into WWII, and it still a powerhouse company in the Great Lakes area. How? The owners kept their options open, they kept looking for needs in the market and leveraged their initial wooden ship building knowledge into where their was a market. They still build excellent cranes (used worldwide) and even have a major industry in food service machines, which was a track they developed because of what they had to do in building subs…they are a major supplier of vending machines, soda dispensers and chilled cabinets. Why? Because Mr. West, and his team kept looking ahead, not because the Federal Government handed them money. And…before you think it was because of the sub contracts alone, read the book and see they made about a 3% profit, and actually took on a few projects for the cost alone, because that’s what some companies did in WWII. There is a very detailed breakout of the financials of the wartime operation to support this in the book.
How much Federal funding has Apple received? Look what they have done with the industry, the employment and housing market…And Steve and Steve didn’t even do it because they were in a tough job market in CA. How about eBay? No federal funding there, but it’s gone worldwide, because one guy had an idea and coded it. The gaming software market? Yes, there maybe be some companies there (”Dangerous Waters” and “Falcon”) are two games I know got some money. the first was an unclassified version of simulator work on Navy contracts, the second, because it was so good, the USAF paid for the 2.0 version, so they could use it for initial training for their F-16 pilots.
What we need is people willing to step up and run their own businesses, and to not settle for just being employees. Hard work? Yes, but they are the one who actually drive the financial engine of this country.
Government, at any level, really has little place in the daily economics, in my opinion. They are to “provide for the common defense” role, which is law enforcement and justice, when translated within our national borders. Consumer protection would fall under that, too. When I used to live in Virginia Beach, many things were “fees.” That way, they could advertise themselves as having a low tax structure. The reality, when you added all the “fees” in, which sure felt like taxes (eg: “Storm Water Fee”), cost like taxes, were billed like taxes, were just that: Taxes for more and more and more projects.
I submit that are far more stories on how one or two people took a spark of inspiration and have created huge economic machines than there are stories of even moderately successful government conceived and funded, and, more importantly, managed projects, within our country, or outside of it. You may not like large corporations, but they once were small entities, that out maneuvered all the competition, either by end running them, or by seeing the “high ground” no one else was going for and they took it. Now everyone (who could have done the same) complains, but they shop there so as to keep more of their hard earned dollars in their own pockets.
The need for a much higher percentage of business owners is the prescription.
The economic situation Nationwide is not the issue here, at least not essentially. This is about specific regions of the country which through various roads have come to the point of local economic collapse. As the original TVA has shown, the national government has the resources to effect a turnaround in that sort of situation. I don't contend that the current situation is as bad as the Depression nation-wide. However, there are places like New Orleans or rust-belt Michigan where its getting that bad and not trending in the sunny direction.
I've nothing against large corporations, economic self-help, or entrepreneurship-led development. However, in the above areas private-sector solutions haven't materialized thus far nor have they shown any signs of doing so in the near future. This isn't because of greed or irresponsibility, its because for them it doesn't make economic sense for the private sector to do so.
Companies want to be competitive and profitable, laying out huge amounts of money to create a place to conduct business when its cheaper to just look abroad is completely unappealing. I don't seek to punish private sector or attempt to shame them into action, I seek to provide the opportunity for them to participate in a healthy and profitable way by taking away the burdens/roadblocks of cash-sinks and large scale infrastructure improvement.
The government doesn't have to make a profit to survive, and by using its resources to create economic opportunity you'll stimulate the very external investment and grassroots economic growth which is needed to bring these targeted areas back. Why do all this? Because its the right thing to do. Flowering local economies are good for the national one, even if unemployment is low you increase the consumer/producer base every time you lower it further still, and the experience gained benefits all parties involved in the long run.
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