It’s Time to Fix the Roof

While they didn’t originate it, both Franklin D. Roosevelt and John F. Kennedy popularized versions of the quote “The time to repair a leaky roof is when the sun is shining”.  Unfortunately, most people don’t follow that advice.  I know that I’m often guilty of putting something off until life and circumstances force me to act.

Given that quote, it’s ironic that both Roosevelt and Kennedy are often referenced when people speak of Barack Obama and list the challenges that he and our country are facing now and will face for some time to come.  Obama’s charisma and personality are often compared to John Kennedy’s and the economic depression that Roosevelt faced for much of his tenure are seldom far from thought when describing our current economic problems.  The United States has a lot of leaky roofs that have been ignored over the years.  Maybe fixing those roofs will be part of the solution to this economic crisis.

As a moderate republican, the financial bailouts that both the financial sector and the automotive industry have received rankle me to my core.  But I’m realistic enough to concede that governmental intervention was and is necessary to control the problems created by un-tempered greed, imprudent lending practices, poor individual financial planning and abysmal corporate management.  I wish that the current administration had kept a closer eye on how the first $350 billion dollars have been used.  I’m hopeful that the new administration learns from those mistakes and makes the needed adjustments.

Free market economics has always been the basis of republican economic policy and to a large degree I agree with the concept.  Markets do have the ability to self-correct, but only while they are generally running on the road and can see the warning lines. This market got of the road because greed and stupidity created a negative feedback loop that over rode normal movement. Once a market is off the berm and into the brush it often takes heroic outside intervention to get it back on the road.  That’s a basic tenet of Keynesian economic theory.  John Keynes, general wacko that he was, has never been a poster child for proponents of republican doctrine, but his theories have proven themselves time and time again when an economy has gotten off track.  We ignore them at our own peril.

It’s clear that Obama wants and will have a program to provide such intervention soon into his tenure.  His first shot across the bow is an $800 billion stimulus package.  That’s a number too big for me to fully grasp and I suspect that I’m not alone in that regard.  The only way that I’ve been able to make sense of it is to look at where he plans to spend the money and compare that with the need.

We haven’t seen the specifics yet, but by all reports the plan is a combination of tax cuts and spending on infrastructure, schools, scientific research and alternative energy projects.   I’m not enough of an economist to know whether that’s a good mix or whether the dollar amount is right, but I do agree on where the money will be spent.

For decades we have been giving roads, bridges, schools and scientific research short shrift and it’s long past the time for a major investment in alternative energy.  It’s long past the time when these roofs need repaired and replaced.  Unfortunately, instead of doing that a little at a time while the sun is shining, we’re going to be crawling up on the roof in the middle of a torrential rainstorm to fix it all at once.

But, that’s OK.  As another old adage goes, “You have to spend money to make money.”  If congress can avoid the trap of pork spending and reserve these funds for truly worthwhile projects then maybe we can come out of this with a trifecta.  Maybe we can get the economy back on the road, fix a dilapidated transportation network and truly prepare the United States for the technological journey into the Twenty-first century.

That’s a big “if” and a bigger “maybe”.  For it to work, Obama’s plan for the $800 billion stimulus package has to be well developed and well executed.  That’s a tall order for a government that has seldom shown that fiscal responsibility is one of its gifts.  I guess that we can only hope that new leadership and fresh blood will make the difference.  Time, hopefully a short time, will tell.

So, grab your hammer, nails and a square of shingles.  We’re all heading up on the roof to do some work.  Oh, don’t forget the raincoat, it’s wet up there.

See Ya

TD

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