Friday, October 08, 2010

Light at the End of the Tunnel Turned Off by Governor Christie

Governor Shows no Understanding of Economic Cycles

New Jersey Governor Chris Christie put an end to the building of a tunnel connecting New Jersey and New York City, along with an expansion of New York's Penn Station that would have created 6,000 jobs. The Governor is either playing crass balanced-budget politics or has no understanding of economic cycles.

Does Christie think that these 6,000 workers can just go across the street and get jobs? Is he trying to keep unemployment rolls high? Drive New Jersey and New York back into recession?

What has Governor Christie done? By clutching idealism instead of acting pragmatically, he is pushing New Jersey and New York into a longer and deeper recession. Of course, the Federal Government will probably rescue this project and Christie can look like the budget-cutting tough guy while he complains about Federal Government spending.

Despite Reaganomic theories, economic cycles cannot be done away with. Periods of growth and recession will always be with us. However, the depth of the recessions can be lessened. John Marnard Keynes taught us how.

I lived in Indianapolis during the economic downturn of the early 1990s. Indianapolis got lucky. They had several large building projects under way when the downturn struck. While many cities struggled, due largely to those projects Indianapolis barely saw the downturn.

I moved out to Denver and watched the city blow its chance to balance the economic cycles. While the economy was going great guns, Denver built a new baseball stadium, a new football stadium, a new hockey-basketball arena, and a new art museum.

Now, during our current great-recession, construction in Denver is in the dumps; right when we need these projects to reduce the depth of the recession.

Your city or state can protect themselves against recession by saving big building projects for when they need them. Don’t build the stadiums when things are going great. Rather, design them (preferably with labor intensive designs) and put them in the drawer. These projects need to be shovel ready when needed.

When the economy turns toward recession, pull out your new stadium, bid it, and start building it.

You don’t over stimulate the economy when it doesn’t need it and you do stimulate it when you need too. Yes, it is difficult to determine where in the cycle the economy is, but we have to try.

Tuesday, October 05, 2010

Last-Man-Standing Politics

The Plot to Push the Middle Away from the Polls

Newt Gingrich started Last-Man-Standing Politics in the 1980s. The goal was to make the average voter so disgusted with government and with politics in general that he wouldn’t bother to vote.

The plan is simple: The Republicans have the larger loyal base of voters, so if people don’t vote, leaving only the parties’ bases, Republicans win.

Remember, the American political system is based not a majority vote, but on a plurality vote. The candidate that receives the most votes, even though less than a majority of eligible voters actually vote, is still the winner.

By convincing people that their votes didn’t matter, Gingrich convinced the average American to sit on his hands on election day. We had some of the lowest voter turnouts in American history and the Republicans won just enough seats, relying on their base, to take over the congress in 1994.

Karl Rove continued Gingrich’s plan by aiming the Bush campaigns directly at the Republican base. In the past, politicians generally tried to attract independent voters, but Rove was able to disgust enough Independents and get just enough base voters to support his candidate to barely win. In fact, Al Gore won the plurality of votes in 2000.

Independents turned out in droves in 2008 and Obama swept into the Whitehouse. Now, the Independents are disgusted again. Why? The Republican Party has stopped everything in the Senate and all most voters see is that the government can’t get anything done.

This year, the same group throws out bizarre accusations, like throwing spaghetti at a wall, to see what sticks and what will lead to voter disgust with the process. Many voters will sit out this year’s elections. Many others, like beagles, will blame the party that’s in power for every problem, no matter who caused them.

Having pushed the average voter away from the polls the Republicans will be the Last-Man-Standing.