Many of you have probably visited some of the great Works Progress Administration (WPA) construction sites of America's landmark hard times period, the Great Depression. I spent the first two years of my college education in a community college that had been built by the WPA. The restrooms had marble floors and there were marble dividers between the stools.
If you have visited a similar site (for something more glamorous you might try Timberline Lodge, a ski area on Mt. Hood, outside of Portland, Ore.), you've probably marveled at the extremely solid construction, ornate craftsmanship and lasting results the people of that era produced. It was a labor of love, because at 25-plus-percent unemployment, and no unemployment benefits, every one of them loved having a job.
If you expect a repeat of the WPA from today's Democrats, you need to stop holding your breath until you turn blue and throwing temper tantrums on the floor in the grocery checkout aisle to get what you want. That behavior affects your judgment. Besides, Obama is from Chicago.
To the politically sane, those last four words say it all. As the current Illinois governor's arrest for attempting to sell Obama's Senate seat demonstrates, governing by Illinois Democrats is less about "spreading the wealth" than consolidating it among their friends.
Democrats paint themselves as the party of the poor and downtrodden. That being the case, there is little point in looking for handouts from their supporters, as the Republicans like to do. The tried and true Democrat alternative is bribery and blackmail, greased with that big porker-in-the-sky, public construction projects.
Which brings us to Obama's massive public works spending plans. Think Illinois, and particularly Chicago, superimposed on the Washington, D.C., printing presses. It's probably safe to anticipate that just the bribes and kickbacks on Obama's plans will exceed the entire WPA budget that employed all those people in the 1930s.
That's the first reason Obama's Illinois Senate seat is so valuable. It will be a great source of kickbacks for whomever manages to purchase it. Illinois contractors will need the efforts of an Illinois senator to help them cement their infrastructure efforts and get paid with those fat public contracts (which will, of course, require unionized labor and give preferences to minority-controlled construction firms). In public works, the bottom line is never cost and efficiency; it's how effectively you spread the money around.
Businesses and municipalities that want infrastructure projects in their neighborhood (a great source of employment and taxes) will have to pony up cash and perks to the new senator to get their horse in the race. For the office holder, it's the political equivalent of a "win-win" in business negotiating, where both parties get something they want. Here, money comes in, in both directions. The potential customers (municipalities) have to pay to get in the game; the potential contractors have to pay to get on the bidding list. So, definitely, you want to appoint a seasoned operator to represent the great state of Illinois.
Not that anybody outside the contracting or unioning business cares, of course. All the rest of us want is for the value of our 401K to recover.
The bad news is, someone has to pay for all these great infrastructure projects. Taxes will be difficult to raise without kicking the economy while it's down, since people are already vastly poorer from the housing and stock market bubbles. That leaves the holders of already deflated retirement accounts.
The temptation to use 401Ks and IRAs to subsidize infrastructure "investments" will be overwhelming. And it will be relatively easy to accomplish. One day soon – when inflation starts heading up toward the stratosphere – the Obama administration will recognize they can't afford the interest on the federal debt any more for all the infrastructure "investments."
The solution? It's elementary, my dear Watson. Simply confiscate retirement accounts. Oh, they wouldn't call it that, of course. All they would need to do is to require that 401K, IRA and other self-directed retirement plans be "invested" in Treasury bonds, as a condition of retaining their tax-deferred status. The once-vast amount of money in these accounts will force the price of federal debt back down to where 401K/IRA "investors" will earn about 3 percent interest on their "government-guaranteed" investment.
This will be heralded as a giant step forward: A much "safer" investment designed to "protect" the masses from the ravages of the market. And it will. Having taken the escalator down to the market basement, retirement investors will be prohibited climbing back on for the ride back up to daylight. But of course, Obama is from Chicago. What did you expect?