Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Keep CounterPunch ad free. Support our annual fund drive today!

The Lights are Out in Washington


I was late with my column this morning. It was the first time that I missed a deadline since I started college. This made me angry, not just because I hated to see a 34-year-streak end, but more importantly because of the reason I was late.

Sunday afternoon a storm hit Washington. It knocked out the power not only in my house, approximately three miles from the White House, but also in large chunks of the city and suburbs. Fifteen hours later we still don’t have power. Since the temperatures are predicted to get into the 90s today, we can expect that people will die. Sick and elderly people who cannot get into an air-conditioned facility will have great difficulty surviving in such heat.

This should make everyone very angry. There is no excuse for the nation’s capital not to have sufficient spare capacity and repair crews to ensure that prolonged blackouts do not occur in the middle of a summer heat wave.

Yes, this would cost money and that is why the whole story is damn painful. We have the money. We have the money.

We are sitting here with close to 10 percent of our workforce unemployed. This is because of a lack of demand. If there were more demand from any source, this would employ many of these workers. These are workers who have the necessary skills and desire to work. Remember, the vast majority of them were working before the housing bubble collapsed.

Back then the $8 trillion in illusory housing bubble wealth was creating the demand needed to keep our workforce near full employment. Now that this wealth has vanished, only the government can generate the demand to employ these people. It is only because of the painful ignorance or willful economic sabotage of members of Congress (mostly Republicans) that the government will not spend the money needed to bring the economy back to more normal levels of employment.

This is where D.C.’s power failure comes in. What would be the problem if Congress dispensed $400-500 billion to the states to be spent on upgrading infrastructure such as electric power lines, mass transit systems, and water and sewage treatment facilities? The stimulus passed by Congress last year started on this path, but did not go nearly far enough.

This spending could be financed by requiring the Federal Reserve Board to buy and hold the bonds used to pay for the projects. If the Fed held the bonds, then the interest would be paid to the Fed, which in turn would then be rebated to the Treasury. That means that there is no additional interest burden on our children for the deficit hawks to whine about. Instead our children will get a modern infrastructure that doesn’t jeopardize the country’s economic and physical health.

The new infrastructure could also be far more energy efficient, making important strides towards reducing greenhouse gas emissions. Perhaps future summer heat waves won’t be quite so hot.

A jobs and growth project along these lines should be a no-brainer. The huge number of unemployed workers is actually a source of wealth. It means that the country is currently meeting its consumption and investment needs while still having 10 percent of its workforce on the sidelines. If we can find useful work for many of the currently unemployed workers it makes the country richer, not poorer.

At this point, the budget deficit crew will invariably start yelling that governments will be wasteful in their spending. There is some truth to this, but so what? Imagine that we spend 20 percent, 30 percent or even 40 percent too much for rebuilding our infrastructure. Five or ten years out we still have a modernized infrastructure. Would be better off if we just did nothing so that our children are left with an infrastructure that is 10 years more out of date in 2020?

We also hear the complaints that this plan would generate inflation. This objection is hard to understand. We have massive excess capacity in almost every sector of the economy. Which business is going to start raising its prices because the government is supporting a major infrastructure program? Furthermore, if inflation did start to get out of hand, the Fed has all the tools necessary to keep inflation under control.

What’s the worst possible scenario, we get a recession like the 1981-82 downturn? That was a much more mild recession than the one we are currently experiencing, so it’s hard to see the basis for fear.

DEAN BAKER is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy and False Profits: Recoverying From the Bubble Economy.

This column was originally published by The Guardian.





Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University.

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine


October 25, 2016
David Swanson
Halloween Is Coming, Vladimir Putin Isn’t
Hiroyuki Hamada
Fear Laundering: an Elaborate Psychological Diversion and Bid for Power
Priti Gulati Cox
President Obama: Before the Empire Falls, Free Leonard Peltier and Mumia Abu-Jamal
Kathy Deacon
Plus ça Change: Regime Change 1917-1920
Robin Goodman
Appetite for Destruction: America’s War Against Itself
Richard Moser
On Power, Privilege, and Passage: a Letter to My Nephew
Rev. William Alberts
The Epicenter of the Moral Universe is Our Common Humanity, Not Religion
Dan Bacher
Inspector General says Reclamation Wasted $32.2 Million on Klamath irrigators
David Mattson
A Recipe for Killing: the “Trust Us” Argument of State Grizzly Bear Managers
Derek Royden
The Tragedy in Yemen
Ralph Nader
Breaking Through Power: It’s Easier Than We Think
Norman Pollack
Centrist Fascism: Lurching Forward
Guillermo R. Gil
Cell to Cell Communication: On How to Become Governor of Puerto Rico
Mateo Pimentel
You, Me, and the Trolley Make Three
Cathy Breen
“Today Is One of the Heaviest Days of My Life”
October 24, 2016
John Steppling
The Unwoke: Sleepwalking into the Nightmare
Oscar Ortega
Clinton’s Troubling Silence on the Dakota Access Pipeline
Patrick Cockburn
Aleppo vs. Mosul: Media Biases
John Grant
Humanizing Our Militarized Border
Franklin Lamb
US-led Sanctions Targeting Syria Risk Adjudication as War Crimes
Paul Bentley
There Must Be Some Way Out of Here: the Silence of Dylan
Norman Pollack
Militarism: The Elephant in the Room
Patrick Bosold
Dakota Access Oil Pipeline: Invite CEO to Lunch, Go to Jail
Paul Craig Roberts
Was Russia’s Hesitation in Syria a Strategic Mistake?
David Swanson
Of All the Opinions I’ve Heard on Syria
Weekend Edition
October 21, 2016
Friday - Sunday
John Wight
Hillary Clinton and the Brutal Murder of Gaddafi
Diana Johnstone
Hillary Clinton’s Strategic Ambition in a Nutshell
Jeffrey St. Clair
Roaming Charges: Trump’s Naked and Hillary’s Dead
John W. Whitehead
American Psycho: Sex, Lies and Politics Add Up to a Terrifying Election Season
Stephen Cooper
Hell on Earth in Alabama: Inside Holman Prison
Patrick Cockburn
13 Years of War: Mosul’s Frightening and Uncertain Future
Rob Urie
Name the Dangerous Candidate
Pepe Escobar
The Aleppo / Mosul Riddle
David Rosen
The War on Drugs is a Racket
Sami Siegelbaum
Once More, the Value of the Humanities
Cathy Breen
“Today Is One of the Heaviest Days of My Life”
Neve Gordon
Israel’s Boycott Hypocrisy
Mark Hand
Of Pipelines and Protest Pens: When the Press Loses Its Shield
Victor Wallis
On the Stealing of U.S. Elections
Michael Hudson
The Return of the Repressed Critique of Rentiers: Veblen in the 21st century Rentier Capitalism
Brian Cloughley
Drumbeats of Anti-Russia Confrontation From Washington to London
Howard Lisnoff
Still Licking Our Wounds and Hoping for Change
Brian Gruber
Iraq: There Is No State
Peter Lee
Trump: We Wish the Problem Was Fascism
Stanley L. Cohen
Equality and Justice for All, It Seems, But Palestinians