Tin Cup Governors

Tin Cup Governors

Will Alms from Washington Be Enough?

Ohio Asks for Funding for Road, Bridge, Rail Projects

with John Michael Spinelli

Columbus, Ohio: Governors and mayors from across the nation, especially from the 44 or so states that have widening budget deficits with no shovel-ready sources of money to close those gaping gaps, are rattling their tin cups, hoping soon-to-be President-elect Barack Obama will shower them with tens of billions of federal dollars so they don't have to choose between shedding services, raising taxes or both.

The closer Obama comes to his inauguration day, the more intense will be the call for stimulus funds -- wasteful bailout funding to some, especially fiscal conservatives -- to flow like flash-flood waters to thirsty states whose budget cups are leaky and dry.

Republicans, who never batted an eye when President George W. Bush ran up record deficits to pay for expensive wars and who defined not spending massive amounts on supporting the troops as un-American and un-patriotic, have switched back to traditional anti-tax arguments.

They are warning that Obama's proposed stimulus package, designed to produce millions of jobs to replace the millions lost just this and over the course of the two terms of out-going President Bush and his tribe of fiscal and social conservatives, shouldn't be too big because it will necessarily shift the burden of repayment to future generations.

But as the debate escalates over how big the economic recovery package should be, governors of states like New York, New Jersey, Massachusetts, Wisconsin and Ohio, among others, are indeed the Chicken Little's of our time. Only in their version of this classic children's tale, the sky really is falling.

In Ohio, for example, a Republican-controlled state since 1992 that elected Democrats in 2006 and went for Obama last year, the projected budget deficit so far is about $7.1 billion, the greatest budget gap in history.

Strickland, Ohio's first Democratic governor since the early 1990s, said in early January that the situation facing the state of Ohio is so dire that in order to balance his state’s budget, he would have to fund every state program at 75 percent of its current level, according to Politico.com. “If I were simply to flat fund the operations of this government, I’d end up with $7.3 billion in deficit,” he said, adding, "We’re just trying to keep afloat.”

The governors have collectively requested Obama and a new expanded Democratic-led Congress for $1 trillion. Hard hit by jobs losses across the board, manna from Washington would be spent to prevent cuts in social services and education, as well as “shovel ready” infrastructure projects that could begin with 18 months, according to published reports.

In the Buckeye State, jobs numbers are grim. Numbers from the Department of Job and Family Services show that employment decreased by 26,600 jobs, while goods-producing industries were down 29,330; manufacturing was down 22,100; and construction lost 7,500 jobs. For a state that never recovered from the Bush recession of 2001, losing 95,000 in the past 12 months, pushing the unemployment rate to 7.3 percent, is shock and awe of a different kind. In some areas of the state, like Lucas County, home to Toledo, the unemployment rate is 9.5 percent. In nearby Ottawa County, it is 10.3 percent.

As dire as conditions are, Republicans are being taken to the wood shed on the efficacy of tax cuts versus direct government spending. Obama's economic team says alms for poor states pack a bigger bang when spent directly than through tax cuts, which recipients might save instead of spending.

For a state like Ohio, which experienced $1.2 billion in state budget cuts in 2008, the hundreds of millions can't arrive soon enough.

In one region, Cuyahoga County and four other northeastern Ohio counties, the cost of their proposed projects are at $197 million, published reports say. County leaders, the report says, have added tens of millions of dollars more to the list.

Howard Maier, executive director of the Northeast Ohio Areawide Coordinating Agency, which funnels federal money to local transportation projects says, explaining the sum to a central Ohio newspaper, said: "We have to be ready the moment a stimulus package is approved." He added, "It's not just the direct jobs; suppliers are involved. There's a multiplier effect of the construction."

Columbus Mayor Michael Coleman is using the opportunity to get his push for light rail back on track. Coleman wants $200 million to build a 13-mile transit system. Cleveland Mayor Frank Jackson wants $730 million to fund road and bridge projects.

But as this page has reported before, so-called "shovel-ready" projects may not be "future-ready" projects.

Which alms flow in what amounts to which states will be a fierce contest for sure. With consumer confidence just one point above an all-time low, doors will be open for the greenback cavalry when ever it arrives.

John Michael Spinelli is an economic development professional, business and travel writer and former Ohio Statehouse political reporter. He is also Director of Ohio Operations for Tubular Rail Inc. To send a tip or comment, email ohionewsbureau@gmail.com

Blame Forward: Holding Republicans Accountable as Obstructionists to Revival

Blame Forward: Holding Republicans Accountable as Obstructionists to Revival

with John Michael Spinelli

Op-Editude

Columbus, Ohio: Having stymied important legislation from passing for two years by preventing Senators from reaching the magic number of 60 in the Senate, backing a reckless war launched by a reckless president that will end up costing us all trillions of dollars and loosing big time in two successive election cycles that show just how fed up Americans are with their brazen, party-first policies that have brought us to the brink of disaster, it seems appropriate that Republicans be blamed forward for what appears to be their strategy of opposing at all costs President-elect Barack Obama's spending plans to bring America back to life again after eight straight years of pet Republican policies that put the nation, and much of the world, on life support.

Republicans, from George W. Bush in the White House to their control of both chambers of Congress for four years starting in 2002 when the GOP regained control of the US Senate, can rightfully be adjudicated as the party who endorsed at best and sat by idly at worst as their leaders, who said government was the problem but who became intoxicated with its power, took us from Clinton budget surpluses to massive Bush budget deficits.

It would seem that people who constantly carp about government as the enemy, who don't know how to run it efficiently or effectively when put in charge of it yet feel as happy as a pig in mud when they have that responsibility and who say starving it so it can be drowned in a bathtub is good, shouldn't be allowed to have anything to do with it; but that would be un-American and un-Democratic, not matter how much sense it makes.

As compassionate as a fox in a hen house, Republicans have brought great harm and heartache to the nation. As the minority party, they now intend to thwart the first African American president and his agenda to revive an economy that's tanked, put to work millions of people who have lost their jobs and bring about the kind of change that garnered him eight million more votes than John McCain or Sarah Palin, showing just how tired and disgusted the nation is with them and their party's so-last-century social and fiscal models.

Woody Hayes, the now infamous football coach of Ohio State University who won several national titles but who will forever be known as the military-like curmudgeon coach who was fired because he slugged an opposing team's player in a bowl game as the tide turned against the Scarlett and Gray, used the phrase "paying forward" to teach the lesson that "paying back" is retrospective while doing good deeds along the way instead of at the end of your career is prospective. Doing so, Hayes believed, you'll have built up a line of credit in being humane that will make you and those you touch better off for it.

Republicans who ruled Washington and state capitals from the mid-1990s to the election cycle of 2006 and who ladled out opportunities for Democrats to me partners in policy formulation as sparingly as a jailer giving food to prisoners and who believed unbridled spending was good as long it was for the war in Iraq, are now whining that Obama needs to be mindful of spending so future generations won't be unduly burdened. Such overt, disingenuous hypocrisy is a wonder to behold. But Republicans have no shortage of brazen chutzpah when it comes to telling others to not do what they do.

Now the minority again after an electoral drubbing of staggering proportions that will be achieved again in 2010 because hopeful GOP leaders think that doubling down on their agenda of making the rich richer, the middle class poor and siphoning off tax dollars to pay their cronies is what you do when you get elected, Republicans are staging, and the media is swallowing it whole like they did the bogus reasons for going to war in Iraq, that too much spending to put people back to work and remedy a housing situation made possible by the greedy Wall Street crowd their economic policies were crafted to satisfy, an assault on Obama and a new, expanded Democratic congress voters installed last November for following through on the campaign promises they ran on and won on.

New York Times columnist and winner of the Nobel Prize in economics, Paul Krugman, sees the new-found caution on spending by Republicans as their way to water down Obama's spending plans to a point where they won't do the job, thereby giving them the chance to say his agenda doesn't work, and please elect us again.

Krugman displays his math skills, arguing that Obama's plan to spend about $775 billion over two years is a conservative amount to do what's needed to put people back to work. He says it "takes $300 billion to reduce the unemployment rate by 1 percentage point" and that spending less will do less, playing into Republican arguments they media is already regurgitating that tax cuts for the wealthy and business is what's needed.

"I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell [aka "Dr. No"] says “See, government spending doesn’t work.” [Paul Krugman ]

Job losses just in 2008 is about 2 million, and news from the Gallup polling group released Tuesday forcast that the unemployment rate is likely to surge on Friday, as the Bureau of Labor Statistics is expected to show that jobs lost at the end of the year will exceed the seasonally adjusted four-week average of 552,250. The Gallup poll also predicts that the unemployment rate is likely to "surge past 7%." And for those of us who believe the official unemployment rate is tamped down from what it shoud be, the real rate, made up of categories of workers not normally factored in to calculations, could be 4-5 percent higher.

While this debate is taking place, we learn that manufacturing activity fell to its lowest point in 28 years. We also hear that some state governors, especially five from the Midwest including Ohio, are asking the new president and congress to open the cash-flow sluice gates to prevent more cuts to education, social services and infrastructure.

For states like Ohio, where about 250 thousand jobs are directly or indirectly tied to the fortunes of Detroit's Big Three, news that Chrysler sales are off 54 percent, General Motors 31 percent and Ford over 32 percent is downright scary. Even without a collapse of car makers, Ohio and two other states, New York and North Carolina, had to shut down their electronic unemployment filing systems due to system stress and heavy volume.

The report by ABC News said about 4.5 million Americans are collecting jobless benefits, a 26-year high. Web sites and phone systems now commonly used to file for benefits, it said, are being tested like never before. That's not all, folks.

John Michael Spinelli is an economic development professional, business and travel writer and former Ohio Statehouse political reporter. He is also Director of Ohio Operations for Tubular Rail Inc. To send a tip or comment, email ohionewsbureau@gmail.com

American Debt Greater Than Collective Networth, Budget Birddog Group Forecasts

American Debt Greater Than Collective Networth, Budget Birddog Group Forecasts

Subsidies, Savings Highlighted as Sinners and Saints

with John Michael Spinelli

Columbus, Ohio: Recent calculations forecasting that America's debts and other financial commitments will soon exceed the collective networth of its citizens, marks a historic first at precisely the wrong time, when the escape hatch out of a long, rough recession calls for massive new spending by a new president and congress.

The foreboding prediction of America under financial water came from the Peter G. Peterson Foundation (PGPF), the eponymous budget birddog group that's riding like Paul Revere to warn us about our financial crisis and how to avoid the disaster it will bring if presidents and other leaders don't act with dispatch.

In its latest newsletter, the group who made "I.O.U.S.A," a tale of how America accumulated its sky-high debt that was recently nominated for the Critics' Choice Awards for Best Documentary, said unfunded promises for social insurance programs such as Medicare, when combined with a drop in the networth of Americans due to lower home equity values, has brought the world's reigning super power to it s financial knees.

The foundation's dire warning is based on new consolidated federal financial statements as of September 30, 2008, numbers that do not reflect the additional toll taken by more recent market declines, bailout packages, and record October and November deficits.

Hard to fathom but all too true, the group's math show that $56.4 trillion in debts, liabilities, and unfunded promises for Medicare and Social Security is for the first time in the nation's history more than a total of household networth, which it pegged at $56.5 trillion.

"Given more recent developments, it's clear that America now owes more than its citizens are worth," said Foundation President and CEO David M. Walker, writing for the group's newletter. "Passing this shocking milestone highlights the need for President-elect Obama and the next Congress not only to turn the economy around and boost consumer confidence, but to put a process in place that will lead to tough choices getting made to strengthen the government's financial condition once the economy begins growing again."

In a related piece called "The Breadth of Brokeness" about the extent of government's problems, author Gene Steuerle outlines a dozen areas where President-elect Barack Obama and a new Democratic-led Congress can make changes.

Many government programs were created decades ago for a different economy, a different family and industry structure, and even a different understanding of our economic and cultural opportunities, says Steuerle, who observes that "many of the agonizing debates over the past three decades have represented a see-saw battle, more often over symbol than substance, leaving in place agencies and programs often moribund and incapable of meeting many modern needs."

Concerns expressed by Steuerle on various topics - health care, tax policy, social security, disability, environment, housing, consumer protection, antitrust, justice, transportation, education, pension policy - may appear on first glance as curmudgeonly, but seem eminently foresighted in their practicality and ability to plan ahead rather than react to.

But the sheer size of the financial picture it paints will be troubling to art lovers, who will come to realize that the rich paying more and individuals saving more are fundamentals to reaching the surface so America can again breath on its own, without resorting to artificial aid like foreign borrowing.

In a separate story on Ohio's worsening budget picture, Policy Matters Ohio, a non-partisan economic think tank, argues that the "roots of the current staggering financial catastrophe lie in over-reliance on the market, excessive deregulation, and our economy's failure to deliver for most families." PMO researchers say wages have been essentially stagnant for the typical worker since the late 1970s, despite rising productivity and tremendous growth in incomes at the very top. The group says "many families went deep into (poorly regulated) debt, which was "not sustainable, for individuals or the economy, and we're all now paying the price. With Obama's selections for various cabinet posts and regulatory agencies like the Securities and Exchange Commission, PMO's call for better regulation and better wages may be realized.

Focusing on the Buckeye State's budget hole of $7.3 billion, the largest in its history, PMO says "failure to fill it will lead to devastating cuts to essential services, services that currently provide the basics to children, families and communities." Further more, not filling it now will "suck money out of our economy just when we need to stabilize, leading to a deeper and longer recession." The research group says only the federal government can come through with aid to cities and states now. But criticizing a five-year incomee tax cut plan Ohio Republicans pushed through in 2005, PMO advises Gov. Ted Strickland and a split legislature to "stop further implementing tax cuts that were ill-advised in any economy and will deepen the crisis."

John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist. To send a tip of comment, email ohionewsbureau@gmail.com

Pax Obama Stars in Rebirth of a Nation

Pax Obama Stars in Rebirth of a Nation

Transportation Infrastructure Key to New Job Creation

Tubular Rail and Personal Rapid Transit Systems Ready to Help

by John Michael Spinelli

Columbus, Ohio: The approximately 200 years of sustained peace and prosperity that a series of Caesars orchestrated for Rome and its Mediterranean empire was called Pax Romana. During this time political leaders spread a style of civilization that included marvels of engineered infrastructure. Towering stone aqueducts flowed precious water from mountains to cities. Engineering and building elevated stone guideways over land, through valleys and across rivers was technically possible and politically desirable.

As Rome was the marvel of the ancient world, so to has America become the marvel of the contemporary world. But the land of the free and home of the brave has been beaten and battered of late in mind and body. During the last eight years the nation watched as bridges and levees collapse, allowed to do so due to a combination of the infallible faith in the power of the market by some and the ideologically view of government as an obstacle not a partner by others, who now need to backtrack given the colossal failure of their view of the world and how it works. The state of the union is clearly ready for an extreme makeover, lead by investment in basic infrastructure, which we now know will include increased attention to and funding for modern transportation infrastructure that may not look like the railroads we've come to know.

Pax Obama

On Election Day this year Americans voted for a change from pre-emptive warring and dysfunctional economics. Barack Obama won't be sworn in as the 44th president of the United States for weeks yet, but its clear from his statements on how he intends to create 2.5 million new jobs in two years, that basic infrastructure will be the backbone of an effort to show America still has what it takes to adapt to and lead during times of change.

Addressing his plans to create jobs during his first term, President-elect Barack Obama said: “It will be a two-year, nationwide effort to jump-start job creation in America and lay the foundation for a strong and growing economy.We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children and building wind farms and solar panels, fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead.”

The street-level community organizer mocked by many during the primaries for his thin executive resume and paucity of legislative accomplishments, is showing he again has the intellectual judgement and political chops to lead a nation out of its modern-day slough of despond. If successful, the next four or maybe eight years could be dubbed Pax Obama, in honor of showing America, working for the common good rather than the private shareholder, still has what it takes to be invest in and build long-lasting, affordable, efficient and effective infrastructure that will wean America away from total dependence on autos.

We know that President Franklin Delano Roosevelt sought to work America out of the ravages of the Great Depression through a series of programs dubbed the New Deal. "We are planning to ask the Congress for legislation to enable the Government to undertake public works, thus stimulating directly and indirectly the employment of many others in well-considered projects," said the man who the nation subsequently elected twice more in his radio address of May 1933 out-ling the basics of the New Deal.

Should Detroit's Big Three automakers eventually receive emergency funding from Congress, they and others should heed Roosevelt's explanation government's role in their operations: "It is wholly wrong to call the measure that we have taken Government control of farming, control of industry, and control of transportation. It is rather a partnership between Government and farming and industry and transportation, not partnership in profits, for the profits would still go to the citizens, but rather a partnership in planning and partnership to see that the plans are carried out."

With alphabet-soup program names like WPA (Works Program Administration) or CCC (Civilian Conservation Corp) or TVA (Tennessee Valley Authority) that put jobless Americans back to work building infrastructure like roads, bridges and dams among other systems, Roosevelt explained to the nation through his now-famous fireside chats how government could do things the private sector couldn't. In an uncomfortably curious similarity to today's economic meltdown, Roosevelt made his New Deal announcement only eight weeks after his first inauguration in 1933, explaining to his radio listeners of the time how he would tackle the banking crisis of the early 1930s and what he would do to put America -- whose unemployment rate reached as high as 25-30 -- back to work again. But we now know from history that as noble, well intentioned and inventive as Roosevelt's New Deal programs were, it took an event the scale of a world war to really get America working again. Under aPax Obama, a Third World War should be untenable.

One giant distinction between the trying times of the 1930s and the economic cliff diving we're experiencing today is that President-elect Obama says he will extricate the nation from reckless war or choice not engage is another one on the scale of WWII. The need to improve and expand on our infrastructure now is all the more important to pursue as we wind down from warring, because it becomes maybe the only way to create the scores of thousands of middle class jobs the nation needs to spend their hard-earned incomes on goods and services, adding more jobs along the way.

Infrastructure Funding Tsunami Building

A Pax Obama allows a tsunami of infrastructure spending to build at sea. The coming wave of interest in and planning for big infrastructure investments will crest with Obama's first budget and crash as it hits the streets in spending in 2010.

One idea simmering in the national stew pot about how to approach the need to update, modify or build new infrastructure is the notion of a national investment bank. Obama says he'll follow through on his campaign promise to create a national infrastructure bank that would not just raise money and invest in the nation’s infrastructure, but would also bring a measure of coherence to the myriad projects that need to go forward.

While basic infrastructure funding for car-centric services like roads and bridges will increase -- the auto lobby is still powerful even though the companies they represent are failing -- the new focus will be new and updated transportation infrastructure connecting cities and regions in ways that reduce or obviate the need to get there by car. Newer more innovative technologies are ready to prove themselves in reality and in the market place. People are likely to opt for fast, flexible, affordable, safe and clean-energy systems that just a few years ago conventional wisdom would have said wasn't possible.

Pax Obama could usher in an era of planning that if done moderately successfully would show that, while at a psychic nadir in its history, America can still renew and rebuild itself to keep current and prepare for its future. Officials of the International Olympic committee may just designate Chicago for the 2016 Summer Olympics, first to reward Obama for being the kind of president the nation and the world believes he can be when compared to his predecessor, and second to give team USA a chance to show how it can re-adapt aMegacity like Chicago, a former railroad and meat-packing center now home to Obama, and make it over in style, design and function as a region ready to face its Olympic future.

Rebirth of a Nation?

The big question now for America is can it use its advanced technology and engineering know-how to do for ourselves today what Ancient Rome did for itself two-thousand years ago, when it built towering stone waterways that amaze us with their longevity of structure and function. Human hands long ago placed one stone upon another over scores and sometimes hundreds of miles to build a gravity-fed system that showed how the dream of civilization could turn into reality.Pax Obama appears ready to demonstrate the nation is strong enough to take on our own concept of ourselves and the rest of the world, which isn't waiting around for America to get its act together.

Bob Herbert of The New York Times sees investing in infrastructure of all manner as critical to buying up and otherwise sinking nation and says "we'll only have eight years of Barack Obama, but that may be enough time to kick start a moribund US economy." A call to arms is sounding to rebuild America's failing infrastructure with updates, replacements or brand new systems like Tubular Rail and Personal Rapid Transit Systems, two innovative and complimentary systems whose build out costs are far less than conventional steel wheel-on-rail systems. But as Herbert stated, "with so much federal money soon to be available for infrastructure projects, it’s crucially important to spend the money as wisely as possible. Ultimately, we face a future of mass transit strained beyond capacity, planes sitting on tarmacs, slow traffic and wasteful sprawl, ports that lack the capacity to operate efficiently, and increasing numbers of bridges and dams that are obsolescent and dangerous to the public health and safety.”

With no new world war to put America back to work, Herbert opined that "we’re never going to get out of this economic fix if we can’t swing open the doors to millions of new jobs. Infrastructure investment is one of the keys to that objective."

John Michael Spinelli is a trained and certified economic development professional and former Ohio Statehouse government and political reporter and business columnist. He is Director of Ohio Operations for Tubular Rail Inc.

To send a tip or story idea to this correspondent, send an email to ohionewsbureau@gmail.com