Public Investment Goods

I've said it (a billion times) before, and I'll say it again: government spending is essential for economic growth. That doesn't mean all government spending is good (duh), but it means that the government needs to spend money on the things private industries need but won't build. That includes roads, electrical grids, ports, and research - the "public investment goods." For decades, "conservative" economists have simply waved their hands and claimed these things didn't exist; as a result of listening to them, we've let our infrastructure decay. I've often advocated "restoring the public goods" as the centerpiece of a new economic liberalism.

Well, Barack Obama probably never read Noahpinion. But my idea came from basic economics, and it looks like basic economics has finally filtered through to the public discourse. In an interview with Rachel Maddow, Obama spoke at length about infrastructure spending, using almost the exact same language I've used on this blog (with far fewer run-on sentences). Go ahead and watch the video, it's great.

Even better, it looks like the liberal "base" is really signing onto this approach. There was a worry that grassroots liberals would look at infrastructure and research spending and say "That spending benefits the rich as well as the poor; why don't we just give the money directly to the poor?" (ingnoring, of course, the entire concept of "growth"). Fortunately, this isn't happening; Matt Yglesias and Ezra Klein, for example, are firmly on board.

In other words, my fondest wish may be coming true: Liberals may have found an economic approach that works. Which, incidentally, is also a key stroke of luck for the U.S., since the conservative economic approach has rolled onto its back and died like a cockroach.