The Public Works Mosaic: Stimulus Now, Dividends Later
Reprinted from the March 2009 issue of Preservation in Print

By Robert D. Leighninger, Jr.

President Barack Obama’s economic stimulus package is the most comprehensive public works program since the New Deal of the 1930s. The bill includes more than just highways and bridges, which were the focus of a more recent 1950s public investment blockbuster that built the Interstate Highway system. The bill includes cyber-technology efforts like broadband Internet access and better management of medical information, energy efficiency and conservation projects, aid to states for healthcare and education, better unemployment benefits and more tax cuts. The bill is intended to create an immediate boost to the economy and long-range dividends from shoring up crumbling infrastructure. In both regards one can look at the New Deal for inspiration, guidance and caution.

Public memory of the New Deal is quite limited, even among experts. Few realize how many and varied the New Deal’s Depression-fighting interventions were. There were at least 12 separate building initiatives, with different organizational structures, leadership and goals. All deserve closer inspection because all had notable successes and equally important limitations. Critics point out correctly that the New Deal was an amazing hodge-podge of often contradictory initiatives and did not end the Depression; a World War was required for that. They note that a roaring recession in 1937 almost wiped out the gains made in the first four years. But they don’t add that the recession was caused by FDR’s misguided attempt to balance the budget by cutting the public works programs. He soon realized the mistake, and by the time the war came along, the numbers were moving back in the right directions.

Click here for more great photos of WPA projects around New Orleans!

But whether the New Deal ended the Depression or not is an irrelevant debate. The important thing is that the public works programs did have an immediate effect on the economy and did leave behind a lasting legacy of physical and cultural infrastructure, which we have been using for more than 70 years. In Louisiana, 11 parish courthouses, whole university campuses, scores of school buildings, a remodeled French Market, the Huey P. Long Bridge, water and sewer systems that prevented public health crises in many towns and cities, City Park in New Orleans, and Charity Hospital are a few examples of New Deal contributions to the state landscape.

Most of the New Deal’s biggest and most enduring projects were provided by the Public Works Administration (PWA). Such things took time, planning and skilled labor. Its stimulation of the economy through reviving the production of building materials such as cement and steel was not apparent for several years, as current critics point out. But there were also programs with immediate results. The Civil Works Administration (CWA) put four million people to work in a few weeks. It directed labor-intensive projects such as building sidewalks, as well as white-collar work including staffing libraries and clinics. It even employed artists. We worry now if there are enough “shovel ready” projects in the current package. In the ’30s, the CWA found, despite reassurance by tool manufacturers, that there were simply not enough shovels for all the workers and projects. Warehouses of World War I army surplus were opened to meet the need. The economic stimulus was immediate and large enough to be noted by the Wall Street Journal, and its absence was apparent soon after the CWA was terminated four and a half months later.

The effects of the Civilian Conservation Corps (CCC) were also immediate. It took idle young men off the streets and rails; gave them nourishment, skills, and education; put them to work planting trees, stopping soil erosion, and fighting forest fires; and sent $25 a month home to their struggling families. The Works Progress Administration (WPA), the program most likely to be remembered and therefore widely assumed to have done all the work, did not arrive until 1935. It continued CWA’s specialization on small to medium, labor-intensive projects, but also built things of lasting value like Tad Gormley Stadium in City Park.

These programs were financed cooperatively by federal, state and local contributions. On WPA projects, most of the labor was paid for by the federal government, but local governments often contributed building materials. The PWA projects relied on a combination of federal grants and local borrowing. Initially the split was 30/70 and after 1935 45/55. In the beginning, PWA would loan the local portion if they could not finance it themselves. By 1935, the local bond market had recovered sufficiently that PWA loans were no longer necessary. This fact alone is evidence of the contribution of public works to the financial system. Bond issues usually required a local election, and most passed overwhelmingly. The Alexandria Town Talk reported September 15, 1937, that the bond issue to fund the new Rapides Parish Courthouse passed in a “sweeping victory,” 735 to 499. People were willing to tax themselves in the midst of a depression, an amazing thought to many contemporary minds. But their investment in the future has paid off many times over.

What could be done now in Louisiana? Two of the three PWA schools in New Orleans — Frederick Douglass, A.P. Tureaud, and John Shaw — are open but all could use repair (Shaw remains closed). The levees still need work. According to the structural engineering report by RMJM Hillier, Charity could be returned to service as a first-rate hospital supplying desperately needed facilities. There is certainly no lack of useful work to be done.

There are also many ways to approach our problems. The New Deal was not a monolithic program. Differently structured agencies served different needs. There are lots of lessons, good and bad, to be learned from it. The four most important lessons, I think, are these: First, public jobs can provide economic stimulus if they go to the people who will spend their salaries immediately. Increased consumption will inspire investment. During the New Deal, millions were desperate for basic food and clothing; money returned to the economy immediately with attendant multipliers once people were employed and had money to spend. Even car sales went up after the CWA had been in operation a few months.

Second, federal oversight, which was exercised relentlessly by the PWA and to a lesser extent by the WPA, will be necessary to reestablish public trust in an age accustomed to pork-barrel excesses.

Third, we must make sure the commitment is enough. Roosevelt pulled the plug on the CWA, even though it was enormously effective, because he was frightened of how much it was costing. He started the recession of 1937 by again cutting public works programs. Had he hung on in 1934 we might not be debating whether WWII was required to end the Depression.

Fourth, we can be assured that if the money goes to public works, we will have something to show for the expenditure, something that will pay dividends for decades.

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Robert D. Leighninger, Jr. is the author of Long Range Public Investment: The Forgotten Legacy of the New Deal and Building Louisiana: The Legacy of the Public Works Administration (available at PRC book shop and prcno.org)