How has the Stimulus impacted American industry? And what lies ahead for future funding? Author John Wasik provides insight.
Launched with great expectation and much political debate in early 2009, the American Recovery and Reinvestment Act sought to lift up the beleaguered American economy. Five months later, that expectation was tempered by realism and a plea for patience.
As the country looks ahead to better days in 2010, the Economic Stimulus will continue to play a role in the nation’s economic recovery. What might that role – and its impact – entail? And what might a “son” of Stimulus plan include?
For answers, Monster turned to John Wasik, author of The Audacity of Help: Obama's Economic Plan and the Remaking of America.
Monster: What size businesses have most benefited from Stimulus funding?
Wasik: At this point, mostly large road and building contractors have benefited, although energy-related firms are receiving grants as well. Large to mid-sized companies seem to be doing the best.
Monster: Will this allocation evolve in the coming months?
Wasik: Yes. Some of the largest funding in medical and energy research takes months to wind its way through the process. There’s a lot of vetting to do and certainly a ton of bureaucracy.
Monster: How would you rate the government’s efforts to distribute Stimulus funding?
Wasik: Fairly good, although the government needs to disclose more on exactly who is getting the money and why.
Monster: Will the education and training programs included in the Stimulus significantly reshape the profile of the US workforce?
Wasik: No, not at this point. The new education bill that Congress is considering will have more of an impact. Sending more money (President Obama has approved $12 billion) to community colleges is key. Congress also needs to do a major overhaul of college aid. There should be more grants and less loans. The House just approved a measure to make the loan program direct, which will save billions. That’s a good first step. Tax incentives for college financing need to be consolidated and broadened if college is to become affordable for the middle class.
There aren’t enough retraining programs for President Obama’s “Green Deal” to make a difference now. They need more funding.
Monster: Will the Stimulus enable US industries to be more competitive globally?
Wasik: Yes. The Stimulus plan effectively makes the US government the largest venture capital entity in the country, especially the Department of Energy. Billions have been committed to alternative energy, new battery technology, electric cars, high-speed rail and a digital electric grid. But the Stimulus is just seed money. A sustained effort and trust fund for research and infrastructure is needed if we’re to compete long-term with the Chinese, Japanese and Europeans, who are planning decades into the future.
I would bet that any profession tied into energy research and development will do the best. There will be a pressing need for nano-technology engineers, systems analysts and integrators, auditors and intellectual property lawyers.
Monster: What areas of the economy might a “son of Stimulus” plan focus on?
Wasik: Manufacturing is still essential. The US still has considerable prowess in making things, but our expertise is in high-end products like machines that make silicon wafers. Biotechnology and nano-technology are two areas where the US has a tremendous advantage. We need to build more partnerships between research universities and Department of Energy Labs and the private sector. We could also lead the world in building technologies, building affordable, green buildings and communities.
Monster: Besides the Stimulus, how else could the government help employers successfully manage the current downturn?
Wasik: Provide more re-training programs, temporary support for lost benefits (COBRA extensions) and affordable universal health care.
Monster: How long do you project it will be before we see a steady improvement in the unemployment numbers?
Wasik: Unemployment will probably turn around early next year. There are a few wild cards, though. Interest rates need to remain relatively low, employers need to regain confidence to hire again and we definitely need a healthcare program that will cover everyone -- particularly small businesses, students and those between early retirement and Medicare. Financial reform is absolutely essential to avoid another blow-up on Wall Street. Global regulation of derivatives is needed. The housing market is still a mess as well. Congress needs to find a more effective way of shutting down foreclosures.
John F. Wasik is author of The Audacity of Help: Obama's Economic Plan and the Remaking of America and twelve other books, including The Cul-de-Sac Syndrome and The Merchant of Power. He speaks widely and writes a weekly Bloomberg News column that reaches readers of five continents and which earned him the 2009 Peter Lisagor award for journalism. He lives in Chicago.