Monday, January 26, 2009

Nazi Make-Work Projects

I stumbled across a small library in Manchester, UK while studying abroad. One gem was a book by an author who I have since been unable to identify. What I know is that he was a journalist from Australia or New Zealand covering Germany in the 30s (As an avid viewer of Flight of the Conchords, I don't take this distinction lightly). He detailed one of the employment schemes set up by the German government during the Depression - large numbers of civil servants were paid to identify and cut out newspaper articles that mentioned the Reich. Sort of the Nazi-version of digging holes and filling them in again.

Saturday, January 17, 2009

Fiscal Stimulus and the Gwinnett Braves

J.C. Bradbury sounds off against the stated rationale for publicly funding the Braves' minor league stadium. However, he seems to leave the door open for other rationale. For sake of argument, let's presume that the Gwinnett project is representative of the projects emerging from the fiscal stimulus package. Would a few thousand stadiums be deemed a success from stimulus standpoint?

From a transparency and data-availability standpoint, my concern is that a Gwinnett-type project is the best we can hope for. Despite the project's warts, at least there are verifiable statements about its expected return. With that in mind, I believe the debate on macro-level multipliers (see Krugman, Mankiw, Thoma) is somewhat misplaced. There does not appear to be sufficient debate in regard to specific projects. Mark Zandi's work moves us in the right direction, but it is still inadequate due diligence to limit the probability that public moneys will be wasted on individual projects that have a negative multiplier.

So here is my challenge for stimulus proponents and opponents alike. Would a fiscal stimulus building minor league baseball stadiums be deemed a success? Why or why not?