You Say That Like It's A Good Thing

Yesterday, the President bragged that highway projects from the Recovery Act were "ahead of schedule and under budget." On the latter, I agree with Krugman:

Ahead of schedule is good. Under budget — well, ordinarily that’s a good thing. But the point of the stimulus is to increase spending! So if we don’t spend as much as expected, that’s less stimulus [...]

Seriously: if the projects really are coming in cheaper than expected, that doesn’t mean we should bank the savings; it means that we need more projects.

As the LA Times story makes pretty clear, the reason the projects are coming in under budget is that contractors are so desperate for work that they're bidding each other down. More than anything, this is the biggest indicator of the true crisis in the economy.

At the same time, several factors have conspired to drive down project costs.

At the top of the list is the searing downturn in residential and commercial real estate construction.

Because the companies that construct highways also tend to build the roads and other infrastructure for housing projects, their business burst along with the housing bubble.

Thousands of workers were jettisoned. Now, state officials say, construction companies are submitting especially aggressive bids in an attempt to win new business.

The massive falloff in construction is also driving down the cost of building materials, while the drop in world oil prices has reduced other costs.

In California, Obama said in his speech, some bids have come in as much as 50% under budget.

Those are fire sale prices. And we're seeing in the concurrent drop in retail sales and prices the risk of a deflationary trap. I certainly hope that the Administration doesn't view this "under budget" stuff as a virtue, but an opportunity to create more infrastructure projects. In addition to using the full appropriation of stimulus money for additional projects, the White House should use the upcoming highway bill to increase spending and create an infrastructure bank to regularize these construction projects.

...Matt Yglesias says that more projects are going to be instituted to ensure that all the money appropriated is spent, and he agrees that the reason everything is coming in under budget is a cause for deep concern.

An Evening With Some Community Organizers

Last night I had the pleasure of attending the 15th Anniversary Awards Dinner for LAANE (The Los Angeles Alliance For A New Economy), which brought 1,000 people to the Beverly Hilton (including Mayor Villaraigosa, Sean Penn, and more) and raised $500,000 for their cause. I know I get depressed reading about endless budget fights and cutbacks to schools and health care, so it's important to take comfort (and some valuable lessons) in those doing important work - and fighting some of the most powerful and entrenched interests in the city and the country - and winning.

LAANE is a group dedicated to fighting for economic and environmental justice by building coalitions and waging campaigns to improve the lives of people in underserved and at-risk communities. Their success stories include some of the most astonishing victories of the last decade - the living-wage campaign in Los Angeles, the (eventually) successful grocery worker's strike, the campaign to keep Wal-Mart out of Inglewood in 2004, the fight for justice for hotel workers near LAX. More recently, they achieved success with a landmark blue-green alliance of nearly 40 environmental groups, community organizers and labor organizations like the Teamsters, to clean up the Port of Los Angeles, which resulted in a huge victory for clean air and clean water which will also provide good-paying sustainable jobs for truck drivers. The Coalition for Clean and Safe Ports is a model for the nation, to combine economic security and respect for the environment at the ports, and Chuck Mack & Jim Santangelo from the Teamsters were honored last night (sporting leis flown in by a Teamster rep from Hawaii).

Another of their campaigns is the "Construction Career Policy," dedicated to providing local residents in low-income communities the opportunity to get middle-class, union construction jobs on projects happening in their area. This has resulted in thousands of jobs for at-risk and underserved communities of color, and the goal is for 15,000 jobs over the next 5 years. Mayor Villaraigosa presented Cora Davis, a construction business owner and leading advocate for the program, with an award.

Finally, in the wake of the movie "Milk," many are remembering the work of Cleve Jones, an activist in San Francisco during the era and the leader of the AIDS Quilt Project. Today, Jones is a community organizer working for UNITE HERE, and he has worked with LAANE on their campaigns to create living-wage jobs and improve working conditions for the 3,500 hotel workers around LAX Airport. Sean Penn, who became friendly with Jones over the last year working on "Milk," presented him with an award for his service. In his speech, Jones talked about these noble working-class people, many of them immigrants, "the ones who are serving you dinner tonight," and he paid tribute to their struggle and dignity. He also had a few words to say about the passage of Prop. 8, which left him heartbroken and drew eerie parallels to the Prop. 6 campaign he worked on with Harvey Milk in 1978. But, Jones said, the real parallel moment is 1964, a time when civil rights for African-Americans in the Deep South appeared remote. "Now is the time for Barack Obama and Nancy Pelosi and Harry Reid to sign a new Civil Rights Act restoring fundamental rights for every American in this country." It's not the tactic you hear from the leading gay rights organizations, but Cleve doesn't hold much of a brief for them either:

The new (gay rights) activists have impressed some gay rights veterans.

“They’ve shown a clear ability to turn out large numbers of people,” said Cleve Jones, a longtime gay rights advocate and labor organizer. “It’s also clear that they are skeptical of the established L.G.B.T. organizations. And I would say they have reason to be.”

Overall, it was inspiring to see a community-based organization so dedicated to restoring fairness, justice, dignity and respect to a part of a population that frequently doesn't have a voice in political affairs, and more important, to see them get results. LAANE is doing some great work.