I attended the California Associated General Contractors Spring gathering in Monterey, California this past weekend. A gorgeous weekend and a great time was had by all. Also present was Steve Sandherr, CEO AGC of America. He is active in the Romney election campaign and he gave a horserace report on the states expected to be in play this November. Which raises the question, would Obama or Romney be better for construction? The answer is not obvious and for this reason I believe it’s a mistake for an association president to be too overtly partisan political.
Looking at economic policy more broadly, on Friday, May 4, 2012, another partisan, Greg Mankiew, professor of economics at Harvard and one of Romney’s economic advisors, gave a plug for an essay by his colleague Raghuram Rajan in the current issue of Foreign Policy magazine entitled “The True Lessons of the Recession.” The article is interesting for its by-line “The West can’t Borrow and Spend it’s way to Recovery.” The sub-title, however, is more provocative than the recommendations in the article. Rajan suggests that government might usefully increase spending on education, worker retraining, technology, and innovation; he also seems favorably disposed to targeted safety net legislation, universal health-care, child-care, and he seems at least open to infrastructure spending in a down-economy. It seems Nixon was right, “We are all Keynesian’s now!” Rajan favorably cites Germany’s example of “austerity,” yet Germany’s tax burden is 50% higher than that of the U.S. and Germany’s spending as a percentage of GDP is higher as well. We have large infrastructure needs that should be built now. The good news here is that the best and brightest of both parties seem to be open to it. The trick is to have Congress come along.
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