Rotwang:

This is an incredible read and really appreciated. Where do you propose we get the money for our modern day version of gas and water? Tax the rich more? Eliminate the tax cuts Obama proposes? Whatever we do, my limited understanding of macro-economic theory and, more to the point, my inclination, leads me to believe that we just have to suck it up spend money on the kinds of job-creating capital investments and expanded healthcare you are talking about and worry about the deficit later. Is that what we need to do and, if so, is there room on Obama's left flank to expect this kind of approach?

Thanks.

Well. So much for future generations and mounting obligations. Heh.

This is an awfully useful vein, Senator Rotwang. The topic is oft discussed in Britain as the rebirth of "Municipal Enterprise." (Avoiding the dreaded S-word.) The early municipal utilities often served a great many functions, from providing street gas to electricity, transit, water, and so on. Their ability to innovate is often found beneath our streets today - where many cities still have old district heating pipes.

The Brits - led by London - have made some initial runs at this. The intent is often to harness private & public capital, sometimes through new quasi-utilities, to provide energy (amongst other services) for people & cure a number of ills at once - assist the poor/Seniors, stop the leakage of funds, create jobs, etc. These efforts were bothered by the British Treasury's emphasis on Private Partnerships which too-often amounted to privatization.

There is enormous room for this today. District heating systems are neither the giant power plants of the Plains some propose, nor the individual self-sufficiency model. They can provide energy price stability, keep money within cities, and be financed & owned by a mix of public and private capital, as desired.

The key is that the state can mobilize enormous amounts of investment capital (e.g. from pension funds), guarantee long-term stable returns (anyone for a 20 year investment @8%?), create the jobs upfront, etc. - while clearing through local barriers, and ensuring customized approaches to each city.

The high-level, national, 'commanding heights' approach offers little traction these days (now that we own the banks, insurance, etc.,... don't we?) but this offers a different take. Just probably best not to call it 'socialism'... so maybe Municipal Enterprise?

And a shout-out to Steeltown! Yo Hamilton!

The mayor's office in Milwaukee, Wisconsin was once governed by genuine Socialists, and we have a lot of very good things to show for it. The Milwaukee County park system, once a shining jewel of the county, has been allowed to go to hell by the Republican county executive who's currently in power. Ditto our bus system. But in the past election, Milwaukee may have given a nod to its early-twentieth century Socialist roots when we voted ourselves a sales tax increase and paid sick day mandate.

The old Milwaukee Socialists were actually extremely fiscally responsible, if not fiscally conservative. They did a damn good job of running the shop and kept Milwaukee debt-free for many years. It's even arguable that Mayor Hoan kept Milwaukee out of the Great Depression for a year. Once it hit, it hit hard, but Hoan was ready with some effective social programs that helped the people through the very difficult times.

The Milwaukee Socialists were still in the mayors office through the early 1960s. Our great industrial base flourished during this time. Our city was healthy, literate, and ran a super-clean government. That's why I say American Socialism, in particular Milwaukee Socialism, was definitely good. Today, I don't see many socialists about. But I wouldn't mind seeing a return to some old Milwaukee Socialist ways.

Americans are not an ideological people. They are for what works. FDR proved that. For the past 40 years, Democrats have been, in most cases, too cowardly to stand up and be for what works anymore because they wanted the support, approval and mostly the cash of the wealthy, corporate interests that dominate our society and our government. If they would just have the slightest bit of courage, the Democrats could do the things Rotwang proposes and more which would allow the government to come into the modern era, address the needs of our people and do so in a fiscally responsible pattern. Haing said this, I am not going to hold my breath for this to happen though because the one thing you can count on from Democrats is complete cowardice when courage is required and fear of criticism from their enemies which seems to be more important to them than votes from their own contsituents.

"the one thing you can count on from Democrats is complete cowardice when courage is required and fear of criticism from their enemies which seems to be more important to them than votes from their own contsituents."

The Democrats only have one real popular constituency--the upper middle class. The other constituencies are just part of the vote drive. Raising taxes on the upper middle class--just a little bit, but no more--is the price this class is willing pay to get rid of the social conservatives, who pollute their usually hygenic environment with all sorts of unpleasantness.

In that sense, it is correct to say that this is still a "center-right" country despite the rather healthy electoral win. The Democratic constituency already got everything it wanted. Now it's just a matter of having their government look like it's "doing something," and putting a more presentable face forward. (That's probably not too difficult).

I am all for building new and repairing old infrastructure but I do have doubts that it would have much of a short-term stimulative effect.

How many here have stopped for a few minutes or more to watch a major construction project? Notice how much heavy equipment is used? I once watched some kind of lopper/tractor combination cut about five acres of 60-70 foot trees in a little over an hour. Then a bulldozer pushed up the stumps, loaded them into a chain of dump trucks to be carted away. Except for the owner/operators of equpment and trucks and some low-skill, low-pay clean up jobs, there were not that many people involved.

Yves Smith asked a good question in a recent post about the fungibility of today's skills. Its hard to imagine many out-of-work finance people transferring to construction projects.

Rotwang,

I enjoyed your post and agree with many of your points. However,I'm always left remembering the laments of Robert Tressel "The Ragged Trousered Philanthropist". Socialism shouldn't be seen as the buffer for capitalism but rather the start of the communal ideal. What I fear is that, like Britain, collective ownership is eventually privitised for the benefit of the few at the expense of the many. Socialism should not be confused with State Capitalism.

We already have socialized fire services, police, water and sewer, airports, highways, monetary system, agricultural subsidies, etc. So what is it with the magic word "socialism"? Who cares?

As far as the "Gov tak[ing] ownership of the "commanding heights" of industry," an alternative (which I've heard described as further left, although I don't see it that way), is for the workers to own the means of production. In my mind this could include both stronger unions and greater federal control of allowable corporate charters (finite in duration, and with a specific and credible public purpose). This, of course, in addition to the public works Socialism that you describe here.

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