Can Washington Rescue Main Street and Wall Street?

Some economists are arguing that the proposed federal bailout of Wall Street will do little for the economy unless it includes provisions to reinvest in infrastructure and refinance mortgages.

2 minute read

September 25, 2008, 5:00 AM PDT

By Michael Dudley


"The Administration has put a corporate-led bailout on the table with the threat that Congress pass it as is or face a worldwide economic catastrophe...This bailout should be seized as an opportunity to start addressing the real economic crisis--the one on Main Street--where the struggle to make ends meet is increasingly more dire in an economy marked by job losses, crumbling infrastructure, the lowest levels of personal savings since the 1920s, Gilded Age inequality and the highest level of foreclosed homes since the Great Depression.

Economist Robert Kuttner argue[s] that this bailout...must include provisions to re-regulate financial institutions; [to allocate] a portion of the $700 billion to be used for mortgage refinancing and putting people back in homes; and at least $200 billion of new economic stimulus 'for infrastructure rebuilding, more generous unemployment and retraining benefits, and green investment.'

[S]avvy economists estimate that an additional $40 billion in infrastructure investment could create as many as one million new jobs. Smart and targeted public investment such as the kind called for in the Apollo Alliance plan for energy independence is what we truly need. Supported by scores of business leaders, labor unions and environmental groups, the Apollo Alliance has provided a blueprint to promote the renewable energy industry with a $300 billion investment over the next ten years, creating 3.3 million jobs, leading to economic growth, more tax revenues, and energy independence."

Monday, September 22, 2008 in The Nation

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