In Harold Meyerson’s column today in the Washington Post about Democratic “harmony” on economic issues, based on the results of Barack Obama’s recent meeting with 20 economic advisers, this section stood out:

That doesn’t mean that differing views weren’t voiced in the meeting or that the party has reached a consensus on trade. But, adds Bernstein, Obama is “more of an ‘and’ guy than an ‘or’ guy. He’s for growth and fairness.”

One way to square that circle is to boost spending on repairing America’s rickety infrastructure, an idea that has captured both the center and the left of the political and economic spectrums. Several participants recommended infrastructure projects as one way to help restore consumer confidence and boost the stagnating incomes of American families. “People need to be confident that the next president will help create jobs that will actually enable families to keep up with rising prices,” says Sweeney.

During the first year of Bill Clinton’s presidency, two of those present Monday, [Former Treasury secretary Robert] Rubin and [former labor secretary Robert] Reich, had dueled over which policy Clinton should emphasize more: reducing the deficit (Rubin’s position) or increasing public infrastructure investment (Reich’s). It was Rubin who prevailed then. But concern about underinvestment in America has risen since 1993. While some of Monday’s participants “were concerned about the deficit issue,” Sweeney adds, “there was significant support for a policy that would help create good jobs, green jobs, infrastructure jobs.”

All of this, of course, conjures up comparisons to FDR’s Works Progress Administration (WPA) of the 1930s — one of the cornerstones of his New Deal legislation.

The debate now is whether the next president should pursue a 21st-century version of the WPA — massive federal government investment in infrastructure projects that proponents (like Reich) believe will provide jobs and revive the economy.

Writing in the New York Sun in April, Amity Shlaes reviewed the history of the WPA and how its successes could potentially be replicated in today’s economic climate. She found, however, that due to several “fundamental problems” with the WPA’s strategy, there was “little cause” to replicate a WPA-type program today:

[...]these same [WPA] programs may actually have stalled recovery. One of the private-sector industries that had the capacity to jump-start recovery was the most exciting sector of the era: the electricity industry. The internet of its day, electric power produced by private companies was in demand even during a downturn.

But David Lilienthal, a TVA executive with a mind so binary it recalls that of Eliot Spitzer, believed that to succeed, his TVA must annihilate private power. For years Lilienthal battled the TVA opponent Commonwealth and Southern in the courts, until C & S gave up and sold part of itself to the government. Lilienthal’s ally Roosevelt joined hands with progressives to pass the Public Utilities Holding Company Act, a law that so vastly limited private utilities that it became known as the “death sentence act.” At the PWA, Interior Secretary Harold Ickes meanwhile busied himself bribing municipalities into contracting with public power companies instead of private ones. New Dealers were similarly aggressive in other sectors to similar result.

The New Deal conveyed the message that only government could do “big” — that the private sector was simply incapable of marshalling the financial resources to build serious infrastructure[...]In his second inaugural address of January 1937, Roosevelt told listeners that his administration was “fashioning an instrument of unimagined power” to bring about a more morally responsible nation.

However, Mark Toma at Economist’s View argues that:

I agree that Fed policy alone may not be enough to get the economy back on track, I’ve argued that for a long time. But tax cuts are not the only option for stimulating the economy, government spending can also be used, and in theory on short-run stabilization policy, a one dollar increase in government spending has a bigger impact on GDP than a one dollar tax cut. Infrastructure is an obvious target for spending, it’s surely needed, but there are other areas that could use help as well.

Megan McArdle of the Atlantic responds:

I regret to report that the idea of using infrastructure spending as a stimulus is a complete fantasy.  This is not your grandfather’s stimulus spending.  FDR could spend whacking great sums on dams and roads and rural electrification, and hope to have an immediate effect, because FDR was working on a multi-year depression, and in the pre-1960s regulatory environment.

Between the environmental impact statements, public review periods, and byzantine bidding process, the development cycle for anything more complicated than painting a bus station is now measured in decades, not years.  This wouldn’t even work to get us out of the ten-year Great Depression, much less the more modest recessions of today.

[...]The reason we rely mostly on monetary policy and tax cuts for stimulus is that it is possible to rapidly implement whatever stimulus you decide on.  With the exception of a few transfer programs such as food stamps and unemployment insurance, which are hard to funnel very large sums of money through, there is nothing on the spending side that matches tax cuts for speed.  You could allocate the money, to be sure, but by the time it actually hit an agency and went through the bureaucratic procedures necessary to actually spend it, the window for effective stimulus would have passed.

At The Economist’s Free Exchange blog, they agree with Ms. McArdle’s argument, but also point out that:

What’s important to note is that there are many infrastructure projects available that are quite close to the construction stage, that have been on the books for some time and only lack final say on funding to begin. In some cases, these projects might have already been underway, had the economic slowdown and credit issues not constrained local and state budgets. It’s quite possible, then, that a quick injection of federal funding for ready-to-go projects might provide the economy with a nice shot in the arm.

In any case, the prominence of the infrastructure spending proposal as an antidote to the economic slump in Obama’s campaign is worth noting. With “several” of Obama’s economic advisers pushing the infrastructure spending proposal, and “significant support” for such a plan among the participants of the meeting, it’s a strong possibility that a potential Obama administration could feature a new-style WPA proposal come 2009.