The Inspiring Story of the True Origin of the Term ‘Shovel Ready’

I have been investigating the origin of the term ‘shovel ready’ suspicious that has gained a definition (capital intensive stimulus) quite different from that in the New Deal Era (labour intensive stimulus).

The argument that projects were too capital intensive and long term for stimulus to work  raged in the 30s.  Roosevelt disagreed that this was paying people just to ‘lean on a shovel’ – postmaster General Jim Farey posted Roosevelt a newspaper clipping about a worker who had broken a bone after slipping leaning on his shovel handle (presumably after exhaustion) joking they should have non slip handles.  He focused on projects where low skilled workers had shovels in hand. As the New Deal song from a 1939 review – answering Texas Congressman Die’s (The Cruz of his day & first Chairman of the House American Activities  Committee) accusation of communist supporting ‘Shovel Leaners’ ,goes:

When you look at things today
Like Boulder Dam and TVA
And all those playgrounds where kids can play
We did it–by leaning on a shovel!…

Miles of Roads and Highways too
And Schools and Buildings Bright and New
etc.

Change a few words it could be a them song for Hilary ‘Hiliarycare and EPA’ there is even a verse about reading Karl Marx in New York – (ahem).

This must have been I think the origin of Keynes parable in the General Theory of digging up bottles stuffed with money – a joke aimed straight at his Treasury View opponents   – expressed to the Macmillan Commission – that roads took too long to build.  Keynes argued here that even if true (which it wasn’t), his theory upended the conventional view that putting people to work and preventing them starving has no positive economic effect.  Slam dunk, Keynes had provider a killer argument that being what we now call ‘shovel ready’ was not the most important factor in stimulus – what was was putting people to work and giving them money to spend and buy on inventory which would clear and the retail sector would restock and factories would reboot – though of course infrastructure upgrades help in addition.

Now the conservative Myth is that Obama invented the term ‘Shovel Ready’ in 2008 as if he were changing the language like he is accused of changing the laws of physics and the direction the earth should spin.  Actually as the Washington Post points out  Hilary first used it in 2007 and she seems to have picked it up from upstate New York where local utility National Grid has used it to promote its projects since the 1990s.  Did it go back further though, and what was it about Up State New York?

A clue the Mohawk valley was the home of the Iroquois who built dramatic bark longhouses. Could there possibly be a connection?

As 75 years ago

when the Society for American Archaeology (SAA) was founded, the United States was deep in the throes of the Great Depression. During the same year of SAA’s founding, Franklin Delano Roosevelt initiated a massive government work relief program designed to alleviate the burden of crippling nation-wide unemployment, the Works Progress Administration, or WPA. Under the auspices of the WPA, and other “alphabet soup” programs such as the Civil Works Administration (CWA) and the Civilian Conservation Corps (CCC), relief workers tackled a diverse group of projects across the country, including archaeological investigations at varying scales-ranging from small camps to large mounds.

Theres even a book about it, several even, the term ‘Shovel Ready being more than a modern play on words

The book, in its opening chapter by Bernard Means,  tells how the SAA sold the concept to the ‘Alphabet Soup’ Agencies

The goal of these federally funded work relief programs was to put people to work quickly, so funds were directed to projects that could get started very quickly—thus, they were shovel ready. Archaeology projects, of course, were literally shovel ready, as shovels are used regularly to move soil during the excavation process. Incidentally, on some projects, workers had to bring their own tools, including shovels, as work relief funding focused on meeting labor costs.

And some of the greatest discoveries of the project was were several Iriqois Longhouses one  – where? upstate New York bigger than a football pitch in size which must have required a small army to excavate, embedding the excavation on local folk memory.

Snow’s presents a finegrained analysis of the organization of production in a completely excavated Iroqouian longhouse in upstate New York. The house dates between ca. AD 1450and ca. AD 1520. The area excavated is a stupendous 7572 m

So Larry Summers and eventutally President Omana neednt have become dissillusioned by teh term, whilst back other forms of stimulus.

In economic terms if you need to expand infrastructure do so, any any time rates are low, as it is long term.  Even pay for that with bank borrowing by the government with the by product of helping global liquidity.    Don’t worry about immediate labour impact, for that you need labour intensive not capital intensive programmes, like a cyclical work guarantee, pay for that with QE direct to people’s pockets, and if inflation is at risk (unlikley with spare capacity at the ZLB), slap on a sales tax which removes the money from circulation (as every good circuitist knows).

Ultimately it is unlikley we could run out of things that need doing that could be geared up quickly

But maybe there are no such investments?  As N. Kocherlakota writes this week powerfully

 

That’s a tough argument to sustain quantitatively.  The current market real interest rate – which I would argue is actually above the natural real rate r* – is about 1% out to thirty years.  This low natural real rate represents an incredible opportunity for the US. We can afford to do more to ensure that all of our cities have safe water for our children to drink.  We can afford to do more to ensure that our nuclear power plants won’t spring leaks.  We can afford to do more to ensure that our bridges won’t collapse under commuters.

These opportunities barely scratch the surface.  With a 30-year r* below 1%, our government can afford to make progress on a myriad of social problems.  It is choosing not to. 

If the government issued more debt and undertook these opportunities, it would push up r*.  That would make life easier for monetary policymakers, because they could achieve their mandated objectives with higher nominal interest rates. But, more importantly, the change in fiscal policy would make life a lot better for all of us.

Get those shovels ready, more archaeology next time.

 

 

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