Some construction leaders may be disappointed because they did not get everything they wished for in the massive $787-billion economic-stimulus legislation signed into law by President Barack Obama on Feb. 17, but they should be looking at a glass half full instead of one half empty. The law contains $130 billion of funding for construction of all types, which represents a serious increase over normal appropriations.
In some markets, this would be like receiving a compensation bonus equivalent to five times one’s normal salary.
For those industry firms already teetering on the brink of financial failure or for those people who have lost their jobs, the American Recovery and Reinvestment Act will not be an instantaneous miracle that will wipe away all bad economic events in a moment. The actions that have led us to this financial brink took years to create and will take years to undo.
The main challenge now is to restore public confidence in American leadership, a new banking system and the ability to keep factories and businesses humming and people working and buying. Right now, that confidence is shaken, but not devastated as it was in the Great Depression, when unemployment went from 3.2% to 24.9% in three years with no federal intervention, while the value of world trade plummeted by 50% due to poor protectionist policies.
If there are wishes to be made now, it should be that the construction industry will deliver what it promised: meaningful, quality projects that create jobs, contribute to economic growth and show the public that America is back to work. This will not be achieved by political infighting among various sectors over whether, for example, union-only project agreements are a good idea for public works or whether school construction should have been allocated another $20 billion. The legislation is what it is, and the industry will have to make the best of it. Project performance still matters in the end.
If the stimulus effort falters, the next wish should be that the U.S. and the rest of the world do not experience the economic tailspin that paralyzed the world from 1929 through 1939, ending only with the onset of World War II. The key still may be in the $2-trillion-plus federal bailout of the U.S. banking system. There are many questions and few answers about how the assistance is being used. That secrecy and the financial excesses by the beneficiaries do not inspire confidence. Performance matters in that sector as well, and accountability now should be a top priority.