TOPICS > Economy

In St. Louis, Comparing Stimulus Funds to the New Deal

April 27, 2009 at 6:30 PM EDT
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In the first in a series of reports from St. Louis on the Obama administration's first 100 days, Paul Solman tracks where federal stimulus money has been spent and compares today's projects with those funded by the New Deal during the Depression.
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JIM LEHRER: Now on the NewsHour and online, we begin several days of reporting from and about St. Louis, Missouri, as part of our spotlight city series. We are there to hear what people have to say about the economy and other issues as President Obama marks 100 days in office.

And we go to Gwen Ifill in St. Louis.

GWEN IFILL: Jim, the president is going to be out here Wednesday, as well, to hear from Missouri residents at a town hall meeting in the St. Louis suburbs. To begin our own look at the situation on the ground, we decided to track where federal stimulus money has been going here.

Our economics correspondent, Paul Solman, looked at how those projects compared with the ones funded by the Depression-era’s New Deal. It’s another of his attempts to make sense of financial news.

PAUL SOLMAN, NewsHour economics correspondent: Springtime in St. Louis, specifically the local zoo’s hoofed mammal exhibit, where the deer and goat–antelope play. Attux is snacking. Others engaged in a mating joust. And a camel named Elvis, who’s not in the house, but home on the range, guarding his newly pregnant harem, whose members carry what you might call his investment in the future.

ROBERT LEIGHNINGER, author: This is a project of the Public Works Administration about 1935.

PAUL SOLMAN: Historian Bob Leighninger says these exhibits are a human investment in the future made back during the Great Depression in a city that could use another wave of investment today.

St. Louis was once the fourth-largest city in the country, home to the World’s Fair of 1904, birthplace of the zoo. It had more than 800,000 inhabitants by the 1930s.

The story of its decline is as dreary as it is familiar: a stalled manufacturing sector; shuttered auto plants; exodus to the suburbs.

BARBARA GEISMAN, deputy mayor for development, St. Louis: We experienced massive disinvestment from 1950 to 2000; 500,000 people left the city, and that was 60 percent of our population.

New Deal investments pay off

Robert Leighninger
Arizona State University
An amazing variety of things were built, and it kind of reflects the variety of New Deal public policy itself.

PAUL SOLMAN: As a result, says Deputy Mayor Barbara Geisman, the tax base has shrunk, leaving little to maintain St. Louis' crumbling infrastructure. By contrast, some of the city's most lasting infrastructure was built in the '30s.

Nationwide, the New Deal spent nearly 3.5 percent of GDP per year for most of the decade. Today's stimulus spending is barely 2.5 percent per year over only two years. And St. Louis is getting a tiny fraction of what it got in the '30s, adjusted for inflation and growth.

Two questions, then: Did the New Deal pay off here? And is today's spending at all comparable to the investments back then, like those at the zoo?

ROBERT LEIGHNINGER: Naturalistic habitats for animals was a new thing in that period.

PAUL SOLMAN: These enclosures, built by the New Deal to mimic native habitats, made St. Louis a pioneer in the natural zoo movement. A male Asian goat-antelope, a takin, intimidating a female.

What are they doing?

MARTHA FISCHER, curator of mammals, St. Louis Zoo: They're being takin. You know, there's some food out there, so they have to argue about who's going to get the most.

Ready for some hay?

PAUL SOLMAN: "Being takin" also means being fruitful and multiplying, made possible in St. Louis by New Deal spending.

As for the species to which the New Deal was dedicated, ours, President Roosevelt's stimulus, also built the still-thriving Muny opera and a greenhouse called the Jewel Box.

ROBERT LEIGHNINGER: These were not just local amenities. They were economic forces, too.

PAUL SOLMAN: Indeed, in 1938, the Jewel Box attracted over 400,000 visitors and their dollars into the city.

ROBERT LEIGHNINGER: An amazing variety of things were built, and it kind of reflects the variety of New Deal public policy itself.

One of Roosevelt's early advisers, Ray Moley, said, if you believe that the contents of the average teenage boy's bedroom were put there by an interior decorator, then you might believe that Roosevelt had a coherent economic policy. But, in fact, he didn't. He was experimenting.

Defending the New Deal

Robert Leighninger
Arizona State University
President Roosevelt declared this a national monument in 1935. And there was $9 million of WPA money that went into clearing it so that, when it came time to put the arch up, the land was there.

PAUL SOLMAN: Leighninger brought us next to a shot you just knew a TV story in St. Louis would feature: the 630-foot stainless steel Gateway Arch.

But it was built in the 1960s. What's the New Deal connection?

ROBERT LEIGHNINGER: President Roosevelt declared this a national monument in 1935. And there was $9 million of WPA money that went into clearing it so that, when it came time to put the arch up, the land was there.

PAUL SOLMAN: So the land and plans for America's main monument to westward expansion, and the icon of St. Louis, was also a stimulus project from the 1930s.

Last stop on our New Deal tour, the Ville, an historically black neighborhood, chock-a-block with infrastructural investments still going strong: Homer G. Phillips Hospital, now an assisted living center for seniors; Stowe Teachers College, now a middle school; Tandy community center; and Sumner High, the oldest high school for African-Americans west of the Mississippi, it was built before the New Deal, but upgraded in the '30s and, says Leighninger...

ROBERT LEIGHNINGER: The 136 of its students were supported by the National Youth Administration, which was a spin-off of WPA, and gave small stipends to kids in order to keep them in school so they wouldn't have to drop out and look for work to support their families.

PAUL SOLMAN: So this is part of your argument that the New Deal effectively invested in our future?

ROBERT LEIGHNINGER: Yes. And some of the more distinguished alumni from Sumner include Arthur Ashe, the tennis player, Tina Turner, Chuck Berry, Bobby McFerrin, Dick Gregory, the comedian, and Grace Bumbry, the opera singer.

PAUL SOLMAN: Leighninger is especially irked by current skepticism over the New Deal's results.

ROBERT LEIGHNINGER: Just look around. Here are, you know, four examples right there that are still here that made people smarter, healthier, and more able to take a part in their society. It's an investment in the population which pays back.

Stimulus bill has limitations

Barbara Geisman
Deputy Mayor of St. Louis
The economic recovery act did not make money available, or a lot of money, for public buildings of the type and the major public infrastructure projects that were the case in WPA.

PAUL SOLMAN: And if St. Louis doesn't convince you, says Leighninger, how about the Riverwalk in San Antonio, the French Market in New Orleans, the Children's Museum at the base of the Seattle Space Needle; New York's Lincoln Tunnel and Triborough Bridge. The list goes on and on.

OK, but that was the '30s. What about now? "What's the federal money stimulating today?" we asked regional planner Les Sternman.

LES STERNMAN, executive director, East-West Gateway: I mean, a lot of it is going to relatively small simple projects, resurfacing roads, building a few new roads, mainly in suburban areas.

PAUL SOLMAN: Sternman's own project is a modest $2 million to $3 million narrowing of South Grand Boulevard to make the city more livable.

Deputy Mayor Geisman and the city's Washington lobbyist, Jim Brown, showed us the signature project in St. Louis to date: $17 million toward the repair of a road above a sinking bridge.

Adjusted for inflation, just purchasing and clearing land for the Arch was nearly 10 times as expensive. But, says Les Sternman, this isn't the 1930s.

LES STERNMAN: Now we have environmental laws that we have to satisfy. We have to protect people's rights if we buy their property. All of that takes time.

So, basically, the only projects we can do are those where your environmental clearances are virtually all done and your property has been acquired to do the project.

PAUL SOLMAN: Deputy Mayor Geisman says the stimulus bill has its own limitations, as well.

BARBARA GEISMAN: The economic recovery act did not make money available, or a lot of money, for public buildings of the type and the major public infrastructure projects that were the case in WPA.

PAUL SOLMAN: So is the stimulus no big deal here in St. Louis?

Look, says lobbyist Jim Brown, the idea was to create jobs. And here at the bridge, he says...

JIM BROWN, Lobbyist for St. Louis: Eight or nine hundred jobs is what it, I think, is estimated, and they're across the trades, which is really good, you know electrical, concrete, iron, you name it.

PAUL SOLMAN: Creating jobs means fewer idle resources, more spending. Moreover, says Les Sternman, you don't rebuild a city overnight.

LES STERNMAN: I mean, we can create wider sidewalks, allow a restaurant to put outdoor seating in.

Ambitions for St. Louis

Richard Baron
McCormack Baron Salazar
The city of St. Louis has gotten very little, and so they're trying to deal with immediate issues, which they should be doing.

PAUL SOLMAN: Sternman says he's trying to use stimulus money to transform the city one sidewalk at a time. Right now, South Grand is dominated by speeding cars and the occasional endangered pedestrian.

So you're really -- you're taking your life in your hands here?

Narrow the street, slow down the cars, a more beautiful day in the neighborhood. But still, a pretty small investment.

In the end, we did find someone who's thinking New Deal big. Developer Richard Baron has a plan to transform the miles of unused land bordering the railroad tracks that bisect St. Louis.

RICHARD BARON, CEO, McCormack Baron Salazar: We estimate about 2,000 acres of fallow land that runs along this rail that could be used for mixed-use projects, for residential, for expansion of universities, for the major corporations in St. Louis. They'd be an enormous job-generator, in addition to creating a whole new tax base for the city of St. Louis, which it desperately needs.

PAUL SOLMAN: Baron estimates the project will generate billions in taxes over time, but he also estimates it will cost $300 million to $400 million, almost 10 times what St. Louis has gotten thus far in federal stimulus money, which raised one last question.

Are you disappointed with the relatively mundane ambitions of the stimulus package for St. Louis thus far?

RICHARD BARON: The city of St. Louis has gotten very little, and so they're trying to deal with immediate issues, which they should be doing. This is a much more transformative project, and I think this is exactly what I hope will happen with larger-scale initiatives that we'll see later this year as they come forward with the second wave of stimulus projects.

PAUL SOLMAN: A second wave of stimulus. Well, maybe and maybe not, even if you could argue that much more money is needed if St. Louis were to build truly ambitious projects, projects enduring enough that local celebrities like Elvis, say, might still be jealously guarding them three-quarters of a century after they were built.