The Obama Stimulus — A View from Cincinnati, Ohio

People in Cincinnati, like others around the country — either having lost their jobs or fearful of losing them — have been waiting anxiously, some desperately, for news that President Barack Obama’s stimulus plan would help them.  Now the news has arrived, and the news is that help is coming.  Help for the banks and for The Banks Project, that is, but not necessarily for the rest of us.

Federal money will be used to bail out the banks and to support developers of a residential and commercial project on the river called The Banks.  Some will get jobs no doubt, but this is no New Deal.  This is public money used to support private capital at the expense of taxpayers with no voice for the citizens.  It’s the same Old Deal.

What exactly is the plan?  Governor Ted Strickland announced $774 million in federal funds will be spent in counties throughout Ohio to find 149 projects.  The Governor’s office estimates that this will create or retain 21,257 jobs.  Of those funds being distributed statewide, here in Cincinnati the private Banks Project will receive $23.2 million, studies of the proposed Eastern Corridor that runs from Cincinnati to north to Columbus and Cleveland will receive $20 million, and various highway construction projects will receive about $12 billion.

Hamilton County Commissioners Todd Portune and Gregg Hartman, as well as Cincinnati Mayor Mark Mallory, expressed their delight at receiving this federal financial aid.  Local banks, realtors, developers, and construction contractors should be even more delighted, for they will be the primary beneficiaries of the stimulus.

Trickle to Drip

While some of the stimulus money will trickle down, particularly to contractors and building trades workers, most Cincinnatians will not benefit directly from the stimulus.  By the time the trickle reaches most of us, it will have become a mere drip. 

The use of Cincinnati’s stimulus money reveals that the Obama government is doing here at the local level what it has been doing at the national level: using taxpayer money to bail out private banks and corporations while neglecting homeowners and working people.  The even greater problem with all of this is that an opportunity provided by the economic crisis to make structural change — in government, in economic institutions, and in our society — is being missed.

The Banks Project

The largest part of the Cincinnati stimulus — some $23.2 million — will go to corporations and banks involved in The Banks Project, the complex of apartments, stores and garages to be built on the banks of the Ohio River near the stadiums.  The Banks Project is being built by two Atlanta-based companies, Carter and Associates LLC and the Dawson Company, both large companies with many projects in Atlanta and throughout the Southeast.  So our tax money will now go to support private projects which will make profits for the Atlanta businessmen who own them.

Much of the financing for The Banks Project comes from local banks, Fifth Third Bancorp, U.S. Bancorp, PNC Financial Services Group, and First Financial Bancorp, which like other banks around the country found themselves facing financial problems.  Cincinnati’s banks have already received help from the federal financial bailout in the amount of $19 billion: PNC got $7.6 billion, U.S. Bank $6.6 billion, Fifth Third $3.4 billion, Huntington $1.4 billion, and First Financial $80 million.  Now these banks will receive millions more in the form of the federal funds for The Banks Project, which will act to shore up the financial situation of their investments. 

The Old Deal, Again

All of this unfortunately represents the Old Deal.  At the federal level, Treasury Secretary Timothy Geithner and Federal Reserve Board Chairman Ben Bernanke have spent trillions of our dollars to save the banks and the bankers who wrecked the economy.  Now at the state and local level Democrats Strickland, Portune, and Mallory will spend millions of our dollars to support banks and developers.  The money will go to downtown — part of the continuing 50-year saga to try to save the central business district through tax abatements and subsidies to private business — not to neighborhoods.

About $12 million dollars will go to highway rehabilitation and construction, that is to construction contractors and building trades workers.  Highways, of course, move cars, so in the short term this is a continued investment in the transportation system which has been largely responsible for destroying our environment.  The contracts for this work will in all likelihood not be given out in an equitable fashion, for they seldom have been.  Minority subcontractors will as always have a struggle to receive even a small part of the work.  The building trades — because of a long history of racial and gender discrimination by both contractors and unions — remain almost all white men, so few African Americans or women will find work in those jobs.

The $20 million for studies of the Eastern Corridor, with the prospect of opening up rapid highway and rail transportation, possibly a rapid rail line between Cincinnati, Columbus, and Cleveland represents the most promising part of the stimulus package.  Such a development might speak to the environmental concerns about global warning.  If it were publicly owned and socially managed by workers and consumers, it could be a really progressive development.  (See my proposal: Dan La Botz, “Our Light Rail: A New Public Transportation System Could Help Create a New Cincinnati.”)  But studies are studies, and whether the study will lead to a progressive proposal will remains to be seen.

Health Clinics

Cincinnati will also receive $1.2 million in federal stimulus money for expanded services and hours of operation in several local clinics, mostly not-for-profits.  Please note, however, the difference between the private Banks Project’s $23.2 million and the not-for-profit clinics’ $1.2 million.  We see there the priorities.

The Obama stimulus to such not-for-profit clinics should also be seen in the context of his rejection of a single-payer health plan and his support for the continued domination of health in the United States by insurance companies and health corporations.  Following Obama’s lead, local Democratic Party state and federal legislators shy away from single-payer and look for ways to use government money to subsidize the insurance companies.  Our country needs single-payer, and beyond that we need a national health program to cover the medical needs of all citizens as a right.  Obama’s health plan and his stimulus plan fail to make the structural changes away from private and toward public health and medicine which move us in the right direction.


So far we haven’t yet heard how Obama’s stimulus money will affect education locally.  Any sort of help will be welcomed by teachers, parents, and students since our city schools have been starved for resources because of inequities in the state funding system.  Nationally, Obama’s education plan would direct $100 billion to education and puts an emphasis on early childhood education, which is important, though obviously parents must themselves have education and training, meaningful jobs at living wages, security in their employment, and health care coverage if they are to help their children take advantage of any schooling.

A good deal of the money, in any case, will go not to improve schools, but simply to restore programs that had been cut because of state and local budget shortfalls.  Obama’s education budget will support school modernization and educational technology in such a way as to provide a federal government supplement to private construction companies and to private corporations producing computers.  At the same time, Obama is open to private school vouchers, another government subsidy to private business.

In terms of higher education, Obama plans to increase the Pell grants to students with economic need from $4,731 to $5,500 and to make more money available for student loans.  The government will help students and parents as they struggle with a higher education system which has become too prohibitively expensive.  But that does not begin to change the increasingly classist character of the higher education system where the most wealthy can go to elite private colleges and universities, the middle class to state schools, and most working-class kids to the classrooms of the overworked junior college and vocational college instructors.

Free Public Education K to PhD

For a young person growing up in California in the 1960s, education was virtually free from K to Ph.D., with only very modest fees for those who wanted to study.  One could begin in a community college and transfer to the state colleges and universities.  The system eliminated many barriers to education for the working class and poor people and catapulted California into leadership in aerospace, microchips, and computers.

The United States today needs, as some other countries have, a free public education from pre-school through postgraduate work for all who want to study.  One can pay for this by taxing corporations and the rich, which is what paid for virtually free education in California, Texas, and New York in another era.  We cannot, however, carry out this necessary redistribution of money and power from the wealthy to working-class people in this country today without a struggle.  When middle-class and working-class parents and students finally rebel against the class barriers to education for their children, then and only then things will begin to change.

Stimulus and War

We should look at the million-something for health clinics here in Cincinnati in the context of the military and war budgets.  We cannot deal with the American economy and society and resolve its problems while the people of the United States bear the burden of maintaining a world empire.  Obama is delaying the promised pullout from Iraq — and intends to leave 50,000 occupying troops there even after the main body leaves.  He is expanding the war in Afghanistan by several thousand more troops and “civilian” advisors.  He has continued and expanded the not-so-secret U.S. war carried out by drones bombing targets in Pakistan.

Obama will also maintain and even increase the U.S. military budget, which has set limits to social spending, in the old guns or butter contest.  The United States also continues to maintain about 700 bases around the globe, organized in command structures by world regions.  Billions of dollars are being spent everyday on these wars to control the oil of the Middle East and Central Asia and at the same time to hold the geopolitical high ground with regard to Europe, Russia, and Asia.  What is now Obama’s war in Afghanistan will not only end up killing thousands of innocents, it will also increase terrorism, and it deprives us here of resources we need for human needs.

Under Obama’s administration, militarism, war, and imperialism are the very real beneficiaries of economic stimulus.

The Missed Opportunity for a New Deal

Most disappointing about the Obama stimulus plan — from the White House to Congress to the State House and City Hall — is the lack of any attempt to use this money to bring about the structural changes that we need to make our society more just and more democratic.  The government and the bankers have created a sense of panic, so that, instead of having a national democratic discussion about priorities, we have had a ruling-class economic agenda thrust upon us.  We have had no opportunity to debate how the economic crisis should be managed, who should get the money, and under what terms.  We have been given the bum’s rush.

The reason that the stimulus package has come down to us as it has is because the thinkers behind these economic plans — Obama, Geithner, Bernanke — all have their eye on the welfare of the banks and the corporations and that small minority that dominates American economic and political life.  Consequently, they have only attempted to reinforce the existing system, with all its inequalities, not to fundamentally reform the system, and certainly not to change it in a qualitative way.

Dan La Botz is a Cincinnati-based teacher, writer and activist.  Contact him through his home page: <>.