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New Deal 2.0
The financial crisis presents an opportunity to create jobs by enhancing the government's ailing electronic infrastructure.

November 9, 2008
Also published on The Huffington Post

Topics = { Financial Regulation + Government }

Now that the identity of the President-Elect is no longer an uncertainty looming over the nation, the biggest issue the new administration faces is that of prioritization. The Obama agenda is so (necessarily) vast and there is so much that urgently needs to be done that it is nearly impossible to sort out the most dire emergencies from those mere problems that should have been addressed years ago. I do not pretend to know which issues are the most important. After all, there is no way to be certain, with the issues being both interrelated and impossible to quantify. What I do know is that parallel processes are more efficient than serial ones, and so proposed policy initiatives that can spur growth in multiple sectors, thereby checking off several items on the proverbial to-do list simultaneously, are the ones that the new administration should take most seriously.

With the 2008 financial crisis echoing the Great Depression in a variety of ways, so too have proposed solutions paid homage to F.D.R.'s New Deal. As in the 1930s, policy makers and pundits have been talking about the option of using vast public works projects to put a dent in rising unemployment figures and falling demand for manufactured goods. The only problem is that compared to the 1930s when there was no federal highway system, the nation's transportation infrastructure already exists, and it is in pretty good shape. There are always bridges that could be safer, levees that need strengthening, and potholes that could be filled, but beefing up America's physical infrastructure alone will simply not be enough to dig out of an economic hole this deep.

In this light, last week, the CEO of IBM, Samuel J. Palmisano, made a speech in which he suggested that the servers and machines that power the nation's infrastructure were also ripe for an (IBM-branded) upgrade. This is probably true, and though the suggestions are on the right track, replacing mainframes still doesn't seem like it will be the country's ticket to economic success. (It would, of course, work quite nicely for IBM shareholders.) Something far broader and more directly relevant to the daily lives of Americans needs to be done in order to really give GDP a jolt: something, I think, having to do with software.

The fact is that after years of failed "e-Government" initiatives, the federal government barely has a technological backbone to speak of. The databases used by the Obama campaign were far more advanced than the systems the FBI has used for the past twenty years. At the same time, the United States of America has been lagging behind India and China in terms of the availability of native skilled workers, requiring technology companies to recruit computer science and engineering graduates from abroad, quickly filling immigration quotas. If there was ever been a time to begin the country's transformation from a forgotten Cold War superpower to a modern technological powerhouse, that time is now.

The need for improvement should be obvious to anyone who has ever visited a web site ending in ".gov." Whether for an Executive Branch agency such as the IRS, GSA, or SBA, a courthouse in the Judicial Branch, or your local legislator in Congress, virtually every Government web site is a terrible mess. Information is hard to find, pages are aesthetic black holes, databases barely function, and security could best be described as a joke.

Only a few months ago, I filed a non-profit tax return on-line. I followed the instructions on IRS Notice CP-299, a letter (with no hint of irony) mailed to me to direct me to the IRS web site, in order to save paper. There, I was re-directed to another non-profit's web site, to which the IRS had outsourced its filing operations for non-profits. Unfortunately, not knowing anything about databases or tax forms, this non-profit had in turn outsourced its web site to programmers in India, who had done a rather poor job. Every tax form filed on the site was exposed to the public. Fortunately, non-profit financial data is public information anyway, but chances are that the data was not intended to be exposed through the filing system.

Other web sites, such as the one the Department of Education uses to collect FAFSA information for financial aid for students, have been due for an upgrade for some time. That's why the Department recently awarded a contract to improve the site—for no less than $300 million. The upgrades will be implemented by your friendly, neighborhood defense contractors, who will need to spend just under 342.5 years in aggregate working on the project to justify their price tag, at a hypothetical rate of $100 per hour. Of course, this is only one of thousands of technology-related projects that the federal government spends money on each year. (We have not yet started buying our fighter jets from Microsoft and Apple.)

This is all to say that if we were to start employing Americans for much-needed technology initiatives, not just those companies who can afford to send lobbyists to Washington, our economy would be in much better shape. Though small business requirements already exist as part of procurement regulations, it is still extraordinarily difficult for smaller software producers to win federal contracts when GSA analysts insist that applicants list their raw material inputs, such as sheet metal or chemicals (which aren't used to produce software), on unnecessarily complex spreadsheets.

An emphasis on technology as part of an economic revitalization initiative would have several effects. With consistent graphic design templates for web sites and paper forms alike, it would have the potential to make currently torturous processes, such as filing tax returns or filling out paperwork for unemployment benefits, simpler endeavors. It could provide incentives for laid-off workers who lack skills to learn new ones that would be relevant for years to come, from web design to database administration. With a relatively small up-front investment it would reduce the government's recurring operational costs by increasing efficiency, at a time when the budget is about as far in the red as it has ever been. And it would help the environment, by reducing the amount of paper wasted each day, and by consolidating servers and reducing electricity usage as a result.

Even the disposal of obsolete computers, whether from within the government or from the public at large, presents an opportunity for the new administration to create jobs. As CBS 60 Minutes reported today, we have been outsourcing the problem of electronic waste to China for years. Federal grants for new businesses and research relating to the safe handling of electronic waste could go a long way toward alleviating problems of pollution and poverty. And despite John McCain's repeated demonization of the concept of re-distribution during the campaign, re-distributing working (if slightly older) computers to the poor could provide myriad opportunities to those who need opportunities most. After all, with this kind of New Deal, there's no reason why people couldn't work from home.

In all, the CEO of IBM is right: technology should play an important role in any plan to boost the economy. The problem isn't simply a lack of shiny new machines, though, it's what we're using them for. There's enormous potential for a more efficient, more personalized government that we would barely recognize when compared to the government of today, that would make both Democrats and Republicans jump for joy. To get there, we need a comprehensive plan to bring the country up-to-date that involves everyone, from the smallest web site design business to those who don't even know which skills they could benefit from.

Don't think we can do it? If there's anything that Obama's victory has shown, it's that even in the face of great adversity, we can.

Aaron Greenspan is the CEO of Think Computer Corporation and author of Authoritas: One Student's Harvard Admissions and the Founding of the Facebook Era. He is the creator of the FaceCash mobile payment system, ThinkLink business management system, and PlainSite legal transparency project.

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