A study [$] published in the winter edition of Political Science Quarterly considers two possible reasons for why the 2009 American Recovery and Reinvestment Act (ARRA) failed to sprinkle Uncle Sam’s magic dust onto those areas of the country that were being hardest hit by the recession.
Was it because well-positioned politicians were successful in delivering the pork?
Or was it because the recession created a “window of opportunity” for politicians to quickly spend a bunch of additional money on pet causes, which had the effect of benefitting certain areas of the country?
I’m going to skip right to the answer: the uneven geographic distribution of stimulus funds had only a little to do with traditional pork barreling and much to do with Obama’s then chief of staff Rahm Emmanuel’s famous quip that “You never want a serious crisis to go to waste.”
On the possibility of traditional pork-barreling, the authors found no statistically significant relationship between the distribution of funds and whether a county was represented by a politician serving on a congressional committee relevant to stimulus funding. Nor was a relationship found between funding and counties that were represented by a Democrat in the House or Senate. However, a relationship was found between funding and those counties that overwhelmingly voted for the president:
There does, however, appear to be a distinct tilt toward counties that were stronger for the Democratic Party in 2008. All else equal, counties at the 90th percentile of Democratic share presidential vote ’08 received between $35 and $36 more per capita in both total funding and infrastructure projects than did counties at the 10th percentile (p ≤ .001)…The effect of presidential politics may be especially relevant for the distribution of ARRA funds because most of the grants, loans, and contracts funded by the stimulus were in discretionary programs overseen by administrative agencies, over which presidents and their political appointees exercise influence.
On the other hand, the authors found that a county possessing attributes that synched with the policies funded in ARRA were more likely to receive money. For example, a county with a lot of interstate highway mileage made out better than a county that did not. Another example is counties that had a larger share of state and local government workers received a larger share of funds.
While it’s not surprising that legislation that funds highway infrastructure projects would benefit areas with more highway mileage, let’s remember that the stimulus was sold by many politicians as being necessary to help those with the greatest need. Indeed, as the authors point out, the text of the legislation stated that a main goal was “to assist those most impacted by the recession.”
The bottom line is that the Obama administration used the economic downturn to spend a bunch of money it otherwise would not have been able to on a stack of its pet policies. In the process, the counties that did the most to put Obama in the White House received a taxpayer-funded thank you in return.
Over at Downsizing the Federal Government, we focused on the following issues this past week:
- Over the last decade, annual average military wages rose 6.6 percent, federal civilian wages rose 5.0 percent, and private sector wages rose 3.0 percent.
- A rule-of-thumb to remember is that total federal spending is 3 to 4 percentage points of GDP larger than usually reported by officials.
- Imagining that more federal infrastructure spending will be a panacea for the economy is a liberal fairy tale, detached from the actual experience of most federal agencies over the last century.
- We’ve nearly tripled the cost of sending a child all the way through the K-12 system, while performance near the end of high school has been stagnant (reading and math) or even declining (science).
- Small Business Administration to close? Unfortunately, no.
Adam Schaeffer has just blogged about the massive increase in public school facilities spending of the past two decades, and about President Obama's likely call to throw even more money at the problem of decrepit schools (in his address on the economy, next week).
Adam argues that money hasn't fixed the problem, but it isn't hard to imagine that a true believer in the status quo (paging Matt Damon...) might conclude that we simply haven't increased facilities spending enough.
I addressed this counterargument a few years ago, using federal government data on the condition of U.S. public schools and data from a survey of Arizona private schools. What I found is that public schools were four times more likely than AZ private schools to have a building in "less than adequate" condition, despite the fact that public schools spent one-and-a-half times as much per pupil. [And, yes, I'm talking total spending here, not just tuition].
So if private schools can and do maintain their buildings in far better shape than public schools, at far less cost, what exactly are public schools doing wrong? The answer comes from one of the federal government's own assessments of school facilities nationwide. According to that report,
a decisive cause of the deterioration of public school buildings was public school districts' decisions to defer maintenance and repair expenditures from year to year. However, maintenance can only be deferred for a short period of time before school facilities begin to deteriorate in noticeable ways. Without regular maintenance, equipment begins to break down, indoor air problems multiply, and buildings fall into greater disrepair... Additionally, deferred maintenance increases the cost of maintaining school facilities; it speeds up the deterioration of buildings and the need to replace equipment.
This routine deferral of necessary maintenance is not, as the spending data show, the result of a funding shortage; it is the result of mismanagement. Allowing a public school to decay has no inevitable consequences for management because public schools have a monopoly on k-12 funding. Private schools, by contrast, would lose students if their facilities crumbled, and so they make a greater (and more effective) effort to maintain them.
The solution to America's public school repair problems is not to spend more, it is to unleash the freedoms and incentives of the free enterprise system on our creaking, calcified, government school monopoly.
At POLITICO this morning we find a long opinion piece by Matt Stoller, “Public Pays Price for Privatization,” summarized as “The real infrastructure trend in America today is privatizing what is left.” If that weren’t enough to give you the flavor of the piece, the bio line tells us that “Stoller worked on the Dodd-Frank financial reform law and Federal Reserve transparency issues as a staffer for Rep. Alan Grayson (D-Fla.). He is currently a fellow at the Roosevelt Institute.” Say no more – except, there’s more to say.
Stoller notes, among much else, that Kansas Gov. Sam Brownback “just turned over arts funding to the private sector, making Kansas the only state without a publicly funded arts agency.” Don’t reel in horror; the cited Los Angeles Times article has already done it for you: “The governor erased state funding for arts programs, leaving the Kansas Arts Commission with no budget, no staff and no offices.” One imagines there will now be no art at all in Kansas.
Not surprisingly, Stoller extols the giant public works of the New Deal and after, which petered out in the 1970s, he says, after which “international competitiveness and environmental costs drove the logic of cost reductions into our political order. Today, we are still living in the Ronald Reagan-Paul Volcker era of low taxes, low regulations, low pay, low spending and high finance.” It seems not to have occurred to Stoller that perhaps the prior absence of “the logic of cost reductions” in our political order might have contributed to why, as he says, “the New Deal coalition melted in the 1970s.”
Art aside – that’s an easy case for defunding – Stoller does go on to criticize much of the “privatization” that’s taken place since – starting with Fannie Mae and Freddie Mac. He’s right there: These “private-public partnerships” are fraught with peril, not least by giving privatization a bad name, something he doesn’t consider. The idea of “public goods” is not meaningless, but the definition has to be strict, as economists know, and the means for privatizing ersatz “public goods” have to be clean. Given the vast public sector before us, we’ve got years of privatization ahead. Let’s hope it’s done right.
The national debt has just passed $14 trillion. It's approaching the so-called "debt limit" of $14.3 trillion, and members of Congress face a vote on raising the limit that doesn't limit. President Obama will no doubt stress his commitment to reducing deficits in his speech tonight, but it's unlikely that he will propose any actual budget cuts or any serious entitlement reforms. And we're told that he will propose new spending on infrastructure, education, and research in the face of trillion-dollar deficits as far as the eye can see.
We've become so used to these stunning, incomprehensible, unfathomable levels of deficits and debt -- and to the once-rare concept of trillions of dollars -- that we forget how new all this debt is. In 1980, after 190 years of federal spending, the national debt was "only" $1 trillion. Now, just 30 years later, it's sailing past $14 trillion.
Historian John Steele Gordon points out how unnecessary our situation is:
There have always been two reasons for adding to the national debt. One is to fight wars. The second is to counteract recessions. But while the national debt in 1982 was 35% of GDP, after a quarter century of nearly uninterrupted economic growth and the end of the Cold War the debt-to-GDP ratio has more than doubled.
It is hard to escape the idea that this happened only because Democrats and Republicans alike never said no to any significant interest group. Despite a genuine economic emergency, the stimulus bill is more about dispensing goodies to Democratic interest groups than stimulating the economy. Even Sen. Charles Schumer (D., N.Y.) -- no deficit hawk when his party is in the majority -- called it "porky."
Annual federal spending rose by a trillion dollars when Republicans controlled the government from 2001 to 2007. It has risen another trillion during the Bush-Obama response to the financial crisis. So spending every year is now twice what it was when Bill Clinton left office. Republicans and Democrats alike should be able to find wasteful, extravagant, and unnecessary programs to cut back or eliminate. They could find some of them here in this report by Chris Edwards.
Tea Partiers and other taxpayers should listen carefully tonight, to both speeches. Is either party prepared to require the government to live within its means? Or will both parties continue to spend with abandon and raise the "debt limit" every few months?
That's the question I ask today over at Downsizing Government. President Obama wants to take the country $50 billion deeper into debt in order to finance more public infrastructure projects. I argue that policymakers should instead give the private sector a chance to satisfy our transportation needs.
...but I can't because of Obama!
That takeoff of the lyrics from the famous folksong "Oh Shenandoah" are the impromptu creation of my wife, who this weekend was as appalled as I was when we packed the kids into the car, headed into the Shenandoah National Park, and were greeted by closed overlook after closed overlook accompanied by the sign pictured to the right. Apparently, one project funded by the so-called "stimulus" includes simultaneously renovating -- or at least cordoning off -- every overlook north of the park's Thornton Gap entrance without posting any clear warning that that's the case as visitors decide whether to head north or south.
Even more upsetting was being subjected to pure propaganda in the park's visitor guide, which reports the following on the page "Shenandoah Looks to the Future":
Some of the treasured resources in Shenandoah National Park are being enhanced through the American Recovery and Reinvestment Act. On February 17, 2009, President Obama signed into law this unprecedented act to jumpstart a failing United States economy. The goal is to put Americans to work while investing in infrastructure for the future.
It's bad enough to have to see "Recovery.gov" after "Recovery.gov" sign informing you that the views you actually came to see -- and for which you paid a $15 entrance fee, I might add -- have been put off limits. But is it really too much to ask that people be able to visit national parks without being subjected to propaganda clearly designed to glorify the highly debatable policies of a sitting -- and likely to run for reelection -- president?
I sure hope not, because no matter which part of the political spectrum you occupy, wouldn't it be nice to be able to get away from politics for a while?