"Absolutely" Working?

Earlier this month, Christina Romer, the Chair of the President’ Council of Economic Advisors, gave a speech at the Economic Club of Washington during which she assured us that, “absolutely” the stimulus is working.

As evidence for this “clear eyed assessment” of the $800 billion spending package, Romer cited a slower rise in unemployment and better than predicted GDP numbers.

Throughout her speech, Romer referred to the economy as a plummeting sky diver and the stimulus bill as his parachute. Since her speech, however, a number of economists have argued that the ‘chute is far from fully open.

Yesterday, an article from Forbes’ Thomas Cooley attempted to sum it all up. Here are the highlights:

Now understand that, no matter what point of view you start from--whether you believe stimulus is effective or that it is the voodoo economics of the new millennium--the Economic Recovery Act is a grand fiscal experiment. It is a bit like throwing the baby in the swimming pool to see if it swims.

At some future time, after careful parsing of the data and studying people's decisions, we may have a much better estimate of the effectiveness of debt-financed government spending of this sort. One should keep in mind, however, that the effectiveness (or ineffectiveness) of the programs to combat the Great Depression in the 1930s is still a matter of great debate. Of course it would be a lot easier if the stimulus programs were better designed and more focused.

To claim, however, that the evidence suggests it is working--and that we need more of it--is nonsense for two reasons. The first, which ought to be obvious, is that we only get one observation on events. To draw a causal connection between the stimulus and the fact that we haven't plunged into another Great Depression seems bold, to say the least. Since we don't have a parallel universe in which to play out events without the stimulus, we can't refute it.

The other reason why it is illogical to claim a boost from the stimulus is that, for the most part, it hasn't gone out the door yet. In a recent presentation made at the International Monetary Fund, Doug Elmendorf, director of the Congressional Budget Office, presented the rates of spending for different pieces of the stimulus package. He estimates that by the end of fiscal year 2009, which falls on Sept. 30, just a month from now, 32% of the income transfers for things such as food stamps and extended unemployment benefits will have been spent and 31% of the tax cuts will have been disbursed. And by the end of fiscal year 2010 just 73% of the money allocated to these programs will have been spent. …

But the most important stuff--the discretionary spending on infrastructure--has hardly started. By the end of the fiscal year, only 11% of the budgeted discretionary spending on highways, mass transit, energy efficiency and medical infrastructure will have gone out the door. This is the really direct government spending that many associate with the stimulus. By the end of fiscal 2010, Elmendorf estimates that only 47% of the infrastructure spending will have occurred.

Check out the full article which contains a couple of informative graphs comparing this downturn, and supposed recovery, to others over the last 30 years.

Every Day Since Jesus

CNN doesn’t like this new ad, what do you think?

How Do We Know Stimulus Bill Will Create 16,000 New Hampshire Jobs?

How do we reconcile the fact that the Obama administration and New Hampshire Reps. Carol Shea-Porter (NH-01) and Paul Hodes (NH-02) have promised that the recently passed stimulus bill will create upwards of 16,000 state jobs with the countervailing fact that, according to stimuluswatch.org, there are zero projects for the Granite State in the package?

Stimuluswatch.org is careful to point out, “[t]hese projects are not part of the stimulus bill. They are candidates for funding by federal grant programs once the bill passes.” STEWARD sought clarity from top legislative staffers on Capitol Hill who explained that the stimuluswatch.org list appears to catalogue the so-called wish lists of “shovel-ready” projects submitted by the nation’s governors and mayors. Many of these requests would be comical if taxpayer money weren’t at stake. $20,000,000 for a “Downtown Quiet Zone” in San Diego estimated to create zero jobs?

If stimuluswatch.org is correct—that Gov. John Lynch and New Hampshire’s mayors have not submitted such a wish list—how should we react? On the one hand, good for them; we don’t need any federally funded “Downtown Quiet Zones.” (In this economy wouldn’t we rather have our downtowns bustling?) But on the other hand, how are we to hold New Hampshire’s federal, state and local officials accountable if they have provided no information as to how the money would be spent? And if they have enumerated no “shovel-ready” projects, how can they estimate New Hampshire will “create or save” 16,000 jobs?

The Obama administration promises to post “spending and performance data” on recovery.gov in due time and that they will soon establish “rigorous internal controls [and] oversight mechanisms.” We look forward to them. But until President Obama, Gov. John Lynch, Sens. Judd Gregg and Jeanne Shaheen, Reps. Shea-Porter and Hodes, and our local officials make it clear to We the People how the money will be doled out, these mechanisms will have nothing to measure performance against.

Perhaps the March 3rd public hearing of the House Municipal and County Affairs Committee will provide some additional and much needed detail.

Santelli’s “Moral Hazard”

NBC’s Brian Williams called this the most e-mailed item on the blogosphere on Thursday:



The debate continued on the Today Show this morning:



There are four Facebook Groups dedicated to furthering Santelli's tea party idea.

What do you think?

Not Enough Staff to Hand Out the Checks!?

What does it say about the stimulus bill that it pays out so much in money (money we don’t have, by the way) that the Obama administration doesn’t have enough government employees to hand out the checks?

Talk About "Bad Debt"

This morning’s New York Times story on some Republican governors supporting the Obama administration’s stimulus plan—specifically, Gov. Arnold Schwarzenegger of California, Gov. Jim Douglas of Vermont, Gov. M. Jodi Rell of Connecticut and Gov. Charlie Christ—is certainly written by reporter Jackie Calmes with a certain villain in mind: House Republicans who voted against the bill.

Well, we suppose that is one way to look at it; through the prism of who won the news day, who’s up, who’s down. But let’s take a step back and look closer at one of those states: California.

The Golden State has no budget. Its unemployment is at 9.3 percent. The governor today will layoff up to 20,000 state employees and suspect 275 public works projects already underway. Only a weak—or deliberately partisan—mind would fault the Republicans in Congress, and seven Democrats, who think the president’s bill is the wrong way to stimulate the economy.

A much more sophisticated analysis would delve into how California’s leaders have so mismanaged the state’s finances that it needs an emergency $42 billion to stay afloat. And they’re not alone. Forty states in the U.S. are unable to balance their budgets. What could the leaders of these states have been doing over the past few years to create such a toxic economic environment?

What Happened to Bipartisanship?

President Barack Obama and Congressional Democrats said they wanted seventy votes in the Senate. They said they wanted a bipartisan bill. Not only does that appear not to be true, the media appears not to be holding them to this commitment.

CNN is running a series of packages this morning calling the GOP “the party of no,” echoing a Big Labor ad released yesterday.

We think this kind of partisan bickering is exactly the problem with this stimulus process.

Blogs Cover STEWARD (Updated)

Many thanks to bloggers giving love to STEWARD of Prosperity:

Glenn Reynolds at InstaPundit

Shawn Macomber of the American Spectator

Ben Smith at the Politico

Jim Geraghty at National Review Online

Don Surber at The Daily Mail

Amanda Carpenter at Townhall.com

Laurie Byrd at Wizbang

How Will the “Blue Dogs” Vote? (Updated)

Brian Faughnan shines the light on the Blue Dog Democrats in the House over at Red State:

Do the Blue Dogs care about balanced budgets? Do they oppose wasteful spending? Are they the taxpayer’s best friend, the conscience of the Congress, and the moderates who craft bipartisan solutions? Today is the day to prove it. If they help Congressional leaders pass this massive spending bill with no scrutiny, then they don’t really serve any purpose. And they’ll be reminded of it over and over again before the next election.

All deficit hawks—Democrat or Republican—need to oppose this compromise bill on the grounds that it punishes our children and grandchildren with too much debt.

UPDATE: Jim Geraghty reports that Rep. Allen Boyd already has a primary challenger.

Health Care Controversy in Senate Stimulus Package

Fox News Channel has offered extensive coverage all Tuesday morning of what they call new health care rules that have been inserted into the stimulus bill without debate:

High Marks for Performance, Not Substance

MSNBC’s Morning Joe crew gave President Obama high marks for his press conference on Monday night. For his performance. Likewise, Bob Herbert has a much buzzed about column in this morning’s New York Times in which he ladles praise on President Obama’s tactical approach to pushing the stimulus package. Herbert compares the president to “a championship chess player, always several moves ahead of friend and foe alike.”

Reasonable people can agree that President Obama communicated his message effectively and that he is a master politician. But where is the praise for the substance of the stimulus bill? Well, there is very little of it out there. One reason might be that the compromise measure as passed by the Senate has only been available to the public since 11:00 PM last Saturday night.

Another reason might be that the plan simply isn’t all that good for the economy and very few people are confident that it will work.

Who Wants to “Do Nothing?”

Reading Twitter last night I observed a common objection to President Obama’s remarks: No one is suggesting we “do nothing” to fix the economy.

One of my favorites comes from Weekly Standard blogger Mary Katharine Ham: “Seriously, the ‘people who want to do nothing’ straw man is OVERDONE, Obama.”

Overdone, Indeed.

Recklessness Rewarded

Joe Scarborough on MSNBC on Monday morning:



One of the biggest drawbacks to the stimulus bill, as currently constructed, is that it rewards bad behavior on the part of governors and state legislatures that refused to control their spending when times were good. And now taxpayers from responsible states have to bail them out.