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What we have here is a failure... just a failure

November 16, 2011 J

We just keep shaking our heads. Thanks to David Kinkade and the Arkansas Project for posting the following.

Yesterday we looked in on how Arkansas has fared in spending economic stimulus funds awarded under the 2009 American Reinvestment and Recovery Act. That whole exercise in futility is in the process of winding down, as the numbers show: The state has now spent some $2.9 billion of its $3.2 billion stimulus allotment.

As we’ve noted, all those millions and billions have failed to move the needle on the state’s unemployment rate, which is actually higher now than when the ARRA was enacted in February 2009.

The Obama administration’s “green jobs” misadventures, a key component of the stimulus package, have been much in the news in recent weeks (we’ll all soon take to the streets chanting “SOLYNDRA! SOLYNDRA!” in outrage. It will be our generation’s “ATTICA! ATTICA!”). So I thought it might be worth taking a closer look at some of the “green” stimulus spending in Arkansas, and how that spending has played out.

To narrow our parameters, let’s look specifically at ARRA funding from the Dept. of Energy provided to Arkansas agencies, as detailed in the latest report from the Arkansas Office of the Recovery and Reinvestment Act (PDF) ending September 30, 2011:

* The Arkansas Economic Development Commission (AEDC) received more than $39.4 million for the State Energy Program. As of the most recent reporting period, about 64 percent of that funding had been spent, with 39.41 jobs created, according to the last quarterly report.

* AEDC also received more than $9.5 million for the Energy Efficiency and Conservation Block Grant Program. About $4.1 million—roughly 43 percent—of those funds have been spent, with 21.46 jobs created, according to the last quarterly report.

* The Energy Efficient Appliance Rebate Program—a sort of “Cash for Clunkers” program for household appliances, administered by AEDC—spent $2.74 million before wrapping up late last year. The report for the last quarter shows zero jobs created in Arkansas under this program.
AEDC also got about $462,000 for the Electricity Delivery and Energy Reliability, Research, Development and Analysis Program. Only about half those funds have been spent, with 2.33 jobs created, according to the last quarterly report.

* Another big chuck of DOE money landed over at the Arkansas Dept. of Human Services, which got more than $50 million for the Weatherization Assistance for Low-Income Persons Program. As of the end of the last quarter, they reported more than $33 million spent and 138.9 jobs created, and are reportedly on track to exhaust their funding by March 2013.

The general pattern is clear—large expenditures of taxpayer money, as part of an effort that was billed as the start of “building the economy for the future,” but with relatively paltry numbers of jobs generated. It’s hard to see how these programs can be billed as “successful” in terms other than “spending taxpayer money as quickly as possible.”

And that isn’t just my tendentious conclusion: It squares with recent testimony by Gregory H. Friedman, DOE’s inspector general, in a House committee oversight hearing on stimulus spending (PDF). Friedman concluded, based on his investigations, that “a combination of massive funding, high expectations and inadequate infrastructure resulted, at times, in less than optimal performance” for DOE stimulus spending. (I’ve included below the jump the relevant portion of Friedman’s testimony where he details the specific challenges that the stimulus program posed for his department—the basic lessons probably apply to every government agency that was charged with distributing stimulus funds.)

“Less than optimal,” indeed! So maybe we can drop the nonsense posturing, still being peddled at high levels, that all we need is more government spending to spark job creation and economic growth? Let’s add to that a hearty repudiation of the “green jobs” scam—which is looking more and more like a classic case of over-promising and under-delivering.

From testimony of Gregory H. Friedman, Inspector General, U.S. Department of Energy, at congressional hearing on DOE stimulus funding, November 2, 2011:

Even under ideal circumstances, the Recovery Act established challenging goals for the Department. We noted during our work that there was what we considered to be an intense effort to implement and execute the various aspects of the Department’s Recovery Act responsibilities. These efforts notwithstanding, we had a number of overarching observations about the Department’s implementation of the Recovery Act. These observations include:

1. The pressure of achieving expeditious program implementation and execution (and doing so with great emphasis on transparency and accountability) placed an enormous strain on the Department’s personnel and infrastructure.

2. The challenges associated with the Department’s program implementation and execution efforts were complicated by the nature of the bureaucracy in which it operates, specifically the diverse, complex, and often asymmetrical set of stakeholders which play an integral role in this process. This includes literally thousands of state and local 6 jurisdictions, community action organizations in every state and territory, universities and colleges, contractors, and other private sector entities.

3. The concept of “shovel ready” projects was not realized, nor, as we now have confirmed, was it a realistic expectation.

4. The Federal, state and local government infrastructures were, simply put, overwhelmed. In several states, the very personnel who were charged with implementing the Recovery Act’s provisions had been furloughed due to economic situations. Ironically, this delayed timely allocation and expenditures of funds intended to boost the U.S. economy and create jobs.

5. The pace of actual expenditures was significantly slowed because of the time needed to understand and address specific requirements of the Recovery Act.

6. Recipients expressed their concern with what they described as overly complex and burdensome reporting requirements.

In summary, a combination of massive funding, high expectations and inadequate infrastructure resulted, at times, in less than optimal performance.

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