It’s considered gospel truth in many conservative circles that the American Recovery and Reinvestment Act of 2009, a.k.a. the “economic stimulus package,” was just a porkfest aimed at buying votes or rewarding Democratic constitutencies at the expense of good, virtuous taxpayers and their grandchirren. In support of this hypothesis, Veronique de Rugy of George Mason University’s Mercatus Center, and a regular contributor to conservative and libertarian magazines and web sites, recently wrote a “study” designed to show that ARRA dollars went disproportionately to districts represented by Democrats and/or that voted for Obama in 2008, regardless of their actual economic needs. De Rugy helpfully touted her study at National Review’s The Corner yesterday, for the edification of those who look to that blog for talking points.
Looks like she should probably have kept the paper to herself. Nate Silver of 538.com took a look at it, and pretty much demolished it today.
Turns out that de Rugy didn’t notice, or didn’t mention, that most of the “Democratic districts” that show up in her study as the top recipients of ARRA dollars happen to contain state capitals. Thus, ARRA spending designed to benefit states as a whole (the Medicaid super-match, school improvement incentives, state infrastructure grants, the state “flexibility” funds, etc.) are attributed by her to individual districts. She also ignored economic indicators showing poverty and local unemployment, which may or may not be correlated with Democratic voting habits, but which certainly indicate actual need.
I hear through the grapevine that de Rugy plans to respond to Nate’s demolition job at some point. If she manages to climb out of this crater, I’ll certainly be impressed.
The larger point, though, is that without Nate’s intervention (and perhaps even after it), conservatives would be gleefully citing de Rugy’s bottom line “findings” as “proof” that ARRA was what they always said it was. She is, after all, an academic thinker, and her “study” is impressive-looking, with lots of footnotes and scatter plot charts. I’m not saying that conservatives are alone in conducting this sort of skewed and deeply flawed “research,” or in citing it without examination. But that doesn’t excuse it for even a moment, particularly when the “researcher” is out there circulating the stuff as agitprop for the chattering classes before the ink is even dry.
This item is cross-posted at The Democratic Strategist.
Photo credit: http://www.flickr.com/photos/jbyoder/ / CC BY-NC 2.0
Tags: conservatives, Nate Silver, stimulus, Veronique de Rugy
Much of the stimulus money went to states which had been living large prior to the downturn in the economy, 4th quarter, 2008. Rather than promoting reforms, the stimulus billions went to prolonging the waste and excessive government Americans will be rejecting in Nov. this year. Unfortunately, the interest on the 800+ billion which was borrowed will need to be repaid, undoubtedly by those who didn’t see any of the benefits of that enormous expenditure. There really is no justification for the tremendous waste, partisanship, and rejection of capitalism symbolized by ARRA. Unions are the common denominator in fiscal decisions made by the Obama administration, whether bailing out states which forestalled the layoffs of Government Employee Union members or teachers unions.
Wow, sometimes I wish Obama had done nothing. He should have let all the 401k’s just bottom out. Wipe out most of the wealth in this country and everything would have just restarted. Mind you we would have had INSANE unemployement, no banks would be lending, and many many companies would have simply died off. We would have suffered a few years maybe a decade then we could have rebuilt. Instead he saved the stock market, saved the banks, and saved Many corporations that would have collapsed. Funny, all the so called leaches on society would have been okay, as they know how to exist with a bare minimum. So who really benefited from the stimulus? Anyone who had investments, anyone with a 401k etc. Hell, let the whole thing burn.
You couldn’t be more wrong Ron. State infrastructure spending was stagnant and even in decline thanks to a decline in State and Federal investment throughout the “bubble” years. The most egregious example is the failure of the I35 bridge in Minneapolis that played across everybody’s TV screens in 2007. And state education and pension funds lost trillions when that bubble burst at the end of ’07, kicking off the worst economic downturn in 80 years. The whole premise of your distaste for ARRA seems to stem from that long running argument between the Keynsians and the Friedmanites that deficit spending as investment during recessionary periods is a necessary evil. And your assertion about unions being a common denominator is uncited rhetoric wholly unsupported by fact. When you decry monies directed at union types, you conveniently disregard that the monies are required by law as these unions held pensions that were guaranteed by the Federal pension Guarantee corporation and their pensions all lost trillions in the housing/Credit default swap fraud perpetrated the large deregulated (By republicans) trading houses. If you want to argue the intricacies of Keynes vs Hayek, that’s cool, but please do not muddy the waters with your personal disdain for our current president, as he is clearly following a mildly hybrid Freidmanite policy of limited deficit spending (relative to the depth of the actual crisis which was in the 10s of Trillions in losses). Your anti Obama bias clearly shows in your post, sadly, and is wholly unsupported by reality.
Wow, I’m an expert in this area and visited George Mason two weeks ago to talk about the distribution of federal funds, but Veronique didn’t bother to show up and talk to me. I could have set Veronique straight on the state capitals problem before she testified. Anybody who’s worked with federal funds data should know about that issue.