Squeezing Out the Little Guy in Stimulus Spending

Socialists like to do things big. They tend to go for big projects that make a splash. They also prefer to deal with big companies.

Apparently the stimulus projects are no exception. From the Billings Gazette of Montana:

KALISPELL - Across the nation, local firms can expect to lose billions of economic stimulus dollars to large multinational corporations, thanks to a government contracting scheme that puts paperwork speed ahead of community recovery.

In Montana, that means qualified building firms are out of the loop, while many millions in federal construction funding will go to a California company that recently earned a stern rebuke for its failures in Iraq - a war-profits scandal that cost taxpayers hundreds of millions of dollars.

"It's a farce," said Dewey Swank of Kalispell's Swank Enterprises. "It stinks of politics and big special interests."

Over the past several years, Swank has teamed with Montana-based CTA Architects to successfully design and build four federal border stations. Several more ports now are being built along the Montana-Canada line, thanks to the massive stimulus bill, but this time Swank and CTA didn't have a chance to bid.

That's because California-based Parsons Corp., of Pasadena, has mastered the expedited IDIQ contracting bid process.

Parsons, with 12,000 employees worldwide and revenues pushing $3.5 billion last year, is no stranger to IDIQ contracting, or to the controversy that comes with it.

The company entered Iraq in 2003, with just eight government contracts for reconstruction. But those few vague umbrella agreements eventually came to cover about 1,000 projects in 500 locations. Oversight was spread as thin as the contracts and, when projects stalled, taxpayer money hemorrhaged.

Question: Wasn't the Left howling angry at the Bush administration's contract awards process which went to firms like Halliburton (primarily because they were the only company qualified that was large enough to do the work) and Blackstone?

But here they are, doing the same type of contracts, and we suspect for largely the same reasons. They are in a hurry, and there are more than likely lobbyists aplenty for this mega-firms in Washington to make sure they are first in line at the trough.

Swank, for one, wonders why someone with Parsons' recent history is still winning government contracts, and then he answers his own question: "Someone's palm is getting greased."

In fact, Parsons ranked third among the nation's construction-services firms in terms of federal campaign contributions during the 2008 election cycle, donating about $600,000 split almost evenly between Republicans and Democrats. The company also spent more than $1.5 million lobbying federal lawmakers between 2004 and 2008, with $305,000 shelled out during the 2008 presidential election year.

"That," Swank said, "tells me a lot about how things get done."

Jobs at Swank Enterprises have been trimmed by a third, victims of an economic recession fueled by firms deemed "too big to fail."

This is not going to stimulate the economy because these are not jobs that create permanent positions, if any. By consolidating projects into a vary narrow range of companies, it merely means that the big cats get fed, and the smaller companies on the food chain will continue to starve. It is corp-ocracy at its finest.

By concentrating on big contracts, the government is ensuring that small business -- the backbone of America's economy -- are left with the scraps from the table. It means that private projects are squeezed out as credit remains tight. The government is the player at the table with all the chips.

Have I mixed in enough metaphors? Whether it's being done by Republicans or Democrats, big government spending through socialist policies does not make for a healthy economy, even when the projects represent needed infrastructure.

Where is Your Proof, Mr. President?

The Associated Press does another soft take-down of President Obama's latest "repackaging" of old stimulus promises and more or less comes to the conclusion that the Obama Economic Team doesn't know how to find its own posterior.

This would be fun to watch were it not for all the pain and misery suffered by those who are losing jobs and those whose lives are being "transformed" as The One attempts to redesign our nation's economics and political system.

Toward the end of a rather long report, they quote Mr. Obama defending himself against his critics. I reprint them here:

Without naming names, Obama shot back at skeptics during the Cabinet meeting.

"Now, I know that there's some who, despite all evidence to the contrary, still don't believe in the necessity and promise of this recovery act."

"And I would suggest to them that they talk to the companies who, because of this plan, scrapped the idea of laying off employees and, in fact, decided to hire employees. Tell that to the Americans who received that unexpected call saying, 'Come back to work.'"

No, sir, Mr. President. This is pure baloney. How dare you raise up another false argument without providing proof!

The first sentence: "I know that there's some who, despite all evidence to the contrary, still don't believe in the necessity and promise of this recovery act."

Yes, there are plenty of people who do not believe in the necessity of the "recovery act," i.e., the stimulus -- porkulus -- package. That part is true.

But "all evidence to the contrary" means, exactly, what? Give us the evidence that the stimulus is working. You can't; furthermore, you don't even try because you know it isn't possible. If all you mean is that we are in dire straits economically, that is not evidence. That is simply restating the problem. It proves nothing.

The same goes for believing in the "promise" of the recovery act. They were your promises. They aren't coming true. You seem to think that it is our unbelief in your promises that is the problem, not the plain and obvious reality that they are not coming true.

Next portion, and this is where the bull manure gets really deep: "And I would suggest to them that they talk to the companies who, because of this plan, scrapped the idea of laying off employees and, in fact, decided to hire employees."

Which are these companies? How many employees were "saved." Even your own people admit that they have no evidence to prove this, and yet this is your argument? Spare us your fantasies, O exalted One! Give us proof. Every other previous administration has done this in spades, and a fawning media is at your beck and call anxious to please you in this.

Next you say "Tell that to the Americans who received that unexpected call, saying, 'Come back to work.'"

Okay, we'll bite. Who are those Americans? What are there names? Why don't you know? Don't you have legions of willing Obamatons desirous of proving that you, sir, are the Great and Infallible One?

I know this is "irreverent", but I am just one of millions who are sick and tired of the mealy-mouthed marlarkey you regularly serve up as your version of rational argument.

Facts are facts. If you got 'em, give 'em. If not, maybe you should consider the fact that your brilliant stimulus plan is, in fact, a disaster of Titanic proportions, borne of equal parts economic ignorance and hubris in high places. You came into office full of piss and vinegar intent on proving that you are smarter than the rest of us Constitution-loving yokels. In fact, you seem to think you are smarter than history itself, which has shown that no nation has ever cured the disease of economic malaise brought on by massive debt by incurring new and record levels of massive debt.

One would almost believe that you are trying to destroy our economy, rather than save it.

The Unstimulating Calm Before the Stimulus

O Beware the Law of Unintended Consequences!

More evidence, courtesy of Jim Geraghty at The Campaign Spot at NRO, that human nature never changes. A viewer who heads up a large medical institution e-mailed:

I am in charge of several large construction projects that are already budgeted and ready to go . . . in effect they are “shovel ready” . . . however, as soon as the stimulus bill was signed into law they all came to a screeching halt. They’ve been put on hold in hopes that the Federal Government will pay for them.

Unfortunately no one knows how much money our institution will be allotted, and how exactly we’re supposed to apply for said money. Meanwhile, these projects will just sit and wait, just in case. My fear is that we won’t find out if they’ll be government funded until sometime in the fall, which will be in the next financial year, and then there will no longer be funds in our budget for these projects.

I suspect that this thinking is not unique to my employer. I’m sure that other institutions plus state and local governments are all putting projects on hold in hopes that they can get someone else to pay the bills. So, from what I have seen; the “Stimulus” has resulted in a slowdown in the economy.

That's why Porkulus was so much more appropriate. Everyone would rather get a freebie from Uncle Sugar than have to repay for these projects through normal means.

Get in line boys. It may be a long wait.

Brad Henry: Spend Porkulus Money Quickly - And Carefully(?)

So Gov. Brad Henry tells his new stimulus oversight panel that the $2.6 billion that Oklahoma receives must be spent quickly and carefully?

"A lot of deadlines are approaching pretty quickly," Henry told the group. "There are also stipulations tied to much of this money. If it's not spent by a certain time, we lose it."

The same story has state auditor Brad Burrage warning that it must be spent "free of waste, fraud and abuse."

Pardon me for saying so, but it's almost impossible to spend quickly and avoid waste. (Haste makes waste, someone once said.) Fraud and abuse are also enabled when you work fast. The chief watchdog for the stimulus package agrees with me:

"I'm afraid that there may be a naive impression that given the amount of transparency and accountability called for by this act, no or little fraud will occur. My 38 years of federal enforcement experience tells me that some level of waste and fraud is unfortunately inevitable," Mr. Devaney told state officials charged with coordinating the spending.

Meanwhile, state officials across the fruited plain are reporting that the spending restrictions and other rules are making it virtually impossible to large parts of the money. David Freddoso at NRO reports:

The strings attached to various parts of President Obama's stimulus package have baffled state government officials, and it's not just a Republican-versus-Democratic issue. The White House was to provide additional guidance today about permissible uses of the money, but I'm told that much of the information will not appear for a week or more. This is a problem in many states that are working on their budgets right now.

There are some inherent problems in areas where the rules have already been written. One example: a senior aide to one governor complained to me recently that his state, given its current program structure, cannot possibly handle a seventy-fold expansion of weatherization funding in just 15 months, which appears to be a condition of accepting some of the funds.

As for the remaining unknowns, some states are simply making assumptions about what they can do with the money, which could prove to be wrong.

He lists several illustrative examples of municipalities and school districts that are finding that even with the added money, they cannot address their real problems because Congress, or the White House, decided to get very specific with targets for spending.

The grousing of local officials over stimulus money may seem like mere ingratitude. But considering that it's not free money — the federal government is borrowing and spending a trillion dollars for this — it's instructive to see what they are saying and what incentives are being created by the funds and the strings attached.

In Geneseo, Ill., they're happy to get money for infrastructure, but they cannot use any of it on sewers. So in the rush to spend, they'll just pave over their aging sewers and pray that they're good for another 7 to 12 years.

Add to this confusion the fact that over half of the stimuli cash is being spent in just 16 states, and that much of the money will not be spent until 2010 or later, and you wonder just how much real improvement our economy is going to see.

What Will You Do With Your Extra $13?

The Pork-a-Palooza math just got a bit more interesting as Judd Gregg, R-N.H., has decided NOT to take the job as Secretary of Commerce in the Obama cabinet, which means he will be available to vote on the cloture motion for the final passage of the bill.

With Uncle Teddy back in Florida, that means one of the three GOP quislings - Snowe, Collins and Specter - will have to cast the 60th and deciding vote, and all three will have to stay on board.

It's hard to know exactly what's in the conference report and what isn't, since Reid & Pelosi seem reluctant to let anyone actually see the printed document (although lobbyists on Washington's famed K street are brandishing huge chucks of it, it is reported). We know that several of the items the trio of Republican "moderates" negotiated are no longer in the bill, so it will be interesting to see if all stay "stuck."

Assuming it passes, one disappointment for many people I know is that the "tax relief" for 95 percent of Americans is going to be far, far less than they had hoped. It isn't going to be a big rebate check. For another thing, you have to be working to get the "relief" from your FICA withholding, the extra money doesn't hit your paycheck until June, and even then it amounts of about $13 per week. The total per worker is $400.

Next year, since the program starts in January, the amount will actually dip to about $8 per week. (Eight dollars times 50 weeks is $400.)

Don't spend it all in one place. Spread it around. The economy needs your money, honey.

Also, if you were one of those people counting on the $15,000 tax credit for a first-time home purchase (on a principal residence), you just got screwed out of it in the conference committee. The credit, which was a Republican proposal added in House voting, got tossed.

Maybe you can get a good job consulting on Harry Reid's new multi-billion dollar mag-lev bullet train from LA to Vegas. Somehow or other it magically appeared.