Government Spending

Nate Silver: Stingy Lunch Date?

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Nate Silver, every girl's ideal lunch date.

You may have enjoyed the recent tango between Nate Silver and Reason Contributing Editor Veronique de Rugy over how much Democratic party affiliation factored into stimulus awards under the American Recovery and Reinvestment Act.

De Rugy's original work, drawing on the woefully incomplete data set available at the Treasury Department website Recovery.org, suggested that districts represented by Democrats received vastly higher stimulus awards than those represented by Republicans.

Veronique de Rugy is a known French person.

You can see de Rugy testifying about the party-specific pattern of stimulus awards before the House Committee on Transportation and Infrastructure. [Spoiler: Rep. James Oberstar (D-Minnesota) steals the show by speaking French with what is certainly one of the most mignon accents ever to come out of the Gopher State.]

Silver countered that many state capitals—where federal stimulus funds would logically stop on their way to whatever local factory makes big green signs that read "Project Funded By the American Recovery and Reinvestment Act"—are in Democratic districts. Thus these districts take up such a large portion of the overall stimulus awards that the study should have controlled for them. Silver's polite post on the matter concluded with a challenge:

If de Rugy follows my recommendations—excludes state capitals, accounts for a broader array of demographic variables, and evaluates unemployment rates at the district level—and still finds a statistically significant positive relationship between the distribution of stimulus funds and whether the district elected a Democrat to Congress, I will buy her and three of her colleagues lunch anywhere in Washington or New York City.

The sign alone created dozens of jobs.

The multi-talented de Rugy responded with a post calling Silver a "respected blogger." Three-time OscarĀ® nominee Silver followed up with a post calling de Rugy "smart and capable." The chirping classes were less civil, but the disagreement between these two mathletes gets to some important points, including the disappointing shallowness of data from Treasury.

Now de Rugy has published a new version of the study, making the adjustments Silver suggested. Her findings:

On average, Democratic districts received 1.53 times the amount of awards that Republicans were granted. The average number of awards per Republican district is 112, while the average number of awards per Democratic district is 171…

Democratic districts also received 2.65 times the amount of stimulus dollars that Republican districts received ($122 billion vs. $46 billion). Republican districts also received smaller awards on average… In total, Democratic districts received 73 percent of the total stimulus funds awarded and Republican districts received 27 percent of the total amount awarded…

Regression analysis (ordinary least squares) was used to explore the predictive power of the various indicators described in the section above. The political variables considered here included the district representative's political party, tenure in office, leadership position, membership on the appropriations committee, and voting in the most recent presidential elections, as well as the inclusion of the state's capital within that district. The analysis finds that a district's representation by a Republican decreases the stimulus funds awarded to it by 27.9 percent. This result underscores the findings from the previous Stimulus Facts report.

This effect is statistically significant at the p < .015 level (see table 1). The regression analysis does not seek to explain (nor does it explain) precisely how funds were allocated (adjusted R2 = .400). That would require a more complete dataset than has been used for these results or is available through Recovery.gov."

Silver had not responded—an understandable move when faced with the prospect of eating lunch in the presence of four libertarians. But his critique underscores the importance of getting more complete data on where each dollar of stimulus originated and where it finally ended up. And also how much of the dollar was left when it reached its destination. Noting that state capital districts go on to disburse some portion of the funds they receive is important, but not dispositive. It's a law of economics, or should be, that a suitcase full of money gets emptier every time it has to make a stop.