Government Spending

Partisanship Was a Feature Not a Bug of Stimulus

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Earlier this year, Reason columnist and Cruise guest, the Mercatus Center economist Veronique de Rugy, caused a stir by documenting that political affiliation was a factor in where stimulus dollars flowed like so much campaign whiskey. De Rugy was challenged by stat-nerd Nate Silver, who has so far welshed on a bet to buy her and her colleagues lunch.

De Rugy has always been careful to note that her data and regression analyses "couldn't tell how much politics mattered compared to other factors, just that it mattered." Now at NRO's The Corner, she reports on new research that explains the situation a bit more. Turns out that the stimulus was indeed partisan, though not in the way you might think. The Dems who wrote the legislation internalized their policy slants in the design of the bill, rather than trying to guide money to their folks after its passage.

Take it away, Jason Reifler of Loyola University of Chicago and Jeffrey Lazarus of Georgia State University:

Money from the recent economic stimulus package is disproportionately going to Democratic House districts, leading to a debate over the cause of this trend. Stimulus critics contend that President Obama and majority Democrats are maneuvering, post-passage, to steer stimulus funds to Democratic House districts; defenders claim that the money is being distributed fairly, according to the substantive criteria of the stimulus package. We contend that both sides of the debate miss an important component of the distribution of federal funds: congressional majority parties routinely shape legislation to distribute federal funds according to their own policy priorities, and to politically benefit their own members. The Democrats of the 111th Congress are no different. Thus while partisanship is influencing the distribution of stimulus funds, the key locus of this partisanship was in the writing of a bill which advances Democratic policy goals such as clean energy, health care, education, and research, not in any post-passage activity. We examine the amount of stimulus funding going to each district. Controlling for districts' substantive claims to stimulus funds according to the criteria identified by President Obama and in the bill, party is no longer a significant predictor of a district's level of funding.

Reifler and Lazarus' study is online here.

NEXT: Let Them Eat Frankenfish!

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    1. Well, he can’t really say “welched,” can he?

    2. You can’t be racist against white people.

  1. who has so far welshed on a bet to buy her and her colleagues lunch.

    Still a bit peeved about Matt * Welch * getting the top job, Nick?

  2. De Rugy has always bee careful

    I’m careful around bees, too. Suckers can sting you.

    1. Not if one remains calm.

  3. This is an indictment of the Machiavellian tendencies of the powers-that-be and not a complaint that certain districts didn’t get enough slop in the trough, right? RIGHT?

  4. which advances Democratic policy goals such as clean energy, health care, education, and research, mom, apple pie, pretty girl next door, unicorns, rainbows…

  5. “Controlling for districts’ substantive claims to stimulus funds according to the criteria identified by President Obama and in the bill, party is no longer a significant predictor of a district’s level of funding.”

    Yeah but weren’t the criteria basically pre-biased to select to advance stimulation in democratic districts?

    1. Oh man. I need to not post right after I wake up.

  6. Even if the idea of the government “stimulating the economy” wasn’t the ridiculous bullshit that it is, this “stimulus” plan would, at best, only accidently succeed in stimulating the economy. If it’s primary purpose wasn’t stimulating the economy, then it’s unlikely that it would do so.

    1. The stimulus was a giant Democratic premature ejaculation.

      They basically just splattered dollars on everything that had been “cut” (i.e., flat-funded) during the Bush years.

      Fucking losers.

  7. which advances Democratic policy goals such as crappy, government-run “clean” energy, crappy, government-run health care, crappy, government-run education, and crappy, government-run research

    Fixed.

  8. This is why it’s better when businesses and people keep their own future earnings and spend it themselves as they see fit–politicians spend it with political considerations… I thought this had been cleared up in 1776?

    INVINCIBLE HAN!

    1. Damn Chinese fifth column.

  9. Oh man, reading the “Silver didn’t pony up for their bet” article was great, as it featued Weigel pre-JouroList reveal.

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  12. Another telling thing about the stimulus is that it wasn’t even focused on the states with the highest unemployment. http://www.usatoday.com/money/…..4_ST_N.htm

  13. how were the tax cuts from the stimulus bill distributed?

  14. By the way, while we’re talking about politicians steering money to their political friends–anyone else notice the goings on at Government Motors over the past few days?

    First it comes out that GM shares will have to be priced at about $134 a share to get our money back (which just means there’s no way the Obama Administration will sell any more than a sliver of its stake)…

    “In order to recover all of the government’s investment, the Treasury would have to sell its 304 million shares at an average price of $133.78 a share, before any splits, according to Neil M. Barofsky, the special inspector general for the Troubled Assets Relief Program of the Treasury.”

    http://www.nytimes.com/2010/09/24/business/24auto.html

    That’s way higher than the stock was when they were selling SUVs hand over fist, say, circa 2000, by the way…

    And now it comes out that Government Motors is making campaign contributions again!

    http://online.wsj.com/article/…..05206.html

    I’m sure bailing out the UAW had nothing to do with the fact that the Democrats and the UAW are practically the same thing–no, that was just a coincidence, I’m sure.

    1. I know it’s hard to believe that in the United States of America, that a politicians could do something like steer money to their campaign contributors…

      No, actually, why is that so hard freakin’ hard for some people to believe?!

      It’s absurd that someone like De Rugy should have to spend her time making such obvious points.

      Politicians don’t use political calculations to spend stimulus? RLY?

      That’s the origin of the old saw, “An argument so stupid, only an intellectual could believe it”… How does anybody argue that politicians don’t take political realities into consideration when they spend stimulus–and keep a straight face?

      Has Nate Silver read a newspaper over the last two years?

      1. Gentlemen, I bring you Exhibit A. Take it away, Alan Vanneman!

  15. I absolutely loathe these kinds of punk weasels like Silver who think that they’re always the smartest guy in the room, and then don’t the balls to man up when they’re proven wrong on something.

  16. I’m not surprised that part of the goal of the stimulus was to stimulate the re-election of Democrats. Two things:

    1) Democrats tend to represent districts with large black and Hispanic populations, which tend to be poorer;

    2) Republicans united to destroy the stimulus package; if they had been willing to accept responsibility for the legislation, they would have gotten half a loaf, or maybe a third. Who can blame the Democrats for refusing to “play fair” when the Republicans wouldn’t? C’est le politics, yes?

    1. C’est le politics, yes?

      Franglish doesn’t put on a smart looking top hat on your rhetoric to cover up the stupidity, AV.

  17. 2) Republicans united to destroy the stimulus package; if they had been willing to accept responsibility for the legislation, they would have gotten half a loaf, or maybe a third. Who can blame the Democrats for refusing to “play fair” when the Republicans wouldn’t?

    “Responsibility” is when the would-be stimulus money stays in the hands of the people who earned it.

    “Playing fair” for me? Is when neither the Republicans nor the Democrats use my future paychecks to fund their political supporters.

  18. Which is also why any attempt to repeal these monstrosities will be met by the gnashing of teeth and paper mache protest warnings of starving children.

    Millions of people depend on government handouts, guaranteeing a huge turnout of pre-printed sign wielding “regular folks” to rail against the elimination of any of these programs.

    The sustainability of the financial system means nothing. These people cannot conceive of a collapse that could derail their cradle to grave plan.

  19. politicians openly campaign on their ability to bring home the goodies to their districts

    look at the number of government facilities named after the local congressman / senator

    it is not credible to argue that the party in power doles out funds equally to districts controlled by the other party

  20. Here’s a shot in the dark, maybe, just maybe , it shouldn’t be a politician’s job to rape one segment of the populace to win the affections of another. I know, crazy talk.

  21. Is this bad because it disproportionately “stimulates” Democrats, or is it good because it “stimulates” the US economy in a desirable direction?

    In other words, are they simply pandering to constituents, or is there a plausible claim that they are doing the right thing and it’s not their fault that Republicans hate the earth?

    The difference is whether they pushed these policies because they thought they were good policies, or because they knew that Democrats would leverage this money.

    1. It’s bad because it does neither.

      Stimulus is just a re-distribution of cash to the politically connected, thereby making it more difficult for the less or non-connected to compete in the marketplace.

      As such the marketplace suffers, which impacts the US economy.

      Unsustainable is unsustainable, regardless of the party attempting it.

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