The 40-Year-Old Stimulus

05/23/2009 05:12 am ET | Updated May 25, 2011

Perhaps it is the near doubling of the unemployment rate since February of 2008 that has kept us from asking whether President Bush's 2008 economic stimulus package - $100 billion in tax rebates and $50 billion in handouts to business - was effective. It seems almost ridiculous, or at least unnecessary, to talk about "demonstrable" results (let alone successes) from that package when the economy has so visibly deteriorated since its passage.

In contrast, questions about transparency, accountability, and results have swirled around President Obama's stimulus package and have characterized much of the criticism (and some of the praise) the measure has received. If the legislation creates or saves 3 million jobs, will it have worked? If it only builds new highways without expanding transit capacity, will it have worked? If it does not regularize the use of health information technology will it have worked? If it does not keep the economy from sinking further into the gloomy abyss, will it have worked?

Such questions were posed at a field hearing of the House Oversight and Government Reform Committee that was held yesterday in Brooklyn. The main subject of the hearing was the role of state and local governments in implementing the American Recovery and Reinvestment Act (ARRA), but each witness really testified about the importance of communicating challenges, opportunities, and results between the federal government and states. The emphasis was on how to make the stimulus package work and on figuring out what "working" actually looks like.

David Robinson of Princeton's Center for Information Technology Policy talked about the opacity of spending funneled from the federal government through states and on to local governments:

Being able to say where the funds were initially sent is important, but incomplete: real transparency means knowing where the funds end up.

The head of New York's Economic Recovery and Reinvestment Cabinet Timothy Gilchrist (known as "Captain Asphalt") called on the federal government to take control of estimating how many jobs are created at the state level by ARRA.

The effort to report on jobs would benefit greatly from a common set of tools - developed by the Federal government, and made available to states, local governments any other direct ARRA-fund recipient.

Instead of each state developing its own criteria for estimating the number of jobs generated by ARRA - and manufacturing the type of patchwork system of standards that weakens the No Child Left Behind Act - the federal government should be responsible for a generic system of measurement.

Finally, community activist Colvin Grannum outlined the expected benefits of ARRA for Bedford Stuyvesant, one of the lowest income communities in New York City. But Grannum worried, quite compellingly, that the structural constraints of ARRA - the speed with which it must be carried out, its prevailing wage requirement - will "limit the number of local residents and minority-owned businesses engaged by the stimulus spending."

Of course, as the conventional wisdom goes, Obama has ushered in a new era of transparency and accountability which, like a breath of fresh air, has swept over the country and relieved it of the malignancies of the Bush years. But the change is really less about transparency and accountability and much more about policy itself. Whereas President Bush was content to "stimulate" (or bribe) the economy with rebate checks, President Obama invested money in programs that are designed to create demonstrable results in communities throughout the country, from Head Start to the Neighborhood Stabilization Program to transit infrastructure. Grannum, Gilchrist, and Robinson are debating the results they would like to see from ARRA, not just some increase in GDP or consumer spending.

Just after the Bush stimulus (negotiated, admittedly, with Speaker Pelosi) was passed last year, I wrote:

As an economic stimulus, ambitious, yet calculated, federal infrastructure projects stand starkly opposed to inducements to consumer spending. Such projects require foresight and forbearance on the part of politicians and constituents, alike. They demand consideration of long-term regional and national goals that range from transportation to sewage to drinking water. They compel consensus on issues as popularly amorphous as climate change and as strangely divisive as freight transport. Such projects at once transcend political opportunism and at the same time are subject to the worst vagaries of influence peddling. These projects ask the question: where should we be in forty years?

As we (rightly) criticize and rethink and reevaluate the transparency and accountability and results of the stimulus package, we should keep in mind that the real debate we are having is about where we want to be in forty years.