Non-partisan analysis of recipients from the Obama administration’s first round of stimulus spending indicates that the President and the Democrats in Congress appear to favor a partisan form of trickle-down economics. It seems that 38% of the stimulus spending went to the wealthiest districts, most notably wealthy districts represented by Democrats.
The same analysis could find no correlation between stimulus spending and unemployment. There was no apparent targeting of areas hit hardest by the economic downturn.
The analysis, a working paper entitled “Stimulus Facts” published by the Mercatus Center at George Mason University, was prepared by senior research fellows Veronique De Rugy and Jerry Brito. The Mercatus Center is a think tank researching economic policy issues.
The study took districts reporting having received stimulus funds and broke them into Metropolitan Statistical Area (MSA) by zip code, then grouped them into quintiles by the median income of each MSA as reported by the Census Bureau. It was determined that districts within the highest-income MSA’s received 38.16% of the stimulus funds reported in the 4th quarter of 2009, or roughly $55 billion. Only about $2 billion, or 1.43%, went to districts in the lowest quintile. Considering all the stimulus money allocated, about $114 billion, or 78%, went to districts with above-average median incomes, whereas only about $32 billion, or 22%, went to districts with below-average median incomes.
The working paper also analyzed stimulus spending by political indicators, including which of the presidential candidates the district voted for in 2008, the party affiliation of the Congressperson representing the district, the Congressperson’s tenure in office, whether the Congressperson chaired a major committee, and whether the Congressperson sat on the Appropriations Committee. Of these, only one variable showed a significant effect on the distribution of stimulus dollars: districts represented by Democrats received 1.8 times as many dollars as districts represented by Republicans, on 1.6 times as many individual awards of funds. It didn’t matter who the district voted for for president, nor did it matter what committee the district’s representative sat on. Only party affiliation mattered. Predictably, Democrats received almost twice as much money.
Non-political variables considered by the researchers included unemployment levels, average income, and affiliation with the construction industry. Of these, the only variable that indicated a group that received disproportionate funds was income; the highest-income areas received by far the most funds. Democrats in Congress touted their focus specifically on the construction industry during the debates in Congress, but apparently did not direct funds disproportionately to areas hosting construction companies.
One more thing — more than half of the stimulus dollars went to governmental entities rather than private ones, according to the Washington Examiner’s article discussing the findings.
So, the stimulus money was taken by a Democratic Congress and sent to the richest districts represented by Democrats. So much for the myth that Democrats care about the poor, eh? This distribution is
far more uneven than as uneven as any spending by any free-market Republican could ever be. In fact, it appears that the primary criterion determining which district would receive stimulus funds was that district’s ability to supply contributions to the nearest Congressman — and most emphatically the nearest Democratic Congressman.
This illustrates the core fallacy of the liberal mindset. Their arguments always begin and end by identifying an inequality produced by free markets. They supply no argument or evidence whatsoever regarding what a government-run solution will produce instead. The entire argument consists solely of the existence of the inequality. It is a fact that government-run solutions invariably produce worse inequalities, but inequalities along partisan lines, favoring the wealthy friends of those who are handing out favors.
Leftists think — or want you to think — that self-interested systems will be replaced by systems run by the wholly Good and Righteous, meaning themselves. What occurs in reality is very different from what they imagine in their fantasies. Leftists hold a completely political view of man (or sometimes an economic, gender-centric, or race-centric view of man), and consequently seldom focus on reforming the weaknesses in their own character, except as they relate to politics (economics, gender, race, or what have you). They are thus at the mercy of their own foibles when they come to power, and behave abominably. Everybody suffers due to policies based on incorrect principles — except those closest to the power centers, who apportion wealth and protection to themselves and their friends. Welcome to the nest-feathering autocracy of the Left.
Remember this statistic the next time any leftist sneers about “trickle-down economics” from Republican policies. When given absolute power, leftists give far more to the wealthy than do conservatives. Only, they don’t do it thinking that it will actually help the economy; they do it thinking they’ll help their friends.
A caveat about the survey: for the analysis the researchers used data retrieved from Recovery.gov, the Obama administration’s site reporting the effects of stimulus spending. The numbers on Recovery.gov are self-reported by recipients. It is possible that there were reporting biases in the data; that is, it is possible that a greater number of Democratic recipients of stimulus funds reported their grants than did Republicans. It is also possible that wealthier districts reported more faithfully than did less wealthy districts. I saw no indication that the researchers assessed this possibility, and can offer only conjecture regarding the possible impact on the data. My gut tells me that correcting for reporting bias could affect the Democrat/Republican statistic a little, but would not change the statistic about the wealth of the districts receiving funds. But that’s just a guess. YMMV.
UPDATE 12/29: Another caveat about the data, this one pretty big. I noticed that in the table from the working paper that contains the primary statistic reported in this piece, namely the one claiming that 96.4% of the stimulus money went to districts in the top quintile of median incomes, that the percentages in the top and bottom quintiles total to 100%. That would mean there were no districts in the 2nd, 3rd, or 4th quintiles. This does not sound correct, so I’m trying to contact the authors. In the meantime, please consider that 96.4% figure suspect. I’ll give you the facts as soon as I’ve verified them. Thanks.
UPDATE 12/30: I contacted the researchers, who acknowledged that there was an error in the white paper at the place I noticed. They are adjusting their figures, and send me appropriate adjustments. I’ll note here that the original report claimed that 96.39% of stimulus funds went to the top quintile, when in actuality it was 38.16%. They also reported originally that 3.61% of stimulus funds went to the bottom quintile, when it was actually 1.43%. I have changed the numbers in the article proper, but not the analysis — I think the disparity between what was received by the districts in the top and bottom quintiles speaks for itself. Whatever Democrats said about trickle-down economics, what they have produced with their back-scratching corruptocracy is worse.