Off-The-Cuff

I hope you all have been surviving March Madness. At this writing, I’m pretty sure my college team, the Dayton Flyers, didn’t make the field of 68. If it will make you feel any better, my second favorite team is the Minnesota Golden Gophers and my second favorite arena, The Barn. Similar to college basketball and March Madness, the topic of my column this issue—federal stimulus spending—can bring out our most primal passions as sinful human beings. Here are mine. Buckle your seatbelts and away we go…

Often, I let certain news articles or opinions linger in a specially marked email file, hoping one day I will have a home for them in our Business Trends section or here in Off-The-Cuff. I can’t tell you how many shovel-ready articles over the years have been permanently dumped in Mac trash before finding a home for them. Probably hundreds. But sometimes two or three articles align to create one here.

For example, in July, I saved a WeeklyStandard.com article on President Obama’s then to-date stimulus results and in December an opinion piece from Minnesota Public Radio’s website. Then I remembered hearing certain words from interviewing our Business Person of the Year 2005. I now join all three…..

The Weekly Standard article analyzed the Obama Administration’s “Seventh Quarter Report” released in July, which had summed up the stimulus’ economic impact to that date. According to weeklystandard.com, the report “was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama and chronicles the alleged success of the ‘stimulus’ in adding or saving jobs.”

Given the authors’ tight relationship with President Obama—they probably play basketball together—this report should have put the President’s stimulus job creation efforts in the best possible light.

Except it didn’t. President Obama’s economists claimed the stimulus had created/saved only 2.4 million jobs with $666 billion in spending (to that date). I say only because this worked out to about one job created/saved for every $278,000 spent. Weekly Standard rightly was unimpressed with the results too and remarked that President Obama could have sent a $100,000 stimulus check to everyone “whose employment was allegedly made possible by the ‘stimulus,’ and taxpayers would have come out $427 billion ahead.”

I don’t know about you, but to me $666 billion seems a lot. Sometimes we limited human beings are incapable of comprehending such large numbers. For instance, by my reckoning, President Obama could have used that $666 billion to purchase about 20,812,500 Chevy Volts at $32,000 each, which meant in order to stimulate the economy he could have given away a free Chevy Volt to every man, woman, and child in Minnesota, North Dakota, South Dakota, Montana, Wyoming, Idaho, Iowa, Nebraska, and Wisconsin combined—and had another 190,000 Chevy Volts left over as back-up parts or to give away to constituents in Chicago. (For perspective, $666 billion also was enough to give each of 20,068,000 Americans under the age of five a free Chevy Volt so their moms and dads could drive them individually to daycare.) In all 2011, General Motors worldwide sold nine million vehicles, so producing and selling 20,812,500 Chevy Volts certainly had potential to shift our cottage cheese economy into Star Wars-like hyperdrive….

Unimpressed with one job created/saved for $278,000 spent, for further perspective, I telephoned Milt Toratti, our 2005 Business Person of the Year and former director of Riverbend Center for Entrepreneurial Facilitation. In short, he used to be Blue Earth County’s economic development arm. He said that from 1989-2005, while working for different economic development groups and helping 1,647 total clients, not once did he exceed $1,000 per job created in a year. Quite a bit better than one job created/saved for each $278,000 spent…..

After citing Weekly Standard and interviewing Toratti, I began feeling President Obama easily could have achieved better results…..

Then I pulled from my email file my last stiletto, a December Minnesota Public Radio opinion piece by Jennifer Vogel mentioning the Washington State Legislature’s scientific way of determining the most efficient means of delivering government programs. It’s called evidence-based policy making. The Washington Legislature employs a bipartisan group to conduct its research, called the Washington State Institute for Public Policy.

The Institute’s mission is “to carry out practical, non-partisan research—at legislative direction—on issues of importance to Washington State. The Institute conducts research using its own policy analysts and economists, specialists from universities, and consultants.” It painstakingly researches the efficacy of current and proposed programs in the areas of education, criminal justice, welfare, children and adult services, health, utilities, and general government.

Vogel said the Institute offers state legislators “hard, consistently derived numbers” enabling them to compare programs. For instance, if one program costing $10 million can document keeping 250 adults out of prison and another costing $20 million keeps out 250, the Legislature will go with the $10 million program.

The Institute’s director, Steve Aos, said to Vogel, “To derive valuations, we go through a formal process to dispassionately review the scientific evidence on what does or doesn’t work. We read every research study we can.” For example, one early Institute project evaluated juvenile crime programs. After evaluating cost versus benefits, the Institute gave a thumbs-up to a family therapy program and a lower rating to Scared Straight. Aos believed the cumulative effect of the Institute helping the State Legislature in crime program research alone had resulted in 1,100 fewer adults in prison over the years.

So to spend tax money wisely, bipartisan evidence-based policy making seems a no-brainer. If President Obama had used evidence-based policy making for his stimulus package, efficient people like Toratti could have created a much better outcome for him than just one job for $278,000 spent.

Though I must admit that having four free Chevy Volts—one each for me, my wife, and two children—would have been fun to zip around Vernon Center in. It also would have been neat watching 55,000 other Volts driving around Blue Earth County. However, I’m not quite sure how I would have been able to identify my Volt in a mall parking lot filled with hundreds of other Volts.

That’s it for now. Thanks again for reading southern Minnesota’s only locally owned business magazine—with a circulation of 8,400 reaching nine counties since 1994.