Apparently the mainstream media hasn’t given up on the Obama administration’s story line that us dumb as dirt country folks just need to be made to ‘understand’ what a wonderful thing the that stimulus legislation was and how bad things would have been without it. The front page Patriot News print edition headline “Stimulus worked, say recipients” is part of the continuing education project.
Another article presenting another series of anecdotal accounts of government spending that had nothing to do with stimulating economic activity in the private sector; little more than a feeble attempt to smear more lipstick on Porkulus Pig. No amount of lipstick can alter one basic fact. It’s still a pig.
Stemming the rising tide of unemployment by increasing government spending to induce the private sector to create jobs was the advertised intended ‘result’ or ‘outcome’ of the Obama administration’s Keynesian economics ‘stimulus’ plan. It might have helped a little if the wise guys in the Obama administration and Congress had understood the difference between a program ‘output’ and an ‘outcome’ before they started dressing that pig up. Trying to convince us dumb old Country Class folks that pork is actually beef hasn’t been working out too well for them.
This latest article uses a number of quotes and stories about stimulus funding that went toward health care related projects such as the Hamilton Health Center. After President Obama let the cat out of the bag by admitting that there really weren’t any shovel ready public works projects the media had to come up with some different types “success” stories to enlighten us with. Perhaps the thinking at the Patriot News was that we might ‘understand’ unnecessary health care spending better than turtle tunnels or bridges to nowhere.
For the Hamilton Health Center, the stimulus delivered tangible success.
Stimulus worked, say recipients [[1]] Patriot News 12-26-10
For a mere $266 thousand in ‘stimulus’ funding a medical care system serving low-income residents in the Harrisburg, Pennsylvania area expanded a 40-hour a week operation to nearly 60 hours, hired two security guards (extra hours required that the mostly female staff work at night in a high crime area), hired an additional health care provider and added 7,000 new patients. This is all very nice but these “tangible” successes are actually just medical services program ‘activities’ and ‘outputs’ that have nothing to do with the ‘outcomes’ on which the Obama administration economic stimulus program was sold to the public. Had stimulus ‘outcomes’ of increased private sector economic activity and employment actually been achieved, Hamilton Health Center program ‘activity’ to add new low-income patients should have been unnecessary or have resulted in an ‘output’ figure of fewer than 7,000 new patients.
W.K. Kellogg Foundation Basic Program Logic Model [[2]]
In a government or non-profit program as shown in the basic program logic model there are (or should be):
- Resources/inputs – money, people, and things used to do things
- Activities – the things you plan to do by applying inputs
- Outputs – amount of product and/or service expected to be delivered by accomplishing activities
- Outcomes – how your program participants are expected to benefit if you achieve the target outputs when you accomplish planned activities
- Impact – Organization, community, or system changes are expected to occur if the outcomes are achieved (benefits to program participants)
What the CEO of Hamilton Health Center said about the ‘activity’ of hiring a couple of security guards may be true.
“That’s been a tremendous help and comfort for the staff that is here and has to go to their car at night,” Peterson said. [[3]]
However, it’s doubtful that increased comfort for the staff (no doubt difficult to measure accurately) would have been listed as a program activity/output or an outcome in whatever justification was submitted in the application for Obama administration stimulus funds. Note: Activities and outputs are not outcomes. [[4]]
The Patriot News article includes a few quotes about what Senator elect Pat Toomey has to say about the stimulus in a short section about critics “deriding” the stimulus. What Senator elect Toomey is quoted as saying is neither derisive nor inaccurate. In fact his comments are spot on. The money spent on stimulus was money of which the private sector was deprived. Money, if left in the private sector, which would have actually contributed to a desired increased employment outcome.
Comments from Joel Naroff (Naroff Economic Advisors) were included in the Patriot News article as “expert” opinion to support the story line that the Obama stimulus was a wonderful thing:
“I think its fair to say the stimulus money kept the Harrisburg region from really being in difficult shape,” Naroff said…
Naroff said the history books will bear out that the stimulus was a success. [[5]]
It’s fair to say that this deficit government spending of dollars represents taxes to be collected on wealth yet to be generated by the private sector that will have to be paid for in higher taxes and or inflation. Either one of which will further impede the ability of the private sector to generate the wealth of this nation necessary to create opportunity, jobs, and of course tax revenues to pay for government programs.
I think I’ll go with the expert economic opinion of the late great economist Milton Freidman (There ain’t no such thing as a free lunch) [[6]] and some old French guy from about 160 years ago, Frederic Bastiat (government spending does not result in an increase in jobs) [[7]]. As for what the history books will say about Porkulus, a good bet is history will include it with what UCLA economists Harold L. Cole and Lee E. Ohanian have shown to be the case with another big government program spending U.S. President (FDR’s policies – spending money we did not have in a big way on government programs – prolonged the Depression by 7 years) [[8]]. Let’s toss in a recent Harvard Business School finding (increased government spending has a detrimental affect on local economies by decreasing private sector investment and employment) [[9]] for good measure.
We don’t have to wait for history to be written to figure out that the Obama administration’s Porkulus is a pig. No amount of lipstick or cover-up is going to turn that pork into beef. There is a much larger issue facing We the People. Elected officials with a fundamental lack of understanding of or outright disregard for the difference between a program output and a program outcome will cause Porkulus history to be repeated early and often if not replaced by real folks with common sense.
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End Notes
[1] http://www.pennlive.com/midstate/index.ssf/2010/12/federal_stimulus_package_funde.html
Note: As is frequently the case the headline in the print edition article (Stimulus worked, say recipients) and the title of the article as it appears in the online archive (Federal stimulus package funded projects, services across central Pennsylvania) are not the same. Although it doesn’t change the weakness of the argument put forth in the article as a whole, the title of the online article is a statement of fact. Money was spent on projects in central Pennsylvania.
[2] W.K. Kellogg program logic model from the W.K. Kellogg Foundation Logic Model Development Guide (2004 edition)
[3] http://www.pennlive.com/midstate/index.ssf/2010/12/federal_stimulus_package_funde.html
[4] While often confused (by the author of the article in this case, not necessarily the CEO running the program described), the examples below of the difference between activities/outputs and outcomes as explained in W.K. Kellogg Foundation Logic Model Development Guide are very appropriate to the medical services program referenced.
Conducting an activity is not the same as achieving results from the accomplishment of that activity. For example, being seen by a doctor is different from reducing the number of uninsured emergency room visits. Tracking data like meetings held or patients enrolled does monitor your program’s implementation and performance, but those data are outputs (activity data), not outcomes (which refer to the results you expect to achieve in future years).
[5] http://www.pennlive.com/midstate/index.ssf/2010/12/federal_stimulus_package_funde.html
[6] http://www.youtube.com/watch?v=YmqoCHR14n8 Milton Friedman – The Free Lunch Myth
[7] Everything I need to know about economics – by some French guy 160 years ago – http://www.ourfounderscompass.com/archives/433
[8] http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx?R
[9] Do Powerful Politicians Cause Corporate Downsizing? http://www.people.hbs.edu/cmalloy/pdffiles/envaloy.pdf
