• Marc Johnson

Where the Stimulus Dollars Flow


The Portland Oregonian editorialized recently and answered “yes.” The positive impacts of the stimulus are being felt, for example, at Portland State University where a serious backlog of maintenance is being tackled.

Dave Broder in The Washington Post weighs in that it is simply too early to tell for sure whether the first round of stimulus dollars are having the intended impact.

Elsewhere, Nevada’s embattled Governor Jim Gibbons (pictured above) – he’s in the middle of a messy divorce, staff defections and has approval ratings in the teens – picked a battle with the Silver State’s legislature over who is going to make stimulus spending decisions. The Las Vegas Sun said the battle has the makings of “a constitutional crisis.” Gibbons intends to hire a stimulus coordinator to oversee spending despite opposition for an interim legislative committee that told him not to make the hires.

USA Today had a nifty series of graphics last week showing, so the paper says, a very uneven picture across the country of how the stimulus dollars are rolling out in the states. California, where the economy is truly in a mess, leads the nation in the percentage (about 60%) of allocated stimulus dollars that have actually been received by the state. Idaho is a 29%, Montana at 20% and Washington and Oregon are at about 42%.

Alaska (are you surprised) leads the nation in total per capita stimulus spending at $1,094 for even citizen of the Last Frontier. Idaho is at $515 per person, Oregon at $543 and Montana at $621.

Meanwhile, a new report on “transparency” – how well the states are doing reporting and disclosing stimulus projects – was released by Good Jobs First. Of the Northwest states, Washington ranked best in this particular assessment. The Oregonian’s Harry Esteve reported on the survey. Idaho’s Governor Butch Otter highlighted some stimulus spending recently in eastern Idaho, making the point that the projects were needed and were not just a case of spending money for the sake of spending money.

This Has Happened Before

A bit of historical perspective may be instructive. The only other time in recent American history that compares to the current round of stimulus spending would be The Great Depression. The late, great Montana historian Mike Malone wrote of the situation in Idaho in 1933 in his fine book on the career of Idaho’s three-term, New Deal-era Governor C. Ben Ross. (Malone’s book is C. Ben Ross and The New Deal in Idaho.)

Ross was a fairly conservative Democrat and he initially supported “stimulus” spending from the Public Works Administration (PWA) and the Agriculture Department. Still, Ross became very frustrated with the bureaucratic delay of getting the “stimulus” money in circulation and the jobs on line.

The Idaho Governor complained about the bureaucratic delays to Agriculture Secretary Henry Wallace and to Interior Secretary Harold Ickes. Ickes – you might think of him as the Rahm Emmanuel of his day (son was Bill Clinton’s deputy chief of staff) – wasn’t going to sit by and allow a “western governor” to criticize the New Deal relief effort.

“I had a letter from a governor,” Ickes said in 1933 in a radio speech clearly referring to Idaho’s Ross, “raising hell about red tape and delay…there is a lot of political whizbanging and sharpshooting. There are a lot of persons trying to make a record for assiduity. They want to be in a position, in case the [relief] programs fails, to say ‘I told you so.'”

Assiduity, by the way, is defined as “persistent personal attention.” Ross became quite skeptical of the relief spending later in his term suggesting that administration of the federal dollars had been politicized.

Still, tough old Harold Ickes pointed out to the Idaho governor in 1933 that Idaho would get more relief dollars – the stimulus of The Great Depression – if Ross would only make certain Idaho had enough qualified engineers to manage all the construction projects that had been funded.

In the early 1930’s, spending to stimulate the economy was, as it is today, an “art” not a “science” and effectiveness depended on many factors, including the ability of an aggressive governor to make a state bureaucracy work efficiently, in order to maximize the stimulus impact.

In another few months, I’m betting, we will have a better take on which governors have not “cut the red tape lengthwise” and been able to maximize the use of stimulus dollars.

Nobel Prize winning economist Paul Krugman, the New York Times columnist, wrote recently that we “aren’t going to have a second Great Depression after all.” The recovery, Krugman wrote, will be slow and difficult, but “the economy has backed up several paces from the edge of the abyss.”

Is the stimulus working? Stay tuned.

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©2019 by Marc C Johnson