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A “Bungled” Stimulus

- December 2, 2011

Stimulus Spending Continues To Be Poorly Managed,  Improperly Documented, And Showered On Obama Cronies

TAXPAYER MONEY CONTINUES TO BE WASTED ON “BUNGLED” WEATHERIZATION PROGRAMS

A Kansas Weatherization Program Spent $500,000 On Advertising, But Resulted In Only 15 Loans. “A failed Kansas weatherization program created to oversee millions of dollars in loans for middle-class residents spent $500,000 for advertising during its first year. But the advertising campaign, which ended in 2010, generated only 15 loans.” (Karen Dillon, “Kansas Weatherization Program’s Big Fanfare Was Prelude To A Flop,” The Kansas City Star, 11/28/11)

  • “It Seems (The Program) Was Bungled From The First.” “Critics say the half-million dollars for marketing was a waste because the campaign was conducted and finished before potential borrowers had access to the zero-interest loans from utilities. ‘It seems (the program) was bungled from the first,’ said Scott Allegrucci, a Kansas environmentalist.” (Karen Dillon, “Kansas Weatherization Program’s Big Fanfare Was Prelude To A Flop,” The Kansas City Star, 11/28/11)

Ohio’s Weatherization Program Failed To Inspect Its Homes And Stop Shoddy Work. “Once praised as the ‘gold standard’ for moving quickly to weatherize thousands of homes with $267 million in federal stimulus money, Ohio fell short of minimal inspection requirements and did not stop shoddy work, a government watchdog said yesterday. State Inspector General Randall Meyer faulted Department of Development officials for emphasizing the quantity of projects over quality.” (David Eggert and Doug Caruso, “Ohio Failed To Monitor Money To Weatherize Homes,” The Columbus Dispatch, 11/30/11)

  • Ohio Failed To Inspect The Amount Of Weatherized Houses Required By The Grant. “One of the most-significant violations was the state’s failure to inspect at least 5 percent of weatherized housing units as required under terms of the federal grant.” (David Eggert and Doug Caruso, “Ohio Failed To Monitor Money To Weatherize Homes,” The Columbus Dispatch, 11/30/11)

The Cincinnati-Hamilton County Community Action Agency Wasted $640,000 On Weatherization. “The state of Ohio says a local social services agency wasted nearly $640,000 in its weatherization program. The Ohio Department of Development said that the Cincinnati-Hamilton County Community Action Agency failed to account for the money as part of the Home Weatherization Assistance Program, a program created as part of the federal stimulus program.” (“State Says Agency Wasted $637K In Weatherization Funds,” WLWT, 11/30/11)

  • “In One Case, The State Said The CAA Spent More Than $14,000 Weatherizing A Vacant Home That Remains Vacant Currently.” (“State Says Agency Wasted $637K In Weatherization Funds,” WLWT, 11/30/11)
     
  • The Weatherization Program Was “Grossly Mismanaged” And Has Met The Conditions For Termination. “The state said in its report that the weatherization program was ‘grossly mismanaged,’ and said the program has met the grounds for termination.” (“State Says Agency Wasted $637K In Weatherization Funds,”WLWT, 11/30/11)

NEW REPORTS SHOW THAT THE ENERGY DEPARTMENT STIMULUS PROGRAMS FAVORED “OBAMA CRONIES”

Awardees From One Stimulus Program Included “A Large Proportion” Of Obama Campaign Connections, Including “At Least 10 Members Of Obama’s Finance Committee And More Than A Dozen Of His Campaign Bundlers.” “But an examination of grants and guaranteed loans offered by just one stimulus program run by the Department of Energy, for alternative-energy projects, is stunning. The so-called 1705 Loan Guarantee Program and the 1603 Grant Program channeled billions of dollars to all sorts of energy companies.  … Nevertheless, a large proportion of the winners were companies with Obama-campaign connections. Indeed, at least 10 members of Obama’s finance committee and more than a dozen of his campaign bundlers were big winners in getting your money.” (Peter Schweizer, “Obama Campaign Backers And Bundlers Rewarded With Green Grants And Loans,” Newsweek, 11/12/11)

  • The Energy Department’s Inspector General Found That Contracts Were Steered To “Friend And Family.” “The Department of Energy’s inspector general, Gregory Friedman, who was not a political appointee, chastised the alternative-energy loan and grant programs for their absence of ‘sufficient transparency and accountability.’ He has testified that contracts have been steered to ‘friends and family.’” (Peter Schweizer, “Obama Campaign Backers And Bundlers Rewarded With Green Grants And Loans,” Newsweek, 11/12/11)

The Government Accountability Office Criticized The “Arbitrary” Way Energy Loans Were Doled Out And Found That Of The First 18 Loans “None Were Properly Documented.” “The Government Accountability Office has been highly critical of the way guaranteed loans and grants were doled out by the Department of Energy, complaining that the process appears ‘arbitrary’ and lacks transparency. In March 2011, for example, the GAO examined the first 18 loans that were approved and found that none were properly documented.” (Peter Schweizer, “Obama Campaign Backers And Bundlers Rewarded With Green Grants And Loans,” Newsweek, 11/12/11)

  • “But The Numbers Don’t Lie: The Recipients Of Loans And Grants Were, Overwhelmingly, Obama Cronies.” (Peter Schweizer, “Obama Campaign Backers And Bundlers Rewarded With Green Grants And Loans,” Newsweek, 11/12/11)

And Their Job Estimates Have Relied On “Fuzzy” And Exaggerated Math

33,000 Of The 60,000 Jobs Energy Secretary Chu Cites As Created By The Stimulus Came From A Single Program - Ford “Supposedly” Converting To “Green Technology.” “But if you dig deeper into the 60,000 number, you find that more than half of it comes from a single program — 33,000 jobs at Ford that were supposedly converted to green technology because of a $5.9 billion loan. The Energy Department translated those as ‘saved’ jobs, even though the number amounts to nearly half of Ford’s total workforce.” (Glenn Kessler, “Steven Chu’s Solyndra Testimony: Misleading Jobs Stats And Missing Context,” The Washington Post’s “The Fact Checker,” 11/18/11)

  • “It’s One Of The Oldest Tricks In The Washington Spin Book: Lump A Bunch Of Tiny Projects With One Big Project, And Then Claim All Of Them — 38 In This Case — Created A Bunch Of Jobs.” (Glenn Kessler, “Steven Chu’s Solyndra Testimony: Misleading Jobs Stats And Missing Context,” The Washington Post’s “The Fact Checker,” 11/18/11)

Ford Used “Fuzzy Math” To Arrive At Its 33,000 Job Estimate. “The Post article had quoted an economist as saying that the 33,000 job estimate for Ford appeared to be the result of ‘fuzzy math.’ Ford spokeswoman Meghan Keck was quoted as saying that the loan provided flexibility in manufacturing that was key to ‘helping retain’ the jobs. That’s pretty fuzzy language for ‘saved’ and in fact appears to relate more to job security than anything else.” (Glenn Kessler, “Steven Chu’s Solyndra Testimony: Misleading Jobs Stats And Missing Context,” The Washington Post’s “The Fact Checker,” 11/18/11)

  • The Loan Merely Converted Workers To Green Jobs Who Were Never Even In Consideration For Layoffs. “Indeed, the description of the purpose of the loan on the DOE Web site simply says this: ‘The project will convert nearly 33,000 employees to green manufacturing jobs.’ When the loan was announced in June of 2009, there was no suggestion that Ford was ever considering laying off these workers if it did not get the loan” (Glenn Kessler, “Steven Chu’s Solyndra Testimony: Misleading Jobs Stats And Missing Context,” The Washington Post’s “The Fact Checker,” 11/18/11)
  • “Since Ford Was Already Planning To Make Those Investments, No Matter How Large The Loan Was, Why Should Those Jobs Be Credited To This Program?” “Since Ford was already planning to make those investments, no matter how large the loan was, why should those jobs be credited to this program? Certainly one could make the case that the loan came at the height of the Great Recession, when credit markets were largely frozen, and so the loan helped Ford move ahead faster with its plans. But, even with that caveat, it seems odd to credit all of those jobs as benefiting from the loan.” (Glenn Kessler, “Steven Chu’s Solyndra Testimony: Misleading Jobs Stats And Missing Context,” The Washington Post’s “The Fact Checker,” 11/18/11)

NO WONDER A NEW CBO REPORT SAYS OBAMA’S STIMULUS WILL DO MORE HARM THAN GOOD IN THE LONG RUN

Since President Obama’s $825 Billion Stimulus Bill Passed, The Nation Has Lost 1.3 Million Jobs And The Unemployment Rate Has Increased From 8.2 Percent To 9.0 Percent. (Bureau Of Labor Statistics, Accessed 12/1/11)

CBO: The Debt Caused By The Stimulus Will Drag On Economic Growth After 2016. “In contrast to its positive near-term macroeconomic effects, ARRA will reduce output slightly in the long run, CBO estimates—by between zero and 0.2 percent after 2016. … ARRA’s long-run impact on the economy stems primarily from the resulting increase in government debt. To the extent that people hold their wealth in government securities rather than in a form that can be used to finance private investment, the increased debt tends to reduce the stock of productive private capital. In the long run, each dollar of additional debt crowds out about a third of a dollar’s worth of private domestic capital, CBO estimates.” (“Estimated Impact Of The American Recovery And Reinvestment Act On Employment And Economic Output From July 2011 Through September 2011,” Congressional Budget Office, November 2011)

  • “In The Future, Some Jobs That Would Have Been Created Otherwise Will Not Be. Of Course, Those Losses May Be Offset By All The Current Man-Hours Devoted To Stimulus Cheerleading.” “Finally, the CBO concedes that in the long run, the stimulus will be harmful because of ‘the resulting increase in government debt.’ In the future, some jobs that would have been created otherwise will not be. Of course, those losses may be offset by all the current man-hours devoted to stimulus cheerleading. It might not show up in tables from the Bureau of Labor Statistics, but the pro-stimulus snow job may be the biggest ARRA-related job of all.” (Editorial, “Stimulus: Correction,” Richmond Times Dispatch, 11/29/11)
  • “The Stimulus Did Less Good Than Earlier Estimates Suggested. There's A Big Shock.” “Just before the Thanksgiving holiday, the Congressional Budget Office released its latest estimates of the economic effect from the Obama stimulus package, and guess what: The stimulus did less good than earlier estimates suggested. There's a big shock.” (Editorial, “Stimulus: Correction,” Richmond Times Dispatch, 11/29/11)

“So How Many Jobs Has The Stimulus Actually Created? We Have No Idea. But It Did Cost $825 Billion.” “So how many jobs has the stimulus actually created? We have no idea. But it did cost $825 billion. And the CBO predicts — using models favorable to the stimulus — that its positive effects (whatever they actually are) are fading and the burden of its debt soon will begin dragging the economy down. So, happy holidays.” (Editorial, “Stimulus Check: How Many Jobs?” New Hampshire Union Leader, 11/28/11)

  • The Stimulus “Shuffled” Jobs Rather Than “Created” Them. “What's more, the CBO concedes that ‘the impact on employment suggested by [CBO] reports could be too great. Some people whose employment was attributed to ARRA might have worked on other activities in the absence of the law.’ In many cases, that is, the stimulus may not have ‘created’ jobs so much as shuffled them around.” (Editorial, “Stimulus: Correction,” Richmond Times Dispatch, 11/29/11)

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