Blame It On Congress!

Is blaming the weakness of the stimulus package on Congress the Obama Administration’s latest approach to damage control?

An Obama administration official told FOXNews.com that “it is not as simple as looking where the money goes. You could have someone who lives in Maryland and works in Virginia and they are benefited from money given to the Virginia firm even though they live in Maryland.” She also noted that it didn’t really matter who got the money because “giving out money is good for everyone. If you give the money to an old person, they will spend it and that will create more jobs.”

She also said that Congress was responsible for deciding where the money would go. “We didn’t write the bill. We let Congress write the bill,” she said.

That quote is taken from a genuinely interesting article by John Lott at FoxNews on how the stimulus money has been spent so far:

The stimulus bill “includes help for those hardest hit by our economic crisis,” President Obama promised when he signed the bill into law on Feb. 17. “As a whole, this plan will help poor and working Americans.”

But FOXNews.com has analyzed data tracking how the stimulus money is being given out across the 50 states and the District of Columbia, and it has found a perverse pattern: the states hardest hit by the recession received the least money. States with higher bankruptcy, foreclosure and unemployment rates got less money. And higher income states received more.

The article has a number of intriguing scatter charts showing how stimulus dollars relate to per capita income, bankruptcy rates, foreclosure rates, and unemployment rates. It should come as no surprise that there isn’t much of a relationship.

This is a point I’ve made repeatedly. The problems we’re having aren’t national problems; they’re local problems with national implications. That doesn’t mean that the federal government should just wash its hands of the problem. It means that resources need to go where they’re most needed.

Imagine if, in response to a hurricane or an earthquake, FEMA allocated aid to all 50 states rather than to those where the damage occurred. That’s about how the federal government is handling the economic downturn.

It seems to me that what is needed is something analogous to declaring a particular county a disaster area. Of course, that would make it a lot harder for committee chairmen to direct federal dollars to favorite projects or causes in their home districts. But it might enable us to deal with the problems we’ve got at hand in a more effective manner.

However, just as building homes in a flood plain is risky behavior when the river overflows its banks, the economic policies in some states leave them particularly vulnerable to economic downturns. Those need to be dealt with or even if the troubled states recover they’ll be in the same straits the next time things turn south.