February 2009

As reported here Sunday, Colorado Sen. Mark Udall and U.S. Rep. Doug Lamborn have both been linked to the latest pork-for-pay scandal in Washington, appearing on a list of members who received campaign contributions from the powerhouse lobbying shop PMA Group, which shut down recently after being raided by the feds, and also backed earmarks for PMA clients.

Neither man ranks high on the list, which could serve as a Who’s Who of Congress’s most notorious pork-barrel practitioners: Udall is credited with securing $2 million in earmarks for PMA clients and receiving $6,533 in campaign contributions from PMA since 2001, while Lamborn is listed as having secured $1 million in earmarks for PMA clients and having received $1,000 in donations. But their presence there, and connection to the next big lobbying scandal in Washington, demonstrates how pervasive, and bipartisan, the earmarking racket has become. How their involvement might be received by fiscally-conservative constituents back home is unknown, since the Colorado media has yet to report on the matter.

It’s not the first time the two have been linked to pork-for-pay, however. The Seattle Times, in some first-rate investigative reporting done last October, also attempted to connect the dots between earmarks members inserted into a Fiscal 2009 defense spending bill and donations they received from earmark beneficiaries. A searchable database compiled as part of the investigation includes this page for Lamborn and this page for Udall, which seem to bolster the case for pork-for-pay quid pro quos.

Lamborn is credited by the Times with getting $7 million in earmarks inserted into the bill, while receiving nearly $40,000 ($39,797) in campaign donations from beneficiaries. Udall is shown as backing $11.4 million in earmarks, while receiving more than $100,000 ($101,522) in donations from beneficiaries. The Times scrubbed only one major spending bill, but similar links between earmarks and campaign donations could undoubtedly be found in every major spending bill passed by Congress.

The Jack Abramoff scandal helped shine needed light on this scandal, and Democrats won a majority promising to clean up an ethics mess they laid at the feet of Republicans. The PMA scandal threatens to do to Democrats what the Abramoff affair did to Republicans.

The House is expected to decide today “whether to start an ethics investigation into the relationship between earmarks and campaign contributions,” reports CQ Politics: “The vote could put majority Democrats and at least a few Republicans in an uncomfortable spot. They will have to choose between authorizing the House ethics committee to investigate the most delicate of political relationships or publicly voting against such a probe.”

The member pushing the ethics inquiry is Arizona Rep. Jeff Flake, who’s been fighting an often lonely, largely futile battle to curtail congressional earmarking. Flake had this to say on the subject in a New York Times op-ed appearing yesterday.

“But nothing has illustrated the insidious nature of Congressional pay-to-play better than the PMA Group, a powerhouse lobbying firm that imploded this month after word got out that it was being investigated over campaign contribution indiscretions. Over the past few days we’ve learned that PMA’s clients received nearly $300 million worth of earmarks in one defense appropriations bill. In what is best described as circular fund-raising, millions of those dollars made a return trip to Capitol Hill in the form of contributions to members of Congress.

The 2009 defense appropriations bill, approved last September, contained more than 1,000 House earmarks, dozens of which were for PMA clients. There was no full committee “markup” where such links could be examined, nor were challenges to the earmarks allowed on the House floor. Further, unless it’s been hurriedly scrubbed by an alert staff member, the omnibus appropriations bill scheduled for debate this week includes many earmarks for PMA clients.

Congress has managed to avoid connecting the pay-to-play dots by looking the other way. This has been easy to do. House rules require members submitting earmark requests to certify that they have no “financial interest” in doing so. But the House ethics manual states: “A contribution to a member’s principal campaign committee or leadership PAC generally would not constitute the type of ‘financial interest’ referred to in the rule.”

Now, thanks to Rod Blagojevich and the PMA Group, perhaps the days of whistling past the Justice Department are behind us. If we think we can rely on Ethics Committee guidelines written by our colleagues to shield us from corruption investigations, we are drinking our own bathwater. We have little choice but to decouple earmarks from campaign contributions. This can be most easily done by clarifying that campaign contributions do in fact constitute “financial interest.” I’ve introduced a House resolution to do just that.”

No matter whether the ethics investigation moves forward, or how it is resolved, constituents and voters will most likely serve as the final arbiters of whether this sort of activity is something they'll tolerate from their representatives in Washington. But that requires that they demand a full explanation from Lamborn, Udall and any others in the Colorado delegation that are linked to pork for pay.

Now we know why the Economic Development Corp. went all way to Austin, Texas, to find a consultant to do its $160,000 economic strategic plan, dubbed "Operation 6035."

Judging from the article in today's Gazette, the consultant, Angelos Angelou, will simply be affirming what EDC wants to hear on one critical subject: incentives. The EDC for years has been looking for ways to get into the taxpayers' pockets, in order to fund various economic development ventures. That's why it's one of the prime movers behind ballot measure 1A, which would extend a soon-to-expire mill levy tax out to 2025 and earmark that funding stream -- $3.2 million per year, or roughly $50 million over the life of the effort -- into as yet unspecified "job creation" activities.

My guest column in today's Gazette lays out some of the pitfalls to this approach, but judging from Angelou's comments in the Rich Laden piece -- and from the aggressively pro-incentives approach his home town of Austin has taken -- it's all but certain that the $160,000 report will sing the praises of honey pot economics, handing EDC the ammunition it needs to keep pushing the city in this direction.

Here are the relevant excerpts:

Q: Are there common themes that employers look for these days in a community (such as quality of life, quality of work force, financial incentives), or are all employers different in what they're seeking?

A: Quality of existing work force and ability to attract new employees are the most important factors. Additionally, public sector support (business-friendly environment), cost of doing business (taxes, utilities, etc.) and incentives availability are critical site-selection factors.

Q: Colorado Springs and the state offer few financial incentives to employers. Without prejudging the results of your study, how important are financial incentives in today's economic development environment?

A: Incentives are increasingly becoming a critical site-selection factor for many companies. Targeted companies are being offered upfront cash grants while maintaining public confidence through various claw-back provisions (retracting incentives if jobs aren't produced). Incentives by themselves are rarely the deciding factor for site selection but one important variable among many other variables.

Even Mike Boyd of the Colorado Springs Business Journal has poked a bit of fun at EDC for commissioning such a costly study to tell us what we already pretty much know. And it seems a high price to pay, too, if EDC is simply looking for third party support for an economic development tactic -- incentives -- we already know it believes in.

But maybe we'll all be surprised to read, when the Angelou report is released, that playing "the incentives game" just isn't the best option in a city where average residents are too protective of their tax dollars, and too discriminating about how they are used, and too wary of using government for innapropriate ends, to go this route.

But somehow I doubt it.

I thought this morning's debate on KVOR was constructive and to the point. Thanks to Jeff Crank for hosting it. We spoke about possibly doing an encore in March, when people are really starting to tune-in to the city ballot. That would be helpful, since the topic is a tough one to cover in 40 minutes.

Doug Stimple is a good guy, and I admire him as a businessman and "jobs creator" of the old school, who didn't look to government help or taxpayer money to make him a success. That's the way it should continue to be done in Colorado Springs, in my opinion. We just differ on the wisdom and workability of 1A.

I gave Doug a list of questions -- posted below and in the "Special Reports" section of the homepage -- I thought backers of the measure need to answer if they want the public to have a better understanding of how their proposal would work, in all its devilish details, since it all seems pretty vague at the moment. He said they seemed reasonable and he would try to get answers. I told him that I would post whatever responses I get.

Jobs How?

Solving the mystery of how 1A will work

The devil is always in the details, as we know, but we have precious few details on precisely how ballot measure 1A would work if it wins approval. Listed below are some of the questions backers of the plan must answer before Election Day, if they expect to win support for a proposal that’s very expensive, yet troublingly vague and open-ended.

I’ll publish the answers on this website as I receive them, and keep you informed if they aren’t answered. And I reserve the right to ask follow-ups along the way.

And if you have questions about 1A that I haven’t asked, send them to me at Seanpaige@msn.com and I’ll happily add them to the list.

Here they are, in no particular order:

1.) What criteria will be used for vetting proposals and recipients?

Is it in writing somewhere?

If not, why not?

2.) What guidelines are there for determining appropriate versus inappropriate uses for these funds?

3.) Who will be charged with writing and approving such criteria?

Will the public have a voice in the process?

How will that work?

4.) Will an independent annual report be published, indicating progress and measurable outcomes?

Who will research, write, publish and pay for that report?

How much staff work will be required?

Will city staff be involved?

5.) Who will handle negotiations between the city and potential recipients?

6.) Will those deliberations be subject to open meeting and open records laws?

7.) How do backers of the proposal define “primary job” -- and are those the only jobs eligible for assistance? Are all jobs created equal, in the eyes of the committee?

8.) Will fund recipients be subject to audit?

Who will pay for, and conduct, auditing and oversight?

9.) Will committee decisions be subject to legal or administrative challenge, by disappointed companies that didn’t get the help they sought?

How will that work?

10.) Who will research and vet the proposals and prospects?

Will this be done independently, or will city staff be involved?

11.) What kind of staff or consulting support will the committee need?

Who will pay for that?

12.) What recourse do taxpayers have if their money is squandered or misspent, of if fraud occurs?

13.) Will there be written, legally-enforceable agreements between the city and the recipient.

What is the legal basis for such agreements?

Could this lead to litigation?

Who will handle and fund any legal work involved?

14.) What if a recipient violates the conditions of that agreement?

Who will investigate and adjudicate such matters?

Who will enforce any sanctions that are brought?

Can the city be sued in such cases?

15.) Has the city researched the legal or liability risks involved?

If not, why not?

If so, what were its findings?

16.) What influence, if any, will citizens have in advance of an expenditure being approved? Will there be a hearing and public comments taken before City Council can act on a proposal?

How will this fit in with regular City Council business?

17.) Could this money be used to pay for City Council or advisory committee members to go on “business development” trips, to conventions or on “fact finding” missions?

If not, why not?

Where is that written?

18.) Can the city be challenged in court if it fails to live up to the terms of agreement? Who will pay to for dealing with administrative or legal appeals?

19.) Are there plans to get any return on investment, or repayment, aside from a promise to create jobs?

If not, why not?

20.) Will the program end when the economic downturn ends?

If not, why not?

What criteria will we use determine this?

I'll be on the Jeff Crank Radio Show tomorrow morning at 8:00 a.m, debating ballot measure 1-A -- the "Corporate Welfare for Colorado Springs Act" -- with Classic Homes CEO Doug Stimple. That's on KVOR, which is at 740 on your AM radio dial.

Tune in if you get the chance.

They don't call it "the show-me state" for nothing, I guess.

After years of wading deeper and deeper into the murky waters of taxpayer-funded "jobs creation" -- something the state of Colorado and city of Colorado Springs also seem enamored with -- some in the Missouri legislature have finally had enough, and are in open rebellion against Gov. Ray Nixon's proposal to get even further in over his head. Two news stories -- here and here -- will provide all the details, but a few excerpts capture the frustration of those who recognize the folly of giving away half a billion dollars annually in tax breaks to virtually any business that promises to hire someone.

"We have become drunk on tax credits," said one dissenter. "For years and years we've almost operated as if tax credits were money from God that were created in heaven and were bestowed and didn't come out of anybody else's pockets."

In response to one senator's claim that $100 million in new tax incentives would "create" 30,000 jobs, another senator offered to bet "my house against your house" that the jobs wouldn't materialize. The tax incentive supporter didn't take him up on it. "It's disingenuous to call this a jobs bill," he said. "This is a tax-credit bill." The lawmaker said that he and his fellow legislators have “lost our way," by letting "the Gucci suits and alligator shoes tell us what does and doesn't create jobs."

"The Gucci alligators to which he was referring, and referred to repeatedly in his remarks, were the lobbyists who prowl the halls of the Capitol," one newspaper columnist pointed out, trading jobs for tax breaks.

What's the relevance of this for the people of Colorado, and Colorado Springs? Well, it could be a warning of what's to come if we succumb to the siren song of government-centered jobs creation. We don't have to get in as deep as Missouri has before we recognize the self-defeating nature of this approach -- which takes money out of the economy with one hand in order to "stimulate" the economy with the other -- and step back while we still can.

The "Show Me State" is showing something to Colorado, if Colorado has eyes to see it.

From New York State comes this man-bites-dog story involving eminent domain.

Most cases of eminent domain abuse involve a city or town using its "takings" power to snatch a coveted piece of farmland, or a rundown home or business, and transfer it to a well-connected developer promising a big pay day for the city. But in this case we have a city confiscating the parcel in question from a developer in order to ensure it remains in the hands of farmers.

An injustice is done in either case, since eminent domain ought to be used in rare circumstances, for a narrowly-defined public good as traditionally understood -- which doesn't include fattening local tax rolls or, as in the case described below, satisfying the aesthetic demands of open space advocates. But it’s just interesting to see it used in such an unconventional manner -- which underscores the point that there's no longer any limits to how or when eminent domain can be used.

The AP reported:

“New York's top court says a Long Island town can use eminent domain to take farmland from a developer, finding the taking is constitutionally proper.

In a ruling Tuesday, the Court of Appeals says Brookhaven took Aspen Creek Estates Ltd.'s 39 acres under a "legislatively declared public policy in favor of farmland preservation." Voter-approved bond acts provided $130 million statewide to acquire ownership or development rights, including the 500-acre farmland tract that contained Aspen Creek's parcel.

The developer outbid the town and bought the parcel for $1.4 million in 2004. Town bids rose to $4 million in 2006, which Aspen Creek rejected. It called subsequent eminent domain proceedings "a flagrant land grab" to benefit the individual who will farm the property.”

A “flagrant land grab,” indeed – and no less flagrant simply because it pleases farmland preservationists.

Part of what President Barack Obama will be touting today, when he signs the stimulus bill in Denver, are all the “green energy jobs” that will be created, and the “new energy economy” that will materialize, when this blizzard of federal greenbacks hits the fan. Gov. Bill Ritter will be there, too, to make his own overblown claims about how the “new energy economy” is working in Colorado.

But take it all with a grain of salt.

We’re likely to hear, again, how Ritter’s support for higher renewable energy mandates and “investment” in alternative energy helped create more than 91,000 jobs in Colorado – a claim Ritter made last fall, citing a then-unpublished report by the American Solar Energy Society in Boulder. That this statistic was generated by an advocacy group, in a study underwritten by the state, might have raised red flags, though all except a few in the media reported it as fact. But now the complete report is available and the truth can be told.

The claim is a fabrication, which falls apart under closer scrutiny.

The 91,000 jobs Ritter takes credit for can only be concocted by defining the “new energy economy” so broadly that the term loses meaning, and by lumping renewable energy jobs in with “energy efficiency” jobs. The first group is more easily identified and quantified than the second, which ASES determines by casting its net widely, like a fisherman desperate for a big catch. Caught up in the net are any jobs even remotely linked to energy efficiency. It could be the gal who cuts the hair of the guy who drives the truck that delivers the energy-efficient refrigerator to the department store. Or maybe you work as a security guard at a recycling center – voilà! You’re part of Ritter’s “new energy economy.” Or perhaps you’re an accountant at a utility company that offers an energy efficiency program (as almost every utility does): That means you’re a part of the new energy economy too.

Maybe I should be counted as part of Ritter’s economic miracle, since I’m typing this on a PC with an energy-efficient screen saver.

Cast a wide net

The study exaggerates the importance of the NEE by inflating the numbers, counting not only the assembler of the energy efficient furnace, but the person who services it; not just the builder of the hybrid vehicle, but the hybrid vehicle salesman. Also lumped in are accountants, cashiers, “management analysts,” roofers, truck drivers, welders, janitors, security guards, and stock clerks.

Roughly 80,000 of the 91,000 jobs counted as part of the NEE in 2007 were of this kind -- though these jobs could just as easily be credited to market forces or consumer choice, since government action isn’t the only thing that encourages efficiency.

That left about 10,000 jobs directly related to renewable energy in 2007. But more than half those jobs – 5,100 – were at a federal government facility, the National Renewable Energy Lab, and pre-dated Ritter’s tenure. That means less than 5,000 private sector jobs could be directly linked to renewable energy in 2007 -- a paltry number, considering that 600,000 new jobs are created in the state each year.

Brad Collins, the executive director of the ASES, concedes that Ritter and his administration have no legitimate claim to having created these jobs when, in a Rocky Mountain News opinion piece published last week, he notes, almost in passing, that “these are not newly created jobs in 2007, but the total number of jobs at the end of 2007, including many jobs created in 2006 and earlier.”

Yet no such footnote came attached to Ritter’s boast of last fall, which was reported as fact by many media outlets and has yet to be corrected. Where standard political spin crosses over the line into dishonesty is hard to pinpoint with precision. But Gov. Ritter was certainly pushing the boundary when he made these claims.

As of two years ago -- the most recent year for which actual data exists -- Ritter’s “new energy economy” was insignificant, in terms of its economic importance and contribution to the state's overall energy portfolio. And while it’s undoubtedly more significant today – given the massive benefits the industry enjoys as a result of government mandates, taxpayer subsidies and political allies – it’s still far less consequential than the governor claims.

The reality behind the rhetoric

Here, in passages pulled directly from the report, is the reality behind the rhetoric:

From Pg. 110:

“... the (renewable energy) industry in the state is small and, except for the federal sector – primarily NREL -- does not currently play a major role in the state economy or job market. For example, in 2007:

* (Renewable energy) RE accounted for less than 0.6 percent of Colorado gross state product

* Excluding NREL, RE accounted for less than 0.4 percent of Colorado GSP.

* The total jobs created by RE accounted for only about 0.4 percent of total Colorado employment

* Excluding NREL, direct employment in the RE industry represents only about 0.2 percent of total state employment”

The report also throws cold water on the idea that the NEE is an equal opportunity jobs creator:

“. . . Despite various proposals that have been made in recent years to use RE as a job creation program for the disadvantaged, the chronically unemployed, or for other target populations, this is simply not feasible at present in Colorado.

Total employment in Colorado is over 2.6 million and unemployment totals over 100,000. The total number of jobs generated by RE (excluding NREL) is only about 4,600, and direct RE employment (excluding NREL) is only about 2,000. Excluding jobs that are not realistic targets for retraining the unemployed or those lacking adequate skills or training – such as jobs in R&D, hydropower, biomass power, DOE laboratories, financial institutions, etc. – leaves direct RE employment in the state at about 1,500 jobs. Even if RE jobs grew 10 percent annually, this would create only about 150 new jobs each year. And, if most of these were somehow allocated to the unemployed – which is not a realistic assumption, the impact on state unemployment would still be negligible.”

The report predicts the future job-creating prowess of the NEE under scenarios of increasingly-remote plausibility. The sunniest scenarios, not surprisingly, all depend on more mandates, more “investment” (read: subsidies) and more government interventions on behalf of the industry. And here’s where the report actually does enhance our understanding of the situation. Clearly, without leaning on a government crutch, and taxpayer support, the New Energy Economy would fold up like a Bedouin camp and vanish into the night.

My definition of a true economy is something that operates largely independent of government meddling and management, responding to private initiative, voluntary exchange, market forces, entrepreneurial creativity and consumer choice. The new energy economy flunks most if not all these tests, and more strongly resembles the “economies” socialists attempt to fashion through command and control methods. It’s a creature of government, which will continue to rely on government intervention, support and subsidies for decades to come, and may never stand on its own.

Thank goodness for skeptics

A few statehouse skeptics chided Ritter for using such a flimsy piece of research in such a self-serving way. State Sen. Scott Renfroe, a Greeley Republican, said he hasn’t seen many of these 91,000 jobs in Weld County, and wondered where they all are. "It doesn't pass the laugh test," said Assistant Republican Leader Greg Brophy, who supports the green energy industry but says he thinks “we ought to tell the truth about the size of it." Noting that the report was done with state support, Brophy joked: “I guess if you can't use tax dollars to effectively promote green energy, you always can use them to promote the promotion of it."

I don’t expect that Ritter will correct the record, or temper the hyperbole today, when he and President Obama sing the praises of the NEE at the stimulus bill signing ceremony. But a little more truth in advertising as we move forward would be a breath of fresh air.

Watching events unfold in a refreshingly detached fashion, from "across the pond," yesterday's Sunday Times had a story angle on Barack Obama's stimulus bill I haven't yet seen -- explaining that the massive infusion of money to the states will obliterate, and probably reverse, gains made in the area of welfare reform since the mid-1990s.

The story goes beyond the bill's possible implications for welfare reform, however, pointing out that, despite having successfully muscling the bill through Congress, Obama is making the sort of missteps a relative novice might be expected to, and that even backers of the president's plan seem to be harboring doubts about whether it's the right medicine for an ailing economy.

It's the sort of reporting one isn't yet getting from the American media, which still seems too bedazzled by Obama's star power.

Here are the highlights:

Obama warned over ‘welfare spendathon’

The new administration's economic stimulus plan may undo reforms that cut the dole queues, critics say

RONALD REAGAN started it, Bill Clinton finished it and last week Barack Obama was accused of engineering its destruction. One of the few undisputed triumphs of American government of the past 20 years – the sweeping welfare reform programme that sent millions of dole claimants back to work – has been plunged into jeopardy by billions of dollars in state handouts included in the president’s controversial economic stimulus package.

As Obama celebrated Valentine’s Day yesterday with a return to his Chicago home for a private weekend with family and friends, his success in piloting a $785 billion (£546 billion) stimulus package through Congress was being overshadowed by warnings that an unprecedented increase in welfare spending would undermine two decades of bipartisan attempts to reduce dependency on government handouts.

Robert Rector, a prominent welfare researcher who was one of the architects of Clinton's 1996 reform bill, warned last week that Obama’s stimulus plan was a “welfare spendathon” that would amount to the largest one-year increase in government handouts in American history.

Douglas Besharov, author of a big study on welfare reform, said the stimulus bill passed by Congress and the Senate in separate votes on Friday would “unravel” most of the 1996 reforms that led to a 65% reduction in welfare caseloads and prompted the British and several other governments to consider similar measures.

Though some researchers have questioned the true impact of Clinton’s “workfare” reforms, they were wildly popular with millions of US taxpayers tired of subsidising what many saw as a generation of slackers.

Despite dire warnings that reduced benefits for single mothers and deadlines on entitlement would create a social calamity – one liberal senator warned at the time that children would be “sleeping on grates” – the 1996 reforms cut welfare rolls from more than 5m families in 1995 to below 2m a decade later without a discernible increase in hardship . . .

. . . .Rector, a senior scholar at the conservative Heritage Foundation, argued that Obama’s spending proposals in effect encouraged individual states to add more families to their welfare rolls; the more Americans sign on to the dole, the more state budgets will benefit from US Treasury payouts. “They have completely overturned the fiscal and policy foundations of welfare reform,” Rector complained . . .

. . . While some scholars are beginning to suspect that Clinton’s welfare reforms were fatally flawed – or at least viable only during an economic boom – Republicans are not alone in fearing that Obama’s hastily concocted package is the first step towards the creation of a quasi-socialist welfare state.

Even Mickey Kaus, a prominent liberal blogger, has denounced what he describes as the “get more people on welfare” provisions of Obama’s bill. Writing at Slate, the political website, Kaus said: “Lack of jobs isn’t a reason to loosen work requirements . . . Have the Dems never heard of ‘workfare’?

“Give recipients useful community service work, and if they do the work, then they get the [welfare] cash.”

The paper notes that Obama's polling numbers remain strong, despite a series of gaffes, including those involving cabinet picks, which led the new president's chief of staff, Rahm Emanuel, to deny that it was “amateur hour” at the White House. But "the dangers are beginning to pile up for the novice president and his struggling economic crew," according to the Times, as the unprecedented scope of the "rescue" plan clashes with America's latent skepticism about big-government solutions, which tend to be wasteful and ineffective.

"In Wisconsin, the state that forged a pioneering path in welfare reforms in the 1990s, residents were astonished by a newspaper investigation that disclosed that a $340m (£236m) programme offering taxpayer-financed child care to low-income working parents was riddled with fraud and expensive loopholes.

In one case, a family of four sisters who had 17 children between them put all of them together, took it in turns to babysit them and over the past three years claimed $540,000 (£374,000) in perfectly legal state childcare subsidies.

Examples like that fuel American suspicion that so-called “big government” invariably turns out to be inefficient, expensive and easily exploitable. And there has been no bigger government action in the US than the stimulus package presented by Obama."

Average Americans seem genuinely conflicted over the stimulus package, torn between their fear that even worse might occur without dramatic government action (a feeling nurtured, ironically, by a president who only weeks ago was preaching the virtue of "hope" over "fear") and their recognition that a government "rescue" also carries huge risks, in terms of wasted money and expanded government power. But now we'll never know whether doing much less, in terms of government intervention, would have been better in the long run.

The dye is cast, as they say. And it's the color of red ink.

We've all heard city leaders bemoaning the budget situation, and saying how painful it is to trim "essential city services" during an economic downturn. But I won't believe the city is truly strapped, or that it has its budget priorities in order, until it eliminates FREX and stops subsidizing commuters who can afford to pay their own way.

FREX isn't on the chopping block, however, for two reasons.

The first is that members of City Council who backed the commuter bus service are loath to admit that they erred in embarking on this experiment, lured by easy federal "demonstration project" money that then ran out, leaving area taxpayers to foot the bill for a service the city shouldn't be providing. This is a textbook case of how federal funds are used to tempt local governments into embarking on activities they usually can't afford, and frequently shouldn't be doing, leaving local taxpayers holding the bag when the seed money goes away. It's one thing to argue that the city should have buses running along its main arteries, and quite another, it seems to me, to say that the city should be helping Colorado Springs professionals commute to Denver, or vice versa.

The second reason FREX won't be axed is that every government program (and handout) generates its own constituency -- in this case, professionals that enjoy a subsidized ride to work courtesy of other people -- which then becomes an effective lobby in favor of perpetuating the program or service, at the expense of those who can't lobby as effectively. The folks that ride FREX have become a special interest group, which is more vocal about keeping a pet service than the general taxpayers are about objecting to it. And that's why it's always difficult to root out government programs once they're established, at the local as well as federal level. It's better to understand from the start that nothing in the world is as permanent as a "temporary" government program, and to resist all entreaties to get new ones started.

So, this has become one litmus test -- call it the FREX test -- I'll use to judge whether the city is truly hurting. As long as it has enough money to fund FREX, it isn't really as broke as it says.

A Montana state legislator has a good idea we might think about trying here in Colorado: the creation of an independent commission to track and police the federal stimulus funds that could soon be flowing, Niagara-like, into the state. Washington can't really be trusted to do the monitoring, if experience is any guide, and states have an even greater stake than Washington does in ensuring that these funds are put to the best possible use. Questions will naturally arise about who would staff such a commission, and what authority it would have to resolve the problems it identifies. But it seems to me that the idea has merit, if such issues can be adequately resolved.

Here's an overview from The Helena Independent Record:

"Senate President Bob Story, R-Park City, pitched his bill Wednesday to create a commission that includes some private-sector members to oversee how millions of dollars of federal stimulus money will be spent by state government.

At a Republican leaders’ press conference, Story said Republicans believe the oversight commission is needed because Montana has never seen the level of federal spending anticipated from the stimulus package. It’s estimated that Montana will receive hundreds of millions of dollars, although details are still getting hashed out in Washington.

Story said Republicans hope Montana can put the money to good use, to help create jobs and jolt the economy, as intended.

“The other thing that we are concerned about is that the money is used wisely and efficiently,” Story said. “We believe because this is a unique circumstance, a unique opportunity for the state, that we should have a specific group of people in charge of oversight after the money is appropriated.”

The Montana commission’s proposed duties would include: "evaluating the coordination of projects, determining if the criteria developed for setting priorities are being followed, determining the adequacy of public notice, determining the transparency of bidding and contracting, determining the maintenance of integrity in the programs and determining to what extent duplication and waste are prevented."

We've all heard about how the new president is big on "transparency," and how he wants to ensure that the deluge of dollars that will soon start flowing, in an effort to stimulate the economy, is spent responsibly and wisely. But we also know that Washington's track record on ferreting-out and eliminating the waste and mismanagement of federal funds is pretty lousy, despite the watch-dogging work done by the Government Accountability Office, the inspector generals in various agencies and the private groups that monitor such things, such as Citizens Against Government Waste.

It couldn't hurt, therefore, to have an independent entity in Colorado (and in every state, for that matter) keeping a second set of eyes of where these funds are going and whether they're being put to efficient use. Even if such an entity lacks the teeth to redirect funds, or to cut them off, or to make criminal referrals in cases where fraud is detected, thorough periodic reports and a well-used bully pulpit could help it give taxpayers an extra measure of comfort that, while we all know much of this money will be squandered, there's a slim chance that this exercise in Keynesianism run amok might yet be more boon than boondoggle.

The New York Times attempted to coin a catchy new phrase recently, when, in a story about President Obama's seemingly laissez faire attitudes about states that regulate in excess of mandates Washington imposes, up popped the term "progressive federalism," which seems the very definition of an oxymoron. Here's the context in which it appeared:

"The Obama administration seems to be open to a movement known as “progressive federalism,” in which governors and activist state attorneys general have been trying to lead the way on environmental initiatives, consumer protection and other issues, several constitutional experts say.

A recent decision by President Obama that could open the way for California and other states to set their own limits on greenhouse gases from cars and trucks represents a shift in the delicate and often acrimonious relationship between the federal government and the states, legal experts say, possibly signaling a new view of federalism.

“I think it’s quite significant,” said Samuel Issacharoff, a professor of constitutional law at New York University law school. “It shows the Obama administration’s more benign view of government intervention,” Professor Issacharoff said, and “may indicate a spirit of cooperative federalism” in which Washington will look to the states for new ideas and even a measure of guidance.

Tom Miller, the attorney general of Iowa, who met with the transition team in December to discuss federalism and other issues, said he believed the Obama administration would “usher in a new era in federal-state relations.” Members of the new administration, Mr. Miller said, “are open to what we’re talking about, what we’re thinking.” They also appreciate, he said, the fact that state attorneys general often achieve a level of bipartisan cooperation when they band together to pursue lawsuits.

The general trend under previous administrations had favored federal pre-emption, the belief that the best law comes from Washington, a concept still favored by business leaders. William L. Kovacs, a vice president for environmental and regulatory issues at the United States Chamber of Commerce, said free-for-all federalism was bad for business and would lead to a “patchwork of laws impacting a troubled industry.” Detroit, Mr. Kovacs said, would have to produce different cars for different parts of the country, and the environmental protection agency would grow tremendously to meet the new regulatory burden.

Many liberal thinkers skeptical of states’ rights and state actions since the days of segregation have begun to see that the states, to use Justice Louis Brandeis’s words from the 1930s, can “serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”

The phrase "progressive federalism" seems designed to have conservatives and libertarians pulling their hair out, since it is the right, by and large, which has owned federalism (or should I call it paleo-federalism?) as an issue in modern times. Although federalism since the founding has served as an ideological ping-pong ball, it is the right that would like to restore a more equitable balance of power between the central government and the states, allowing the latter (in the famous image evoked by Justice Louis Brandeis) to serve as laboratories for civic experimentation, where "novel social and economic experiments" can be tried "without risk to the rest of the country.”

Far from putting the rest of the country at “risk,” such experimentation can fall to the country’s overall benefit, since states, free to be creative, may serve as the incubators for true innovation, as happened in the case of welfare reform in the 1990s.

Not only are states better equipped to tailor policies that meet their particular needs, but under this model, Americans can vote with their U-Hauls for the governing approaches that best conform with their beliefs and values. A bit of this goes on now, when, for instance, we read about fed-up people fleeing California for Colorado. But so great has the uniformity become, as Washington's hegemony had grown, that the latitude for real experimentation is gone and the choices open to Americans are becoming very limited.

The insidious thing about "progressive federalism" is that it is a one-way street, selectively employed in a manner designed to relentless increase, but never decrease, government power and control. Obama and other statists are more that happy to see command-and-control California set higher-than-federal auto emission standards, in a case of wag the dog regulating. But states that decide to go another way, and regulate below the federal standard -- who decide, for instance, to opt out of certain provisions of the Clean Air Act or Endangered Species Act -- are out of luck, and will find the federal hammer coming down on them.

The point is made explicit by William Marshall, a law professor at the University of North Carolina who was deputy White House counsel in the Clinton years, when he's quoted by The Times as saying that federal rules should serve "as a floor and not a ceiling,” meaning that states would be allowed to pile new regulations on, but never reduce or renounce them.

So much for experimentation. So much for choice. This "laboratory" is designed to produce only one outcome -- more regulation. "Progressive federalism" is another Orwellian attempt to rob words of their meaning -- and might more accurately be described as "faux federalism."

The new president has gotten a lot of love (some say "adoration") from a normally skeptical and cynical media, as more than a few press-watchers have noted, so I was pleasantly surprised to see the story below on the Associated Press news wire today. The story wouldn't be called anti-Obama, by any means, but it's refreshingly skeptical of some of his positions and statements, which gives one hope that the media honeymoon won't last forever.

Check it out:

Fact Check: Obama has it both ways on pork

At least Route 31 is a road to somewhere.

President Barack Obama had it both ways Monday when he promoted his stimulus plan in Indiana. He bragged about getting Congress to produce a package with no pork, yet boasted it will do good things for a Hoosier highway and a downtown overpass, just the kind of local projects lawmakers lard into big spending bills.

Obama's sales pitch on the enormous package he wants Congress to make law has sizzle as well as steak. He's projecting job creation numbers that may be impossible to verify and glossing over some ethical problems that bedeviled his team.

In recent years, the so-called Bridge to Nowhere in Alaska came to symbolize the worst excesses of congressional earmarks, a device that allows a member of Congress to add money for local projects in legislation, practically under the radar.

Nothing so bold, or specific, as that now-discarded bridge project is contained in the stimulus package. That's not to say the package steers clear of waste or parochial interests. Obama played to such interests Monday, speaking at one point as if he'd come to fill potholes.

A look at some of Obama's claims in Elkhart, Ind., in advance of a prime-time news conference called to make his case to the largest possible audience:

OBAMA: "I know that there are a lot of folks out there who've been saying, 'Oh, this is pork, and this is money that's going to be wasted,' and et cetera, et cetera. Understand, this bill does not have a single earmark in it, which is unprecedented for a bill of this size. ... There aren't individual pork projects that members of Congress are putting into this bill."

THE FACTS: There are no "earmarks," as they are usually defined, inserted by lawmakers in the bill. Still, some of the projects bear the prime characteristics of pork - tailored to benefit specific interests or to have thinly disguised links to local projects.

For example, the latest version contains $2 billion for a clean-coal power plant with specifications matching one in Mattoon, Ill., $10 million for urban canals, $2 billion for manufacturing advanced batteries for hybrid cars, and $255 million for a polar icebreaker and other "priority procurements" by the Coast Guard.

Obama told his Elkhart audience that Indiana will benefit from work on "roads like U.S. 31 here in Indiana that Hoosiers count on." He added: "And I know that a new overpass downtown would make a big difference for businesses and families right here in Elkhart."

U.S. 31 is a north-south highway serving South Bend, 15 miles from Elkhart in the northern part of the state.

OBAMA: "I've appointed hundreds of people, all of whom are outstanding Americans who are doing a great job. There are a couple who had problems before they came into my administration, in terms of their taxes. ... I made a mistake ... I don't want to send the signal that there are two sets of rules."

He added: "Everybody will acknowledge that we have set up the highest standard ever for lobbyists not working in the administration."

THE FACTS: Two of his appointees, former Senate Democratic leader Tom Daschle for secretary of health and human services and Nancy Killefer as his chief compliance officer, dropped out after reports they had not paid a portion of their taxes.

Obama previously acknowledged he "screwed up" in making it seem to Americans that there is one set of tax compliance rules for VIPs and another set for everyone else. Yet his choice for treasury secretary, Timothy Geithner, hung in and achieved the post despite having belatedly paid $34,000 to the IRS, an agency Geithner now oversees.

That could leave the perception that there is one set of rules for Geithner and another set for everyone else.

On lobbyists, Obama has in fact established tough new rules barring them from working for his administration. But the ban is not absolute.

William J. Lynn III, tapped to be the No. 2 official at the Defense Department, recently lobbied for military contractor Raytheon. William Corr, chosen as deputy secretary at Health and Human Services, has lobbied as an anti-tobacco advocate. And Geithner's choice for chief of staff, Mark Patterson, is an ex-lobbyist from Goldman Sachs.

OBAMA: "The plan that we've put forward will save or create 3 million to 4 million jobs over the next two years."

THE FACTS: Job creation projections are uncertain even in stable times, and some of the economists relied on by Obama in making his forecast acknowledge a great deal of uncertainty in their numbers.

Beyond that, it's unlikely the nation will ever know how many jobs are saved as a result of the stimulus. While it's clear when jobs are abolished, there's no economic gauge that tracks job preservation.

---

Associated Press writers Tom Raum and Jim Kuhnhenn contributed to this report.

The absence of teacher unions has long been one of the defining characteristics of charter schools.

It's what leaves the teachers free to teach, without constant reference to what's in "the contract." It's what leaves school administrators free to manage, without butting heads with obstructionists within. Absent is the adversarial relationship between "management" and "workers" that unions feed on. These schools put the interest of students first, and teachers second. It's one of the secrets of their success.

Yet of late I've seen a number of stories about teacher unions infiltrating charter schools, including, in just the last few days, this story in the New York Times, about the tensions caused by one attempted takeover in New York City, and this article in the Los Angeles Times, with an eerily similar story line.

The N.Y. Times:

"Perhaps the standoff should not be a surprise. Charter schools, which are publicly financed but operate independently, were founded in opposition to teachers’ unions; many of the movement’s supporters view union contracts as a fundamental flaw in public education that keeps ineffective teachers on the job. And KIPP, like many charters, has hired teachers without traditional training and requires long hours and weekend work, usually for extra pay.

Teachers’ unions initially ignored charter schools or viewed them as the enemy, but as the charters grew in size and influence, the unions’ feelings warmed somewhat. Green Dot, a Los Angeles-based charter network, has unions at each of its schools, including one that opened with the teachers’ union’s cooperation last fall in the Bronx.

In New York, 18 of the state’s 115 charter schools are unionized, including two in Brooklyn operated by the teachers’ union. What happens to the unionization effort at KIPP AMP is being closely watched nationally as a test of whether two powerful forces in education will cooperate, coexist or devolve into protracted battles."

Clearly, the unions, having failed to thwart the charter school movement, are adopting a new strategy, of trying to infiltrate the schools and destroy them from within, by turning them into conventional public schools, where unions, not administrators, call the shots. The unions portray these takeovers as signaling their willingness to be part of the solution, not the problem, and as proof they aren't the obstacles to innovation and excellence they obviously are. Thus the lead in the Times story (my italics added):

"With its stellar test scores and connection to a national network, the KIPP AMP charter school in Crown Heights, Brooklyn, presented a ripe opportunity for the city’s teachers’ union to prove that it, too, could embrace innovation that fuels rapid improvement for students."

But a more practical, bottom-line motivation lurks behind the takeovers. The wild popularity of charters has the tide turning decisively against unions. It represents a steady drain on union membership, union dues and union power -- which is all most unions care about. Unless they find a way to co-opt charters, not only will unions experience a continuing decline in membership and money, but America will before long have two public school systems existing side my side.

One system, free from union dominance, will be succeeding, while the other, anchored down by union dominance, will be failing. And that will be the most glaring evidence yet of the cancerous influence these organizations have had on American public education.

Dan Cole is certainly making excellent use of the space he's given each week on The Gazette's editorial page.

Today he takes tiger firmly by tail by asking whether it's appropriate that the head of the Colorado Springs Economic Development Corp., Mike Kazmierski, is such a consistent and vigorous advocate for bigger government and higher taxes, considering that a portion of his annual budget comes from public funds. I've often wondered about that myself; it seems like a conflict of interest to me.

It's a little odd, really: EDC exists to promote the business climate in Colorado Springs, yet it often promotes government expansion and higher taxes instead. The government and business sectors need not be adversaries, but they shouldn't be in bed together either, since this convergence of interests can put the taxpayers at risk. We see it at the federal level with bailouts and stimulus packages. Here at the local level, it's manifest in a proposal to use taxpayer dollars to promote business ventures and "job-creation."

Cole uses the term "reverse lobbying" to describe this situation, but why get clever -- it's lobbying, plain and simple, by an organization that receives public funds. Whether or not it's legal, it seems improper. And now is not a bad time to spotlight this, since EDC is bound to be deeply involved in the campaign to pass the city ballot measure. What safeguards exist to ensure that some of the fungible public dollars EDC receives won't be used to promote a ballot measure that, if approved, has the potential to pump even more money into EDC coffers, and to greatly enhance its influence? None that I am aware of.

Cole also catches Kazmierski in a glaring inconsistency, in that the EDC chief was not long ago promoting an increase in the county sales tax, arguing that "essential services" are suffering because local government is starving for more tax dollars, but now is backing a city ballot measure that would dedicate $3.2 million annually for nebulous and unspecified economic development purposes, while "essential services" are on the chopping block. That, too, seems like an excellent point.

But there's no need to repeat all Cole's points, when I can paste his entire piece below:

EDC engaged in reverse lobbying?

February 6, 2009 - 9:49AM

Whenever local government decides to propose a tax increase, Mike Kazmierski, president of the Colorado Springs Economic Development Corp., is sitting near the front of the room, promising to "educate the public" about the tax's innumerable virtues.

In fact, Kazmierski seems so intent on "educating the public" that he just might succeed in creating an entirely new profession: the lobbyist-in-reverse, employed by local government to influence the vote of the people.
It would be a smooth transition for Kazmierksi. After all, his economic policies take as their only consistent premise that, without larger government, our private sector won't prosper.

Furthermore, he doesn't seem too particular about what he's promoting, provided it's a tax increase.

Last fall, as chairman of the group pushing the goliath public safety tax, Kazmierski argued that the city's reputation for low levels of basic services discourages businesses from settling here. As he told the Denver Post, "We've come up with some things we find pretty scary."

Ironically, this alarmist rhetoric served only to reinforce our undeserved reputation, but that's beside the present point.

Three months after the public safety proposal failed at the polls, a property tax is about to expire. When the council gathered last week to discuss the issue, there was no doubt they would request a permanent extension. The only question was whether the $3 million per annum should flow into the general fund, bolstering the very services

Kazmierski had warned were so dangerously underfunded, or instead underwrite a governmental Economic Development Authority, with the vague mission of "attracting, retaining, and creating jobs," presumably through corporate handouts.

Evidently oblivious to his own arguments from last November, Kazmierski now maintained that creating an Economic Development Authority should be our top priority. Councilmember Darryl Glenn and Mayor Lionel Rivera held the line on basic services and public safety, but the rest of the council voted in favor of the corporate slush fund.

This erratic, haphazard economic strategy has wearied both sides of the political aisle.

In the words of Nathan Fisk, outgoing executive director of the El Paso County GOP, "Kazmierksi eagerly proposes tax increases, when he should be looking to free market principles and trying to eliminate onerous regulations and taxes."

Allison Hunter, outgoing president of the El Paso County Democrats Club, doesn't necessarily embrace Fisk's limited government philosophy, but she does believe that Kazmierski gives tax increases a bad name. "Kazmierski skips from tax to tax, from one priority to another, billing each as ‘extremely urgent' and ‘do-or-die.' He makes us progressives look ridiculous."

As someone more aligned with Fisk's view, I tend to think that Kazmierski's ability to make tax-hikers look ridiculous is actually one of his greatest virtues. The problem, from my perspective, is that his capriciousness infects certain members of the council, to the point where they vacillate as wildly and inexplicably as he does.

Margaret Radford, for example, initially recognized the absurdity of increasing corporate welfare at a time like this. Why throw money at corporate jobs, she reasoned, when shortfalls are already forcing the city to eliminate essential jobs here at home? After her courageous talking points, Radford voted for Kazmierski's slush fund anyway. The managing editor of the

Colorado Springs Independent mysteriously remarked that Radford was the only one who "got it," but he must have left the meeting before she switched positions, leaving Rivera and Glenn to stand alone. It was probably just this type of political contortionism that led the Colorado Springs Business Journal to describe most councilmembers' statements as "incomprehensible."

Infectious fiscal fecklessness aside, there's another significant problem with Kazmierski's organization. The EDC receives public funds. Before we think about approving a tax that could provide millions more for Kazmierski's projects of the day, the EDC needs to get out of the business of selling tax increases.

Last year, the EDC contributed $14,000 to Kazmierski's sales tax campaign. Money is fungible, so additional public infusions would allow the EDC to dedicate even more revenue to "educating the public." It's appalling to realize that a quasi-public institution is collecting public dollars and then spending money lobbying for higher taxes.
-
Cole, of Colorado Springs, is a writer, translator and political organizer. Readers can reach him at
dancoloradan@yahoo.com.

Not all the documents have been signed yet, but I have it on good authority that Amity Shlaes, author of "The Forgotten Man: A New History of the Great Depression," a brilliant reassessment of The Great Depression and Franklin Roosevelt's response to it, will be speaking in Colorado Springs on the evening of April, 28, as part of Limited Government Week 2009. Shlaes, formerly with the Wall Street Journal editorial page, punches and prods a left-wing sacred cow by demonstrating that FDR's New Deal, far from saving the country from economic calamity, actually deepened and prolonged the suffering -- a timely topic to revisit at a time when the nation seems poised to repeat those mistakes as part of what some are calling a "New New Deal."

Shlaes had an excellent piece in Sunday's Washington Post, in which she covers some of the points made in the book. I offer it up as an appetizer, though the main course -- nourishment for the body and the mind -- will be served up April 28 at the Cheyenne Mountain Conference Resort, as part of a multi-day Limited Government Week program.

More information will be forthcoming, as details are nailed down, but mark the days of April 27 - 30 on your calender now. I'm told it's going to be the best LGW yet.

Here's the piece by Miss Shlaes. Enjoy:

FDR Was a Great Leader, But His Economic Plan Isn't One to Follow

By Amity Shlaes
Sunday, February 1, 2009

One evening in the 1930s, a 13-year-old named William Troeller hanged himself from the transom of his bedroom in Greenpoint, Brooklyn.

William's father was laid up in Kings County Hospital awaiting surgery for an injury he'd suffered on the job at Brooklyn Edison. A federal jobs program was paying William's older brother Harold for temporary work. But the amount wasn't nearly enough to make ends meet. Gas and electricity to the family's apartment had been shut off for half a year. Harold told a New York Times reporter that both hunger and modesty had driven William to act. "He was reluctant about asking for food," read the headline in the paper.

The surprising part of this story is not that it happened; most Americans know that after the 1929 stock-market crash, hard times sometimes led to suicide. The surprising part is that William Troeller killed himself not in 1930, when Herbert Hoover was president, but in 1937, in Franklin D. Roosevelt's second term. The New Deal was almost five years old, but the economy was not back. In fact, the country seemed farther from recovery than before. A new sense of futility was overcoming Americans. The British magazine the Economist sneered that the United States "seemed to have forgotten, for the moment, how to grow."

The date matters, because our new president has made it clear that his model is Roosevelt. Barack Obama has spoken of creating 3 million jobs with his stimulus plan. As a new president in 1933, Roosevelt spoke of creating "one million jobs by October 1" through his spending packages. At about $850 billion, Obama's stimulus represents about 5.9 percent of gross domestic product. The spending programs of Roosevelt's National Recovery Administration amounted to almost precisely the same share. Then as now, the country was in what we might call an "illions" moment, when a nation contemplates federal spending of a magnitude previously unimaginable. The only difference is that today, we're discussing trillions instead of billions.

It's reasonable that a new executive in a downturn would want to evoke Roosevelt the leader. Like no other president, Roosevelt inspired those in despair. He kindled hope with his fireside chats on a then-young medium, radio. The new president gives radio talks, but they are also made available on this era's young medium, the Internet.

But Roosevelt the economist is unworthy of emulation. His first goal was to reduce unemployment. Of his own great stimulus package, the National Industrial Recovery Act, he said: "The law I have just signed was passed to put people back to work." Here, FDR failed abysmally. In the 1920s, unemployment had averaged below 5 percent. Blundering when they knew better, Herbert Hoover, his Treasury, the Federal Reserve and Congress drove that rate up to 25 percent. Roosevelt pulled unemployment down, but nowhere near enough to claim sustained recovery. From 1933 to 1940, FDR's first two terms, it averaged in the high teens. Even if you add in all the work relief jobs, as some economists do, Roosevelt-era unemployment averages well above 10 percent. That's a level Obama has referred to once or twice -- as a nightmare.

The second goal of the New Deal was to stimulate the private sector. Instead, it supplanted it. To justify their own work, New Dealers attacked not merely those guilty of white-collar crimes but the entire business community -- the "princes of property," FDR called them. Washington's policy evolved into a lethal combo of spending and retribution. Never did either U.S. investors or foreigners get a sense that the United States was now open for business. As a result, the Depression lasted half a decade longer than it had to, from 1929 to 1940 rather than, say, 1929 to 1936. The Dow Jones industrial average didn't return to its summer 1929 high until 1954. The monetary shock of the first years of the Depression was immense, but it was this duration that made the Depression Great.

This outcome is worth reviewing, component by component, for what it suggests about individual Obama administration projects. The first of these would be ambitious spending on infrastructure. Obama has said that he wants to "put people to work repairing crumbling roads, bridges and schools." In addition, he would like to modernize 75 percent of government buildings, as well as equip tens of thousands of schools with new technology.

Roosevelt, too, proceeded boldly on infrastructure. The budget of his Public Works Administration was so large that it shocked even the man who ran it, Interior Secretary Harold Ickes. Sounding a bit like Republicans today, Ickes said of his $3.3 billion allowance: "It helped me to estimate its size by figuring that if we had it all in currency and should load it into trucks, we could set out with it from Washington for the Pacific Coast, shovel off one million dollars at every milepost and still have enough left to build a fleet of battleships."

New Deal public-works spending did have a short-term effect, creating jobs and economic activity during Roosevelt's first term. Americans took heart at the sight of schools, swimming pools and auditoriums rising in nearly every county in the country. FDR so pumped up the federal government that 1936 was the first peacetime year when it spent more than states and towns. A master of timing, he even managed to get unemployment down to a low of 13.9 percent in November of that year, the month of the presidential election. The voters rewarded him by giving him 46 of 48 states.

But many of the jobs that the early New Deal produced were not merely temporary but also limited in economic value. It was in these years that the political term "boondoggle," to describe costly make-work, was coined. It came from "boondoggling," the word for leather craft projects subsidized by New Deal work-relief programs. As was the case for the Troeller brothers, work-relief earnings were usually not sufficient to offset other Depression losses.

After the 1936 election, Roosevelt found himself appalled at the budgetary deficit he had run up and turned frugal. Infrastructure spending slowed. Monetary authorities feared inflation and doubled reserve requirements at banks. The "Depression within the Depression" of the Troellers' time began. This cynical cycle -- spend on construction, hold election, tighten, confront new joblessness -- is familiar nowadays, especially in Latin America. But then, to Americans, it came as a bitter surprise.

Another similarity also stirs concern. Obama is focusing on our country's most promising innovation, one that is among the most likely to generate recovery jobs -- the Internet. He wants to use stimulus dollars to give poorer Americans access to that technology. Specifically, the president wants to achieve the goal of "expanding broadband across America." The listener gets the impression that Obama wouldn't mind if the federal government ran some of this business if such involvement is what it takes to get universal access. Equity first.

In Roosevelt's day, there was also an appealing new technology: electricity. Power was the industry that symbolized growth -- the Dow Jones utilities average was expected to lead the old industrial average into recovery. After all, access to electricity was so desirable that power companies' operating revenue rose even during the Depression. There were also private companies ready to supply power to the rural unwired. One was the Commonwealth and Southern Corp., fashioned by venture capitalists and industry leaders explicitly to raise the vast sums of capital necessary to light the South.

Here Roosevelt, too, combined a stimulus project with his goals for social equity. He created the Rural Electrification Administration to wire the countryside. He also created the Tennessee Valley Authority to provide hydropower. One can picture private and public working together, and that's what Commonwealth and Southern imagined, too, at first. At a tense meeting at Washington's Cosmos Club in 1933, the company's chief executive, Wendell Willkie, begged a TVA officer, David Lilienthal, to strengthen public-private cooperation. Instead, Lilienthal waged war on Willkie, using the TVA's tax-free status to compete for customers and fighting Commonwealth and Southern in the courts. In 1935, Roosevelt signed a utilities law that so restricted private capital raising that it was known as the "Death Sentence Act."

At the time, observers told themselves that the shift caused no economic loss. But the stock indexes told the real story. Instead of matching or outperforming the industrial average, the Dow Jones utilities average lagged behind. The great "stimulator," government, had emerged as an opponent. The effect, beyond the tragic unemployment, was to slow down the creation of new companies. Even the New Dealers despaired. "We have tried spending money," Treasury Secretary Henry Morgenthau said to the House Ways and Means Committee in the late 1930s. "We are spending more than we have ever spent before and it does not work. . . . I say, after eight years of this administration, we have just as much unemployment as when we started . . . and an enormous debt to boot."

What the New Deal record tells us is that it's worthwhile imagining an alternate Washington program. A program that's merely about budget balancing is wrong in an hour when banks are wildly deleveraging. But Obama could put market reform before spending. It's time to keep plans to strengthen the regulation of markets and widen regulators' mandate so that they monitor most of what's traded and derivatives don't slip through the cracks.

What about spending? The Depression tells us that public works are probably less effective than improving the environment for entrepreneurs and new companies. The president has already put forward a big tax cut for lower earners. He might offer a commensurate one for higher earners. He might expand the tax advantages he is currently offering to companies -- wider expensing of losses, for example -- and make them permanent. A discussion that permits the word "trillion" might also include the possibility of bringing down U.S. corporate taxes, taxes on interest, dividend and capital gains -- again, permanently. The cash that a relatively competitive United States draws from abroad will move the country forward faster than any stimulus.

So the Depression and the New Deal are both worth going back to, but for different reasons than many suspect. We may rely on the best of the New Deal, the matter-of-fact bravery our parents and grandparents showed then, to help us through today's unexpected challenges. But we don't have to repeat New Deal stimulus experiments, because we know that they didn't work.

Amity Shlaes, a senior fellow in economic history at the Council on Foreign Relations, is the author of "The Forgotten Man: A New History of the Great Depression."

Some of the topic tags we use on LLO's news aggregators may be obvious to most users -- like "Education" or Property Rights" or "Second Amendment" -- and some may be a bit more obscure: "Recreational Correctness," for instance. Perhaps it's time I explained that one's meaning, using an illustrative example.

Just as "political correctness" describes the effort to curtail public discourse by declaring certain ideas or expressions out of bounds or unacceptable, "recreational correctness" describes a growing movement to severely curtail public access to public lands, by declaring certain forms of outdoor enjoyment out of bounds and unacceptable. The continuing clash over snowmobiles in Yellowstone National Park is probably the most obvious example. Hard evidence is lacking that the snow machines do any real harm to the park or its wildlife, yet a persistent group of radicals won't rest until the machines are ousted. Motorized forms of recreating are most often the target of these public lands exclusionists, but more "light on the land" activities such as rock-climbing, mountain biking and even cross-country skiing have come in for occasional criticism, indicating that no one is safe once this elitist mindset gains a foothold. Late in his tenure, President George W. Bush took steps to encourage more mountain biker access to national parks, for instance. That this innocuous policy change would stir controversy indicates how ingrained recreational correctness has become in certain circles.

A letter appearing in today's Summit Daily News, written by a woman from Dillon, Colorado, perfectly captures the prevailing attitude of the recreational correctness crowd:

Moto-use on public lands unacceptable

While perusing the Opinion page, the header “Give off-road riders a chance” caught my eye. My gut response was, No, never! Even after reading a well-written, rational plea for consideration of responsible use of off-road motor vehicles, I still say never.

I believe in “live and let live” and respecting individual rights, but only when those rights don’t impinge on another’s. Smoking is the perfect example. While I empathize with all those smokers whose right to smoke has been greatly curtailed, we others have our own right not to be subjected to secondhand smoke and its negative effects.

I feel the same way about off-road vehicles. In particular, I live not too far from the referenced Tenderfoot Mountain and I, too, like to use this public land. Only my use is on foot, emitting no carbon monoxide or particulate or noise pollution. With minimal impact on the terrain, no impact on the environment, and any noxious odor I may emit comes only after a particularly hard workout.

To Ms. Jeche’s assertion that she is being “squeezed out of ‘our’ public lands,” I would suggest that the right to use public lands is predicated on use that doesn’t step on the rights of much of the public. And finally, it’s not her being squeezed out — it’s her off-road vehicle. In my view, even responsible use of ATVs, ORVs, OHVs — whatever acronym you give them — is unacceptable recreational use of public land.

Catherine Houdek
Dillon, CO Colorado,

A report in today's Wall Street Journal couldn't be more timely or relevant for readers in Colorado Springs, given the debate that's just beginning here about whether the city should begin earmarking tax dollars to fund as-yet-unspecified job "creation" activities. States, too, are under intense pressure to "play the game," as the story points out, by offering companies deep tax reductions or cash payments in exchange for the promise of jobs. And even though the story notes that such strategies are of questionable long-term value, politicians feel compelled to grasp at such straws, for fear they'll look like they're not doing enough to bolster the local or state economy.

Colorado also makes a cameo appearance, as one of the states that feels compelled to throw money at the problem even while general coffers are running empty and cuts to government services loom.

The story is relatively balanced, so both champions and critics of such approaches can point to passages that seem to bolster their case. I've italicized the sections that seem to support my position -- which is that this is a slippery slope, and an invitation to mischief, that Colorado Springs doesn't need to resort to if it would begin working systematically toward improving its overall business climate. That's less glamorous work, no doubt, but it's the best and surest way to ensure the long-term competitiveness of this city, in terms of growing or attracting jobs.

But the seduction of quick fixes and panaceas is strong for politicians, who want to seem like they are "doing something" even when what they're doing is the wrong thing. They are acting out of desperation, as the story makes clear. And desperate people frequently get stampeded in the wrong direction.

Desperation is a subtext of this story as well, about Texas cities that are jumping aboard the corporate welfare bandwagon, lured by the same arguments we're hearing from certain circles in Colorado Springs. But does that argue in favor of doing likewise? On the contrary, it may argue for choosing a different path, which doesn't drag taxpayers into risky "investments" and instead focuses on getting the other business climate fundamentals right.

And as the second story makes clear, such "incentive" deals can fall-through or backfire.

"In perhaps the most notable recent example, state and local officials showered Texas Instruments with a combination of tax breaks and incentives worth an estimated $300 million to build a massive computer-chip factory in Richardson.

The company promised to bring at least 1,000 jobs and move $2.5 billion worth of equipment to the factory. One study predicted the plant would spawn 75,000 new jobs in the area.

But the plant has remained empty since construction ended in 2006. Earlier this week, Texas Instruments announced large-scale job cuts."

Here's the Journal piece:

• FEBRUARY 2, 2009, 12:57 P.M. ET

More States Considering Tax Breaks to Woo Jobs

By STEPHANIE SIMON