Dont Let Shortterm Thinking Dribble Our Stimulus Away
Written by Michael Lewis on February 26, 2009
By Michael Lewis
We’re to know March 10 how much South Florida is due from the $787 billion Obama bonanza.
More important is how we’ll use our share to gain the most impact.
Local officials are rushing to claim much of Florida’s estimated $12 billion because, as Miami Commissioner Tomás Regalado put it, "there will be fights from 67 counties to get that stimulus money."
Gov. Charlie Crist seeks $8 billion to balance Florida’s budget. Miami and Miami-Dade County alone target 855 projects at more than $4.7 billion for stimulus aid.
But a local windfall is wishful thinking. Miami Mayor Manny Diaz, whose team had requested more than $3.2 billion, recently reportedly said he thinks the city will get about $30 million for infrastructure.
President Obama on Friday warned 80 mayors in Washington that he won’t tolerate wasting the local stimulus; he planned the same message this week for governors. He said federal watchdogs will oversee stimulus use.
But Mr. Obama left it to individual mayors and governors to define waste and determine what, on the flip side, could yield the biggest bang for the buck.
So what, realistically, should localities target from the stimulus? Ignore for now the amount and concentrate on spending principles to yield the highest impact.
The worst thing is to dribble out tiny drops everywhere. That won’t yield a big impact for anyone.
Unfortunately, Miami-Dade’s Metropolitan Planning Organization, which sets transportation priorities, took that bumpy road Friday by dividing an anticipated $260 million for infrastructure into slivers that go to every county, city, town and village as well as a vital truck highway running west from Miami International Airport. Big projects that can make a difference always trump handouts for minor patch-ups.
That same flaw mars Gov. Crist’s program to sprinkle bits of state government’s share everywhere rather than hit focal points that make a long-term difference.
Local governments should heed that mistake and reject pleas to cover all commission districts or ethnic groups, or to set targets for small businesses or hardship areas.
Next, maximize impact by ensuring that funds create work immediately but also build an engine to churn out added jobs over the medium and long terms.
Any spending at all could get money flowing now. But the aim should be to multiply impact so that a project spurs the economy time and again. To do that, spending should both enable future economic growth and spur that growth.
So to both shore up South Florida’s economy now and send it shooting ahead faster when global pressures ease, create jobs now, multiply their impact, and aim to spawn enablers and catalysts that expand production and sale of our goods and services beyond county lines.
By that yardstick, the worst gameplan is to hire workers until the money runs out and leaves nothing behind. We could pay 10,000 people $10 an hour to dig holes and another 10,000 $10 an hour to fill them up again. That would create 20,000 jobs at $1 million a week until funds ran dry. We’d be left with 20,000 well-callused workers and no jobs.
A slight improvement is to add infrastructure but create no permanent jobs or community growth. Building a stadium, as an example, might employ 2,000 people for almost three years. But once open, a ballpark would just shift jobs from Dolphin Stadium, adding no multipliers, enablers or catalysts.
Far better would be construction projects that produce a vital long-term economic impact, though with a time gap between.
Improving mass transit, for example, would create jobs today and multiply business and commerce somewhere down the road. Building technical education centers would also add construction jobs but the vital impact — graduating productive workers to spur bio-tech industries — wouldn’t be felt for years.
In that higher category also is dredging a 50-foot channel at the Port of Miami to allow massive new cargo carriers to trade here, bringing a new cash flow into Miami several years later.
At the absolute top of the list, however, target spending to not only put people to work today but multiply those dollars by spawning activities that flow money immediately into our community, not just shuffle it around.
Improving our Miami Beach Convention Center, for example, would quickly pull meetings, trade and visitors from the outside — and visitors on average spend more than $1,400 a day here.
Not just governments but also interest groups, lobbyists and constituencies are jockeying for stimulus aid. But spreading money everywhere triggers the waste that President Obama railed against. Local officials should spend not to benefit only special interests today but the whole area for both today and the long run.
The seaport and convention center, for example, spread jobs and economic impact countywide, as do transit and educational systems.
The need is big. So are stimulus dollars. Their use requires big thinking for big impact, not parochialism that dribbles away our best chance to build good jobs now and in the future.