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As we approach year’s end, we wanted to share some of our observations from the last year about the impact the stimulus has had, and the lessons future government leaders can take away from this experience. Despite polls that show that a remarkably small percent of people believe the stimulus created jobs, there’s ample evidence of significant positive benefits, as the non-partisan Congressional Budget Office has repeatedly reported. Even beyond that, our reporting leaves us with a strong sense that the Recovery Act has led to vastly improved intergovernmental relations and major strides in transparency. On the other hand, we’ve frequently been accused of being optimists, and we’ll have to wait and see how much of this good stuff sticks.
In any case, there are a bunch of lessons to be learned, many of which have strong applications to people working for government at state, local and federal levels.
Lesson #1 -- Watch out for predictions that can come back and bite you. A paper co-written by Christina Romer, the head of the President’s Council of Economic Advisors until September, boldly predicted that the stimulus would keep unemployment from rising above 8 percent. This optimistic projection was quickly proven false as the recession worsened. It gave opponents of the stimulus package an opportunity to label the whole thing a “failure,” which they did at every opportunity. (In the course of the last year, we sometimes wondered whether a memo had gone out to opponents of the Obama administration to use the word “failure” whenever the stimulus was mentioned.)
Lesson # 2 – If you’re doing lots of thing, don’t just measure one of them. The stimulus was designed to serve many functions. It bolstered state budgets during a time of unprecedented revenue decline. It protected the poor and unemployed from greater misery through extended unemployment benefits, food stamps and other protections to social programs. It invested in the future through programs that were geared to broadband, high-speed rail, electronic health records, research & development and energy. But the public face of the stimulus concentrated narrowly on job creation. Eileen McNulty, Deputy Accountability Officer in Pennsylvania, said it well when we talked to her for a post we wrote back in August. “When you have a program with five overarching goals, it may be a mistake to require reporting on just one. That causes people to focus on the one goal to the exclusion of the others.”
Lesson #3 – Don’t shortchange management. Little money was set aside to help the states deal with the enormous oversight and reporting responsibilities that went along with the stimulus. In fact, state auditors didn’t get any money at all. “That was unfair,” Recovery Board Chairman Earl Devaney told us about a month ago and we heard plenty from state recovery directors about the paucity of administrative funds. We wish program funders at both the state and federal level would get over the idea that money spent on management is fluff. Even a casual reading of the Government Accountability Offices extensive reports on the stimulus reveals that lack of capacity has been an ongoing problem.
Lesson #4 – Attention to accountability needs to be balanced with attention to results. We believe deeply in accountability, but we fear that one reason behind the public’s distrust of government stems from the government’s zealous audits and investigations of its own programs and its often anemic reporting on results. In the same vein, an emphasis on transparency can’t just focus on what’s spent, it needs to focus on what is accomplished with the spending. Evaluation of what works and what doesn’t needs to get its fair share of attention.