States hardest hit get least amount of Porkulus money

Last week, the Obama administration attempted to spin the failure of Porkulus by claiming that they never meant their stimulus bill to actually stimulate the economy.  Republicans howled with laughter, but according to a new study by economist John Lott at Fox News, that may be more true than even the White House would like to admit.  Lott discovered that the money from Porkulus went not to the states that needed it the most, but rather to those that needed it least:

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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 transfers to the states having the least problems are large. Even after accounting for other factors, each $1,000 in a state’s per capita income means that the state got $21 more per capita in stimulus funds. With a spread of almost $38,000 in per-person income between the top and bottom states, this has a sizable impact. High-income states get considerably more stimulus money.

States with higher bankruptcy rates got a lot less, not more, money — roughly $86 less per person for each percentage point increase in the state’s bankruptcy rate. States with higher foreclosure rates were treated very similarly, losing $82 per person for each one percentage point more of the people suffering foreclosures.

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Again, just as with other questions from the lack of impact Porkulus has had on the economy, it goes back to its design.  Very little in this bill provided real, short-term stimulation, and even that was based less on regional need than on overall tax breaks for individuals and businesses.  Most of the money got spent in Year 2 and afterwards, and of that money spent in Year 1, most came in block grants to states.  States applied for the money based on their lists of “shovel-ready projects,” but the block grants have funded few of those.

The administration made its decisions on block grants based on its own calculus, which Lott reveals as rather inept.  If the plan was to buffer states from the effects of high foreclosures or bankruptcies, the administration failed utterly to target those issues.  However, Lott discovers that it’s not based on political support either:

In our results, Obama’s share of the vote accounted for only a small percentage of the variation in how the stimulus money is being allocated. A one percentage point increase in Obama’s vote share means an additional $13.52 in per capita spending, but even then the relationship rests on the large amount of money given to D.C.

Breaking down the data by type of spending shows that money for infrastructure was much more likely than social spending to go to high-income states with low bankruptcy and foreclosure rates. Federal spending on construction and repairs to federal buildings as well as repairs to highways and public transit projects drives much of this perverse relationship between economic distress and infrastructure stimulus spending.

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Basically, we’re talking about a pattern of pork distribution.  States with higher per capita income levels and better economies produce better contributors, which get pork-barrel projects assigned back home.  It underscores why we called this Porkulus — it’s not a stimulus package at all, but an omnibus pork-barrel bill sold as a stimulus by both Congress and the White House.  It’s economic snake oil, and the only people getting rich off of it are the snake-oil salesmen.

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