Remember the movie "Roxanne" with Steve Martin and Daryl Hannah. He plays a small town fire captain who puts his $.50 into the newspaper machine, looks at the headlines, screams, puts $.50 in again to put the paper back. That's how I felt this morning looking at an article on the front page of the Wall Street Journal. The headline was "Next Challenge- Spending All That Money."
Sage Electrochromics, Inc in Minnesota has been waiting over two years for its application to the Energy Department for a loan guarantee to be processed. Sage makes energy efficient windows and has applied for the loan which is what the Energy Department wanted them to do. The approval process has dragged on for over two years and now the Energy Department is supposed to step up to the plate and process some $40 billion more in "stimulus" spending fast enough to make a difference. The New Secretary of the Department has decreed that he wants to know want it will take to get the backlog cleared in four weeks. He's got to be kidding. The stifling bureaucracy will take four weeks to take a deep breath.
Sage Electronics waits as does Beacon Power in Albany, N.Y. They have been waiting 26 months for their loan and have filed 96 required documents including a study by a team of archaeologists that scoured the ground for the proposed plant looking for prehistoric remains. This ain't going to work.
That is why some, including me, have called for the bulk of any stimulus package to be in the form of across the board tax cuts. Lower the withholding right away and you don't need 26 months while the bureaucracy wastes money not reaching decisions. The American consumer would figure out in 26 minutes how best to allocate the tax relief. Small business need the same relief. It's fine with me if the "rich" are not included in the tax cut. Just cut out the government hierarchy at the same time.
The other less prominent headline in today's news is the move to take the Census Bureau away from the Commerce Department and put it under the White House control. My pal Art Cashin wrote the other day about the origin of the word "gerrymandering." The good Governor of Massachusetts, Elbridge Gerry, way back when was asked to figure how to draw up election districts. He did such a good job maneuvering lines to favor his party a new phrase was coined. To gerrymander is to "abuse your power to enhance election prospects of friends." Rahm Emanuel will play that game well and Republican Senator Judd Gregg correctly would not give such a blatant power grab political cover and removed himself from consideration for a wounded Commerce Department.
I thought this administration was going to be different.
The stock market, meanwhile, is stubbornly hanging in. We are getting used to bad news and that is the good news relative to the market.
- Stimulus: Where The Money's Going