Stimulus Pie Chart

By Catherine Rampell

Earlier today, the House Committee on Appropriations released a run-down of what will most likely be included in the “American Recovery and Reinvestment Bill of 2009″ — a.k.a. the gigantic stimulus package everyone keeps hypothesizing about.

The summary’s introduction says the bill will contain “$275 billion in economic recovery tax cuts and $550 billion in thoughtful and carefully targeted priority investments with unprecedented accountability measures built in.” But those accountability measures seem to have a giant loophole; in the “executive summary” of spending measures that immediately follows this grandiose statement, the various spending programs total only $518.7 billion. So they’re, you know, just $31.3 billion short. (To be fair, there’s a much, much longer list that follows that I have not yet had a chance to tally up, but I will hunt for the missing $31.3 billion there.)

In any case, I took the liberty of plugging all those figures into Excel to give you a sense of how the package is distributed. The category names are all taken from the report, with the exception of “???,” which I used to refer to the $31.3 billion unaccounted for in the executive summary.

INSERT DESCRIPTIONSource: House Committee on Appropriations

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Lewis Louthean – Australia January 15, 2009 · 10:40 pm

The Laws and Ethics…. Who’s Kidding Who? (TOP READ)

By Paul Shearstone

Years ago I read an article by a renowned psychologist wherein he wrote his studies found one percent of all human beings would never lie, cheat or steal. One percent would always lie, cheat or steal and given the right set of circumstances, the rest of us would likely lie, cheat and/or steal.

I mention this to highlight the fact that, if we can buyoff on this one principle – sobering though it may be – we have then, a benchmark from which to begin to at least try to understand the denigration of ethics that lead to outcomes like Enron and WorldCom.

Most believe morality walks hand-in-hand with unquestioned ethics. A quick look-up in a dictionary for Morality reveals words like, ethical, good, right, honest, decent, proper, honorable, just, principled and so on. All good words, no doubt. Words too that describes what most of us – including Enron Exec’s – see in ourselves, Morally Upstanding.

Nevertheless, there is no shortage of those who climb high upon their perch in an attempt to [dare I say] distance themselves from the great unwashed by proclaiming their undaunted commitment to honesty and ethics all the while engaging in activities to the contrary.

Foyer walls of most companies utterly ooze words of benevolence and righteousness – there only for others to see, but in practice, never to be followed. To be fair, the great unwashed are not sacrosanct from unethical behaviors or from a reluctance to take ownership for actions deemed untoward. Even if it’s something as simple as misusing the Internet or pinching office supplies from the company stockroom.

The fact is the Enrons and Worldcoms have not cornered the market on unethical behavior. Like it or not, moral degradation is systemic in today’s society.

In an attempt to enlighten us on the realities of true ethical behavior, USA Supreme Court Justice Potter said, [Ethics] “…is knowing the difference between what you have a legal right to do, and, what is the right thing to do?”.

Omniscient words to say the least! Words that in theory makes a whole lot of sense. In practice, however, one may point out to his Honor, when he is seated on the Supreme Court bench and asked to adjudicate anything, his moral and ethical position, is and will always be, compromised by one factor – in the end, what is LEGAL… what is the LAW?

Climb any pedestal he wants, in practice, his dedication to ethics are only words, like so many words used to make up so many smarmy Corporate Mission Statements that run juxtaposed to routine.

The Judge in this case, should not be criticized for knowing the fundamentals of true morality / ethics or for advocating the benefits therein. Neither should he be allowed to stand apart from anyone when clearly, in reality, he too is handcuffed by the very principle that challenges the rest of us – the thing that governs the outcome of most every ethical business decision – IS IT LEGAL?

The decision to lay-off 1-100-1,000 or more employees; we can do it – but is it legal? The decision to withhold commissions, payables or taxes in order to weather corporate economically challenging times – Q: What are the legal ramifications?
The ethical dilemma regarding whether to cut back on contracted services to improve the bottom line and appease the shareholders – Ethics be damned – Q: What’s our legal position?

It’s not a pretty world and it serves no purpose in kidding ourselves by attempting to extirpate our own involvement by blaming the Business-Barons from the likes of WorldCom. Let’s agree, when faced with most ethical dilemmas, we all hide [if we can] behind the skirt of the lady who holds the scales of justice.

The question still remains, however, how do the Enrons and WorldComs get so out-of-hand? The answer is not all that mysterious, especially if you buy-off on what was written earlier – … given the right set of circumstances, nearly all of us [from time-to-time] will take the wrong path.

It’s shortsighted to believe high-level executives get out of bed each morning thinking about how they can swindle the world, take unfair advantage or act unethically. Just the opposite! That’s not to say, however, just like in Supreme Court Justice Potter’s case, there are circumstances beyond their control that may unequivocally govern decisions, which may challenge their innate moral commitment to ethics.

For example; who among us cannot think of a boss we once had [have] who said
to us something like, “I don’t want to hear how you’re NOT going to achieve what I asked and the company EXPECTS…. I only want to see RESULTS!”

In many cases like this and in practice, the decision we are left to make is, is our ethical position more important than keeping our job and putting food on the table for our family? It’s a tough world out there for those without a good job. So suck it up soldier! You’re only doing what you’ve been ordered to do! It’s not your decision! Somebody else will have to take responsibility for your unethical actions if the doo-doo hits the fan.

…. And we all then fall a little deeper onto the sword of ethics…Everyone’s for corporate and personal liability to include financial recompense and/or jail terms especially for those at the top entrusted by us to always do what is right. We must be careful tough. To level our sights only on CEOs or CFOs is to miss the real perpetrators by aiming too low.

Like us, CEOs have bosses too. They report the Board of Directors. Granted Boards have shareholders to whom they are ultimately accountable, but in practice, the buck stops at the Board level where ethical decisions – bad or good – are made.

In the book, Built to Last: Successful Habits of Visionary Companies, Jim Collins and Jerry Porras speak to this issue by highlighting the [Board’s], “explicit emphasis on Fair return rather than Maximum return”.

Again, I must point out, fine words we can all embrace because they altruistically revolve around the Golden Rule of fairness. In general, however, they are not always practiced. Sadly, we live more today, an aberration of author *Ayn Rand’s existential position – there is no room for altruism in business.

Understand a CEO’s ethical dilemma when challenged with a take-it-or-leave-it maximum return challenge. In the end, an executive’s lifespan is predicated on one thing: ‘carrying out’ or being ‘carried out’. My observation should in no way be construed as an endorsement for the illegalities engaged in by Enron / WorldCom or others still to be discovered.

The point is, what they are accused of didn’t just happen overnight. Given the right set of circumstances, the right amount of time, the right global competitive business climate, the right protection under the law, these large companies evolved – learned to become what they are today.

Does that make them any less culpable? No! But it should serve more as a lighthouse warning that, a) This problem is more far-reaching – insidious – than we might once imagined, and, b) It Must be corrected – Quickly!

On a positive note, there are and have been many reputable studies done on the positive impact of ethics in the workplace for example **Harvard Business School Professors John Kotter and James Heskett who studied the performance of 207 large firms over an 11-year period. In their findings they wrote:

Corporate culture can have a significant impact on a firm’s long-term economic performance. They found the firms with cultures that emphasized all the key managerial constituencies (customers, stockholders, and employees) and leadership from managers from all levels outperformed, by a large margin, firms that did not.

Over an 11-year period, the former increased revenues by an average of 682% versus 166% for the latter, expanded their work forces by 282% versus 36%, grew their stock prices by 901% versus 74% and improved their net incomes by 756% versus 1%.

The net-net of this demonstrates companies that paid attention equally to customers; stockholders and employees outperformed those that didn’t and over an 11-year period garnered a net growth income factor of 756%. Ethics Pays!

On the other hand, all the positive studies in the world will do little to stop the dismantling of morals and ethics as long as those who engage in unethical behavior are allowed to continue. It’s time Governments and law-enforcement agencies bring more pressure to bear on those who sit back comfortably at a distance [Corporate Boards] creating policies that stretch the boundaries of law and fan the flames of ethical undoing.

Stronger laws and penalties with teeth – financial and criminal – are needed to bring needed consequences to already financially comfortable Board Directors who, I think we’ll find out quite quickly, will be more willing to re-embrace the “Do Unto Others” principle that keep business strong and elevates the collective!

· * Ayn Rand: Author “Atlas Shrugged”.

· ** Jeffery L Seglin: Author “The Good the Bad and Your Business”.

Paul Shearstone aka The ‘Pragmatic Persuasionist’ is one of North America’s foremost experts on Sales and Persuasion. An International Keynote Speaker, Author, Writer, Motivation, Corporate Ethics, / Time & Stress Management Specialist,

Paul enlightens and challenges audiences as he informs, motivates and entertains. To comment on this article or to book the Pragmatic Persuasionist for your next successful event we invite you to contact:

Paul Shearstone directly @ 416-728-5556 or
//www.success150.com or paul@success150.com .

Sherry January 16, 2009 · 5:51 am

There could be no better use of bail out bucks than to invest in America becoming energy independent.The high cost of fuel this past year did serious damage to our economy and society. After a brief reprieve gas prices are inching back up again. Our nation should not allow other nations to have such power over us and our economy . We have so much available to us in the way of technology and free sources of energy. WE seriously need to get on with becoming an energy independent nation. We are spending billions upon billions in bail out dollars. Why not spend some of those billions in getting alternative energy projects set up. We could create clean cheap energy, millions of badly needed new green jobs and lessen our dependence on foreign oil all in one fell swoop. I just read an eye opening book by Jeff Wilson called The Manhattan Project of 2009. It would cost the equivalent of 60 cents per gallon to drive and charge an electric car.If all gasoline cars, trucks, and SUV’s instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. This past year the high cost of fuel so seriously damaged our economy and society that the ripple effects will be felt for years to come. //www.themanhattanprojectof2009.com

Tucker January 16, 2009 · 1:17 pm

That isn’t enough going to the states considering they typically have among the highest associated multiplier. Hopefully thats where the missing billions are going.

Richard January 16, 2009 · 1:31 pm

Interestingly, Ayn Rand’s view of ethics states that “the moral IS the practical”. Her principle is supported by fact that corporations who properly considered customers, stockholders, employees and managerial leadership, outperformed those who did not. That says something positive about free markets. The financial crisis was wrought in large part by the government agencies pressuring lenders to engage in extremely risky loans. Without such interference the lenders would have had to face the consequences and would not have done so, out of self-protection. Nor would the problem have become so large, because small market corrections would have ‘notified’ larger lending institutions that they were skating on thin ice.

Now we all pay for the non-value non-wealth, stored in those millions of bad decisions. The first ethical finger should be pointed at the one agency most responsible, the U.S financial administrators. The second should be pointed at those who blindly rode the artificial wave half from avarice and half out of the need to compete and reward stockholders.

How do we pay? Some pay in huge stock market losses. Everyone pays in the de-valuing of circulating money caused by handouts and bailouts by Paulson et al. who print money to do so. We all pay by the spending of tax monies as part of those bailouts, but also because of the interest on the debt those actions incurred. The government handling of both the mortgage industry before, and as a result of, the financial collapse makes Madoff’s Ponzi scheme seem like good business.

Wonks Anonymous January 16, 2009 · 2:47 pm

Richard. Ayn Rand’s assertions on the inherent relationship between morality and profit maximization depend on certain assumptions about market conditions that are not met in reality.

If consumers had access to perfect information about the past performance of long lasting firms, if these firms were small enough, relative to the size of the market, and if coercive influence over the rules of the marketplace could be ruled out; then doing right by customers would probably be the best possible profit strategy.

I am inclined to believe that these conditions do not hold and probably have not held since the 19th century – if they held then – but this is a matter for empirical evaluation.

If we examine the performance of the US economy during the gilded age – which I believe Richard will agree was a time of relatively high market freedom – we find widespread fraud and abuse of consumers, irrational bubbles and panics and, in many cases, reliance on organized violence to capture markets and supress competition – if you watched Deadwood you remember the Pinkertons.

Rand’s selfless entrepreneurs have the same connection to reality as the selfless commissars of socialist realism.

Please don’t tell me that market freedom was not perfect in the 19th century. Communism was not perfect under Stalin.

JackDoitCrawford January 17, 2009 · 9:28 am

Rand’s selfless entrepreneurs ??? Are you talking about the villains in her books?
The virtues of Ayn Rand’s philosophy of Objectivism are rationality, honesty, justice, productiveness, pride, integrity. This is not the code of ethics of criminals. Make a distinction between a thief who takes what he wants and a businessman who earns enough to buy what he wants.

is it legal January 17, 2009 · 10:44 am

Legality questions such as this are omnipresent. It would seem the populous should have clear and easy access to all applicable laws from they day they are born onwards. An interesting discussion site on legalities that can address questions such as is it legal to..? Is //www.isitlegalto.com

john January 19, 2009 · 5:31 am

comment about presentation…the chart would convey more information if presented as pareto…

Leon Freilich January 19, 2009 · 9:36 am

FORMULA

Trying to please everyone

Puts you high on the goodness scale,

Pleasing all the righteous flock

But guaranteeing that you’ll fail.

ILMOTUSA January 21, 2009 · 12:40 pm

Can someone explain to me how making it easier to stay on unemployment for a longer period of time, insuring unemployed people with healthcare, printing more food stamps, billions to the teachers union, research and making temporary jobs is going to stimulate an economy?

Bob January 26, 2009 · 10:27 am

@ILMOTUSA

Apparently you haven’t noticed that tens of thousands of otherwise productive workers have been laid off; the additional benefits are not intended to have a direct simulative impact, but rather are there to help people while looking for work. It’s hard to focus on finding a job when you’re struggling to get your kid to the doctor.

Billions to the teacher’s union? You clearly do not know any teachers nor have any children in the public education system (or can read well, as the line item is designated for local districts).

I know one excellent teacher in particular who is changing careers next year and thus will no longer benefit our society’s future because the pay is terrible and the support (financial and administrative) is nonexistent. I know nothing about you, but am certain that she contributes far more to the betterment of our country in one year than you could accomplish in a hundred lifetimes.

ILMOTUSA January 31, 2009 · 6:33 pm

Well I guess in some liberal, government union loving way that attempted to explain how any of this welfare money is going to stimulate the economy. You know it’s been a while since I made this post and it seems I am no longer the lone voice in this trillion dollar hand out to obama supporters debacle that looks like is doomed to failure thankfully. Also do not live in the dark about who ILMOTUSA is…visit me at //www.ilmotusa.com and know exactly who I am!

Colin February 3, 2009 · 8:25 pm

“it seems I am no longer the lone voice in this trillion dollar hand out to obama supporters debacle that looks like is doomed to failure thankfully”

Trillion dollar hand-out to Obama supporters? Are you mad? Are you so bitterly ground up in short-sighted partisan myopia that you do not see what is and has gone on here? Let me explain to the intellectually-challenged of the past eight years. OUR MONEY was taken and locked up in the upper confines of the finacial elite through hook and crook. Then those cretins of neo-Conservative orthodoxy waged a war all on credit whilst not only not asking for any sacrifice from the well-heeled but gave them money too! What a grand ol party it was, too. Now we are in deep trouble, you and I. Any money paid out to people who actually work with their hands to build the badly deteriorated infrastructure is good money that flows right back into the economy. We do not need ideological nitwits at the keyboard, we saw what they did at the helm.
Colin

Dave February 4, 2009 · 1:06 pm

Colin,

Interesting reply.

Those who where in the white house for the last eight years were not conservatives by any means.

Troubles that we are seeing today did not happen overnight, but have been brewing for a long time, some are traced back to the Clinton years.

The real issue is that it is still our money that is being thrown around. The bail out of the banks, and now this attempt to fund as many social programs as possible before the honeymoon is over. A lot of the items in the stimulus package are short term items and really have nothing to do with job growth in this country. The rebuilding the our infrastructureis a good ideal, but now the president is pulling the plug on using American made for those projects.

People in this country need to start taking personal responsibilities and stop relying on the government for everything in their lives.

A real plan would be to give everyone a tax holiday for a year. That would put real money back in to every ones pockets. Allow them to spend it as they see fit instead of allowing a bunch of people in DC who have never worked a day in their lives nor have a clue as to what it feels like unless they take the time to ask their drivers or servants

.

Eric Meyers February 4, 2009 · 3:17 pm

Yeah, I agree dave. Taxes are our money. If it goes to Washington before they “give” it back in “stimulus” checks, lots of hands touch it before we have it in ours again.

Colin February 4, 2009 · 6:41 pm

“People in this country need to start taking personal responsibilities and stop relying on the government for everything in their lives.”

Dave, I am self-employed and have yet to turn to the government. I know very few people who suckle at the government teat. But Exxon Mobil sure does. Mining companies sure do. Agribusiness does. Military contractors do.So do investment banks, heh? Yabetcha. See what I am getting at here? It is time for the government to give US back OUR money instead of feeding it to corporate behomeths. It is time for them to play by the rules and pay their damn taxes like we do. Of the Fortune 500 last year, fully half paid no corporate income taxes.
Colin

Eric Meyers February 4, 2009 · 11:55 pm

Colin,

I have to agree with you on this one. How they (big corporations) avoid paying the statutory rate is intriguing and I must educate myself on this conundrum. My guess is it will be labyrinthine in character. The basic presumption is the rich are fleecing the poor. I don’t know if it is that simple but it could be a valid analogy in general terms. What needs to be changed in the tax code and corporate protocol, in specific terms, to make it fairer? This is what I’m trying to figure out.
Simply enforcing what’s on the books, I presume, will be too difficult considering how the free-market in the global economy seems to work. Why isn’t this quandary more a part of the current debate of the stimulus bill?
Dave, you said Obama was “pulling the plug on American made” products in the infrastructure allocations. The protectionist bias there seems to piss off many of our trading partner nations. You make a good point about a lot of this being traced back to Clinton. I’m thinking about the trade agreements and also the CRA which contributed to the housing bubble.

Dave February 5, 2009 · 12:54 pm

Eric, Colin

A good thread we have going here.

I too am self employed.

From where I sit, It has taken a while for us to get to this point – did not happen over night. And where we are is based on bad policies that have been put in place in which no one comes back to revisit, To get out of this is not going to happen over night, but most of the population in this country is very short term thinkers, of the give it to me know crowd with out regard to the future.

There are others that have started to take stock in their lives and spending habits – shaking off the credit card monster so that in case something happens they will be ready.

But if you really take a look at the stimulus plan there really is very little in it to actually grow business in this country. Small business is where the growth is at but small business has no say in Washington – we can not afford the Lobbyists :)

To grow this country I see two areas – Education and tax cuts. There maybe others but with out good solid education hard to grow anything.

The other items are pet projects to continue the process of making more and more people depended on the government instead of them selves.

John February 6, 2009 · 3:32 pm

When have loan program that allows to purchase a house with only a 3% down payment (FHA) or to re-finance will lend you up 97.25 of the value of the property (FHA).
With mortgage payments equal 33-35% of their household income instead of 25% of their household income. These people are praying that there NO SURPRISES in LIFE because the are living on the edge.
FHA require a 10% downpayment when purchasing a house and when refinancing shoul only lend up 90& of the value of the property
Yes , buying a house is the American DREAM but the DREAM is going put you into foreclosure it is a NIGHTMARE.
Rule of thumb figure out what is the max. mortgage payment you can handle and reduce by 20%

Clifford Decker February 15, 2009 · 9:58 pm

Is there any way that this pie-chart can be suspended above the horizon so that the entire stimulus can be daily seen as a pie in the sky?

dave February 24, 2009 · 8:49 am

All have been living in the Divied States of America. There is no United States of America left, Eveyone needs to realize that . A person the steals a gallon of milk, a car, a jar full of donated money, or robs a bank and is caught is a theif and goes to jail until sentenceing date A person who steals 50 BILLION dollars is a theif. Gets a bracelet to lives in a penthouse that they own until they are sentenced. Welcome to the Divided States of America. Lesson #1 the more you are worth the more you can influence local,state and fed. goverment. So take as much as you can before they catch you that is the lesson. #2 you can become career criminal and get all the medical health care, food, tv, education needed.hell even become your own attorney there are endless possibilities for theives. But don`t worry no one will say anything in 5yrs. because they all have short term memory and won`t remember what you did. So make your choice carefully. There is no denote after the word “theif” to protect the wealthyor scamers Now for the stimulus plan isn`t it funny the when a couple of banks needed money they got it quickly. But people who are about to loose everything they worked for. They lost there jobs and have no money left in there savings. Now 5months have gone by and still no relief for those who really needed 3 months ago. Now they are in default on credit cards, auto loans and morgages at no fault of there own.(well maybe for some) HOW COME IT`S TAKING SO LONG? Now if people who are loosing everything are now getting low credit scores because of delinquet payments how can they a loan that the gov. gave to banks to give back out to the people. BUT WE THE PEOPLE CAN NOT GIVE THE BANK A LOW CREDIT SCORE AND HIGHER INTREST RATE LIKE(19%) TO REPAY THERE LOAN ALOT FASTER. Turn about is fair play if you(bank) got your money in 45days . Then loans should go out in 45days. You the banks took risky loans and fail Now they need to be removed from the business. If i went to the casino and lost $10k dollars it was a risky move and i deserve not to have the money. I can`t go to the gov. and get it back at a low rate. nor should the banks. They new that giving large loans outside of what people could afford was dangerous. Make all CEO,CFO, ECT. sell all assets and personal belongings and put the money back into there businesses they need to live like everyone else in the default world to understand what is happing. And if belonging and assets can not be sold then an assessment of belonging and assets collected for worth. Now give them a loan on the open market value. But only a 40% of total asset worth. and loans to be charged at 19% for the first 2 yrs and 24% there after until it is completly paid off. Now you will get there attention and they will not make stupid gambling mistake again. If my property was bought for $100,000.00 and 5yrs. goes by and now worth $400,000.00 i`m up $300,000.00 but still owe $75,000.00 on a loan and a bank sends me pre-qualified loan for $200,000.00 to do as i please that is extream risk on there part. they were gambling for my default to get the property in the long run and it back fired. so they need to take on the chin and move on. The amount is high but what were they making at the time is bounses ans salaries.

Anonymous May 2, 2009 · 12:46 pm

The extra 31.3 billion will probably go towards Obama’s next campaign.

Brad at UCI-Merage MBA School May 23, 2009 · 5:05 pm

And if the stimulus works, the rest of the $800 billion will provide indirect benefit to Obama’s next campaign, too . . .

What has concerned our recent coursework on the topic is the time lag required for much of the stimulus to go into effect (despite efforts to the contrary) and the potential negative impact of the long-term debt burden (and short-term crowd-out) on the U.S. economy. Part of the stimulus seems to be an attempt to fund some wish-list projects; meanwhile, it might mitigate the important but painful adjustment toward a healthier equilibrium of housing prices and input costs. Many sectors are already seeing upward pricing (or reflationary) pressure–mostly from abroad, but the effect is the same. It would be unfortunate if the economic stimulus, once it actually hits the economy, adds fuel to the inflationary fire.