30 Jan Infrastructure stimulus packages: Best practices, Part I
Some state and local economic development commissions are asking what do we do with this money that is supposed to be distributed for jumpstarting the local economy? Others are just waiting to blow it on something without really considering how the money could do the most good for their communities. After all, why do something different than the status quo of the last two decades?
Unfortunately, I have also heard that some are waiting for stimulus money just to pay off bills that they already racked up.
So where is the promised stimulus and subsequent growth for regional sustainability? Are all the right people in charge of spending this cash infusion wisely? Or will it get wasted away on pet projects and more “bridges to nowhere?” I believe that accountability should be high on all money going out to all corporate and government agencies.
Show me the money
This is from a reader from Joplin, Missouri, the Show Me state:
The question our Missouri economic development community is struggling with is what can this state, or any state, do that makes sense to support tech and build for the future, if the Feds are not going to or are incapable of helping change the direction? I think a column on that issue and “best practices” that you can find would be very helpful and interesting.
I think this gentleman raises a good question because most state and local agencies know how to ask for more money, but do they have the right policies and procedures in place to make that money work the hardest in jumpstarting their local economies?
Based on what I see happening, it’s easier to find more on “Worst Practices” to shed light on than getting any example to follow for Best Practices. Having said that, we still need to address the people in Missouri’s question because they at least want to try to do something good with the money they get.
Maybe more of us should be following their example for our own states. “How do we spend this stimulus money wisely?” Something as simple and clear as this would resonate loudly over the constant political noise in Illinois.
There is a lot of criticism on the value of bailouts and their long-term effects. All of this is being discussed on the various news channels and some feel the bailouts will not provide a lasting positive effect.
If there would be some guidelines on spending this extra money correctly, what would they be? It is already looking like the bailout is starting to look like a pork sandwich.
Don’t be like Citibank and buy a $50 million executive jet
Lesson One: Best practices? We can see that Citibank/Citigroup does not have them so we cannot emulate their leadership as a model. Taking government money and blowing it on an executive luxury jet when the same executives drove the company to the ground should be considered as “Worst Practices.”
Maybe Citigroup should have been left to collapse as their executives showed poor leadership when given a second chance. How many mortgages would that $50 Million have taken care of? That expenditure would not have sparked anything for our economy either as the jet was built in France. Could they have at least bought a plane here?
Nice example of Citigroup, who got a bailout of $45 billion so far. Good thing they had second thoughts (after all the negative publicity in the last 48 hours) and just cancelled the plane. Financial responsibility? That’s an oxymoron at Citibank/Citigroup/Citibilk whatever.
As they say, that’s water under the bridge, but that’s a lot of water.
At the same time, it is interesting to see most cannot get any mortgage relief from the same banks which had their hands out asking for billions. There was a trader that placed full-page ads in the New York Times this week asking “Where did all the money go?”
Best practices make sense, but where were they before?
How many at these failing financial places got year-end bonuses? It’s reported that at Merrill Lynch bonuses went into the billions before Bank of America bought them out with some of their bailout money (BofA has received $45 billion so far.)
A bonus for running the enterprise aground? That’s like giving the Captain of the Exxon Valdez a big bonus after running the tanker aground. Now Thain, former CEO of Merrill Lynch, is under investigation by the New York Attorney General.
Where was the SEC with all these financial firms in the last couple of years? There are safeguards and strict compliance issues. Where were all the government agencies that review compliance issues?
How could Madoff get so far with his hedge fund? Best practices for reviewing investors’ and institutions’ investing practices in financial instruments did not seem to be practiced, let alone in place. This is a topic for an article in itself.
Infrastructure best practices
Now that we are at this point in the economy, “Best Practices” better be discussed and in place before any bailout money comes across to any municipality. I know some of you are saying “dream on” but someone has to point this out. The people in Missouri seemed to be concerned. Give credit to those that want to do right with the money and not just blow it.
Many people have become so cynical about everything. Some say that at least $1 billion was wasted in Louisiana and Mississippi after Katrina. How much is being wasted and will be wasted now?
Remember that best practices are a moving target. What was considered best practices last year could be totally obsolete this year. Keep a flexible approach that you can adapt to changes as you get further into this process.
Part II next week – The Details.
Carlini-ism: Best practices are a moving target and usually change with the weather.
Previous articles by James Carlini
- James Carlini: Stimulus package 2009: 21st Century infrastructure defined
- James Carlini: Financial uncertainty freezes holiday customers
- James Carlini: Auto industry bailout protects the mediocre
This article previously appeared in MidwestBusiness.com, and was reprinted with its permission.
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC.