The debate over the economic stimulus package has come and gone. I remain on the fence, but this recent article reminded me of how long it takes for your average “shovel ready” project to begin. Here’s the steps:
- Congress passes the law and the president signs it.
- The federal government distributes the money down to the organizational level where contracts are executed, or the money is distributed to the states. Two weeks (at least).
- The executing agency prepared the work package and the solicitation. Assume that the project is “shovel ready” meaning that the work is already identified and defined, and a specification was written up beforehand. Two weeks.
- These are major projects, so you’re going to have to synopsize the work package for 15 days on FedBizOpps (if this is a federal procurement). This informs potential offerers of the general scope of what you will be contracting out. Following synopsis, you will issue the solicitation. The bids are due prior to the bid opening, which will occur 30 days after the solicitation is issued.
- If this is a negotiated procurement — a request for proposal (RFP) instead of an invitation for bid (IFB) — then give at least two weeks for negotiations. Most high dollar projects are RFPs.
- Once the agency decides who they want to award the contract to, give at least two weeks for legal review, congressional notification, and other administrative tasks.
- The agency awards the contract. Two months after award, work begins (this gives the contractor time to plan their production schedule, hire workers, and purchase material).
- Two to four weeks after the start of performance, the contractor begins receiving progress payments.
In other words, about six months after the president signs the law the first check from the federal government gets mailed out (actually, payment is distributed via EFT). This, of course, is for the most shovel ready projects. Projects where the work scope isn’t entirely defined, where there are technical or political issues to be worked out, or that require an environmental impact survey, will all take much longer. Your average recession from 1854-2001 lasted 17 months.
From the headline story on the New York Times website:
Questions about why Timothy F. Geithner did not know sooner about the A.I.G. bonuses and act to stop them could overwhelm his achievements and undermine the president’s overall economic agenda.
Really? This largely media-made scandal about how some minuscule fraction of our taxpayer donation to AIG is being spent could derail the President’s overall economic agenda? Because what? It’s consumed the past 24 hours of the news cycle, and you’re trying to stretch it out for another day or so?
Someone please explain to these people that the purpose of marching is simply to get from point A to point B:
When organizations that are insured against any challenge to their supremacy grow to a certain size, they start to care primarily about retaining their own power. An excellent example of this is the teachers’ union, which is primarily concerned with insuring its own grip on teachers and on the education system. While we should be having a national discussion on how to reward good teachers (this is actually isn’t all that easy to do and will require lots of discussion), the teachers union has us discussing whether or not performance should even be a factor in teacher compensation.
The union is also excellent at weeding out initiatives that could reduce its stranglehold on the workforce. As David Brooks explains in the NY Times:
Democrats in Congress just killed an experiment that gives 1,700 poor Washington kids school vouchers. They even refused to grandfather in the kids already in the program, so those children will be ripped away from their mentors and friends. The idea was to cause maximum suffering, and 58 Senators voted for it.
School vouchers allow students to go to charter and non-public schools, most of which aren’t unionized. The only argument against allowing school vouchers is that it reduces the critical mass necessary to have a functioning education system. There’s merit to that argument, but not enough merit to justify yanking 1700 students away from their friends and classmates.
A senior Vatican cleric on Saturday defended the excommunication of the mother and doctors of a 9-year-old girl who had an abortion in Brazil after being raped. The child was pregnant with twins.
The regional archbishop, José Cardoso Sobrinho, excommunicated the mother for authorizing the operation. He also excommunicated the doctors, who carried out the operation for fear that the 80-pound girl would not survive a full-term pregnancy.
1) It takes me about a full month on each end to adjust my body clock. I’m constantly looking outside and thinking it’s an hour earlier/later than it actually is.
2) Once ever few years (such as this year) I forget about the time change and show up to things at the wrong time.
3) Evening is my favorite time of day.
Anna Fricke, over at the NY Times’ Proof blog, explains what she misses about drinking:
So it’s not the alcohol I miss. It’s the immaturity. The selfishness. The wasted days frittered away recuperating from the wasted nights. It all turned around so quickly. I wasn’t prepared to be this person. A person who can clearly recall all the events of the night before. Who can be the designated driver. Who can go to a work party without apologizing the next day. This must be parenthood. I would toast this milestone, but I have pears to puree.
Megan McArdle provides an analogy to the current writings of some, who claim that some homeowners aren’t morally obligated to pay back their mortgages simply because their house has fallen in value:
Four weeks ago, I bought a grill on my credit card. It was not the best grill Home Depot had–indeed, because I am cheap, and also have never longed to rotisserie in my very own back yard, it was the cheapest grill they had in stock, except for tiny tabletop camping models.
It’s a nice grill. But I’ve since realized that our landlords have an old, broken grill that we might have been able to repair with enough duct tape, saving me almost $200. Meanwhile, I’ve discovered that I can’t sell the grill for a profit, because Home Depot seems to have a large number of very similar grills in stock which they are willing to offer to buyers for a mere $200. For that matter, I can’t even sell it for the value of the loan with which I financed it. The equity in my grill has dropped by about 50%. Given all that, I don’t see why I should be required to pay back the credit card company. After all, they knew when they loaned me the money that I might not pay it back, and I suspect they also knew that I might not like my grill as much as I expected to. Hell, the dirty bastards may well have known that I was going to end up underwater on my grill loan. I don’t see why I have any obligation to repay them.
This seems to me to be approximately the logic behind the people saying that folks who took out stupid loans don’t have any sort of moral obligation whatsoever to make good their debts. The loan company didn’t have your best interest at heart, the logic goes, so why should you take care of them at any cost to yourself?
Well, imagine you’re the one I borrowed the grill money from. I doubt almost anyone reading this would be plunged into bankruptcy by the loss of $200. So why should I pay it, when you knew just as well as I did that the grill would depreciate and I might be better off without it?
Call me bourgeois, but I think that when you sign your name to a document promising to repay money you’ve borrowed, you have an obligation to repay the money you’ve borrowed.
From today’s Senate hearing on AIG:
In prepared testimony, one official, Eric R. Dinallo, superintendent of the New York State Insurance Department, denied that his agency was the primary regulator of the insurance giant and maintained that he oversaw only a small portion of A.I.G.’s business — a handful of its insurance companies that are based in New York. The primary source of the crisis at A.I.G., he said, was its financial products division, which handled credit-default swaps, derivatives and futures totaling an estimated $2.7 trillion.
“A.I.G. Financial Products is not a licensed insurance company,” he said. “It was not regulated by New York State or any other state.”
“We were not responsible for the whole securities lending program,” Mr. Dinallo added.
But Richard C. Shelby, Republican of Alabama and a ranking member of the committee, repeatedly needled Mr. Dinallo.
“Are you trying to evade your responsibility?” he asked. “You can claim here today that you have little responsibility if any for all these problems?”
If I may respond on behalf of Mr. Dinallo: “Senator, if you are asking whether I failed to violate the statutory limitations on my authority, then yes sir, I failed. I failed miserably. As I’m sure you’re aware the organization you belong to — Congress — makes laws that regulators like me enforce. And if I may, I’d like to be so bold as to apologize on your behalf for failing to put in place the legal and regulatory structure that would have prevented this from happening.”
Some more confidence inspiring rhetoric:
Senator after senator complained that the bailout of A.I.G. had effectively bailed out A.I.G.’s many counterparties, and that the Fed had refused to reveal who they were. Senator James Bunning, Republican of Kentucky, predicted that before long the Fed would come back to Congress, seeking more money to help A.I.G.
“You will get the biggest ’No’ you ever got,” Mr. Bunning warned. “I will hold up the bill. I will stop you from wasting the taxpayers’ money on a lost cause, because that’s what A.I.G. is, a lost cause.”