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Perishable Thoughts — Shovel-Ready

Jim Prevor’s Perishable Pundit, January 28, 2009

President Obama was still just a President-elect when he appeared on Meet the Press with Tom Brokow on December 7, 2008. During that interview he used a phrase that has become the very centerpiece of the American political debate over the President’s proposed stimulus package. The phrase he used? “Shovel-ready” — as in this quote:

“Well, I think we can get a lot of work done fast. When I met with the governors, all of them have projects that are shovel-ready, that are going to require us to get the money out the door, but they’ve already lined up the projects and they can make them work.”

President-elect Barack Obama
Transcript
‘Meet the Press’ December 7, 2008

The Washington Post is calling it The Obama Buzzword That Hit Pay Dirt:

The image is positively retro.

Picture a sweaty brow, rolled-up sleeves, knotty forearms, calloused hands. Picture virgin land, just waiting to be transformed.

Shovel-ready land.

This is America on the eve of the Obama era.

Shovel-ready.

He keeps telling us so. On “Meet the Press,” fill-in host Tom Brokaw wants to know how quickly Barack Obama can create jobs, and the president-elect promises to move fast. After all, he says, he’s met with a bunch of governors “and all of them have projects that are shovel-ready.”

Announcing his energy team, Obama beams about “shovel-ready projects all across the country.” Unveiling his choice for education secretary, Obama plugs his plans “to start helping states and local governments with shovel-ready projects.”

So many shovels.

All of them, apparently, quite ready.

But what the heck does this mean, and where does shovel-ready come from? Ah, this requires a word detective.

The article goes on to trace the phrase to an unlikely source:

We discover shovelready.com.

The Web site says it is maintained by the Upstate New York economic development arm of National Grid, an electric utility. Art Hamlin, the company’s Upstate New York economic development director, is on the horn.

So, what about Obama and all this shovel-ready business?

“I laughed when I heard it on the radio this morning,” Hamlin says. “It’s very satisfying.”

Hamlin says his company started throwing around the term back in the late 1990s. At the time, they were looking for ways to stimulate development of “brownfields,” the abandoned and frequently contaminated industrial sites that were being cleaned up and made available for development.

Executives at the company, then called Niagara-Mohawk Power, figured entrepreneurs would be more likely to develop the brownfields if they knew in advance that the sites already had electrical service and gas and sewer lines, as well as preliminary environmental permits. But they needed a catchy way of saying that.

They came up with shovel-ready.

“It had a nice ring to it,” Hamlin says.

Such a nice ring, in fact, that they decided to stake a claim. In 1998, the company bought the shovelready.com Internet domain name and even trademarked it.

Regardless of derivation, though, the phrase “shovel-ready” is absolutely crucial to President Obama’s stimulus package. The Congressional Budget Office did an analysis of the public works portions of President Obama’s plan that The Wall Street Journalcharacterized in this manner:

According to Congressional Budget Office estimates, a mere $26 billion of the House stimulus bill’s $355 billion in new spending would actually be spent in the current fiscal year, and just $110 billion would be spent by the end of 2010. This is highly embarrassing given that Congress’s justification for passing this bill so urgently is to help the economy right now, if not sooner.

And the red Congressional faces must be very red indeed, because CBO’s analysis has since vanished into thin air after having been posted early last week on the Appropriations Committee Web site. Officially, the committee says this is because the estimates have been superseded as the legislation has moved through committee. No doubt.

The unfortunate truth is that the stimulative effects of “shovel-ready” projects are probably near zero. Why?

Well, if a project is truly “shovel-ready,” this means that a lot of money and effort have already gone into design, engineering, perhaps land acquisition, a permitting or public review process, very often environmental impact statements have been produced and lawsuits have been litigated or settled. Contractors have been selected, construction bonds secured, insurance arranged.

What this enormous investment and effort means is that the project was judged important and worthy by local officials and was highly likely to proceed, with or without a stimulus package.

If the expenditure would have taken place anyway, the stimulative effect wouldn’t occur. So that leaves us with three possibilities: 1) Projects that are not “shovel-ready” and thus will not provide the quick stimulus that is the basis for this policy, 2) Projects that are shovel-ready but would have been funded anyway, and 3) Projects that were “shovel-ready” and were not going to proceed because of, say, budget cuts. The immediate stimulative effect would only come from this relatively small third group.

Of course, that also implies that these were the projects local officials saw as having the least value.

Words are powerful things, and a phrase such as “shovel-ready” carries with it the powerful symbolism of a nation about to get back to work. No such effect, however, is likely from the proposal currently on the table.

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