I think Arnold Kling has pointed this out several times, but it's
Which has always made me think this green jobs strategy (which pales in comparison to the newer, incredible mayors-of-the-world-unite in the largest-cash-grab-the-world-has-ever-seen strategy, coming early 2009) is closer to Bastiat's broken window fallacy.
In related news, Greg Mankiw has an excellent post in which he merely copies and pastes a letter he received from a reader familiar with government bureaucracy. Excellent excerpt:
To make a long story short, you cannot juice up a government agency's budget by tens of billions (or in the case of the stimulus package, hundreds of billions) and expect them to be able to process the paperwork to contract it out, much less oversee the projects or even choose them with any kind of hope for success. It's like trying to feed a Pomeranian a 25 lb turkey. It's madness.What gets lost in the nearly-incomprehensible size of these "stimulus" packages is the likelihood that they will be badly, badly mismanaged. America needs James Q. Wilson now more than ever (though if my POL113 students are any indication, they wouldn't read him anyway) for the simple but irrevocable fact that bureaucracies operate according to perverse and often inscrutable incentives. This was my primary empirical-theoretical (not normative) beef with Mike's support for what would become TARP--that despite the enormity of the problem, the solution was not a feasible one based purely on the sorts of institutional incentives that original $700 billion had to make its way through. The news appearing daily about bureaucratic mismanagement and companies quickly and surely finding their way around compensation limits is not in the least surprising--this was always the way this had to go. If Washington was filled with sharks (lobbyists, rent-seekers, money-starved executive bureaucracies) before, we've quite wittingly dumped unprecedented amounts of blood into the water. Expected and realized results: more sharks (hello GM, Chrysler, Ah-nuld, state of New York, America's governors and mayors, etc.).
Actually, the sharks point is different. Regardless of lobbying influences, the point here is that these bureaucracies are operating, presumably, at something near their funds-allocating capacity. Allocating money, believe it or not, requires time and manpower in terms of deciding where money is going to go and how it's going to be spent. What gatekeeping and oversight that these agencies previously managed is going to go directly out the window when their budgets and handout-seekers quintuple. Look for corruption on a scale we haven't previously imagined.