Michael's abandoned Manchester studio

It hasn’t worked out that way.

Instead, according to a report issued by the New Hampshire Office of Economic Stimulus, the stimulus act has created only 96 private sector jobs and has “saved” a little over 700 state government jobs. Meanwhile unemployment has climbed to 6.8% since the stimulus became law.

The reason for the low level of job creation is easily gleaned from the so-called Progress Report issued on August 19th: At least $175,000,000 of the first $336 million of stimulus money spent in the New Hampshire has replaced existing state spending on education, housing and safety programs which may have been cut due to state budget constraints.

A NowHampshire.com investigation reveals almost $37,000 of that money went to a Bedford beauty school that does not grant degrees.

The Office of Economic Stimulus granted Coiffures by Michael, Inc. $35,088 in a “direct payment for specified use,” and another $1,571 in “student financial assistance.”

Coiffures by Michael runs Michael’s School of Hair Design and Esthetics. The school promises “no learner is left behind.” Guest speakers at the school include Dean Banowetz, the self-proclaimed “Hair Ho.”

Micchael's new studio in Bedford

We contacted the Office of Economic Stimulus for further explanation as to the meaning of “direct payment for specified use,” but the state’s “Stimulus Czar” could provide no definitive information because the funds were distributed by the federal government, not the state.

“These are funds directly from the federal government, so I do not have access to as much information as I do for State managed programs,” said Orville “Bud” Fitch, who runs the Office of Economic Stimulus for Gov. John Lynch. “With that qualification, if ‘Coiffures by Michael, Inc.’ is a school that teaches barbering, cosmetology, hair dressing, etc., then my expectation is that these are federal student loan program payments. To determine this for certain you would need to speak with the federal authorities for this program.”

Other stimulus funded programs may raise eyebrows, as well, including $68,590 for youth theater in Henniker, $35,008 for a pot washer at Manchester’s Beech Street School and $293,100 for the New Hampshire State Council on the Arts.

The issue is certain to be a major topic of discussion during the 2010 race to replace the retiring Senator Judd Gregg (R-N.H.).

The National Republican Senatorial Committee has criticized Hodes for the state’s anemic job creation. “The people of New Hampshire are looking to elect a U.S. Senator who will safeguard, not recklessly spend, their hard-earned tax dollars. Unfortunately, Paul Hodes rubberstamp record in Washington demonstrates that he has embraced the opposite approach alongside Nancy Pelosi and Harry Reid,” said National Republican Senatorial Committee (NRSC) spokeswoman Amber Wilkerson in a statement.

Hodes’ office did not respond to our request for comment.

Read the full “Progress Report” from the Office of Economic Stimulus:

Jobs Contracts Approved 081909