Now This Really Is Stimulus Failure

By Derek Thompson

Now that I've defended the stimulus, it's only fair to pass this along:

Two departments within the city of Los Angeles received $111 million from the 2009 American Recovery and Reinvestment Act. With that money, the departments had expected to save or create 264 jobs. In the end, the total was just 55.

"I'm disappointed that we've only created or retained 55 jobs after receiving $111 million," says Wendy Greuel, the city's controller, while releasing an audit report.

"With our local unemployment rate over 12% we need to do a better job cutting red tape and putting Angelenos back to work," she added.

According to the report, the Los Angeles Department of Public Works generated only 45.46 jobs (the fraction of a job created or retained correlates to the number of actual hours works) after receiving $70.65 million, while the target was 238 jobs. Similarly, the city's department of transportation, armed with a $40.8 million fund, created only 9 jobs in place of an expected 26 jobs.

If we had directly hired people with $111 million for, say, $60,000 in compensation, we could have added 1800 jobs instead of 55. Oy.

Read the full story at Washington Independent.

This article available online at:

http://www.theatlantic.com/business/archive/2010/09/now-i-this-i-really-is-stimulus-failure/63177/