According to an article in today's International Business Times, the City of Los Angeles received $111 million from the American Recovery and Reinvestment Act, yet created only 55 new jobs. That works out to a cool $2 million per job. Milton Friedman explained this long ago, when he said "you never spend other people's money as wisely as you would your own." It also casts serious doubt on whether the government spending multiplier is even remotely positive.
"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.This is a disgrace and an abomination. But if the information is put to good use, it might help send enough new and disciplined people to Congress come November to make a difference.