rebuild the infrastructure of today and break ground on the infrastructure of tomorrow, driving sustainable job creation, economic growth, innovation, and global competiveness.” 17
—SUMMER OF RECOVERY: Project Activity Increases in Summer 2010, Office of the Vice President, June 17, 2010
JOB CREATION
From the Department of Labor, the Bureau of Labor Statistics reported that the unemployment rate in the “Summer of Recovery” was:
June: 9.5 percent
July: 9.5 percent
August: 9.6 percent 18
In September 2010, most Americans knew that the Obama Administration’s “stimulus package” of nearly $1 trillion had failed in its principle task of restoring real economic growth and returning Americans to work. The administration’s “Summer of Recovery” had become a “Summer of Embarrassment.”
By the end of the summer, more and more stories like this one from the
Los Angeles Times
began cropping up:
Two L.A. agencies get $111 million in stimulus funds but have created only 55 jobs
September 17, 2010
Two Los Angeles departments have received $111 million in federal stimulus funds yet have created only 55 jobs so far, according to a pair of reports issued Thursday by City Controller Wendy Greuel. The reports conclude that the agencies, Public Works and Transportation, moved too slowly in spending the federal money, in part because of the time it takes to secure approval of government contracts. The two agencies plan to create or retain a combined 264 jobs once all the money is spent, according to the reports.
With unemployment above 12%, city officials should move more urgently to cut red tape and spend the money, Greuel said. “The process needs to be changed to make sure we get these projects out as quickly as possible,” she said . . .
So far, the public works agency has shielded 37 public employee jobs from elimination as a result of the city’s ongoing budget crisis and created eight public or private jobs, the report said. Part of the problem, Greuel found, was that it took eight months to put together certain bid packages, review the bids and award the contracts. The second report looked at the Department of Transportation, which received seven grants worth nearly $41 million to purchase buses, install traffic signals and upgrade railroad crossings. Although thoseprojects were designed to support 26 jobs, nine have been created or retained so far, Greuel’s report said. 19
Now imagine what a young start-up with a fresh new idea could have done with $111 million. I’m not advocating handouts to startups, but I am pointing out the absurdity behind the belief that government can spend its way to real job creation. The Office of the Vice President’s report might have had the best of intentions, but those intentions always—always—run into the local Public Works and Transportation Offices, which haven’t the foggiest idea how to create a job. That’s why it spent over $2 million for each job it “created.”
The U.S. economy is in crisis, with official “unemployment” stuck near 10 percent, and actual under-employment well into double digits, and both measures are dismally much higher for youths and minorities. Much of the public is frustrated that the federal government seems unable to stimulate real growth in our economy and jobs. Yet this presumes a fallacy—that it is the government’s job to create jobs. Recently, the federal government’s massive and quick action has caused so much business uncertainty and debt, it has actually reduced jobs.
To create the conditions for private entities to create jobs, the federal government should first do no harm. More, it can stimulate jobs by focusing on which environment is ready for innovation. The evidence of the unique economic power of innovation has been accumulating for most of our history and has become irrefutable as the high-technology revolution gained traction over the past several decades.
The news these days is filled with stories
—SUMMER OF RECOVERY: Project Activity Increases in Summer 2010, Office of the Vice President, June 17, 2010
JOB CREATION
From the Department of Labor, the Bureau of Labor Statistics reported that the unemployment rate in the “Summer of Recovery” was:
June: 9.5 percent
July: 9.5 percent
August: 9.6 percent 18
In September 2010, most Americans knew that the Obama Administration’s “stimulus package” of nearly $1 trillion had failed in its principle task of restoring real economic growth and returning Americans to work. The administration’s “Summer of Recovery” had become a “Summer of Embarrassment.”
By the end of the summer, more and more stories like this one from the
Los Angeles Times
began cropping up:
Two L.A. agencies get $111 million in stimulus funds but have created only 55 jobs
September 17, 2010
Two Los Angeles departments have received $111 million in federal stimulus funds yet have created only 55 jobs so far, according to a pair of reports issued Thursday by City Controller Wendy Greuel. The reports conclude that the agencies, Public Works and Transportation, moved too slowly in spending the federal money, in part because of the time it takes to secure approval of government contracts. The two agencies plan to create or retain a combined 264 jobs once all the money is spent, according to the reports.
With unemployment above 12%, city officials should move more urgently to cut red tape and spend the money, Greuel said. “The process needs to be changed to make sure we get these projects out as quickly as possible,” she said . . .
So far, the public works agency has shielded 37 public employee jobs from elimination as a result of the city’s ongoing budget crisis and created eight public or private jobs, the report said. Part of the problem, Greuel found, was that it took eight months to put together certain bid packages, review the bids and award the contracts. The second report looked at the Department of Transportation, which received seven grants worth nearly $41 million to purchase buses, install traffic signals and upgrade railroad crossings. Although thoseprojects were designed to support 26 jobs, nine have been created or retained so far, Greuel’s report said. 19
Now imagine what a young start-up with a fresh new idea could have done with $111 million. I’m not advocating handouts to startups, but I am pointing out the absurdity behind the belief that government can spend its way to real job creation. The Office of the Vice President’s report might have had the best of intentions, but those intentions always—always—run into the local Public Works and Transportation Offices, which haven’t the foggiest idea how to create a job. That’s why it spent over $2 million for each job it “created.”
The U.S. economy is in crisis, with official “unemployment” stuck near 10 percent, and actual under-employment well into double digits, and both measures are dismally much higher for youths and minorities. Much of the public is frustrated that the federal government seems unable to stimulate real growth in our economy and jobs. Yet this presumes a fallacy—that it is the government’s job to create jobs. Recently, the federal government’s massive and quick action has caused so much business uncertainty and debt, it has actually reduced jobs.
To create the conditions for private entities to create jobs, the federal government should first do no harm. More, it can stimulate jobs by focusing on which environment is ready for innovation. The evidence of the unique economic power of innovation has been accumulating for most of our history and has become irrefutable as the high-technology revolution gained traction over the past several decades.
The news these days is filled with stories
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