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  • Where Are the Jobs? In Washington of Course

    Federal stimulus spending is stimulating business for contractors helping the government figure out how to spend the stimulus money, reports the Washington Post. Government agencies say they can’t properly oversee the $789 billion stimulus package without hiring outside help. As a result, the region around the nation’s capital is doing just fine. Reports the Post:

    Of the stimulus grants and contracts awarded so far, the District has received nearly 10 times as much per capita as the national average, and Maryland has received more per capita than much harder-hit states, among them Florida, Michigan, Nevada and Ohio. Virginia’s statewide average is relatively low, but of the 496 stimulus contracts the state has received, two-thirds of them, with a total value of $562 million, have gone to Northern Virginia, home to hundreds of contractors.

    Virginia’s unemployment rate is 6.6 percent, and Maryland’s is 7.3 percent, well below the 10.2 percent national average. And data released Wednesday puts the Washington metro area’s unemployment rate at 6.2 percent, an increase of two percentage points over last year, while the jobless rates in other metro regions has gone up much more – to 9.3 percent in New York, and above 10 percent in Chicago, Atlanta and Los Angeles.

    The Post article identifies a number of the contractors getting multi-million dollar contracts from the feds, including Fig Leaf Software. Fig Leaf won a $1.1 million Interior Department contract to build a computer system for stimulus funding recipients to report back to the government. The contract enabled Fig Leaf to hire three more people at its office in the District. Dave Gallerizzo, a principal at Fig Leaf Software, told the Post: “I look around the country at all the places that are hurting and the one place that has jobs is here. And I don’t have a problem with it. If the money went to Michigan and employed three people there, what’s the difference?”

    That, of course, is the “drop the money out of an airplane” theory of government spending, which, we would like to think, is not normally espoused by the people hired to help the government keep track of how it has spent its money.

    (Cross-posted at InsiderOnline.)
    Update: In the comments below, Mr. Gallerizzo says the Post quoted him selectively and he provides the full quote he says he gave to the Post. We quoted him directly from the Post article, and in so doing it seems we have incorrectly imputed to Mr. Gallerizzo the view that all government-created jobs are equal. The point we make—that bureaucracy plays the role of leaky bucket in government transfers of wealth—remains valid; but we agree that this is not Mr. Gallerizzo’s fault.

    Posted in Economics [slideshow_deploy]

    3 Responses to Where Are the Jobs? In Washington of Course

    1. Dave Watts says:

      As a principal of Fig Leaf Software and Dave Gallerizzo's coworker, I may be biased in my response. That said, fortunately, we haven't been hired to tell the government how to spend its money. We've been hired to build a system to allow the government to do this for itself. And, sensibly enough, since the government is located here, the work to build this system is also done here. We also provide a wide range of consulting and implementation services to The Heritage Foundation, which perhaps unsurprisingly is also in Washington, DC.

      Neither Dave Gallerizzo nor Fig Leaf Software are telling the government that it should spend its money in one place or another. We are, of course, happy for the work, as we prefer that to the alternative of not working.

      Dave Watts, CTO, Fig Leaf Software
      http://www.figleaf.com/

    2. Dave Gallerizzo says:

      As the one who was quoted in the paper I feel the need to comment on Alex's post. As anyone that works with the Heritage Foundation should know, the Washington Post is very well known for taking a direct quote and wording it in a way that meets the needs of the bent of their article.

      When asked why I thought that so much of the stimulus money was going to the Washington DC area I replied, "Right now the Washington/Baltimore market is one of the few markets in the country that is seeing an upsurge in hiring. This is because there are specific needs on specific government contracts, and Fig Leaf Software was positioned to meet that need, hence the award. I don't have a problem with that. I don't see how it would have made any difference if the government went into Michigan and found a way to employ four people there, verses employing them in DC. Clearly there was a need in DC. Either way, the money, in the short term at least, has employed more people."

      I stand by that comment. The government had a need, we met that need. The Post took what they wanted and printed it. During the whole interview, in which I spoke to the reporter for close to 30 minutes, he was able to get two lines from me to quote. I could tell very early on in the interview where he was headed with this article.

      What wasn't printed was the point that I made that this whole stimulus effort was simply a band-aid and not a long term fix for the economy, especially from a jobs perspective. There are many ways the government could allow us to build and grow our business, unrelated to simply infusing various agencies with temporary money.

    3. Bobbie Jay says:

      In Washington of course…

      Where the brainless go to accommodate the brainless government jobs.

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