"The private sector is doing fine." -- More Evidence That Barack Obama Doesn't Understand a Free-Market Economy!
June 14, 2012 4:00 A.M.
Only the Public Sector Is ‘Doing Fine’
Sorry, Mr. President: There’s no need to bail out the state and local governments.
By Jason Richwine & Andrew G. Biggs
http://www.nationalreview.com/articles/302768/only-public-sec...
President
Obama’s puzzling claim that “the private sector is doing fine” has been
met with much skepticism, and even ridicule. To many observers, it is
self-evidently wrong. While many in the media are content to label the
incident a “gaffe” and move on, some of the president’s supporters
insist that he actually voiced a fundamental truth, albeit inelegantly.
Are they right?
In the eyes of his defenders, Obama simply was pointing out that the
private sector has been adding jobs in recent months while the public
sector has been losing them. “Doing fine” was apparently just an
imprecise and awkward way of saying the private sector is gaining.
unemployment would be for Congress to borrow money and send it to state
and local governments — who are generally prohibited from deficit
spending — to help avoid public-sector layoffs.
So is it really the case that the public sector needs help more than
the private sector? We are skeptical, to put it mildly. First, some
context concerning unemployment in the public sector: It is well known
that government employees enjoy considerably more job security than
private workers. The steps required to fire tenured public workers are
often so arduous that managers are loath even to try.
Consequently, unemployment rates have been consistently and substantially lower
in the public sector than in the private sector. The recession and its
aftermath are no exception. Last month, government workers had the
lowest unemployment rate (4.2 percent) of any class of worker
categorized by the Bureau of Labor Statistics (BLS). The next lowest
unemployment rate, 4.9 percent, is for workers in the burgeoning energy
industry. Construction workers, by contrast, are unemployed at nearly
three times the rate of government workers.
Public employees tend to be more educated and experienced than the
average private-sector worker, so one could argue that government
workers just naturally have lower unemployment rates. The figure above
tests this possibility, comparing public-sector unemployment rates with
the unemployment rates of comparably skilled workers in the private
sector over time. In other words, the private-sector line shows the
unemployment rate that a typical public worker might face if he took his
skills to the private sector.
Much of the difference between the two lines — an average of 3.3
percentage points over the past eleven years — is likely to reflect a
perk of government work, one that public employees have enjoyed for a
long time. That the gap narrowed slightly in 2011 — after exploding
since 2008 — isn’t evidence that the private sector is “doing fine” and
the public sector is ailing. In this context, arguing for a bailout of
state and local governments seems rather shortsighted.
private sector is doing fine." Really Mr. Obama, with an unemployment
rate that is just about TWICE that of the public sector the private
sector is doing FINE and you want to add more state and local government
jobs?
Top Opinion
-
Temlakos~POTL~PWCM~JLA~☆ 2012/06/14 22:46:35
+5Of course, to him, "the private sector is doing fine." There shouldn't even *be* a private sector, by his way of thinking.
We should actually be cutting public sector jobs, pay, and benefits by about 10% per year for the next 4 or 5 years, or until workloads, pay, and benefits are commensurate with the private sector. The public sector should not be outpacing their employers, the taxpayers.
Also, the job security of the public sector makes it prudent to allow the private sector to pay for a certain level of risk. The private sector reacts faster to pressure to reduce salaries than the public sector.
Collective bargaining in the public sector as changed the compensation graph from a gentle uptrending wave to a straight line with a positive slope, while the private sector continues on its roller coaster business cycle.
It is time to bring salaries, benefits, and working condition back in line. Industry is having to streamline, government need to follow suit.
"Capitalism doesn’t exist to employ people — only to make profits. The President makes the correct reference that the private sector is doing just fine. They are at all an all-time high in profits. The Dow is up 50% since Jan 2009, the NASDAQ is up, the S&P; is up. All is up except employment. So the President was correct. I think we can all agree on this because as you continue to note corporations (capitalists) don’t exist to employ people — just make money and they are doing just fine in that." - http://www.washingtonpost.com...
Our national debt isn't doing fine, nor is the sustainability of Social Security. Our balance of trade sucks, our physical infrastructure requires major repairs, far too many Americans sit in jail for drug crimes, and our healthcare and education systems need overhaul.
Obviously everything is NOT okay. But the private sector, per se, IS doing fine - at least in comparison to many other segments of society.
"The way to combat noxious ideas is with other ideas. The way to combat falsehoods is with truth."...
"Capitalism doesn’t exist to employ people — only to make profits. The President makes the correct reference that the private sector is doing just fine. They are at all an all-time high in profits. The Dow is up 50% since Jan 2009, the NASDAQ is up, the S&P; is up. All is up except employment. So the President was correct. I think we can all agree on this because as you continue to note corporations (capitalists) don’t exist to employ people — just make money and they are doing just fine in that." - http://www.washingtonpost.com...
Our national debt isn't doing fine, nor is the sustainability of Social Security. Our balance of trade sucks, our physical infrastructure requires major repairs, far too many Americans sit in jail for drug crimes, and our healthcare and education systems need overhaul.
Obviously everything is NOT okay. But the private sector, per se, IS doing fine - at least in comparison to many other segments of society.
"The way to combat noxious ideas is with other ideas. The way to combat falsehoods is with truth." - William O. Douglas
Did you miss the point that Obama was calling for more public sector employment when the unemployment rate is just 4.2% in the public sector? Are you happy with the way our economy is performing? Are you happy with the fact that government spending as a percentage of the GDP has increased by almost 25% under President Obama, from 20% of GDP to 25%? Do you think that it is healthy (for the economy) to have government spending at 25% of GDP?
"The way to combat noxious ideas is with other ideas. The way to combat falsehoods is with truth." - William O. Douglas
Sure. Why not? German government spending is over 45% of GDP.
I note that you declined to answer the other questions.
do something about the oppressive cost of public sector contracts....usually negotiated
by elected officials the unions have helped put into office, the state is
balancing its budget, lowering class size, which must mean they are hiring teachers,
and dropping oppressive property taxes for the states residents. Maybe the
government should look at what these states are doing to balance their budgets and
provide better services to the taxpayers of that state.
Even your own chart demonstrates this - private sector unemployment is going down, as it should. Public sector unemployment is going up. Right Wingers conveniently forget that it was massive spending to create millions of public sector jobs by Franklin Roosevelt ended the Great Depression.
How you can continue to defend a guy who urges another bailout for state and local governments when the public sector unemployment rate is just over 4% (considered by most economists to be full employment when applied to the private sector!) is beyond me.
Draconian public sector cuts? Once again, the public sector unemployment rate is 4.2%! What is it that you don't understand about the need for both state and local governments to cut spending and balance their budgets? Our governments, at every level, are so bloated that the economy cannot support them - if we follow the path that Obama wou...
How you can continue to defend a guy who urges another bailout for state and local governments when the public sector unemployment rate is just over 4% (considered by most economists to be full employment when applied to the private sector!) is beyond me.
Draconian public sector cuts? Once again, the public sector unemployment rate is 4.2%! What is it that you don't understand about the need for both state and local governments to cut spending and balance their budgets? Our governments, at every level, are so bloated that the economy cannot support them - if we follow the path that Obama would set for us we will end up like Greece, Spain and Italy.
Your words: Right Wingers conveniently forget that it was massive spending to create millions of public sector jobs by Franklin Roosevelt ended the Great Depression.
LMAO! Are you still trying to peddle that lie? FDR DID NOT end the depression!
“We have tried spending money. We are spending more than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot!” -- Henry Morgenthau Jr. — Secretary of the Treasury and key architect of FDR’s New Deal, May 9, 1939.
Who is the one who is either misinformed or is a liar? The fact is that supply-side economics have boosted our economy every single time they've been tried: By Coolidge in the 1920s, by JFK, by Reagan and by Bush.
4.3 million jobs created in more than 2 years is woefully inadequate.
It will take 3 million jobs each year for the next four years to get unemployment back down to what it was in 2007.
Obama's gaffe was based on his attempt to deflect criticism away from himself and place blame at the state level. (His press conference was a shameless use of the White House for campaigning. There was no need for him to hold a news conference and not tell us anything new.)
The President has very little to do with jobs for teachers, police and firefighters.
With the exception of another stimulus, he has no effect whatsoever. And all that would accomplish is to transfer debt from the states to the federal level.
Funny thing is, (I tend to think absurdities are amusing), the same thing President Obama says he is not responsible for he blames Romney for. Romney, as President could not "fire teachers, firemen and police officers" anymore than President Obama.
Wisconsin has been a major disaster for the Dems, union membership has fallen nearly 70% since the forced deduction of union dues from government pay has been ended!