The Private Sector Is Not Fine, the Public Sector Is Still Fat
You can tell that President Obama's press conference statement Friday morning -- "The private sector is doing fine" -- is a big problem for Democrats, the left, and much of the media simply because they're spending so much time and energy denying that it is.
Their biggest problem: Obama's supposed back-off from his original remarks was instead an attempt to fool people into thinking it was a back-off. A full-context look at his morning statement and later response shows that:
- He never retracted his contention that "the private sector is doing fine," only saying that "the economy is not doing fine."
- He insisted in his response that the private sector "has not been the biggest drag on the economy," when for all practical purposes the economy is the private sector, and it has been the biggest drag.
- He still believes, after well over three years of proof to the contrary, that the road to recovery is historically ineffective Keynesian demand-side stimulus.
- He still believes that it is a proper role of the federal government to prop up state and local governments which refuse to reform themselves.
Luckily, CNN's Candy Crowley, of all people, understood Point 1 She tried three separate times on Sunday to get Obama chief campaign adviser David Axelrod to say "yes" or "no" as to whether he agreed with the president that the private sector is doing fine. Crowley knows that Obama didn't backtrack at all. Of course, Axelrod dodged the question all three times.
As to the location of the biggest drag on the economy, let's take a look at the relative seriousness of the private-sector employment problem compared to the public sector in the following chart, which maps seasonally adjusted percentage job loss or growth since the economy's employment peaked in January 2008:
At the federal level, after taking away reductions in postal service employment (appropriate, since those jobs are never coming back, and the Post Office is an independent agency which is supposed to live or die on its own, a concept which will be severely tested in the coming months and years), employment is up by over 11%. Imagine that.
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