The Private Sector

isn’t doing just fine, Mr. President.

[Afternoon update]

Instapundit has a lot of links. This seems (appropriately) to have resulted in a firestorm of criticism of the economic ignoramus. I agree with John Hinderaker that it is redolent of his intrinsically socialist mindset.

[Update later afternoon]

What goes around, comes around.

This also points out just how incompetent McCain and his campaign were, compared to Romney.

And how not-so-brilliant the Obama team is/was. They were lucky. Their luck has run out, I think.

30 thoughts on “The Private Sector

  1. wodun

    Looks like he is now blaming state and local governments. Too bad he doesn’t understand that if everyone was working again the state and local governments would have the tax revenue to pay their employees. Handing out money wont effect the part of the equation that matters.

    1. Peterh

      There are state and local governments that rightly share in blame for the ongoing economic woes. But that does not absolve the occupier of the whitehouse and his associates from being consistently on the wrong side of the economy.

  2. Larry J

    Obama’s statement reminds me of an old Richard Pryor line, “Who are you going to believe, me or you lying eyes?”

    1. McGehee

      Sharply up, only since 2010. That’s like giving Bill Clinton credit for welfare reforms that he vetoed three times, or for the budget surpluses that the Democrat Congress of 1993-94 never would have given him.

    2. wodun

      Trending doesn’t mean that everything is fine as Obama said.

      If things really were fine, state and local governments would have the tax base to keep their employees working. Giving state and local governments handouts only masks what the real problem is, that the general populace doesn’t have the wealth to support bloated government. We already did this a few years back but in the meantime Obama’s policies have been detrimental to the private sector.

      Giving money is also a short term bandaide and it costs the entire country money it doesn’t have.

      The better solution is getting people employeed so they can pay taxes and cutting out the bloat in the meantime.

      1. Titus

        “Ooops…” Time for the drones to update their positions:

        “It is absolutely clear that the economy is not doing fine,” Obama said in his correction.

        ;D

        1. Chris Gerrib

          His original quote was perfectly clear – ““The truth of the matter is that, as I said, we’ve created 4.3 million jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government.”

          He was talking about job growth, and yes, the private sector job growth is not nearly the problem that public sector job loss is. But since certain people can only hear three words at a time, we’re having this stupid argument.

          Bottom line – private sector is adding jobs, public sector is losing jobs.

          1. Curt Thomson

            It’s “adding jobs” at a rate that is less than replacement. Hence the recent increase in the unemployment rate.

            I’d try to reduce that to three words, but I suspect the effort would be wasted. Chris.

          2. Bob-1

            Curt, did you add the extra “Chris.” at the end of your comment by accident, or were you trying to sound polite, or was it to sound hostile, or was it for some other reason? You’ve replied the same way to me – a concluding “Bob.” — and I’ve wondered what tone you intended to convey.

          3. Gregg

            Geez Chris are you congenitally unable to contrast?

            When Reagan was President Volker told him that the recession was necessary to wring out inflation so they tipped us into it. It was a VERY sharp V recession and the economy came roaring back to unprecedented growth levels. Deficit spending is not a good economic idea (though unless you are going to go to war with hopites, you pretty much have to borrow to fight these days), in general.

            But look at the colossal differences between then and now:

            debt vs GDP

            No huge Obamacare sword hanging over the heads of everyone (including business)

            A president who was pro-business (this would not be Obama).

            Far Far Far less regulation all across the spectrum

            Size of government (which was still too big in 1980) MUCH smaller than now

            No cushy public sector union deals draining the economy.

            And on and on….

          4. George Turner

            His original quote was perfectly clear – “The truth of the matter is that, as I said, we’ve created 4.3 million jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government.”

            And he’s created just 188,000 jobs since he took office, according to the latest BLS numbers. Assuming he means the 27 months is marked from Jan 2010, he’s only added 3.954 million new jobs. The number of people who are not in the labor force has increased by 4.325 million people since Jan 2010, so perhaps his eyeballs traced the wrong row of the BLS chart when he looked over and saw 4.3 million.

            Here is some of the data I grabbed from the BLS situation summaries.

            Civilian non-institutional population (May 2012) 242,966,000
            (5,968,000 more than Jan 2010, and 8,227,000 more than Jan 2009)

            Employed (May 2012) 142,287,000
            (3,954,000 more than Jan 2010, but only 188,000 more than Jan 2009)

            Employment-population ratio (May 2012) 58.6%
            (58.4% in Jan 2010, 60.3% in Jan 2009)
            Up slightly over the past 27 months, but down significantly since he took office.

            Not in labor force (May 2012) 87,958,000
            (83,633,000 in Jan 2010, and 81,023,000 in Jan 2009)
            (4,325,000 more than Jan 2010, 6,935,000 more than Jan 2009)

            Unemployed 12,720,000
            (14,837,000 in Jan 2010, and 11,616,000 in Jan 2009)

          5. wodun

            How many of those jobs are Green jobs? Because taking existing jobs reclassifying them and then double counting them doesn’t count as creating a job. Just saying…

    1. Rand Simberg Post author

      Correlation is not causation. Reagan was able to increase government spending (though that wasn’t his goal, other than for defense) because the economy was recovering thanks to his tax policies.

      1. Der Schtumpy

        He was also spending the Evil Empire into the dust bin of history with much of that increase.

      2. Chris Gerrib

        The economy at that point was doing no better than it is now, and deficits were skyrocketing.

        In every recession since and including the Great Depression, increased government spending, AKA stimulus, was needed to get out of the hole.

        1. Al

          You’re crediting at least one $200-billion-deficit year as “being responsible” for getting us out of an official recession with “increased spending”.

          Yet, we’re in the trillions now, and -still- not on a typical path.

          If spending is good, and more spending is -better-, then we should be talking about how we’re overheating the economy at this point.

          But some people can’t recognize that simultaneously digging a ditch -and- filling in the whole does not in any way product a “stimulus”. It has to be aimed at actual infrastructure. Not “infrastructure”.

          Obama’s quote on the subject of government spending’s targeting is: (puzzled tone) “It’s all good, right?”

        2. Josh Reiter

          Uh, that was the whole point of Reaganomics. Despite criticism by a number of conservatives at the time his idea was to return federal money back to state and local governments. His idea was that it was better to return the tax payer money back to the local governments were it could better serve the taxpayers from which the money came from. So, you saw those increases in city, and state spending because that. was. the. whole. point. This was part of his supply side strategy. Any of the increases you see at the federal level were most directly a result of a massive military build up spending. Once the military spending leveled off the deficits came back under control. People were more willing to accept the huge deficits because, well, they don’t like the thought of Tsar bombs vaporizing them. Fear has a uncanny way of focusing a group of people.

          Obama is no Reagan with regards to fiscal policy. Obama keeps trying to chase the Keynesian demand side-stimulus rabbit down the hole. Krugmanites keep saying, “Oh but the stimulus wasn’t large enough” and they post pretty charts that align themselves just to the so called “stimulus” itself. But the funny thing is that the supposed one time TARP and stimulus levels of spending have become the new norm. The Krugmanites said of 3-4 trillion in stimulus would have saved us from; stuff. But we surpassed that long ago. Isn’t 5 trillion in debt over 4 years enough to finally get this recovery going? When is this demand side stimulus style spending going to spur a recovery that one normally sees follow a recession? Couple that with the fact that social spending has ballooned from 6% of GDP in the 80′s to 10% now. While military spending was about 6% during the 80′s and had fallen to around 5% now. I mean, where are the big government people wanting to pump the the military? Wouldn’t an army of regimented graduates of hard core military schools give you better bang for the buck than say, an army of paper pushing bureaucrats who graduated schools that provide more info about who you should know than what you should know? And don’t even get me started on how the rate of spending is dramatically higher. The percentage of GDP versus debt is a 40% which is only surpassed by WWII. GDP growth is pitiful when you adjust for inflation. It all adds up to people being pissed the hell off that this stuttering clusterfuck of a moron doesn’t know what the hell he is doing.

        3. wodun

          You might have a point about stimulus spending but you have to look at how that money was spent. Giving money to state and local governments, as was done, didn’t effect the right part of the employment equation to generate private sector jobs which provide the tax base for supporting government. Also, you have to take into account that the stimulus wasn’t designed to produce jobs, remember Obama laughing off there were no shovel ready jobs, but it was designed for rewarding Obama’s political supporters, which it did a good job of.

          You appear to have the same misuderstanding of stimulus spending, that all that matters is spending the money to get the multiplier but it isn’t enough just to spend the money, everything hinges on how the money is spent. Obama didn’t have a clue then or now on how to spend money to create sustainable jobs.

        4. Karl Hallowell

          In every recession since and including the Great Depression, increased government spending, AKA stimulus, was needed to get out of the hole.

          Name the recession that needed government spending. Even the Great Depression didn’t. The US government had prior to the Great Depression more than a century long history of muddling through, without significant government spending, recessions just as severe as the one that caused the Great Depression, and it got out of them.

          Further, correlation doesn’t imply causation. Sure, we see recoveries from recessions and we see increased government spending, but I think it foolish to connect the two. Instead, we now have two solid counterexamples in the past twenty years, the botched recovery from the 1990-1991 Japanese recession and the current failed efforts of the past few years throughout the developed world.

  3. Der Schtumpy

    I’m sitting here watching WWII in Color while I’m reading this. And it seems like history repeating itself with the Obumble Admin in some ways.

    I have begun to wonder if he’s getting all the information we get. Is he SO insulated from the real world that he really thinks things are better? Or is he just a lying idiot, who thinks we’re too stupid to know the truth?

  4. ken anthony

    Finally, Obama has lost the election. Until now, I was worried.

    “The private sector is doing fine.” is the final nail in his coffin.

    Watch the GOP broadcast that like a skipping record in Oct.

  5. IcePilot

    Historians will mark this election as the Turning of the West. As WI,TX, Canada and Estonia have demonstrated, saving ourselves from this fiscal/national security catastrophe can succeed without extreme hardship.

    Getting across the idea that we have to produce more that we consume has helped. The truly historic changes require a preceding event, like the election of President Obama, to allow clarity as to just how bad things can get, if the takers take over from the makers. And now the pendulum starts to swing with an acceleration that catches the attention of all, causes disbelief and horror in the corridors of MSNBC, and may result in some actual restraint of this federal behemoth.

    1. wodun

      Heh, the President of Estonia actually fights his own battles on Twitter. Poor Krugman.

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