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Sometimes The Problem IS The 'Solution'Probably the biggest fake news last week was President Obama’s feux pas saying “the private sector is doing fine”. When you watch the full response in which the comment was made, it was clear (to me anyway) that he was saying, “In comparison to the 14 straight months of job losses in the Public sector”, the 27 straight months of 4.3million jobs created in the private sector shows the private sector already has the tools necessary to create jobs, and it’s time to focus on the public sector. I’ve been ranting on here for months now that “public sector layoffs are undermining our recovery”. For every public job we eliminate, that’s one more person unnecessarily competing for a private sector job. So while Republicans scream about the need to “cut government spending”, when Obama does shrink the size of government, it cuts into the “total number of jobs created” figure, and stymies the Unemployment Rate (ticking UP last month for the first time since June of last year. And… as I pointed out weeks ago… those same Republicans demanding Obama cut the size of government have been hiring government workers like crazy to get their own state unemployment figures down so they can say: “Look at MY state! I know how to get things done!” So the sub-story underlying President Obama’s “gaffe” is, “Is he finally starting to get it?” If you want unemployment down in time for the election, STOP FIRING PUBLIC WORKERS.

I posted this graph a couple of times already, and I’m likely to post it a few times more:
 

Public sector job growth under Ronald Reagan:
Reagan started hiring like mad to bring down UE

Notice above that the government stops laying off people right around the mid-1982 mark. After Reagan entered office in January of 1981, unemployment continued to climb like a monkey in a tree well into his second year, peaking at 10.8% unemployment in both Nov/Dec of 1982. Also notice that the graph is eight years of government hiring. But look where it was by the start of 1984. Public sector hiring really didn’t budge too much since mid-’82. The Reagan Administration hadn’t actually begun to DO much government hiring by that point, they just stopped firing public workers.

Now here’s a graph you probably haven’t seen:
 

Unemployment rate during Reagan’s first term (1/81 – 12/84):
UE plunges following massive gov hiring.

See what happened to unemployment right around the same time (late-1982)? Then look where it was by January of 1984. Translation: You don’t need massive government hiring just to bring down unemployment. YOU JUST NEED TO STOP LAYING PEOPLE OFF!

Compare Reagan’s 10.8% peak unemployment 23 months into his presidency vs President Obama’s peak of 10.0% just nine months into his FIRST year, peaking in October… the same month Bush’s last budget ended (all numbers via The Bureau of Labor Statistics). St. Ronnie didn’t institute any “Massive Jobs Program” or any other major policy initiative in late 1982 to account for the sudden/dramatic dip in unemployment… unless you count RAISING TAXES. Yes, Reagan’s first big tax hike came in 1982 to stem the rapidly rising National Debt. But most importantly, he stopped gutting public sector jobs.

Reagan came into office promising to “cut government”… which he did… at the cost of the unemployment rate. When unemployment broke 9.5% (two points higher than when he took office) in mid-1982, the government stopped firing people. It took a few months for the economic inertia to stop rising unemployment figures, but once those paychecks started making their way into the economy, you only need to look at that second graph to see its effect on unemployment.

And the Right declared Reagan a “hero” for “saving the economy”, handily winning re-election in what still stands today as one of the most lopsided election victories in American history. Reagan’s “morning in America” ad pointed out how much better the economy now was (in time for the election) as compared to where it was when he took over… unemployment was 7.5% in January 1981, compared to 7.2% by November 1984. Everyone quickly forgot that just two years earlier, it had hit 10.8%.

And now peering through the fog of President Obama’s “gaffe cloud”, do my ears deceive me or was his gaffe the result of frustration as he finally starts to recognize the crippling effect public sector layoffs have had on our recovery? Maybe last month’s 1/10th of a point tick upward in the unemployment rate was just the kick in the pants he needed to finally get that it’s time he stop handicapping his own recovery? I’m angry it would take anyone so long to figure out that when you’re trying to bring down unemployment, the last thing you should be doing is FIRING people!

Let’s hope so, because if that’s true, I envision a “Great Awakening” in Obama’s second term as he learns to stop listening to people that wake up every morning thinking up ways to make him look bad.
 

ADDENDUM: In case you missed it, right after I posted this… my fourth rant on Public Sector job losses and Republican hypocrisy on the subject… the always excellent Rachel Maddow Show made the subject the opening topic on Monday nights show, and included the following graph:
 

Public Sector employment by president
Public Sector employment under last three Republican presidents

I’m glad to see the Mainstream media finally catching up.
 

(Editor’s Note: If you missed it, I added a new page to the Rap Sheet: “Reasons to NOT vote for Obama” according to the Right, each Talking Point linking to pages debunking those claims. As with our Romney Page, I will do my best to continually update it throughout the year.)
 


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