Obama flops with ‘private sector is doing fine’
Oh, boy. President Obama and his supporters will be hearing this line for a while:
“The private sector is doing fine.”
Obama made that remark during a press briefing today about the U.S. and European economies. Now, he and his supporters will almost certainly counter that the line is being taken out of context. Via ABC News’ Jake Tapper, here is that context:
“We’ve created 4.3 million jobs over the last … 27 months, over 800,000 just this year alone,” the president said, “the private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government, oftentimes cuts initiated by, you know, governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility of the federal government in dealing with fewer revenues coming in.”
Michael Scherer of Time notes that Obama and the Democrats did not give John McCain the same benefit of context when they pilloried him for his September 2008, mid-financial-panic comment, “… the fundamentals of our economy are strong.” So, to a large degree, turnabout will be fair play.
But let’s give the president the benefit of context. Is he right that the “weakness in our economy” is that Washington isn’t bailing out state and local governments fast enough?
Obama cast the private sector’s alleged strength in the terms of job growth. So, let’s look at that on the public-sector side.
For starters, let’s consider that the states and locals that are cutting jobs, where they are cutting them, because they don’t have the money to fund them. With annual deficits over $1 trillion a year, Washington doesn’t have the money to fund them, either. What Obama is proposing is to borrow more money from China to pay for civil servants in Sacramento (data for April, the latest available state-by-state, show almost a quarter of government job losses were in California).
But even if one is prepared to go along with this bailout, is it really the cure for what’s ailing us?
Federal data for last month show state and local government employment fell by 111,000, or 0.58 percent, from May 2011. Had those 111,000 people still been in their jobs — and here we’re going to give Obama the benefit of the doubt and assume none of them found employment elsewhere, which is a rather big assumption — the nation’s employment level would have been 0.08 percent higher. The national unemployment rate would have been 8.1 percent, instead of the actual rate of …
… wait for it …
… 8.2 percent.
For those 111,000 people and their families, those layoffs were undoubtedly terrible. But as an explanation for the “weakness in our economy,” and as a possible target for efforts to spur economic growth, the reduction of state and local government employment is a complete nonstarter.
Next excuse?
– By Kyle Wingfield
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266 comments Add your comment
Thulsa Doom
June 9th, 2012
1:16 pm
Slowly but surely I think people are realizing we have a complete incompetent in the White House. Massive debt, a stagnant economy, national security leaks, this is what happens when you hire a community organizer with ZERO executive experience to run the most powerful nation in the world. Why would anyone be surprised over this man’s rank incompetence?
ragnar danneskjold
June 9th, 2012
1:19 pm
Chauncey is beginning to look like The Great Pretender, isn’t he? (I always called him “Chauncey,” after “Chance the Gardner”/Being There, during the last election cycle.) Taranto’s essay yesterday, Noonan’s essay today paint a portrait of an incompetent loser. Best note of the day, however, is by Robert Higgs, (WSJ “notable and quotable” today):
Economist Robert Higgs in “Delusions of Power” (2012):
John Maynard Keynes persuaded his fellow economists and then they persuaded the public that it makes sense to think of the economy in terms of a handful of economy-wide aggregates: total income or output, total consumption spending, total investment spending, and total net exports. . . .
In fact, “the economy” does not produce an undifferentiated mass we call “output.” Instead, the millions of producers who bring forth “aggregate supply” provide an almost infinite variety of specific goods and services that differ in countless ways. Moreover, an immense amount of what goes on in a market economy consists of dealings among producers who supply no “final” goods and services at all, but instead supply raw materials, components, intermediate products, and services to one another. Because these producers are connected in an intricate pattern of relations, which must assume certain proportions if the entire arrangement is to work effectively, critical consequences turn on what in particular gets produced, when, where, and how.
These extraordinarily complex micro-relationships are what we are really referring to when we speak of “the economy.” It is definitely not a single, simple process for producing a uniform, aggregate glop. Moreover, when we speak of “economic action,” we are referring to the choices that millions of diverse participants make in selecting one course of action and setting aside a possible alternative. Without choice, constrained by scarcity, no true economic action takes place. Thus, vulgar Keynesianism, which purports to be an economic model or at least a coherent framework of economic analysis, actually excludes the very possibility of genuine economic action, substituting for it a simple, mechanical conception, the intellectual equivalent of a baby toy. . . .
Because the vulgar Keynesian has no conception of the economy’s structure of output, he cannot conceive of how an expansion of demand along certain lines but not along others might be problematic. In his view, one cannot have, say, too many houses and apartments. Increasing the spending for houses and apartments is, he thinks, always good whenever the economy has unemployed resources, regardless of how many houses and apartments now stand vacant and regardless of what specific kinds of resources are unemployed and where they are located in this vast land. Although the unemployed laborers may be skilled silver miners in Idaho, it is supposedly still a good thing if somehow the demand for condos is increased in Palm Beach.
ragnar danneskjold
June 9th, 2012
1:22 pm
Lest the blog be populated with leftist Luddites, “the vulgar Keynesian” is not an intentional reference to the president, and has nothing to do with Nairobi.
MarkV
June 9th, 2012
1:31 pm
Rafe Hollister @12:46 pm: “… when someone accuse someone of being wrong, the normal person offers some explanation of WHY they are wrong.”
Why don’t you quote me where I accused (this time) Kyle of being WRONG? I accused him of demagoguery, and explained why. Any questions?
Tiberius - Banned by Bookman and proud of it!
June 9th, 2012
1:48 pm
Rafe, MaryV doesn’t come here to learn. She just comes here to be disagreeable. Ignore her.
Tiberius - Banned by Bookman and proud of it!
June 9th, 2012
1:51 pm
Ragnar, I loved Being There! One of Peter Seller’s best efforts.
Rafe Hollister
June 9th, 2012
1:52 pm
MarkV
You said he was wrong to assume the money had to be borrowed from China. Semantics, is your game Mark, not much of substance, but you were right, we could borrow it from ourselves, Poland, Greece, or Uncle Vito, not likely, but semantically you were right. Feel better now. Game over!
md
June 9th, 2012
1:52 pm
“Further, they money given to states is not, as you seem to claim, something that just disappears in a black hole, no matter how some people want to make it to be. If money is given to hire more teachers, firefighters, police and other public servants, not only people get better services, but those employees will spend the money for necessities, encouraging production, which is the way to get the country “back on the economic growth.””
Wrong……that money has to come from the private sector one way or the other……and making the private sector generate more capital only makes it that much harder for the private sector to get back on it’s feet………..
MarkV
June 9th, 2012
2:00 pm
Rafe Hollister @ 1:52 pm
Missing the point again. What else is new?
Rafe Hollister
June 9th, 2012
2:02 pm
Redistribution of money from the private sector to the public sector is not a way to return us to the path of economic growth. If it was, we would not be in this shape now.
MarkV
June 9th, 2012
2:03 pm
md @1:52 pm: “…and making the private sector generate more capital only makes it that much harder for the private sector to get back on it’s feet………..”
It would be interesting to find any sense in this statement, but it would be hopeless.
Rafe Hollister
June 9th, 2012
2:05 pm
MarkV
Your next post that has anything other than a semantic point, will be the first.
You argue like Slick Willie, we can’t begin the argument, until we define the meaning of “is”.
MarkV
June 9th, 2012
2:07 pm
Rafe Hollister @2:02 pm: “Redistribution of money from the private sector to the public sector is not a way to return us to the path of economic growth. If it was, we would not be in this shape now.”
Redistribution of money from the private sector to the public sector is not the cause of the shape the economy is in now. Not in the US, and not in Europe (with exception of Greece and possibly Portugal).
Rafe Hollister
June 9th, 2012
2:11 pm
MarkV
I will give you a MarkV answer to the post at 2:07
Wrong! Ridiculous statement, based on facts as they exist.
MarkV
June 9th, 2012
2:11 pm
Rafe Hollister @2:05 pm: “Your next post that has anything other than a semantic point, will be the first.”
In this case, you are right. Apparently, you do not even understand what “semantics” means.
Lil' Barry Bailout (Revised Downward)
June 9th, 2012
2:16 pm
MaryK: Metablogger. Mostly blogs about the blog.
MarkV
June 9th, 2012
2:24 pm
Rafe Hollister @2:11 pm
“I will give you a MarkV answer to the post at 2:07
Wrong! Ridiculous statement, based on facts as they exist.”
Rafe Hollister @12:46 pm: “… when someone accuse someone of being wrong, the normal person offers some explanation of WHY they are wrong.”
kelly
June 9th, 2012
2:33 pm
Thanks Dr Pangloss for correcting the record. Some of us hear what was said, with context, not just want we want to hear.
An observation: Most of the anti-Obama crowd also seem to be the most frequent name callers, especially with clever play-on-words names for the President.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
June 9th, 2012
3:12 pm
First, the assertion indicates the president has fallen prey to the temptation to believe in macroeconomic generalities that make him feel good, rather than facing the practical realities of life outside the White House bubble.
And if Michelle’s anywhere close, it’s life inside the bubble butt.
md
June 9th, 2012
3:14 pm
” hereand making the private sector generate more capital only makes it that much harder for the private sector to get back on it’s feet………..”
“It would be interesting to find any sense in this statement, but it would be hopeless.”
It makes all the sense in the world if one has a clue as to how the system works……you do know that the “gov’t” is NOT a self-sustaining entity….right?
It is a parasytic entity that relies on the private sector for it’s life blood…..please tell us you understand that.
And it that blood is running low in the private sector, what in the world do you think will happen if that sector is required to generate more lifeblood??
Get with the program there fella……….
MarkV
June 9th, 2012
3:27 pm
md @3:14 pm
It would be interesting to find any sense in those statements, but it would be hopeless.
Old Timer
June 9th, 2012
3:29 pm
Here is one for Obama, Democrats and taxes–
You pay social security maximum tax for your 49 working years. You total income is over $32000 a year, so you pay income tax on 85% of your social securty received.
Due to the fact your home is paid for, and you began life before the total entitlement society, Obama’s reckless spending and were taught to not buy any thing unless you could pay for it, thereby saving.
In this case you now pay more income tax than the total you recieve from Social Security.
So, in reality you give the Social Security money back to the government with a a penalty on 85% of it.
And, Obama thinks that ony the rich need to be taxed more–when he is penalizing someone intelligent to try to live the Americn Dream that existed one time,
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
June 9th, 2012
3:48 pm
Obozo is working hard at taxing folks who play by the rules to buy the votes of those who do not.
In case you’re not sure what “the rules” are:
1) Get a job
2) Show up on time
3) Don’t abuse alcohol
4) Don’t use illicit drugs
5) Keep your pants up
Obozo’s base are the moochers who can’t manage the above.
md
June 9th, 2012
4:06 pm
Well Mark…..I think we have identified the problem.
Look at it this way……the private sector can exist without the public sector, but the public sector can not exist without the private sector………..
The public sector is nothing more than a giant monkey on the back of the private sector., as the private sector MUST generate most of the capital required to run both sectors.
When the gov’t gets too big, it’s basic math…..the private sector struggles to pay ALL the bills.
MarkV
June 9th, 2012
4:27 pm
md @4:06 pm
What you have written, that” the private sector can exist without the public sector, but the public sector can not exist without the private sector,” is not really true. But it is at least an improvement over what you had written before (@3:14 pm):
“you do know that the “gov’t” is NOT a self-sustaining entity….right? It is a parasytic entity that relies on the private sector for it’s life blood…..please tell us you understand that.”
That was such a piece of garbage that it was hard to believe it coming from a thinking person.
md
June 9th, 2012
4:34 pm
Mark….hate to say it, but you are truly clueless about how the system works……..
The first statement is absolutely true…….the private sector can absolutely function without the public sector……it may not always be pretty, but it can function.
On the other hand, the public sector can not function on it’s own in a capitalistic society……now, if you want to get into communism………..but bear in mind, that communism for the most part always struggles to function for the masses. If one has noticed, China had to turn to capitalism (private sector) to pull itself out of the dark ages.
And parasitic is exactly the relationship between the two……where in the world do you think the public sector gets it’s money??
@@
June 9th, 2012
4:38 pm
CHICAGO — On the sixth floor of a sleek office building here, more than 150 techies are quietly peeling back the layers of your life.
DANG! Republicans have been accused of sacrificing their privacy in the interest of national security.
Democrats are giving up THEIR privacy for an evening with George Clooney!!??!!
REALLY!!!!
MarkV
June 9th, 2012
5:15 pm
md @4:34 pm
I am losing patience with the nonsense you have been writing, so I am going to give it to you straight:
When I wrote that your statement , “the private sector can exist without the public sector, but the public sector can not exist without the private sector,” was not really true, the important word was “really..” A private sector could exist without a public sector only in some insane, fantasy world, where private companies would just compete with each other without government, without laws and courts, without a common army, without anything done for the “public good.” You should think hard about the words of Thomas Jefferson: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. THAT TO SECURE THESE RIGHTS, GOVERNMENTS ARE INSTITUTED AMONG MEN, deriving their just powers from the consent of the governed.” (my emphasis).
So if a government is for you “a parasitic entity,” if you prefer a country without this entity, without government building roads, warning you against hurricanes, checking water and air for pollutants, warning people about diseases, investigating crimes, convicting criminals, and all those innumerable functions of a government, in other words, if you do not want to live in a civilized society, then why don’t you find a deserted island not belonging to anybody, and stay there and not bother other people with this kind of nonsense.
md
June 9th, 2012
5:31 pm
That long rant has nothing to do with the basic facts…..one can function without the other but the inverse is not true…..merely basic fundamentals.
All the rest you have thrown in is “in addition to” the basic fundamentals. Do we function better with “some” gov’t…..absolutely, but that doesn’t change the balance needed for both to thrive……and when a country has 16 trillion in debt and a 1.5 trillion yearly deficit, the system is wayyyyyy out of balance. That gov’t entity you seem to love so dearly pays next to nothing toward that debt……it has to be generated by the private sector that you seem to loth so dearly.
md
June 9th, 2012
5:35 pm
I’ll ask you again mark……where does that benevolent gov’t get it’s money??
td
June 9th, 2012
5:51 pm
MarkV
June 9th, 2012
5:15 pm
“So if a government is “a parasitic entity,””
This is 100% true statement. Government can not exist without the private sector to pay for its needs so by definition it is a parasitic entity.
Does this mean that there is no need for the government. Of coarse not. We do need the government but the Federal government needs to go back to what the original intent was. I have found a pretty good commentary of the subject for you to read:
Another not unimportant consideration is, that the powers of the general government will be, and indeed must be, principally employed upon external objects, such as war, peace, negotiations with foreign powers, and foreign commerce. In its internal operations it can touch but few objects, except to introduce regulations beneficial to the commerce, intercourse, and other relations, between the states, and to lay taxes for the common good. The powers of the states, on the other hand, extend to all objects, which, in the ordinary course of affairs, concern the lives, and liberties, and property of the people, and the internal order, improvement, and prosperity of the state.
Joseph Story, Commentaries on the Constitution, 1833
MarkV
June 9th, 2012
6:00 pm
md @5:31 pm
As I have written already, I have enough of your stupidities, such as “the private sector that you seem to loth so dearly.” Where did I write that? As long as you write so patently ridiculous statements like “one can function without the other but the inverse is not true” about the private and public sectors, there is no point discussing it.
md
June 9th, 2012
6:30 pm
You are right Mark…..there is no point in educating you any further when you refuse to learn…..learning is a choice.
And for the 3rd time Mark…..where does the gov’t gets it’s money??
Or try this one…….on any given federal worker, what % of salary and benefits are paid with private sector dollars?? Hint…..it isn’t quite 100%………..
elgrunir
June 9th, 2012
6:33 pm
The private sector is in fact, doing fine.
Companies are sitting on record profits and cash.
Period.
md
June 9th, 2012
6:35 pm
“As long as you write so patently ridiculous statements like “one can function without the other but the inverse is not true” about the private and public sectors”
I’m always eager to learn Mark……maybe you can explain how a public sector can exist without a private sector in our capitalistic society………I’m all ears and waiting patiently………
md
June 9th, 2012
6:36 pm
elgrunir …….try going back and reading why that talking point means next to nothing……what % of corps in this country does that apply to??
MarkV
June 9th, 2012
7:01 pm
md @6:35 pm: “I’m always eager to learn Mark”
I hope you are, but
“maybe you can explain how a public sector can exist without a private sector in our capitalistic society”
You should start by paying attention and not to falsify what others have written. Why should I explain the above, when I never claimed anything like that? In a capitalistic society neither a public sector nor a private sector can exist without the other one. If you want to claim the opposite, that a private sector can exist without the public sector, then describe the society with only a private sector, without laws, courts, etc. That is what you claimed was possible.
I’m all ears and waiting patiently……….
MarkV
June 9th, 2012
7:18 pm
td @5:51 pm: “Government can not exist without the private sector to pay for its needs so by definition it is a parasitic entity.”
1. The above is not a definition of a parasitic entity.
2. The private sector cannot exist without a government; if the above definition were true, it would be also a parasitic entity. It is neither.
md
June 9th, 2012
7:22 pm
“Why should I explain the above, when I never claimed anything like that?”
You haven’t huh?
“As long as you write so patently ridiculous statements like “one can function without the other but the inverse is not true” about the private and public sectors”
So……….what do you call that?
and:
“If you want to claim the opposite, that a private sector can exist without the public sector, then describe the society with only a private sector, without laws, courts, etc. That is what you claimed was possible.”
Ever heard of private schools, private security, private firefighters…….none of it HAS to be done through a gov’t entity…….that is what you seem to be missing.
Now, your turn……
md
June 9th, 2012
7:25 pm
Mark…..what do you call 2 farmers trading pigs for chickens?? Hint……very basic private enterprise (no gov’t involved)……and they take care of all their other needs themselves. Now, expand that concept and you may see the light.
Gov’t as an arbitrator is a choice, not a necessity……..
Proud Voter
June 9th, 2012
7:53 pm
The middle class does NOT need any more taxes! As Obama said, we are doing fine without any right wing jockeying to put more economic pressure on us. Obama could have said, “Bless you” when someone sneezed and the Republicans would have wanted him gelded for mixing politics and religion. Someone people cannot be pleased.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
June 9th, 2012
8:37 pm
MaryK: Where did I write that?
————————
Educated people are aware of something called “inference”.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
June 9th, 2012
8:39 pm
Proud Voter: The middle class does NOT need any more taxes!
—————————–
Obozo’s planning on raising your taxes beginning January 1.
You must really be ticked.
MarkV
June 9th, 2012
8:43 pm
md @7:22 pm
This is the last time today I will try to educate you:
“As long as you write so patently ridiculous statements like “one can function without the other but the inverse is not true” about the private and public sectors”
“So……….what do you call that?”
I call that a completely consistent statement with a rejection of your claim that a private sector can function without the public sector, which is what you have claimed by the above (“one can function without the other but the inverse is not true”) Where do you see in of my statements a claim that a public sector can function without the private one, in a capitalist society?
“Ever heard of private schools, private security, private firefighters…….none of it HAS to be done through a gov’t entity…….that is what you seem to be missing.”
Are you trying to be even more ridiculous than to this point? This borders on either dishonesty or idiocy. I was discussing a country, as you can see from all I have written about the GOVERNMENT and its functions. Which is also what YOU have written about, about the GOVERNMENT, not some “2 farmers trading pigs for chickens.” YOU (@3:14)pm have written: “you do know that the “gov’t” is NOT a self-sustaining entity….right? It is a parasytic entity that relies on the private sector for it’s life blood…..please tell us you understand that.”
Which was how our exchange started. If you cannot argue seriously, I have nothing to discuss with you.
md
June 9th, 2012
11:15 pm
Yes Mark, it is quite obvious that you do not understand that gov’t is a desire, not a necessity. A private sector can function without a gov’t if it desired to do so……I can’t help you if you can’t understand that. Individuals within that private sector have to choose to form a gov’t……key word….choose.
Get Real
June 9th, 2012
11:38 pm
MarkV…..I been reading all your posts; do you even live on this planet or in some parallel universe where free lunches exist for everyone….
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
June 10th, 2012
7:04 am
For the capitalism-hating tinfoil hat crowd (carlosgvv et al):
——————————
Corporations Not Hoarding Cash
The Federal Reserve on Thursday came out with its quarterly “flow of funds” report, which for two years now has reflected the steady increase in the amount of cash on corporate balance sheets. Sure enough, the report showed that corporate cash ticked up yet again in the first quarter of the year by around $12.6 billion, to $1.74 trillion.
But here’s the funny thing about that figure: Back in March, the Fed said nonfinancial companies ended the year with a record $2.23 trillion. The new release revised that figure down to $1.72 trillion. Even for the Fed, a half-trillion-dollar revision is a big deal.
$1.7 trillion is still a lot of money, close to an all-time high. But more significant than the actual number is the implication for what had been one of the most enduring narratives of the recovery: the massive pile of cash that was sitting on the sidelines.
http://blogs.wsj.com/economics/2012/06/09/number-of-the-week-corporations-not-hoarding-cash/
AU Liberal in ATL
June 10th, 2012
7:51 am
When you take everything out of context and spin it to suit your own political puffery, you’re the flop. Even God couldn’t get anything done with this bunch of congressional cornballs.
hryder
June 10th, 2012
7:53 am
Another example of Obama, the United States entertainer in Chief, not having a clue with reality in the economic world. VOTE OUT ALL INCUMBENT ELECTED OFFICE HOLDERS IN THE NOVEMBER ELECTIONS.
Lil' Barry Bailout (Unexpectedly Revised Downward--Again)
June 10th, 2012
7:56 am
AU Liberal in ATL: When you only read the headline, ignore the provided context and link to the full story, and then whine “out of context”, you’re the flop.
—————–
Fixed.