Obama: “Private sector is doing fine”
On Friday, President Barack Obama hosted a press conference at the White House to discuss the economy. It wasn’t his finest moment. In his remarks, Obama told the media that all is well in the private-sector, rather it is the public-sector that is holding the economy back. Here’s the relevant quote:
The truth of the matter is that, as I said, we 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. Often times 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 as the federal government in dealing with fewer revenues coming in.
It’s hard to convince many people, particularly those that will be voting in the fall, that the private-sector economy is “doing fine.” People see the news reports about tepid job creation, still high unemployment numbers, and incredibly large budget deficit. They’re no doubt wondering what planet Obama has been living on over the last three-plus years.
The press conference really could be taken as an in-kind contribution to Mitt Romney and the Republican Party. They’ve pounced on the opportunity to slam the gaffe-tastic remarks. Playing right into their hands, Obama later issued a statement emphasizing that the economy is, in fact, not doing all that well:
Obama repeated his view that state and local governments needed help to avoid teacher and police layoffs, and that Congress should help buoy struggling homeowners and construction workers who remain out of work several years after the financial crisis.
“It is absolutely clear that the economy is not doing fine, that’s the reason I had a press conference,” the Democratic president said, seated next to Philippines President Benigno Aquino.
Notice, however, that Obama didn’t walk back his comments about the private-sector. That’s a telling point. He unsurprisingly believes that public-sector is where the economy is struggling. Moreover, the public-sector has already received a bailout through the 2009 stimulus bill, which cost as much as $4.1 million per “created or saved” job. Meanwhile, the private-sector is indeed struggling to keep up thanks to the increased cost of doing business through ObamaCare and other regulations.
James Pethokoukis notes that, despite Obama’s characterization of the private-sector, there isn’t much about which to be optimistic:
Is the private sector “doing fine?”
1. Private-sector jobs have increased by an average of just 105,000 over the past three months and by just 89,000 a month during the entire Obama Recovery.
In 1983 and 1984, during the supply-side Reagan Boom, private sector jobs increased by an average of 292,000 a month. Adjusted for population, that number is more like 375,000 private-sector jobs a month
2. If the labor force participation rate for May had just stayed where it was in April, the unemployment rate would have risen to 8.4%. As it is, the U.S. economy is suffering is longest sustained bout of 8% unemployment or higher since the Great Depression.
3. Private-sector GDP rose just 2.6% in the first quarter, after rising a measly 1.2% last year.
By contrast, private-sector GDP rose 3.8% in 1983 and 6.5% in 1984 during the supply-side Reagan Boom.
4. The U.S. stock market is down 7% since early April.
5. Real take-home pay is down over the past year.
6. That first-quarter GDP report also showed that after-tax corporate profits dropped for the first time in three years. Major red flag.
No, Mr. President, the private-sector isn’t doing fine at all. And it certainly isn’t ready to deal with a fiscal cliff of tax hikes or a continued deluge of new regulation.
Say what you want about Romney being out of touch with Americans, but Obama doesn’t seem to understand that the life-blood of our economy is the private-sector, and he’s doing little to make it vibrant again as his regulatory and tax policies (remember, Taxmageddon is right around the corner) are discouraging businesses from hiring or expanding. Unfortunately, this is Obama’s economy, and we’re just living in it.