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:
As has been pointed a couple of times this week, President Barack Obama has said that the “private-sector is fine” and that the real lag in jobs comes from the state and local governments. The comments are scary in that Obama does seem to grasp that the private-sector is where the real strength of our economy is and that regulations and mandates are causing lagging job growth. But what of the substance of his claim? Obama is wrong, according to Ed Carson at Investors Business Daily:
Private-sector jobs are still down by 4.6 million, or 4%, from January 2008, when overall employment peaked. Meanwhile government jobs are down just 407,000, or 1.8%. Federal employment actually is 225,000 jobs above its January 2008 level, an 11.4% increase. That’s right, up 11.4%.
Private payrolls have been trending higher in the last couple of years while government has been shedding staff. But that’s because governments did not cut jobs right away. Overall government employment didn’t peak until April 2009, 16 months after the recession started. It didn’t fall below their January 2008 level until September 2010.
The recession was boomtime for federal employment, especially after Obama took office. Federal jobs kept rising (excluding a temporary Census surge in early 2010) until March 2011 — more than three years after overall payrolls peaked.
We all know that public sector pensions—of firefighters, police officers, teachers, and other civil “servants”—are dragging state budgets under and imperiling other budget areas. But the question is, how bad is it? There have been numerous conflicting reports to the unfunded liabilities state governments are facing.
Well, as usual, it seems to be worse than we previously thought. From the Economic Freedom Project:
These facts should stop dead any further pushes to defend and keep public pensions sacrosanct. The left and public unions may get up and toot their own horn, but they can bleat about it until they’re blue in the face: the simple fact is we have no money. Eventually, people are going to get sick of the reductions in service and the hiking of taxes in order to pay for these pensions, and they’re going to come at them with hatchets.
Yet, for some inane reason, public unions cannot recognize this fact. They cannot see ahead even just ten years.
The good times are over. We all need to make cutbacks in order to get through this, and that includes our government. No matter what the left likes to think, reality does not have a liberal bias. It has a libertarian one.