Americans for Prosperity follows closely in the footsteps of pro-Romney super PAC Restore Our Future, taking President Obama’s comment that “the private sector is doing fine” out of context in order to leave voters with the impression that the president is out of touch with economic reality. Full context reveals, however, that Obama was speaking specifically about how public-sector job losses are impeding economic recovery – something that’s backed up by facts. As the private sector has gained 4.5 million jobs over 29 straight months of growth, state and local government have been forced to lay off employees, with the GOP crowing about shrinking government all the while.
President Obama Was Talking About How Public-Sector Job Losses Are Dragging Down Recovery
Obama: “Where We’re Seeing Weaknesses In Our Economy Have To Do With State And Local Government.” From a transcript of an exchange between President Obama and a reporter:
Q What about the Republicans saying that you’re blaming the Europeans for the failures of your own policies?
THE PRESIDENT: 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 — oftentimes, cuts initiated by 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.
And so, if Republicans want to be helpful, if they really want to move forward and put people back to work, what they should be thinking about is, how do we help state and local governments and how do we help the construction industry. Because the recipes that they’re promoting are basically the kinds of policies that would add weakness to the economy, would result in further layoffs, would not provide relief in the housing market, and would result, I think most economists estimate, in lower growth and fewer jobs, not more. [WhiteHouse.gov, 6/8/12]
- Obama Clarified That He Didn’t Mean The Economy At Large Is “Doing Fine.” From the Huffington Post: “The president sought to clarify his remarks later Friday, saying it is ‘absolutely clear the economy is not doing fine.’ He continued, ‘That’s the reason I had a press conference. That’s why I spent yesterday, the day before yesterday, this past week, this past month and this past year talking about how we can make the economy stronger. The economy is not doing fine. There are too many people out of work. The housing market is still weak, too many homes underwater and that’s precisely why I asked Congress to start taking some steps that can make a difference.’” [HuffingtonPost.com, 6/8/12]
The Facts Back Up Obama’s Statement. From the Huffington Post: “Obama’s comments about jobs growth have some bearing. The economy has gained about 4.2 million private sector jobs since early 2010, putting payroll at about the same level as it was in January 2009. Since Obama took office, about 607,000 fewer people work in the public sector. State and local governments, unlike the federal government, generally have to balance their budgets, and with fewer revenues, spending cuts have forced layoffs.” [HuffingtonPost.com, 6/8/12]
3.3 Million New Private-Sector Jobs Since Recession Ended, But 640,000 Government Employees Out Of Work
Recession Officially Ran From December 2007 To June 2009, Making It The Longest Since World War II. From the National Bureau of Economic Research: “The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months. In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month.” [NBER.org, 9/20/10]
- Recession Resulted In 8.3 Million Job Losses. According to the Associated Press, “the Great Recession killed 8.3 million jobs, compared with 1.6 million lost in the 2001 recession.” [Associated Press via Yahoo! News,5/4/12]
Bush Recession Was So Severe That Economy Was Still Shedding Over Three-Quarters Of A Million Jobs Per Month Through First Few Months Of President Obama’s Term. According to the Bureau of Labor Statistics, the economy shed 839,000 jobs in January 2009, 725,000 in February 2009, 787,000 in March 2009, and 802,000 in April 2009, for a four-month average of 788,250 lost jobs per month. [BLS.gov, accessed 5/3/12]
Since The Recession Ended In June 2009, The Private Sector Has Added 3.3 Million Jobs While Public-Sector Employment Has Fallen By Over 640,000. According to the Bureau of Labor Statistics, there were 107,933,000 private-sector jobs in June 2009, and 111,317,000 private-sector jobs in July 2012, an increase of 3,384,000 jobs. The BLS also reports that there were 22,570,000 Americans working in the public sector in June 2009, and 21,928,000 working in the public sector in July 2012, a decrease of 642,000 jobs. The private-sector gains and public-sector losses add up to a total increase of 2,742,000 jobs.
The following chart shows the cumulative private-sector job gains and public-sector job losses since the recession officially ended in June 2009:
- Conservative AEI: The Public Sector Is Shrinking, But Private-Sector Growth Is Above Average. From American Enterprise Institute scholar Mark J. Perry: “In the second quarter of 2012, ‘public sector GDP’ decreased -1.44%, and that was the eighth straight quarter of negative growth for total government spending, averaging -2.88% per quarter over the last two years. In contrast, there have been 12 consecutive quarters of positive growth for private sector GDP averaging 3.07% per quarter in the three years since the recession ended, which is slightly higher than the 2.8% average growth rate in private real GDP over the last 25 years.” [AEI-Ideas.org, 7/31/12]
- GOP-Favored “Government Downsizing” Has Been “A Drag” On Job Growth. From the Associated Press: “Conservative Republicans have long clamored for government downsizing. They’re starting to get it — by default. Crippled by plunging tax revenues, state and local governments have shed over a half million jobs since the recession began in December 2007. And, after adding jobs early in the downturn, the federal government is now cutting them as well. States cut 49,000 jobs over the past year and localities 210,000, according to an analysis of Labor Department statistics. There are 30,000 fewer federal workers now than a year ago — including 5,300 Postal Service jobs canceled last month. By contrast, private-sector jobs have increased by 1.6 million over the past 12 months. But the state, local and federal job losses have become a drag on efforts to nudge the nation’s unemployment rate down from its painfully high 9.1 percent.” [Associated Press, 10/25/11]
The Private Sector Has Added 4.5 Million Jobs Over 29 Consecutive Months Of Private-Sector Growth. The following chart shows the monthly change in private-sector jobs dating back to January 2008.
President Obama’s Private-Sector Jobs Record Is Better Than President Bush’s. Bureau of Labor Statistics data show President Obama has presided over a net increase of 1,057,000 private-sector jobs from February 2009 to July 2012, including more than 4.3 million over the past 29 consecutive months of private-sector growth. By contrast, from February 2001 to January 2009, President Bush oversaw a net loss of 638,000 private-sector jobs. In just the first term of the Bush administration, from February 2001 to January 2005, private-sector employment collapsed by 905,000 jobs. [BLS.gov, accessed 8/3/12]
[NARRATOR:] Maybe your family is like most: struggling to make it by. But recently, President Obama said: [PRESIDENT OBAMA CLIP:] “The private sector is doing fine.” [NARRATOR:] Hmm. How can our president be so out of touch? [OBAMA CLIP:] “The private sector is doing fine.” [NARRATOR:] How can he fix the economy if he doesn’t know what’s wrong? [OBAMA CLIP:] “The private sector is doing fine.” [NARRATOR:] The private sector is not doing fine. Tell President Obama: Support the AFP jobs agenda. [Americans for Prosperity via YouTube.com, 6/20/12]