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President Barack Obama makes a campaign-style stump speech at UNLV’s Cox Pavilion on Thursday, June 7, 2012. Obama made a two-hour pit stop in Las Vegas to urge Congress not to raise student loan interest rates.
By Karoun Demirjian (contact) 
Tuesday, June 12, 2012 | 2 a.m.
Sun coverage
- New Romney ad hits Obama on the “fine” economy (06-10-2012)
- Obama seeks to clarify remarks on private sector (06-08-2012)
- Nevada unemployment falls to lowest level in 3 years (05-18-2012)
- Brookings report: Job growth in Las Vegas ‘flat’ after two good quarters (12-14-2011)
- More Sun political news
- More Sun business/economy news
Republicans had a festive weekend excoriating President Barack Obama for saying “the private sector is doing fine” Friday during a press conference about the state of the economy.
“Mr. President, I beg to differ,” Nevada Republican Rep. Mark Amodei said. “Tell the nearly 160,000 Nevadans who are looking for work ‘the private sector is doing fine.’”
Obama’s “sunny outlook doesn’t help nearly more than 158,000 unemployed Nevadans,” Republican Sen. Dean Heller retorted.
To say any part of the economy is “doing fine” just after May reports showed the slowest job growth in a year is politically perilous to start.
Democrats have already experienced just how treacherous it is to make such conclusions about the private sector. Last fall, when Sen. Harry Reid said the private sector was “doing just fine,” Republicans piled on his comments in much the same way.
But politics aside, both Reid and Obama have a point — at least comparatively speaking.
“Because of balanced budget constraints, state and local governments have been shedding jobs for the last three years, and this has cancelled out some of the job growth in the private sector,” said Elliot Parker, an economics professor at UNR. “There are job losses at the state and local level, (but) the private sector is improving.”
According to Department of Labor statistics, employers reported almost 2 million more non-farm, private sector jobs this May compared with one year ago. But the public sector reported 161,000 fewer jobs than one year earlier.
Even in the last month, in which reported job gains were disappointingly low, the private sector added 82,000 jobs while government sectors lost 13,000.
The public sector trend is often overlooked because of the dramatic job losses in the private sector — which employs more people — during the worst of the economic downturn.
In Nevada, the recession hit the private sector particularly hard, with key sectors — especially construction — taking the brunt of the fallout. In the public sector, the federal stimulus helped staunch the jobs hemorrhage by funding salaries for teachers, firefighters, police and public works personnel.
As a result, the Nevada private sector shrank by 13 percent while the public sector shrank by 9 percent.
Republicans consider that record to be a failed one. They often cite the average six-figure stimulus price tag per public job saved, and they claim the cost-per-job created in the private sector — largely through tax incentives — would have been much lower.
But in a recession such as this one, the trade-off of private-vs.-public sector health isn’t cut and dry.
“Can anyone say we have too many teachers? ... Can anyone say we have too many police officers? Too many infrastructure jobs?” Reid said Saturday, defending Obama and citing the potential for even more layoffs in Clark County schools this year. “I don’t think so.”
Some economists argue that a healthy public sector is more important during a recession.
“When the economy is doing pretty well, let’s say above average, then an expansion of the public sector winds up taking resources away from the private sector,” Parker said. “When the economy is below average, especially in a situation like this where you have very low interest rates, the public sector and the private sector tend to be complements: The better the public sector does, the better the private sector does.”
In an election year, however, political reality can trump economic nuance.
In Obama’s case, the better the economy is doing, the better the president will do on Election Day. If the economy is suffering, so will Obama’s numbers.
When it comes to lagging public sector numbers, Obama can point a finger at Congress and chide them for not passing a jobs plan and slow-walking a transportation bill, as he did Friday.
But when it comes to the gains and losses in the private sector, he’s at the mercy of the monthly Bureau of Labor Statistics reports. And as those reports have recently gotten worse, the Republicans have been heaping the blame on his administration.
That gives the president an extra incentive to say things are “fine” in the private sector when they might just be getting marginally better.
“I wouldn’t say the private sector’s ‘fine’ because you still have inadequate demand,” Parker said. “But had we not been having state and local governments cutting back, the private sector would be even better off.”
Government creates plenty of jobs. That $176 million dollar Navy Drone that crashed didn't produce any jobs? The people that designed, built and operated it didn't have a job? and those people didn't go out and buy goods and services as well? creating more jobs.
Just so we are on the same page
Unemployment for Public government employees is 4.2%
For the whole country it is 8.2%
Government employees have higher pay, higher benefits and higher job security
-----)
Given all that Obama claims increasing government employment is the way to save the economy and here is what is reported above ---- "But politics aside, both Reid and Obama have a point -- at least comparatively speaking.
"Because of balanced budget constraints, state and local governments have been shedding jobs for the last three years, and this has cancelled out some of the job growth in the private sector," said Elliot Parker, an economics professor at UNR. "There are job losses at the state and local level, (but) the private sector is improving."
Really Democrats are saying this comparison works as if it makes any sense.
Anyone from the left that thinks that the economy is doing alright is as clueless as Obama. That one statement proves how out of touch with reality the President is and the left cannot defend that remark.
What is clear, the Democrats need to develop a spine against Republican attacks. Anytime the Republicans challenge the President, not one Democrat will come to the microphone and defend the facts. And now, we see the President genuflecting in response to Republicans attacks.
Democrats need to grow a pair, talk about the facts, the progress being made in spite of the open opposition to whatever the President proposes.
How could Obama be wrong? My goodness the man won a Nobel Peace prize because he...it was his work on...he discovered that...oh what was it again that he won it for?
Oh, it doesn't matter...the man is never wrong and that should be good enough for the masses.
The economy was recovering nicely until the Tea Republicans won control of the House of Representatives in 2011. Their number 1 goal is to tank the economy again to regain power, absolutely disgusting.
Polling showing disapproval of the TEA party greater than disapproval of the President is very telling. Most Americans know what is going on, but it is still concerning in a close race that many will fall for the propaganda.
This Economy is enjoying 4.2% unemployment in the Public Sector, 8.2% in the Private Sector. (Well over that in many states.) Stimulus will benefit the Public Sector..that really does not need it. Come one people, no more stimulus. Road and bridge projects need to be bid to private sector contractors. HELP EDUCATE AND DON'T BE SHEEP.
Yes, he was wrong. The only real question is was it a gaffe or does it reflect a worldview that is hostile to or ignorant of the role of private enterprise in America's economy?
Mr. Gordin the Republicans took control of the House in 2010 not 11. And as far as knowing whats going on I suggest you look to Wisconsin to find your answer.
Wow. I can't believe the writer's weak response to the criticism of the stimulus program.
Karoun, I'm neither Republican or Democrat, but if you somehow think that spending six figures per job created (many of which were very temporary - weeks) was a successful, job creating program, then I guess I don't even know how to respond. If you don't think that waste, corruption, theft, or all three occurred as part of that program, then you're either blind or your intentionally trying to deceive your readers. If you don't think that issue requires some serious investigation, and that we absolutely should NOT do the same thing again, then you're definitely a part of the problem.
I would be much more on board with a program that was even $50K per job created, and each job had to be at least a year long (and it needs to actually need a year to do the job, not just be an inflated number). But the only requirement was that the jobs had to be "shovel ready", and many of the projects were not shovel ready.
Regardless of your political leanings, you need to acknowledge when programs are failures. Otherwise, you'll never be taken seriously.
Yes, I look at the BLS data, and yes, I base many of my macroeconomic opinions based on that data. I also realize that the methodology used isn't ideal for every single specific scenario, but it's a better guide than anything else that I've seen. Certainly better than any BS that any politician, or politically charged group, is going to try to feed me. That data shows me that we have a long way to go before we have a fundamentally strong economy. Not one that's artificially propped up by unnecessary spending on programs/projects/items where there is no demand. I think public money can be better spent through oversight (simple, basic, big stuff, not overly complex set of rules that, in the end, has loopholes for lawyers and accountants to identify), and making sure we have as fair of a playing field as we possibly can, while continuing to offer incentives to bring jobs and money back to the US. As of right now, most of those initiatives have been "all talk and no substance", which is pretty much the government motto.
Are we not in charge of our own local economies? Was it really the federal politicians' fault that we refused to believe all the reports now gathering dust at the Legislature that warned of the dangers of a non-diversified economy?
We, as a state, sat on our hands for decades, investing in casinos and not education, and now the blamer-crowd wants to pin it on the current feds in office. Nevada used to be populated by self-sufficient people. Cowboy-up, transplants.
chuck333: "Mr. Gordin the Republicans took control of the House in 2010 not 11."
These are the type of people voting, not knowing the very basics. The 112th Congress serves January 3, 2011-January 3, 2013. Yes they are elected in November of even years, but service begins in the following January.
This actually highlights the ignorance on the right; many believe President Obama was President in 2008. They look at the horrible economic charts and data of 2008 and blame Obama, it's amazing to me these people vote with their ignorance.
Another mistake many make is the federal fiscal year is October 1st - September 30.
In other words the first budget with Republican control in the house is October 1, 2011 - September 30, 2012. The very budget we are currently under and have proven to be hampering the previous economic growth.
The party of no has obstructed any pro-growth legislation. Their obstruction also occurred prior to 2011 when democrats controlled both houses, with their abuse of the filibuster requiring 60 senate votes to pass ANYTHING. No compromising, no negotiating, complete obstruction with the goal of hampering the economy. They succeeded. It is disgusting to me.
Obama was only hammering the republicans when he made this claim about the private sector doing "fine". He was drawing his self serving attention to the public employees, many of whom are his voters.
Most of those in the private side of the market, which in a broader sense includes not only employees and employers, but noting these same people are also home owners who have seen their values plunge by about 40%, and their retirement/investment portfolios also slashed in the past seven years, these people are not doing fine at all. Obama and his family are doing "fine" living off the People, who are in many cases broke.!
Bill, there is no federal budget. They're just spending and spending. Even Senator Reid refused to seriously discuss President O's draft budget--wouldn't give it a hearing. psst: We have too many teachers. CSR is bankrupting us. 100,000 illegal students are helping the insolvency. At 20 illegal kids per teacher, in elementary, that's 5,000 excess teachers just for that. Let's get SCOTUS moving and follow up after the Arizona 1040 decision. There is NO RULING that illegal kids get birth-rite citizenship. Let's get this decided as we expel the 15 million who shouldn't be here bankrupting our governments.
Of course, he's not wrong, he's Obama The Brilliant.
The private sector is not doing fine, but thats because our politicians and CEO's are shipping all the private sector jobs overseas.
People forget that Obama has never worked a real job a day in his life. How would he know anything about private sector?? he has had everything handed to him as his handlers moved him into play for the White House.
Another "summer of recovery". Obama, you've done it again!
I wasn't sure he even knew what a private sector was.