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Jobs report: Public sector loses 202,000 jobs; private sector gains 71,000

jobsandunemp710.jpg

The July jobs report is bad news for jobs, but tepidly good news for recovery. Another 143,000 census positions expired, contributing to a total public sector job loss of more than 200,000 jobs. But the private sector continued to recover, adding 71,000 jobs -- its best performance since April, and its third-best number this year.

privateandpublicjob.jpg

Minority leader John Boehner was not impressed. “Welcome to the reality of President Obama’s broken promises, out-of-control spending sprees, and failing ‘stimulus’ policies," he said. Which is odd, because the job losses were driven by the expiration of public-sector jobs. If he doesn't like those losses, it's proof that government stimulus works, and we need more of it.

But Boehner hasn't been very consistent on this. He looked at the May jobs report, which showed 430,000 new jobs, and sighed that "it is disappointing that nearly all of those gains are temporary, taxpayer-funded government jobs through the U.S. Census." So in May, he was upset about all the census jobs. Now that they're expiring, however, he's sorry to see them go.

There's something to both positions, though not the opportunism with which Boehner adopts them. At the end of the day, jobs are jobs. When people lose a job in the public sector, they become unemployed. And if we don't step in and get more help to the states, we're going to see hundreds of thousands of public-sector employees find that out. But so far as real recovery goes, that's going to have to come from the private sector, and it's notable that they've added jobs for the past seven months straight.

So you can look at the bottom line one of two ways: Either we lost 131,000 jobs, or if you ignore the census jobs, we gained about 10,000. The good news? The 71,000 jobs we did gain came from the right place, and the jobs we lost are job losses we can prevent if Congress finds the will and the votes.

By Ezra Klein  |  August 6, 2010; 9:03 AM ET
Categories:  Economy  
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Next: The political logic of job losses

Comments

What's the difference between a public sector employee with a job and one without a job?

They're both parasites on their fellows, no?

Posted by: msoja | August 6, 2010 9:42 AM | Report abuse

Hey, Ezra - care to comment on yesterday's report about Social Security and Medicare that showed those programs are considerably more healthy fiscally than previously thought? Maybe you could use that to push against the catfood commission types who want to impoverish us all. Just saying........

Posted by: redscott1904 | August 6, 2010 9:46 AM | Report abuse

People listen to Boehner?

Posted by: baldinho | August 6, 2010 9:50 AM | Report abuse

Using Boehner as a foil is cheap. As the head guy of the opposition, he has to say something. What's he going to say? "The economy and the adminstration is muddling through. It'll have to do." Yeah, that'll fire up the troops.

Posted by: Klug | August 6, 2010 9:51 AM | Report abuse

People listen to Ezzie Klein?

Really, this guy has taken spin to the PhD level.

Ezzie - your stuff does not go down in the era of an informed and engaged voter.

Posted by: hz9604 | August 6, 2010 9:55 AM | Report abuse

The reason for the tepid job growth comes from the fact that the consumers are tapped out and are saving more(savings rate is 6.2% compared to low 1% in the past years)ushering in the "Paradox of Thrift" which has a direct effect on the GDP. Additionally the banks are risk averse due to their own mistakes.

Posted by: beeker25 | August 6, 2010 9:55 AM | Report abuse

Ezra,

Did you check with the White House and your former Journolist buddies before writing this tripe?

Posted by: gorams1 | August 6, 2010 9:55 AM | Report abuse

Good morning, Mr Klein. Interesting article. Did you vet it with your committee of liberal propagandists before you published?

Posted by: 1234567890qwerty | August 6, 2010 10:01 AM | Report abuse

There are two ways of looking at this issue and all politics:

Ezra's way or the correct way.

Posted by: mikeinaustintx | August 6, 2010 10:02 AM | Report abuse

The way I look at it: Boehner makes statement criticizing the President's policies but when it comes the Republicans' own policies that created this mess in the first place he feigns ignorance.

Typical... but not unexpected..

Posted by: beeker25 | August 6, 2010 10:04 AM | Report abuse

This would only pass for analysis in my grammar school.

Posted by: bruce18 | August 6, 2010 10:05 AM | Report abuse

Msoja-
Republicans love government jobs, that's why they make so many of them.
Bush posted a net loss of private sector jobs during his tenure.

Posted by: karenfink | August 6, 2010 10:07 AM | Report abuse

So you can look at the bottom line one of two ways: Either we lost 131,000 jobs, or if you ignore the census jobs, we gained about 10,000. The good news? The 71,000 jobs we did gain came from the right place.

Wait a minute Ezra. You're as bad as Boehner. Back when we were adding the temporary census jobs your normal schtick was "temp census jobs are still jobs so we should be happy we have that" and now its, "The 71,000 jobs come from the right place?"

Seriously??

On top of that as we all know it takes 100-150k jobs added to break even. We haven't done that all year. Again businesses aren't hiring because they're going to push their current workers as hard as they can because of the market and because of the uncertainty of this administration and everything hanging over their heads (Bush tax cuts ending, healthcare's implementation, climate change legislation etc). They're going to sit on the sidelines until more certainty is in place. You still don't get it.

Sure you can argue the other side of the stick (ie consumer demand) but consumer demand isn't there because no one is hiring and many that are employed are worried that they could be let go at anytime so they're not spending.

Posted by: visionbrkr | August 6, 2010 10:15 AM | Report abuse

Wash. Post circulation down more than 10 percent for the second quarter of 2010. Wash. Post found to be the hub of JournoList during the second quarter of 2010. Maybe they are not related. But maybe there are people like me who will never buy a copy of the Post until all the JournoListers are gone.

Posted by: MrRealistic | August 6, 2010 10:16 AM | Report abuse

Was this piece linked by some kind of "Ezra Sux" blog? There are a lot of people making evidence-free assertions that the content of the piece is somehow false or twisted, along with several completely useless and irrelevant indictments of journolist.

If you're going to knock one person's analysis, you should probably provide some of your own.

Posted by: KBfromNC | August 6, 2010 10:18 AM | Report abuse

One reason I read Mr. Klein is for the data. The graphs, the links, etc. I can examine the information and draw my own conclusions.
Funny how Ezra's critics do not leave links to support their contentions. So, my conclusion is there there is NO VALID data to back the sniping. These kind of assertions would not pass my kid's elementary school.

Posted by: gratis11 | August 6, 2010 10:19 AM | Report abuse

Ask yourself this question: How would Klein have presented this information if GWB were the President and Republicans controlled congress?

The man is a shill for the democrats and has no credibility. It's documented.

Posted by: ADNova | August 6, 2010 10:21 AM | Report abuse

ERZA still at the POST?

POST why is this CONFIRMED left-winger and frequent quest on the left-wing MSNBC and manulator of news and information, Journolist, STILL employed by the POST

POST = Mudd............

Posted by: allenridge | August 6, 2010 10:23 AM | Report abuse

I just tallied the US employment to population ratio for July 2010 to be 58.9%, down from 59.5% last month, and the lowest level since 1982 (or 28 years ago) -- check out the chart at:

http://wjmc.blogspot.com/2010/08/us-employment-to-population-ratio.html

The US needs to do something about employment (creating jobs rather than reducing unemployment, which are not the same). The US needs millions of new jobs to be created or frankly, our nation may be doomed...

Posted by: mckibbinusa | August 6, 2010 10:26 AM | Report abuse

I think these companies sitting on the piles of cash is foolish. They are not very smart businessman (but the Wall Street debacle already demonstrated that). The employment market is flooded with lots of tallent that is available at discount rates because of the economy. If I were an excutive at financial and retail firms, I would be hiring as many of these people as I could. I would be hiring managers, R&D, analysts, economists across the board because they can all be had on the cheap now. Instead, it is better to sit on a pile of cash so that you become an attractive takeover target for some foreign company that will take the cash with them and sell off once they get it.

Posted by: Prosperity2008 | August 6, 2010 10:50 AM | Report abuse

The one sure thing we can expect to get from JournoList creator Ezra Klein is pure garbage disguised as analysis. Starting with the first graph he chose, notice how he refused to include the revised job numbers? Total job losses numbered more than 200,000 in June. But good ol' JournoList creator Ezra 'forgot' to include the revision. Then went on to use those false numbers to create another imaginary blog.

Posted by: infuse | August 6, 2010 10:53 AM | Report abuse

Wash. Post circulation down more than 10 percent for the second quarter of 2010. Wash. Post found to be the hub of JournoList during the second quarter of 2010. Maybe they are not related. But maybe there are people like me who will never buy a copy of the Post until all the JournoListers are gone.

Posted by: MrRealistic | August 6, 2010 10:16 AM | Report abuse

Washington Times, the Conservative Newspaper in DC OUT OF BUSINESS--AS IN STOPPED PUBLISHING--The Examiner--the free conservative news paper losing money hand over fist. So, the point is that comparatively, the Washington Post is doing quite well, even without MrRealistic buying a copy.

Posted by: Prosperity2008 | August 6, 2010 10:57 AM | Report abuse

Ezra Klein, ever the Obama/Democrat apologist. Even if the country had lost jobs last month he'd have found a way to make it sound good. A public/government job is not as good as a private sector job. A person with a government job depends on the taxpayers of this country to pay his or her salary. They're kind of like leeches sucking the vital fluids out of the private sector. A few of them can be tolerated but if you get too many the private sector dies, drained of fluids (taxes). I'll also point out that every job report gets revised down after a month of analysis, so I wouldn't get too excited about that 71,000 private sector job report.

Posted by: RobT1 | August 6, 2010 10:58 AM | Report abuse

"I think these companies sitting on the piles of cash is foolish. They are not very smart businessman (but the Wall Street debacle already demonstrated that). The employment market is flooded with lots of tallent that is available at discount rates because of the economy. If I were an excutive at financial and retail firms, I would be hiring as many of these people as I could. I would be hiring managers, R&D, analysts, economists across the board because they can all be had on the cheap now. Instead, it is better to sit on a pile of cash so that you become an attractive takeover target for some foreign company that will take the cash with them and sell off once they get it.
Posted by: Prosperity2008 | August 6, 2010 10:50 AM | Report abuse "

as long as commpanies feel unconfortable about spending their cash in the age of obama...
the American people will suffer...
replace the congress in 2010 and obama in 2012 and lets see what happens...

Posted by: DwightCollins | August 6, 2010 11:08 AM | Report abuse

Remember the days when Ezra and his Journolist buddies cried about the "jobless recovery" under President Bush? There was never any news they couldn't find a negative thing to write about. It's sad how far the WashPO and journalism in general has fallen.

In a just world, Ezra would have resigned in disgrace over the Journolist fiasco. As it always is with the left, they will circle the wagons for their own and no harm while come to you no matter how crooked, corrupt, lazy and incompetent you are.

Posted by: gorams1 | August 6, 2010 11:09 AM | Report abuse

Remember the days when Ezra and his Journolist buddies cried about the "jobless recovery" under President Bush? There was never any news they couldn't find a negative thing to write about. It's sad how far the WashPO and journalism in general has fallen.

In a just world, Ezra would have resigned in disgrace over the Journolist fiasco. As it always is with the left, they will circle the wagons for their own and no harm while come to you no matter how crooked, corrupt, lazy and incompetent you are.

Posted by: gorams1 | August 6, 2010 11:10 AM | Report abuse

@ Prosperity2008 - do you have any understanding of the economic term, demand? Employers don't hire people just because they have money. They do so because the demand for their product or service requires the added help.

Posted by: infuse | August 6, 2010 11:17 AM | Report abuse

@DwightCollins,

I don't think you'll have to wait until 2012. I think if Republicans take over the house you'll see jobs increase at a faster pace.

Posted by: visionbrkr | August 6, 2010 11:20 AM | Report abuse

Unfortunately Ezra, your generation sees debt as something to be monetized, not paid back. It's a shame.

Thomas Jefferson said in 1802:
"I believe that banking institutions are more dangerous to our liberties than standing armies.

If the American people ever allow
private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers
conquered."
.

Posted by: hz9604 | August 6, 2010 11:38 AM | Report abuse

"I think these companies sitting on the piles of cash is foolish. They are not very smart businessman (but the Wall Street debacle already demonstrated that). The employment market is flooded with lots of tallent that is available at discount rates because of the economy. If I were an excutive at financial and retail firms, I would be hiring as many of these people as I could. I would be hiring managers, R&D, analysts, economists across the board because they can all be had on the cheap now. Instead, it is better to sit on a pile of cash so that you become an attractive takeover target for some foreign company that will take the cash with them and sell off once they get it."

Somehow, Prosperity2008 has more knowledge than millions upon millions of experienced businessmen and women. If only businesses would hire wantonly without regard to business need, we'd never have unemployment again.

Some reading material:

http://www.econlib.org/library/Essays/hykKnw1.html

Another thing to consider is that the government is running massive deficits right now. For the government to be able to borrow, someone else has to lend. When companies "sit on cash", they aren't greedily shoveling dollar bills into vaults. They are more than parking their cash in money market funds, which have significant holdings of treasury bills and notes. Even if you convince all businesses to spend their reserves, you'll only find a new villian "sitting on cash" that could be put to use.

Do you have any savings, Prosperity2008? Why don't you go out and spend it all right now? Isn't it foolish to sit on cash? Paradox of thrift and all.

Posted by: justin84 | August 6, 2010 11:38 AM | Report abuse

There is no upside to today's employment report. Approximately 150,000 new units entered the employment market in July. 70,000 new jobs were generated, leaving US way below par even allowing for permanent attrition from the market. No economic progress was made in July, indeed, a good argument exists for the beginning of the second leg down.

Posted by: lsignor | August 6, 2010 11:43 AM | Report abuse

There is no upside to today's employment report. Approximately 150,000 new units entered the employment market in July. 70,000 new jobs were generated, leaving US way below par even allowing for permanent attrition from the market. No economic progress was made in July, indeed, a good argument exists for the beginning of the second leg down.

Posted by: lsignor | August 6, 2010 11:44 AM | Report abuse

Hey Prosperity. Don't let the facts get in the way of your post. The Wash. Times is still publishing. And how come you didn't bring up the latest liberal success story - Newsweek?

Posted by: MrRealistic | August 6, 2010 11:54 AM | Report abuse

"Somehow, Prosperity2008 has more knowledge than millions upon millions of experienced businessmen and women."

Business owners aren't omnipotent economy seers - they're normal people and most of them go out of business within a year or two.

Posted by: lol-lol | August 6, 2010 11:56 AM | Report abuse

Wow - we all know Ezra is a left-wing Obama rooter, but this article might mark a new low for him as he is changing into another EJ, making anything Obama does the right answer, and all bad outcomes the fault of the GOP and Bush.

The fact Ezra tries to make today's jobs report look good for Obama's "Stimulus" program is both stupid and dishonest.

It is apparent that Obama and his allies will try anything to save some face in the upcoming midterms......but nobody is buying their lame-brain spin on an increasingly bad financial situation.

Posted by: Realist201 | August 6, 2010 11:57 AM | Report abuse

There is NO good news to report about employment or unemployment. In the face of bad news --- continuing contraction of our employment base --- why just shut the you know what up? Trying to attack a critic of bad news, or somehow spin this latest report just smacks of utter desperation.

Posted by: Curmudgeon10 | August 6, 2010 11:58 AM | Report abuse

The primary reality is the widespread denial throughout the poltical spectrum about the long term trends that are responsible for our economic problems. Yes, it is better that employment is growing some. But, it is very unlikely that the potential sustainable growth in our economy over the next couple of years is large enough to fix our unemployment problem. The good news is that the President and a number of credible experts do have some good ideas about how to begin addressing our long term problems. The bad news is that the prospects for achieving the level of political consensus needed to tackle the long term structural problems that have accumulated in our economy over the last fifteen years or so don't look too good. The question seems more whether partisan differences will be enough to hobble any active effort to address the problems or whether one end of the political spectrum or the other will be strong enough to force another round of past mistakes and do yet more damage to our long term economic prospects.

Posted by: dnjake | August 6, 2010 12:11 PM | Report abuse

More fallacious spin from the Obama Propaganda Ministry at The Washington Post masquerading as journalism. They're trying to put lipstick on the pig...but no one is going to buy that package! Newsweek was sold for $1...where will the Post end up?

Posted by: JM80 | August 6, 2010 12:26 PM | Report abuse

you're diverting Klein ... projecting onto Boehner won't fool anybody ... the spin isn't working anymore ... just relax and bend over for your prostate exam in November ...

Posted by: cunn9305 | August 6, 2010 12:27 PM | Report abuse

"The 71,000 jobs we did gain came from the right place,"

You got that part right.

"and the jobs we lost are job losses we can prevent if Congress finds the will and the votes."

You got that part wrong. There is no reason whatsoever why people in ant states should subsidize bloated public sector payrolls in grasshopper states. Most especially if we have to borrow money from the Chinese to do it.

But your essential point that we need to look behind the unemployment numbers is correct. The quicker we reduce public sector payrolls the better our long term chances of emerging from this mess. So, in that sense, the jobs report is good news.

Posted by: bgmma50 | August 6, 2010 12:32 PM | Report abuse

Ezra,

You cannot remind your readers often enough of the fact that reductions in state and local government spending have more than offset the federal government's stimulus investments. Time for another post on that topic, I'm afraid.

The state aid package awaiting final approval (funded by reducing food stamp benefits) will counter only a small fraction of the the anti-stimulative effects of the nation-wide state and local budget crises.

Given that we have a net "anti-stimulus" in aggregate government spending, the fact that GDP is growing at all, and that the private sector is at least no longer shedding jobs, is a testament to the resilience of the American economy. Too bad we aren't doing more to re-start the engine.

It is unfortunate that the current political climate of deficit peacock-ery (and inflation superstition) prevents an ongoing serious and sustained effort at counter-cyclical spending to put people back to work, to get the economy working near capacity, to create a surge in demand for private sector goods and services, and to prevent a Japanese-style "lost decade" and the imminent era of structural high rates of joblessness.

It is a good thing for us all that FDR was not politically limited to a single under-sized stimulus package. Evidently in our current political culture we must behave as if our own history teaches us nothing.

Posted by: Patrick_M | August 6, 2010 1:06 PM | Report abuse

Ezra, way to put lipstick on the pig. Can you torture your logic more on this jobs report? 71,000 jobs created-private sector? What about the May and June adjustment down 97,000 totaling 221,000 jobs lost? You know darn well that July's numbers are estimates and will be adjusted downward in August! Man you live in dreamland. Now with Christine Romer gone, only sycophants are left at the WH to guide our economic future. We are in trouble!!!!

Posted by: hstad | August 6, 2010 1:20 PM | Report abuse

"

Was this piece linked by some kind of KBfromNC said,

"Ezra Sux" blog? There are a lot of people making evidence-free assertions that the content of the piece is somehow false or twisted, along with several completely useless and irrelevant indictments of journolist.

If you're going to knock one person's analysis, you should probably provide some of your own."

Fine.

Here's the only number we should be concerned with that none of these spin doctors never include in their blind faith defense of Obama economic policy. Size of the labor force.

Hidden in all these jobs reports is the supplementary data, such as the U-6 figures and size of the labor force.

The size of the labor force in July dropped by 181,000 people. In June, the size of the labor force dropped by 650,000. That's slightly more than three quarters of a million people dropped from the labor market in the last two months.

When Obama took office the size of the labor force was over 130 million and now we're about to fall under 126 million.

But fools like Ezra will keep telling us not to look behind the curtain.

Posted by: TSulli | August 6, 2010 1:39 PM | Report abuse

"Business owners aren't omnipotent economy seers - they're normal people and most of them go out of business within a year or two."

lol-lol,

I never made the case that business owners are 'omnipotent economy seers'. My only claim is that a given senior manager knows a lot more about running his or her particular business than does Prosperity2008.

Do you actually believe the economy would be in better shape if senior management level decisions for all companies were made by Prosperity2008?

Posted by: justin84 | August 6, 2010 1:40 PM | Report abuse

"They're both parasites on their fellows, no?"

soggy is such a manly manly man that when he capsizes in his toy boat, he'll demand that the collectivist parasite rescue team leave him to drown for the randroid cause.

Go and suck on a pig.

Posted by: pseudonymousinnc | August 6, 2010 1:40 PM | Report abuse

@msoja: Make sure to call the next fireman or police man that saves your sorry ass a parasite.

Having worked with govt employees for several years, the vast majority have been extremely hard working and willing to go the extra mile to do quality work. They have been superior to the private sector experts I have worked with, so stop the cat calling on govt employees from your tower in farrightwingnutistan.

Posted by: srw3 | August 6, 2010 1:56 PM | Report abuse

Ezra:

It may be that too many state and local government jobs were added previously and the excess is now being winnowed down through necessity. In 1982, when the US had a population of 231.6 (m) there were 12.9 (m) state and local jobs. By 2007, when the US had a population of 299.4 (m), there were 19.4 (m) state and local jobs. (The 2010 Statistical Abstract is the last year I have.) So the nation got along with 5.6% of its population working for state and local governments in 1982, but that rose to 6.4% by 2007, despite efficiency gains in many other industries from computerization.

Posted by: cossack2 | August 6, 2010 3:18 PM | Report abuse

"It is a good thing for us all that FDR was not politically limited to a single under-sized stimulus package. Evidently in our current political culture we must behave as if our own history teaches us nothing." PatrickM

I don't know that I would characterize WWII, which is what actually got us out of the Great Depression and not FDR's New Deal, as a good thing. However, if we don't stop Obama and the Democrats from piling up debt to unrepayable levels, we may just get out of the current financial disaster the same way.

Posted by: bgmma50 | August 6, 2010 4:08 PM | Report abuse

"I don't know that I would characterize WWII, which is what actually got us out of the Great Depression and not FDR's New Deal, as a good thing. However, if we don't stop Obama and the Democrats from piling up debt to unrepayable levels, we may just get out of the current financial disaster the same way."

Thanks for proving my point about our turning away from the lessons of history (despite your complete non-sequitur about debt and WWII).

Throughout the New Deal years, there were dramatic annual increases in GDP and dramatic annual reductions in unemployment. Except of course in the recession of 1937 when we made a premature return to austerity (as is happening now). But because the hole was so deep, it took WWII to pull us out.

And what was WWII? An enormous, deficit-financed, public works and full employment program, complete with "socialist" measures like wage and price controls.

No, WWII certainly was not "a good thing." But it was a good thing for the economy, and the final proof (building on a long record of New Deal success), that government stepping in to fill capacity and create demand is the right way to re-start the private sector economic engine after a sever downturn.

Interesting that you suggest we get out of the Great Recession the same way.

Posted by: Patrick_M | August 6, 2010 9:34 PM | Report abuse

JOURNOLISTER........JOURNOLISTER!!!!!
Alert Alert.....nothing but spin and lies...this publication is and will be nothing but a rag until it FIRES ALL JOURNOLIST MEMBERS!!!

Posted by: caseoftheblues1 | August 6, 2010 11:00 PM | Report abuse

Hey EZRA...I will tell you what is a damn shame that a Journolist member like yourself wasn't among the tens of thousands that lost their job during this Obowma Recession...now that would be some actual good news and not this garbage kiss obowma bum crap you were told by someone to spit out!

Posted by: caseoftheblues1 | August 6, 2010 11:04 PM | Report abuse

"Interesting that you suggest we get out of the Great Recession the same way."

I'm doing no such thing. What I am suggesting is that the economic policies being pursued by your President and your Congress might well take us there.

"But it was a good thing for the economy, and the final proof (building on a long record of New Deal success), that government stepping in to fill capacity and create demand is the right way to re-start the private sector economic engine after a sever downturn."

Aside from the fact that the New Deal did nothing but create a temporary rise in GDP followed by a double dip (sound familiar?), WWII was far more than the government stepping in to create demand to restart the private sector after an economic downturn. What it was, was, a global conflagration that cost millions upon millions of lives, and destroyed the economies of most of the rest of the world. We were pretty much the only ones left standing, so yeah, the aftermath of the devastation worked out alright.

But there's no guarantee that we'll be the only ones left standing next time around. Or even how much of us will be left standing. Especially if you Dems are running things much longer. But hey, I'm not the one with a college age son to serve as canon fodder, so what the hell?

Posted by: bgmma50 | August 6, 2010 11:48 PM | Report abuse

RWNH: KUDOS TO KLEIN AND YGLESIAS FOR FANTASTIC POSITIVE SPIN ON SPECTACULARLY BAD JOBS NUMBERS
http://rightwingnuthouse.com/archives/2010/08/06/kudos-to-klein-and-yglesias-for-fantastic-positive-spin-on-spectacularly-bad-jobs-numbers/

Posted by: StewartIII | August 7, 2010 1:23 AM | Report abuse

"Aside from the fact that the New Deal did nothing but create a temporary rise in GDP followed by a double dip (sound familiar?), WWII was far more than the government stepping in to create demand to restart the private sector after an economic downturn. What it was, was, a global conflagration that cost millions upon millions of lives, and destroyed the economies of most of the rest of the world. We were pretty much the only ones left standing, so yeah, the aftermath of the devastation worked out alright."

Thanks for proving my point yet again. The "temporary rise in GDP" was continuous (and dramatic) throughout the New Deal era; the "double dip" of 37-38 was (as I already mentioned) the result of a misguided premature return to austerity.

Yes, I certainly know that WWII was a global conflagration. If only we would commit to helping to restore our economy with peaceful expenditures with the same single minded sense of purpose we devoted to that war, we might make faster progress with the recovery.

In any event, moralizing about wars, deficits, and stewardship of the economy --coming from the party that brought us the smoking ruins of 8 years of Bush-Cheney-- is hilarious.

Posted by: Patrick_M | August 7, 2010 2:47 AM | Report abuse

What, unemployment stayed at 9.5%? But that’s what the Republicans said would happen if I did what I said before I was elected. Hmmmm. I think I have to address the Union. Let me begin planning my speech:
Obama:
“My fellow Americans, It looks like the unemployment rate is not going to lower with no drop in sight. The good news is that the economy is really getting better. We had another month of positive growth. (huh). This Administration has inherited an economic catastrophe from the Bush administration that is far worse than expected. My plans to spend over a TRILLION dollars to kick start job growth has not worked because of Bush’s policies still not allowing it to work even 20 months into my Presidency. I know that is more money spent than all previous Presidents combined but they did not know what they were doing.
So, we will pass another bill to extend payments to those on unemployment. If we continue to do this, no one needs to work and I can count the 4 MILLION jobs lost since I took office, due to Bush, as creating jobs by paying indefinite unemployment. That should bring us down to about 2% unemployment and we will start to find positions where these people can really work for a living.
If I continue to do this, every Democrat will be voted out of office, the Republicans will have control, and then I can blame them and not my policies for ruining this country my last 2 years too”.

Folks, get a grip on what this guy is doing. You cannot be so naïve to still follow, support, and believe this guy. Wait till the Health Care kicks in and makes things even worse.

Reminds me of a Little League team that loses their first 5 games by an average of 9-0. Then in the 6th game they finally score an "unearned" run. Hey they're getting better aren't they?

Posted by: TRUTH20 | August 7, 2010 3:48 AM | Report abuse

Sigh. Patrick M. Are you familiar with the formula for GDP?

GDP = private consumption + gross investment + government spending + (exports − imports)

See that government spending component up there? The reason that government spending causes a rise in GDP is because government spending is a part of GDP. In no way should anybody confuse this with a rise in real economic activity.

And your party blew the infrastructure spending. Nothing has been invested that would lay the groundwork for productivity or prosperity in the future. I had a fairly jaded view of stimulus, but had it been a well planned, executed, and focused spending package designed to advance an important interest....say alternative energy, I could have bought into it.

Posted by: bgmma50 | August 9, 2010 10:01 AM | Report abuse

"In any event, moralizing about wars, deficits, and stewardship of the economy" yadda yadda yadda.

Just setting you straight on the fallacies of Keynesian economics.

Posted by: bgmma50 | August 9, 2010 10:04 AM | Report abuse

ARRA has reduced the deficit:

http://wonkroom.thinkprogress.org/2010/08/07/boushey-deficit/


"...government spending is a part of GDP. In no way should anybody confuse this with a rise in real economic activity."

If the government decides to build a bridge, it contracts with a private company. That company hires subcontractors. They all earn profits and pay wages to workers who would otherwise be unemployed, and all of those earnings flow into the private economy (just as if the owner of the project were a private entity). Society enjoys the multiplier effect. There is nothing "unreal" about this economic activity, or about the resulting beneficial effect on the private sector of getting the economy functioning nearer to capacity rather than sitting idle. And society and the economy benefit for decades thereafter from the improved infrastructure.

"Nothing has been invested that would lay the groundwork for productivity or prosperity in the future."

All summer I have been seeing ARRA signs alongside highway construction projects where roads are receiving long-overdue improvements. Research has been funded, small businesses are receiving opportunities that would not otherwise have existed. I agree that a larger sum should have been targeted toward forward-looking infrastructure start-up activity, but the politics of the day were about trying to keep the package "moderate" and attractive to centrist Republicans, so it ended up under-sized, and filled with tax cuts and diverse small bore investments.

Posted by: Patrick_M | August 9, 2010 11:52 AM | Report abuse

"if the government decides to build a bridge, it contracts with a private company. That company hires subcontractors. They all earn profits and pay wages to workers who would otherwise be unemployed,"

Duh. And if the government hires people to dig holes and fill them back up, the same thing will happen, and it will have the same effect. A temporary rise in GDP, which will disappear as soon as the government stops spending.

Posted by: bgmma50 | August 9, 2010 1:23 PM | Report abuse

The temporary increase in jobs figures and blip in GDP that results from hiring people to dig holes and fill them back up should always be evaluated in light of the impact on long term debt.....an part of the equation that Keynesians always crawfish around.

Posted by: bgmma50 | August 9, 2010 1:26 PM | Report abuse

"A temporary rise in GDP, which will disappear as soon as the government stops spending."

No, the money that flows into the private economy spurs demand and leads to growth, just as it would if it was generated by private investment.

If you belive that private spending and investment lead to growth but that public spending and investment do not, you will need to explain that magical difference in the stimulative effect of public vs. private dollars. If I own a restaurant, and I am serving customers at two tables, I hardly care that one pays the bill with wages earned on a government project and the other with wages earned on a private project. Both of their dinner checks help my business to thrive and pay the wages of my staff.

"And if the government hires people to dig holes and fill them back up, the same thing will happen, and it will have the same effect."

Yes, it would have a similar beneficial effect for the economy. But you would not have the resulting bridge, which will continue to benefit the economy long after the current recession subsides. So, it would be stupid to dig and fill holes, whereas building bridges, roads, hospitals, levees, extensions of broadband networks, electrical grids, etc., is not stupid.

Posted by: Patrick_M | August 9, 2010 1:41 PM | Report abuse

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