There are a few things politicians of all stripes say that should drive you as nuts as they drive me. One I’ve been inveighing against since OTE was born is the bass akwards formulation: “just like families, the federal government must tighten its belt in hard times” (the subject of one of my first posts). This one’s particularly invidious both because it makes folksy sense and because it’s precisely because families are tightening that the public sector, specifically to federal gov’t, needs to loosen.
But challenging that damaging aphorism for first place is this common point of agreement between politicians as diverse as Obama and Romney: the government doesn’t create jobs.
That’s not just patent nonsense. It’s economically damaging in lots of ways.
Every month the jobs report prints the numbers showing that this assertion is off by, at last count, 22 million or 16% of total payrolls:
Government Jobs in Sept 2012:
Federal: 3 million
State: 5 million
Local: 14 million
Local Education: 8 million
Source: BLS Sept Jobs Report
Yet, as this spot-on editorial from the NYT reports this morning, in the last debate, both candidates tripped over each other to deny that government creates jobs.*
I get that Gov Romney lives in a world where facts are mere inconveniences, but the President, very righteously IMHO—these jobs are often essential to our communities—goes around the nation pointing out that we need to staunch the layoffs of teachers, police, maintenance workers, and other members of the government workforce. So, “the government doesn’t create jobs”—but we need more of them.
The global point here is that it’s actually very bad economics to enshrine the private sector as the place from which all good things flow and conversely, the public sector as the evil one incarnate. The last few recessions—the bubble/bust ones—originated in private sector excesses, facilitated by vastly inadequate public sector oversight, which was itself borne by fetishistic, Greenspanian adoration of private over public, including the myth that the financial sector would self-regulate.
Unless we shed such ideological blinders, we’ll continue to make the same mistakes. In fact, this dynamic—vilification of the public sector; deification of the private—is in no small part behind the shampoo economy of the last few decades (bubble, bust…repeat). It’s also a great source of confusion to claim that 22 million jobs are a figment of our collective imagination.
Again, I’m used to the Republicans’ flights from reality. D’s really shouldn’t go there with them.
*The NYT editorial cites this same study I posted on months ago by EPI measuring the private sector multiplier of public sector jobs. It’s not just that, of course, the public sector creates jobs. It’s that those jobs have positive spillovers into the private sector.