Editore"s Note
Tilting at Windmills

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October 8, 2010

IT DOESN'T HAVE TO BE THIS WAY.... In September, the economy added 64,000 private-sector jobs, while losing 159,000 public-sector jobs. The former number can best be described as "meh"; the latter as "awful."

But the public-sector losses, unlike most of the summer, weren't driven entirely by the Census Bureau. Indeed, David Leonhardt explained that local governments cut 76,000 jobs last month -- and cut 143,000 jobs over the last three months -- many of them from public schools. All told, local governments are now "cutting jobs at the fastest rate in almost 30 years."

This is an important detail to keep in mind. Republicans are likely to say today's jobs report is disappointing because private employers are worried about Bush-era tax rates, or health care reform, or whatever the new talking points say. But that's foolish -- the new jobs report would have looked a whole lot better if Congress had saved those local government jobs. It had the ability to do so, but chose not to.

Ezra Klein explained this morning:

The government is now impeding an economic recovery. But it's not for the reasons you often hear. It's not because of debt or because of taxes. Nor has it scared the private sector into timidity. It's because, at the state and local level, it's firing people. There are more than 14 million Americans looking for work right now -- to say nothing of the 9.5 million who have been forced into part-time jobs when they want, and need, full-time work -- and the government just added 195,000 more to the pool. Consider this: If we only counted private-sector jobs, we'd have had positive jobs reports for the last nine months. As it is, public-sector losses have wiped out private-sector gains for the past four months.

It doesn't need to be like this. The government can't make the private sector invest. They can't demand that Wal-Mart stop hiring. They can offer incentives, and tax breaks, and encouragement, but that's it. The same cannot be said when it comes to public sector jobs. The government can, if it's willing to run deficits, keep those workers employed. But Senate Republicans, alongside some conservative Democrats, have decided to make the government pro-cyclical: Rather than fighting the downturn in the business cycle, the government is now accelerating it.

It would have been surprisingly easy for Congress to make the investments in state and local governments necessary to save these jobs. But lawmakers have come to believe (a) Republicans would block any such effort; (b) voters may punish Congress for "spending"; and (c) the electorate will reward GOP candidates for supporting the policies that prevented these jobs from being saved.

We have an obvious economic problem. But the political problem is standing in the way of making things better.

Steve Benen 10:20 AM Permalink | Trackbacks | Comments (15)

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1. Voters don't know squat about economics. This includes me, so don't take as sneering.
2. Public service employees are viciously disliked because they have used collective bargaining to earn stable, middle class lives. As the middle class shrinks, these government employees are the natural target for resentment, as voters CAN punish them for being better off (actually, more secure) than themselves. People simply don't have the guts to fight the wealthy. That's a lost cause.
3. Hope people enjoy fighting their own fires, preventing crime by themselves, and repairing their own highways. They'll need to learn how.

Posted by: JMG on October 8, 2010 at 10:29 AM | PERMALINK

State and local governments need to raise taxes on the upper classes and if able, issue bonds to help fund the gap. It's obvious the Democrats are going to get it done. State and local governments need to do it themselves.

Posted by: ParryAnderson on October 8, 2010 at 10:48 AM | PERMALINK

Ezra says 195k; you say 159k. Are they supposed to be the same number?

Posted by: Suzii on October 8, 2010 at 10:54 AM | PERMALINK

There's an old joke, here in Pennsylvania: "What is yellow and sleeps six? -A PENNDOT crew cab. . ."

Governor Rendell had a hiring freeze last year, and only now are we beginning to hire/rehire a few state employees. Somehow we muddled through the 'Terrible Times'.

All that is parenthetical to the simple FACT that we live in a consumer driven economy, and until spending gets back to the rah rah levels of the Clinton Years, growth will be slow. (The long term good news is we are saving more.)

Posted by: DAY on October 8, 2010 at 10:56 AM | PERMALINK

This is just more proof that the economy cannot trust the so-called free market to provide enough jobs to keep the consumption market working and keep the economy growing. The private, free market has failed in its function of improving the economy and requires government support and direction for it to work.

Private industry is not worth crap without the help and guidance of big brother government.

Posted by: Rick B on October 8, 2010 at 11:26 AM | PERMALINK

* Low/Middle-Income, & All Investments, Savings, Retirement, Medical, Charity: 0% tax.
* High Income, Spending, Estate @ $500k+: 100% tax apportioned to states.

Posted by: CitizenPlusPlus on October 8, 2010 at 11:30 AM | PERMALINK

"Cut government spending" is the ubiquitous GOP refrain. This is what spending cuts look like.

Now watch carefully as GOP spokesmen misdirect the public's attention and try to convince us that "spending" is the reason for firing the very people whose jobs were cut.

Posted by: Quaker in a Basement on October 8, 2010 at 11:55 AM | PERMALINK

Government is growing like a cancer under Obama! Government is crowding out the private sector!
Government is EEEEvvviiillllll!!!

We need to cripple the government by firing everyone and return to a better time.

You know, when there was no government and governement taxes. When the working class worked and paid tribute to a feudal lord to protect them. Ah, those were the days.

Posted by: GOPinionista on October 8, 2010 at 11:57 AM | PERMALINK

The real problem is that the country has been dumbed-down over the past 40 years by the anti-intellectualism of the right and the public celebration of ignorance of the fundamentalists, with the complete dumbing-down of public education in the social sciences, to the point where probably 80% (at a minimum) of the public have absolutely no clue how things are supposed to work, so they are uniquely vulnerable now to being demagogued on just about any topic, which gives the Party of Demagoguery the advantage it has.

Posted by: TCinLA on October 8, 2010 at 12:27 PM | PERMALINK

Flasback: (way, way back to August 10, 2010)

"Obama Signs $26 Billion Bailout for Cash-Strapped States"

How's that "Hopey Changey Thing" work'n out for ya?

Posted by: dualdiagnosis on October 8, 2010 at 1:54 PM | PERMALINK

^ That bill will save thousands of more state and local jobs from being lost. But in your world, those jobs don't count.

Posted by: Sam on October 8, 2010 at 3:31 PM | PERMALINK

^ That bill is a political payoff, to generate political support, using taxpayer dollars, borrowed from the Chinese, to obtain support just before an election.

Posted by: hondr on October 8, 2010 at 3:51 PM | PERMALINK

I'm just curious. When did state and local governments lose their taxing authority?

Posted by: SteveinCH on October 8, 2010 at 4:55 PM | PERMALINK

Local gub'ment employee here. This is a longtime cyclical trend. Local politicos woo police and fire unions who help get their buddies elected central committee chair or national delegate. (Other municipal employees are much less likely to do this.) In good times, City Councils and Boards of Supes give raises to municipal employees and give huge raises to police and fire. Huge because they give them pension raises that the other unions don't get. The politicos give the cops these raises because the police and fire unions will target the supervisor as soft on crime or not respecting firemen.

Then bad times hit and local governments revenue drops - sales and property tax. So the locals can cut services but they are stuck with the crazy police and fire pensions which allow these guys to retire at 50 with %100. Then just like the military, the police and fire avoid the cuts and the municipalities cut social services, parks, potholes, job training, schools get cut.

Then it happens all over again.

Posted by: Wally on October 8, 2010 at 7:43 PM | PERMALINK

Great site, identified a few something completely new! Subscribed RSS for later, wish to see more updates like this one.

Posted by: Kimberly Badilla on February 2, 2011 at 1:27 PM | PERMALINK



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