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October 07, 2011 1:15 PM ‘An unforced economic error’

By Steve Benen

Following up on this morning’s job numbers, it’s worth reemphasizing a point the right generally prefers to ignore: spending cuts are making unemployment worse. Dealing with the jobs crisis is hard enough, and conservative policies are akin to throwing an anvil at a drowning economy.

In September, the U.S. economy added 103,000 jobs overall, but the private sector added 137,000 jobs. The total was dragged down by the loss of 34,000 jobs. There’s no great mystery here — as government at every level cuts spending, this necessary leads to public-sector layoffs, affecting, among others, teachers, police officers, and firefighters.

For Republican policymakers, this is a feature, not a bug. In the GOP worldview, the economy will improve when hundreds of thousands of public-sector workers lose their jobs. That may sound ridiculous — and it is — but it’s also a central tenet to the Republican employment policy. Remember what House Speaker John Boehner said earlier this year, told that his budget plan would force hundreds of thousands of government employees into unemployment? “So be it.”

Also, this isn’t a new problem. Alan Pyke posted this chart today, showing “the steady contraction of the public sector and the expansion of the private economy since the Recovery Act actually began to reach the economy in early summer 2009.”


In case it’s hard to read, the blue line shows private-sector growth, while the red line shows public-sector deterioration.

When spending cuts force these public-sector workers from their jobs, it not only hurts them and their families; the effects are felt throughout the economy. These laid-off employees are forced to scale back dramatically, which means they’re spending and investing far less, taking money out of the economy when the economy needs more capital, not less.

The result, obviously, is a brutal drag. Adding insult to injury, it’s a drag that’s easy to avoid. Layoffs at the state and local level were mitigated in 2009 by the Recovery Act, which saved thousands of jobs that would have otherwise been eliminated, and helping keep the economy from getting worse. Those funds have since been exhausted, and the public sector is back to making severe layoffs. David Leonhardt recently described as “an unforced economic error” — with all of the problems we can’t control, this is one problem we know exactly how to prevent. The notion that government would actively and deliberately make unemployment worse seems genuinely insane, and yet, that’s what’s happening thanks to GOP fiscal policies.

What’s necessary right now is some political will. President Obama’s American Jobs Act includes resources to keep public-sector workers on the job. Congressional Republicans have said this is out of the question because, well, I really don’t know why. They haven’t said. Something about “government = bad” or some similarly useless phrase that demonstrates a child-like understanding of public policy.

But the fact remains that it would be fairly easy to make the jobs landscape better. The expense wouldn’t even be that great. The only thing standing in the way is a major political party that’s convinced unemployment will get better after they fire a lot of teachers and cops.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

  • c u n d gulag on October 07, 2011 1:24 PM:

    Well, if they can't be 'Kings of the Hill,' Republicans will be happy to blow up the hill - as long as they can then be 'Kings of the Crater!'

    PARTY UBER ALLES!

    When will this "Republican Reign of Error" ever end?

  • fourlegsgood on October 07, 2011 1:38 PM:

    Even if they DO pass Obama's jobs act, it will be too late for me. I'm a public employee and yep, I'm being laid off.

    I cannot tell you how much I hate the republican legislature of my state.

    In the meantime, yes, I am cutting back on just about everything. Not just discretionary spending, but on necessities as well. I'm sure everyone else who's being laid off is doing the same thing.

  • jheartney on October 07, 2011 1:46 PM:

    I think you are giving the GOP far too much credit in saying they think that government spending cuts will benefit the private economy. I'm sure the smarter ones (i.e. the ones who run things, not the teatards) are well aware of the economic dynamic. They are happy to deliberately crater the economy if it will put them back in power. In fact, they're counting on it.

  • Memekiller on October 07, 2011 1:59 PM:

    This is why Obama should have been setting the agenda all along, as he has with the Jobs Bill. Had he campaigned against spending cuts and austerity due to the fact that they would increase unemployment, and called for more stimulus, then he could be saying "I told you so."

    Instead, by agreeing to raise unemployment as part of a bipartisan consensus with the GOP, Obama owns the results, and gets the blame.Thank Darwin the Dems didn't fall for owning the dismantling of our social net, as well.Why on Earth the Dems have been so eager to enact failed Republican policy so they can take the blame for it, I'll never understand.

    Now look at the difference. Sure, this won't pass - but by campaigning for what makes economic sense, when jobs aren't created by laying off public employees, people will want to create jobs - which the GOP is preventing. If you want jobs, you have to elect Democrats. If we don't pass Obama's bill, we can all judge how well spending cuts and tax cuts is working because Obama is campaigning against it rather than embracing a non-compromise, GOP economics as his own.

    Vote Obama and rather than boosting the richest 1 percent's confidence with free cash so they'll feel better about hiring people, we'll actually use that cash hire someone.

  • Upper West on October 07, 2011 2:22 PM:

    Is there a metric by which you can attribute a certain part of changes in the unemployment rate to public sector job losses? e.g., if the unemployment rate is 9.1% now, how much lower would it be if 600,000 public sector jobs had not been lost in the last year.

  • jjm on October 07, 2011 2:46 PM:

    Just remember, real economic depression in the 20th century permitted the rise of right wing dictatorships all over Europe. Some of them aggravated the problem on purpose to drive people to desperation and then offered themselves as 'saviors.' I don't want to make a false analogy, but I recall Hitler demanding deep sacrifices of the people ....

  • Jim Pharo on October 07, 2011 2:53 PM:

    Remember, most GOP'ers look at that chart as proof that laying off government workers creates jobs. They simply could not care less about the facts, the truth, understanding, etc. They see one line going up -- good jobs! -- and one line going down -- bad jobs! -- and conclude that their point is demonstrated.

    This is the same approach they bring to the stimulus, which they claim not only didn't work, but -- look at the charts! -- made unemployment much much worse.

    The fact that they are as wrong as can be is simply irrelevant to them and their enablers.

  • wordtypist on October 07, 2011 3:34 PM:

    I think there is one important point that needs to be made as often as possible about the distinction between public and private sector layoffs. In a recession private sector jobs are eliminate because there is insufficient demand for the products they make. There is no similar phenomenon in the public sector. There is no reduction in demand for most public sector workers. We still need teachers, policemen,firemen, people to provide clean water, dispose of waste, collect taxes and a whole host of other essential functions.

  • wordtypist on October 07, 2011 3:38 PM:

    I think there is one important point that needs to be made as often as possible about the distinction between public and private sector layoffs. In a recession private sector jobs are eliminate because there is insufficient demand for the products they make. There is no similar phenomenon in the public sector. There is no reduction in demand for most public sector workers. We still need teachers, policemen,firemen, people to provide clean water, dispose of waste, collect taxes and a whole host of other essential functions.

  • Blue Texan on October 07, 2011 8:26 PM:

    Yes, cutting spending during a weak recovery is stupid. But who said this in July?

    "Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs."

  • jhm on October 08, 2011 7:39 AM:

    wordtypist has almost said what I wanted to stress is the problem with Steve's (and others') point about the private sector, but he too misses the essential issue.

    It isn't enough to point out that the public sector job losses are a drag on the economy when GOPers believe that these positions are simply useless sinecures in the first place. Defending government jobs simply plays into their worldview of a communist state living off the taxes they pay on their hard earned social security benefits.

    The further point needs to be made that these positions are not only worthwhile for increasing employment, but are needed—and needed all the more in recessions—for their active participation in maintaing a healthy economy. In other words, we need to be showing how government is a positive force above and beyond simply being an employer. This isn't to say that private sector employment is somehow inferior, but that the two need to be in place for the whole to be at its best.

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