Obama's press conference and the real debate about the economy

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PLANK JUNE 8, 2012

The Politics of Stupid, In Real Time

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The conservative reactions showed up in my twitter feed within a few seconds, the first missive from the Republican National Committee came through e-mail not long after that. Somewhere in between, Mitt Romney worked it into a speech and now, I see, congressional Republicans are talking about it too.

I’m referring, of course, to President Obama’s already infamous comment at today’s White House press conference: “The private sector is doing fine.” Following three months of disappointing job reports and with unemployment still above 8 percent nationally, critics are likening Obama’s statement to Romney’s statement in January of “I like being able to fire people” and, perhaps more ominously, to John McCain’s statement in the fall of 2008 that the “fundamentals of the economy are strong.”

Politics is frequently a game, and a stupid game at that. Politicians are human; sometimes they choose poor phrasing. When they do, opponents can be counted upon to exploit them and the media can be counted upon to dwell on them. But good politicians understand this fact and act accordingly. The best politicians figure out a way to avoid making those statements, even as they speak candidly and in a mature way to the American public.

Obama is usually among the most adept at doing that. Today he was not.

Still, an intelligent political environment would magnify such statements only when they seem indicative of what a politician actually thinks. McCain’s statement arguably reflected a real problem: His failure to grasp the magnitude or nature of the financial crisis. Romney’s statement about firing people, by contrast, wasn't even about employment. He was simply making a clumsy metaphor about health care.

So let's look at what Obama actually said, in full context:

The private sector is doing fine. Where we're seeing weaknesses in our economy have to do with state and local government. Oftentimes cuts initiated by, you know, Governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don't have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.

Broadly speaking, the analysis is correct. The private sector has been creating jobs at a steady pace, but the public sector has been shedding them, slowing growth. And there is no reason why that has to happen. Stabilizing the public sector workforce or, better still, increasing it would be among the very easiest things for the federal government to do: It can simply write checks to state and local government, as it did with the Recovery Act and has traditionally done during times of economic distress.

Republicans disagree. Downsizing the public sector is very much their goal and Romney said as much in his quick response:

[Obama] wants to hire more government workers. He says we need more fireman, more policeman, more teachers. Did he not get the message of Wisconsin? The American people did. It's time for us to cut back on government and help the American people.

The economic theory behind this seems rather questionable: I’ve yet to see the study suggesting that the recent decline in government workers has been good for growth or jobs. Keep in mind, too, that a downsized public sector is one with fewer teachers and firefighters, not to mention civil servants who may go by the ugly name “bureaucrats” but provide more essential government services than most people seem to realize. Sometimes we need fewer of these workers, but sometimes we actually need more of them.

One might even argue, as Steve Benen and Greg Sargent have, that Romney's quote is far more meaningful—and alarming—than Obama's.

Another criticism of Obama would be that he doesn’t fully grasp how weak the private sector remains. It’s been creating jobs, yes, and is posting plenty of profit. But it should be creating jobs a lot faster. That's not "fine." But if that is the argument Romney and the Republicans want to make, they really should explain why they have no serious plan of their own to boost job growth in the short term—and why they won’t seriously consider any of Obama’s proposals, such as public works spending or targeted tax credits, most of which have widespread support among mainstream economists.

You’ll notice that Obama made specific mention of putting construction workers back on the job, through the kind of infrastructure investments he has proposed and his administration was touting even during the winter and spring, when the economy seemed stronger.

Or maybe you won’t notice Obama said this at the press conference, given the media coverage. That’s too bad, because this debate over how to create jobs is precisely the one we should be having.

For more, see Ezra Klein and David Weigel.

Update: I reworded the passage on public sector jobs, adding the Romney quote along with the links to Benen and Sargent. I also noted, per a reader suggestion, that private sector profits are high.

Follow me on twitter @CitizenCohn

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