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Paul Krugman Explains Why Obama’s Private Sector Gaffe Wasn’t Wrong

Last updated on February 8th, 2013 at 01:46 am


On CBS, Paul Krugman explained how Obama got the phrase wrong, but his point about private versus public sector health was correct.

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Here’s the video from CBS This Morning:


Krugman was asked about Obama’s private sector, “gaffe” and he detailed how Republicans have killed 1.4 public sector jobs. Krugman said, “You know, that was an unfortunate line. The president bungled the line. The truth is the private sector’s doing better than the public sector, which is not well enough. And actually the real story about this economy is that this cutback at the public sector are what’s hurting recovery. By this point in Obama’s presidency, if we’d had normal public sector job growth, we’d have around 800,000 more people, firefighters, school teachers, police officers. Instead we’ve got 600,000 fewer, so right there is like 1.4 million jobs that we should have had in the public sector, and of course, those are translated to more private sector jobs too. So that’s what he was trying to get at, of course, he screwed up the line.”

The fact is that once the stimulus dollars stopped coming from the federal government, state and local public sector layoffs went up. It isn’t just that state and local governments can’t afford these employees. There is an ideological component that was put into motion by the Republican victories in 2010. Republican governors and the then newly controlled Republican House are on an ideological mission to destroy the public sector. Public sector layoffs hit a record high in the year after the Republican victories. Part of this is due to their belief in small government, but they also see the political benefits to killing public sector unions that mostly support Democrats.

An additional 1.4 million jobs would have a dramatic impact on the unemployment rate. To put this into context, if we were at normal public sector employment, there would be an additional 116,000 jobs a month created. The monthly job creation number of the course of a year would be double what it is today.  More people would be back to work, and the unemployment numbers wouldn’t look so bad.

Since Mitt Romney has decided that the country doesn’t need more public sector employees, voters shouldn’t count on the jobs situation getting better if he wins the election. In fact if he implements his plans, more public sector layoffs will be coming. Republicans have proven themselves to be more interested in their ideology than fixing the economy. If they are victorious in November, don’t expect an abrupt shift away from the job killing policies that they have been advocating for during the Obama years.

As Paul Krugman said, the president may have bungled the phrase, but his point was accurate. The private sector is doing better than the public sector, and the Republican public sector job killing agenda is hurting the entire economy. While the media continues to obsess over a phrase taken out of context, they are missing the bigger point. Obama may have not gotten the phrase right, but his point was correct. 

  But I wouldn't hold my breath waiting for the media to focus on what the president was saying, when they can work themselves into a tizzy over a self-manufactured gaffe.

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