Labor Day wallpaper – An Honest Comparison of Obama Recovery to Reagan’s Should Include Public Sector Jobs

Labor Day wallpaper


In the last post I did not have the time to get around to Paul Ryan’s(R-WI) convention speech, The Most Dishonest Convention Speech … Ever?

At least five times, Ryan misrepresented the facts. And while none of the statements were new, the context was. It’s one thing to hear them on a thirty-second television spot or even in a stump speech before a small crowd. It’s something else entirely to hear them in prime time address, as a vice presidential nominee is accepting his party’s nomination and speaking to the entire country.

Here are the five statements that deserve serious scrutiny:

1) About the GM plant in Janesville.

Ryan’s home district includes a shuttered General Motors plant. Here’s what happened, according to Ryan:

A lot of guys I went to high school with worked at that GM plant. Right there at that plant, candidate Obama said: “I believe that if our government is there to support you … this plant will be here for another hundred years.” That’s what he said in 2008.

Well, as it turned out, that plant didn’t last another year. It is locked up and empty to this day. And that’s how it is in so many towns today, where the recovery that was promised is nowhere in sight.

It’s true: The plant shut down. But it shut down in 2008—before Obama became president.

By the way, nobody questions that, if not for the Obama Administration’s decision to rescue Chrysler and GM, the domestic auto industry would have crumbled. Credible estimates suggested that the rescue saved more than a million jobs. Unemployment in Michigan and Ohio, the two states with the most auto jobs, have declined precipitously.

2) About Medicare.

Ryan attacked Obama for “raiding” Medicare. Again, Ryan has no standing whatsoever to make this attack, because his own budget called for taking the same amount of money from Medicare. Twice. The only difference is that Ryan’s budget used those savings to finance Ryan’s priorities, which include a massive tax cut that benefits the wealthy disproportionately.

It’s true that Romney has pledged to put that money back into Medicare and Ryan now says he would do the same. But the claim is totally implausible given Romney’s promise to cap non-defense spending at 16 percent of gross domestic product.

By the way, Obamacare’s cut to Medicare was a reduction in what the plan pays hospitals and insurance companies. And the hospitals said they could live with those cuts, because Obamacare was simultaneously giving more people health insurance, alleviating the financial burden of charity care.

What Obamacare did not do is take away benefits. On the contrary, it added benefits, by offering free preventative care and new prescription drug coverage. By repealing Obamacare, Romney and Ryan would take away those benefits—and, by the way, add to Medicare’s financial troubles because the program would be back to paying hospitals and insurers the higher rates.

3) About the credit rating downgrade.

Ryan blamed the downgrading of American debt on Obama. But it was the possibility that America would default on its debts that led to the downgrade. And why did that possibility exist? Because Republicans refused to raise the debt ceiling, playing chicken not just with the nations’ credit rating but the whole economy, unless Obama would cave into their budget demands.

4) About the deficit.

Ryan said “President Obama has added more debt than any other president before him” and proclaimed “We need to stop spending money we don’t have.” In fact, this decade’s big deficits are primarily a product of Bush-era tax cuts and wars. (See graph.) And you know who voted for them? Paul Ryan.

5) About protecting the weak.

Here’s Ryan on the obligations to help those who can’t help themselves:

We have responsibilities, one to another – we do not each face the world alone. And the greatest of all responsibilities, is that of the strong to protect the weak. The truest measure of any society is how it treats those who cannot defend or care for themselves. … We can make the safety net safe again.

The rhetoric is stirring—and positively galling. Analysis from the Center on Budget and Policy Priorities shows that 62 percent of the cuts in Ryan budget would come from programs that serve low-income people. And that’s assuming he keeps the Obamacare Medicare cuts. If he’s serious about putting that money back into Medicare, the cuts to these programs would have to be even bigger.

Among the cuts Ryan specified was a massive reduction in Medicaid spending. According to a report by the Kaiser Family Foundation and Urban Institute, between 14 and 27 million people would lose health insurance from these cuts.

If you’ve ever been to a Baptist church service in the south, j or just about anywhere really, you will be told they we’re all sinners, we’re all flawed. True enough. We all tell little white lies everyday. Some of them are what Catholics call lies of omission – you don’t think you really lied, you just did not speak up with the truth. Some of these lies are what sociologists call civilized lies. We tell the boss the new car looks nice, even though it will probably go down in history with the Pontiac Aztek as one of the ugliest cars ever. When Republicans lie there are many types, but the two most common are malicious lies and lies out of voluntary stupidity. When Ryan was looking straight into the camera, making some eye contact with the crowd espousing complete falsehoods that was done with a malicious intent. Even beyond that was the contempt for the morality of truth telling. The Ryan lies and the Romney lies are by arrogant, morally bankrupt scoundrels, done in the cause of conservatism. The delegates, for the most part, and the echo of approval by Republican bloggers and pundits were a mix of arrogance and the lack of moral depth one needs to make more good judgements than bad. These miscreants have a lot invested in a movement that is based on a foundation of greed, social-darwinism, placing more value on the contributions of the elite than the contributions of the workers that make their wealth possible and eliminationism. If only we could harness the power of this mental bubble for national defense, we could save billions. That bubble is not very sophisticated – I’m not talking opera versus country music – I mean being mentally agile enough, emotionally secure enough to handle new facts and have a deeper understanding of the moral implications of, for example cutting off health care for millions of Americans or understanding the direct comparisons of Reagan era economic problems versus the economic crash that President Obama’ inherited. Reagan has it easy compared to Obama. Regan seized the S&Ls and used Keynesian stimulus spending. Obama did not seize and force the banks to reorganize and his Keynesian stimulus was one-third tax cuts. Fox’s “Stupid” Comparison Of Obama Recovery to Reagan’s

In response to those numbers, Fox Business analyst Stuart Varney compared the current recovery with that of Reagan, saying that “it is a very negative comparison for President Obama.”

However, Krugman has noted that the two recoveries are not comparable, explaining:

If government employment under Mr. Obama had grown at Reagan-era rates, 1.3 million more Americans would be working as schoolteachers, firefighters, police officers, etc., than are currently employed in such jobs.

And once you take the effects of public spending on private employment into account, a rough estimate is that the unemployment rate would be 1.5 percentage points lower than it is, or below 7 percent — significantly better than the Reagan economy at this stage.

One implication of this comparison is that conservatives who love to compare Reagan’s record with Mr. Obama’s should think twice. Aside from the fact that recoveries from financial crises are almost always slower than ordinary recoveries, in reality Reagan was much more Keynesian than Mr. Obama, faced with an obstructionist G.O.P., has ever managed to be.

Look at how the argument is beframed by Republicans – who suddenly have decided that government, i.e. presidents do create jobs, SEN. Jon Kyl (R-AZ)- ““Faced with the reality of historic unemployment rates and record federal debt, I had hoped that President Obama, by now, would understand that even more government spending doesn’t create jobs.” [9/09/11] or SEN. Kelly Ayotte (R-NH) “It’s not the government that’s going to create jobs in this country, it’s our small businesses, it’s the private sector.” [9/22/10]. So when Fox News, serial liars like The Gateway Pundit and American Power lie about the Obama jobs record, the lies stand because they would have to have some moral courage, and goodness forbid, they would have to do some math – or at least compare apples to apples.

In the words of the Economic Policy Institute, “the current recovery is the only one [of the last four recessions] that has seen public-sector losses over its first 31 months.” EPI continued:

If public-sector employment had grown since June 2009 by the average amount it grew in the three previous recoveries (2.8 percent) instead of shrinking by 2.5 percent, there would be 1.2 million more public-sector jobs in the U.S. economy today. In addition, these extra public-sector jobs would have helped preserve about 500,000 private-sector jobs. ( If we’re going to count the number of public sector jobs Reagan created as part of his job creation record, than it is only fair and using the same math to count the public sector job losses during the last three years. Jobs lost because of Republican spite)

Note the dark green line – that is the Reagan increase in public sector job creation

Chief economist at Moody’s Analytics Mark Zandi found that job losses at the state and local government levels have “the most serious weight on the job market.” And when the public sector cuts jobs, it significantly affects private sector employment, as economist Joel Naroff noted:

Behind those government job losses are budget cuts, particularly from states and local governments, many of which have lost revenues as lower incomes and lower property values lead to lower tax income. Those budget cuts mean fewer government contracts, which also leads to pain in the private sector. The winding down of the stimulus package also contributed to these losses, as federal assistance to state governments for things like extra Medicaid funding has disappeared, leaving many states with substantial budget gaps.

Altogether, the strain on the national economy is considerable. “There’s no such thing as a free budget cut.” says Naroff. “If the public sector trims [20,000 to 25,000] jobs a month, then the private sector has to create those jobs before the economy can add one job. That’s the hole that the public sector puts the economy in at this particular point,” he says.

The Obama administration’s jobs bill would have given about $35 billion to state and local governments to prevent many of these public sector job losses, but because of a Republican filibuster, the bill has languished. Since then, the public sector has lost 124,000 jobs.

It is the old it is OK for Republicans to do it, but when Democrats do something similar it is creeping Marxism.

Why are Republicans dead set on preventing Reagan-like spending on public sector jobs which have a multiplier effect that creates private sector jobs? The same reason for the conservative debt ceiling strategy: McConnell Debt Ceiling Strategy: ‘I Refuse To Help Obama Reelection’  and remember Michele Bachmann (R-Minn) – ‘I Hope’ Higher Unemployment Will Help My Campaign. If liberals are sometimes angry at Democratic triangulation they should be livid at the conservative movement willing to maliciously inflict so much pain on the American worker and the nation, all in the grand cause of conservatism. This destroy Obama at any cost mentality is certainly not about patriotism, it is about the unhinged nationalism of the Republican Party. If they have to give America the shaft to further their radical agenda, than so be it. So when Obama Senior campaign aide Stephanie Cutter said she gathered that Republicans “think lying is a virtue” and states that Saint Ronnie comes up short on a fair comparison of job numbers, she’s correct for those who bother to do the math.

On September 5, 1882, some 10,000 workers assembled in New York City to participate in America’s first Labor Day parade.

Miners with Their Children, at the Labor Day Celebration, Silverton, Colorado,
Russell Lee, photographer, September 1940. Republican pundits like to call these working class Americans  thugs. Over the last hundred years or so there has been labor violence, but it has always been the case that more union heads have been busted with ax handles and night sticks than the other way around. When you run the factory you can afford to buy professional thugs to beat labor. In the Bay View Labor Riot of 1886 on May 5, 1886, advocating an 8-hour work day, the state militia opened fire on the unarmed crowd and killed seven people. A protest for jobs that the police turned into a riot, Tompkins Square Riot (1874), “Samuel Gompers described the events and his experiences, “mounted police charged the crowd on Eighth Street, riding them down and attacking men, women, and children without discrimination. It was an orgy of brutality. I was caught in the crowd on the street and barely saved my head from being cracked by jumping down a cellarway.”