Harry Reid, October 2011: 'Private-sector Jobs Have Been Doing Just Fine'

Last year, Harry Reid said pretty close to the same thing President Obama said on Friday about the health of the nation's private sector. Obama claimed that "The private sector is fine." On the Senate floor on October 19, Reid claimed that "It's very clear that private-sector jobs have been doing just fine."

Don't feel bad if you don't know this, because the press mostly ignored it. The few who did notice it worked mightily to excuse it. One of the chief excusers was Pete Kasperowicz at the Hill:

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Reid signals government jobs must take priority over private-sector jobs

Senate Majority Leader Harry Reid (D-Nev.) on Wednesday indicated Congress needs to worry about government jobs more than private-sector jobs, and that this is why Senate Democrats are pushing a bill aimed at shoring up teachers and first-responders.

"It's very clear that private-sector jobs have been doing just fine; it's the public-sector jobs where we've lost huge numbers, and that's what this legislation is all about," Reid said on the Senate floor.

... Reid reiterated his emphasis on creating government jobs by saying Democrats are looking to "put hundreds of thousands of people back to work teaching children, have more police patrolling our streets, firefighters fighting our fires, doing the rescue work that they do so well … that's our priority."

... Private-sector jobs have increased over the last 19 months, while government jobs have lagged. They've also seen cuts in several states that are struggling to balanced their books.

... Democrats who support the bill have said it would help save 400,000 teacher jobs and thousands of first-responder jobs that have either been cut or could soon be cut. Reid said Wednesday that these layoffs are "rooted in the last administration," but did not explain further.

Obama's "private sector is fine" statement was also rooted in a desire to steer even more federal money to the public sector, a fact which a Saturday Wall Street Journal editorial found even more revealing than the statement which got so much attention (bolds are mine):

... This is all good campaign fun, but Mr. Obama's presser was far more revealing for what it said about how he thinks an economy grows. His line about "the private economy doing fine" was followed immediately by a complaint that America's real growth problem today is shrinking government.

... (President Obama said) "Where we're seeing weaknesses in our economy have to do with state and local government—oftentimes, cuts initiated by 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."

"And so, if Republicans want to be helpful, if they really want to move forward and put people back to work, what they should be thinking about is, how do we help state and local governments and how do we help the construction industry."

... The President's response is to say as his first policy priority that the federal government should borrow or tax more so it can then finance more hiring by state and local governments. Spur the economy by growing the size of government.

... But the lesson of the stimulus—which spent hundreds of billions of dollars in aid to the states—is that this boost is temporary and fades when the spending ends.

Mr. Obama also misdiagnoses state and local government layoffs. They aren't the result of falling state and local revenues, which have increased by 6% over the last two years, according to the Census Bureau. The problem is that the cost of worker benefits is growing faster than revenues. Governments are having to lay off workers to pay for their rising pension and health bills.

That's especially true in states that haven't followed the example of Wisconsin's Scott Walker and altered their benefits or reformed collective bargaining. Think California and Illinois. Mr. Obama is asking Congress to tax Americans from every state more, and borrow more from China, to send money to states that have been the most spendthrift.

Let's look at changes in public-sector employment in Wisconsin as reported by the Bureau of Labor Statistics from December 2010 through April 2012:

• State government employment has gone from 98,500 to 100,600 (seasonally adjusted).
• Local government employment has gone from 289,100 to 278,600 (seasonally adjusted). But since December 2011, employment has only dropped by 1,300.
• Local government education employment has gone from 164,800 to 158,900 (not seasonally adjusted). But since December 2011, employment has risen by 500.

Many of the job losses which occurred during 2011 before mostly stabilizing in 2012 can be traced to either the end of one-time federal stimulus funding (which should not have been treated as something to repeatedly expect) and to public-sector unions negotiating deals to preserve their outsized pension benefits ahead of when Republican Governor Scott Walker's Act 10 reforms went into effect. For example, the teachers union in Milwaukee, where Walker's challenger Tom Barrett is mayor, was willing to accept 250 more layoffs than would otherwise have been necessary had they been willing to give on pensions. Hundreds of other laid-off teachers weren't recalled because of "federal money that's no longer available."

What Wisconsin's experience really shows that if the Obama administration's goal were really to sustainably preserve his beloved government sector, he would be behind what Walker has done.

Back to Reid's October statement -- it demonstrates two important points.

First, in combination with what Obama said on Friday, the idea that the "private sector is fine" is clearly a fundamental leftist and Democratic Party perception -- quite erroneous, as I demonstrated in October while making points that are mostly still quite valid today (i.e., that the private sector is nowhere near recovering the jobs lost in the recession and it policy-fumbling aftermath, a disproportionate percentage of the private sector's job growth has been in part-timers and temps, and that non-postal federal government employment has grown while states and localities have suffered).

Second, the establishment press did not do Democrats any favors by engaging in damage control on Harry Reid. If they had given Reid's out of touch comment the attention it deserved, perhaps Obama would have known better than to step into the same hole again -- this time to the point of making a statement which should haunt him for the rest of his reelection campaign -- if Mitt Romney and Republicans don't let people forget it.

Cross-posted at BizzyBlog.com.