Obama: the private sector is “doing fine”
I’ve been trying to figure this one out ever since it happened.
At first I assumed Obama’s remark that the private sector is “doing fine” was a truncated quote. But no, he really did say that, even in context. This video gives the entire statement, which was an ad lib answer to a reporter’s question rather than a scripted remark. Ad libs tend to be either careless errors, or especially revealing, or sometimes both:
So it becomes a matter of what he meant. Now, even if he meant something perfectly reasonable and yet said the above, it counts—as Romney said—as an “extraordinary miscalculation,” if only in the political sense, although it’s probably one in the mathematical and economic sense as well (which I believe is what Romney meant by using the phrase, although we can’t be too sure of that, either.) Some of the numbers are crunched here.
When I watch the video of Obama, I get the impression that he was first and foremost being strategic—that is, he was focused on the last part of his statement rather than the first, racing ahead in his mind to get to the “let’s blame the Republicans” part. And Wisconsin loomed large in his mind. So he didn’t stop to think what that first part sounded like to most Americans, in his rush to get out a message to undo the Wisconsin results and focus on how much we need to take care of public sector employees.
I think Powerline’s John Hinderaker has it just about right*, as well:
…I think there is more going on here then merely another instance of Obama’s cluelessness. Rather, I think the belief that the private sector is rich and the public sector is poor, so that transfers of wealth from private sector to public sector are endlessly justified, is embedded deeply in Obama’s ideology.
Another thing that’s very deeply embedded is that public sector employees and especially their unions are Obama’s natural constituency compared to private sector employees. Of course, exceptions to that rule are massive, but there’s nevertheless a strong tendency in that direction. Right now Obama is all about his own re-election and shoring up his base as well as appealing to those in the middle, which gives us another reason for his seemingly clueless remark: he’s trying to spin his record and say it’s not really so bad, and he hasn’t caught onto the fact that most Americans simply don’t and won’t believe him.
Defenses have come fast and furious from Obama supporters. They range from Andrew Sullivan’s predictable “he was taken out of context” (no, he wasn’t), to more convoluted responses such as this, which seem to rely on essentially ignoring the private sector remark and focusing on how it is that the mean old Republicans are stiffing the public sector.
Even Obama got into the defensive act this time, rather than just relying on surrogates, which showed that he’s at least aware that he may have wounded himself with his earlier remarks:
It is absolutely clear that the economy is not doing fine,” Obama said in his correction. “That’s the reason I had a press conference.
Fair enough. He never said the economy as a whole was doing fine. He continued:
I think if you look at what I said this morning and what I’ve been saying consistently over the last year, we’ve actually seen some good momentum in the private sector. There’s been 4.3 million jobs created, 800,000 this year alone, record corporate profits. And so that has not been the biggest drag on the economy.
That may have been what he meant, but it’s not what he said. He didn’t say that even though the private sector is still hurting, it’s doing a bit better than the public sector. He still it was doing fine. So it’s not that he was misunderstood. He was disagreed with: it depends what the meaning of fine is.
And it also depends on whether you’re looking at this chart. You can see that the private sector has taken an upswing lately compared to the relative flatness of the public sector line. But you can also see that the private sector is not doing fine compared to the public sector:
“Tone deaf” doesn’t even begin to describe it.
*I said Hinderaker had it right when he wrote that Obama’s remark rested on principles embedded in Obama’s philosophy. We can see that Obama is hardly not alone in this, as the following video of Harry Reid from October of 2011 attests:
Back then, Reid’s remarks got some press, although nothing like Obama’s recent coverage. There was even some discussion of what Reid meant, and an attempt at ascertaining the facts:
Republican staff from the Senate Finance Committee also said it would be difficult for Reid “to be more wrong” since as a percentage, more jobs have been lost in the private sector than in government since the start of the recession in December 2007.
“Bottom line: Private sector jobs have been greater both in absolute terms and as a proportion of the pre-recession base than government sector jobs,” the aides said.
Asked about the senator’s statement, Reid’s spokesman defended it as accurate.
“All he was doing was pointing out that most job losses in recent months have been coming from the public sector,” said Reid spokesman Adam Jentleson, noting that the president’s jobs bill “contains tons of provisions to encourage private sector hiring,” including tax credits for small businesses and write-offs for expenses.
“The bill currently on the floor is about cops and firefighters, and that was what he was talking about. (Reid), of course, thinks we need to spur hiring in the private sector,” Jentleson added.
It’s not usually a great idea to take a leaf out of Harry Reid’s book. But I think Obama arrived at the formulation independently, and for the same reasons and reflecting the same mindset. It’s sort of like the simultaneous development of the theory of evolution by Darwin and Wallace—only not quite so smart.
[ADDENDUM: John Podhoretz has a good analysis in the NY Post.]
Often and maybe even usually, the simplest interpretation of what someone said is the best interpretation.
In this instance, the simplest interpretation is that Obama is a clueless ideologue.
Taking into account the fact the private sector is the producer of wealth and all its ancillary benefits and the public sector inherently a drain with the ancillary effect of being, in certain instance, a quid pro quo criminal enterprise, the discussion (public/private jobs) would seem ridiculous.
Charles Krauthammer’s most recent article reported two instances, Wisconsin and Indiana, in which public service employees, released from mandatory union membership, happily opted out. The harbinger canary (Wisconsin) and the writing on the wall (red ink pension plans) have the Progressive clique worried. If a sea change is in the offing it should come as no surprise that Obama et al have other things on their mind than the private economy.
Properly dramatized, the Supreme Court would enter stage right just about now and administer the coup de grace — the end of Obamacare. Properly melodramatized, Progressives across the country would self-defenestrate. FINIS
He truly believed what he said, he wouldn’t have qualified the statement with record profits etc. if he didn’t.
No Gaffe.
There are so many campaign commercials that can be made of him in his own words and just a graph or statement of what actually happened.
How come the public sector employees are always policemen and firemen? What about the DMV clerks, diversity administrators, and the thousands of DC paper pushers? Does Valerie Jarret count as a public sector worker?
Obama was trying to say his policies are working and things are improving. Of course, he does not believe that.
The private sector is the wealth creator and the public sector is overhead. This statement takes the cake, in that it’s is the first time i’ve heard a CEO mention a lack of overhead as a cause for financial woes.
Check out the hilarious and damning RNC commercial titled “headwinds,” (http://www.youtube.com/watch?v=-PPfkDCyn8k) featuring probably 20-30 clips of Obama citing “economic headwinds”–starting in 2008 and up until a few days ago–as the reason his policies have not worked, and the economy hasn’t recovered.
I believe that Barney Frank made the same point about the problem being public sector jobs when he was interviewed on Fox business the night before. It was likely some talking point that the geniuses in the Obama camp had decided to regurgitate and distributed to all the usual suspects.
I have grown utterly weary of watching this awful man try to cloak his virulent anti-Americanism, his rabid anti-capitalism and his contempt for the very people that he is supposed to be representing.
I would rather take my own life than to vote for him – seriously – but one has to wonder what it must be like for the 52% that projected their disney views upon his blank slate only to find out that was was played back was a pornographic snuff film.
The old saying goes that it is always darkest before the dawn, to which I will add that the coldest part of the day is just as the sun rises.
I can only hope and pray that this is the case as we endure this longest of nights.
A path to public pension reform: Fiscal Responsibility: A Tea Party Cause
Neo, could you please add a link to the source of that chart? I see that the vertical axis is an index of some kind, and I’d like to know what it is. Thanks.
In this instance, the simplest interpretation is that Obama is a clueless ideologue.
This.
I’d have said “clueless dolt,” but you’re more polite than I am.
I can’t imagine why this genius, the mostest brilliant President ever, has buried his transcripts deeper than Jimmy Hoffa (a true corpse-man). No idea.
The natural result of Affirmative Action extrapolated to the Oval Office. The only emotion that’s inappropriate to these goings-on is surprise.
“Jimmy Hoffa (a true corpse-man)”
THAT is funny! LOLOL!
I’ve been trying to figure this one out ever since it happened.
The Dog-Eater’s claim that the private sector is doing fine is a combination of his utter idiocy (he really doesn’t understand anything that involves numbers greater than 20), his innate America-hating disgust with the whole concept of a private sector, and his shallow marxist reasoning (“at some point you’ve made enough money”). It’s not a question of whether he believes what he says. That’s never an issue with the Indonesian Imbecile. He just says whatever he thinks will further his cause – which is the destruction of America and everything we stand for.
To wonder what a guy who has shown such contempt for America, our institutions and our culture, and has tried to impress people with his deep knowledge by publicly pondering what the “profits AND earnings ratios” tell, is to ask an aardvark to stop eating ants and give an explanation of relativity theory. On all levels it is simply beyond him and contrary to his nature.
Barky is too stupid to know much of anything, too much of a pathological liar to care about anything even if he could know (which is clearly outside of his intellectual capabilities) and too contemptuous of America to even assume that he would tell a truth that would help America if he did.
I think I understand him perfectly. Compared to private sector jobs, public sector jobs are magnificant. They offer much better wages, lavish health plans and pension plans, and are practically indestructable. Compare those spectacularly wonderful government jobs to private sector jobs, which have less pay, benefits and stability.
Obviously, to Barack Obama, public jobs are so much better than private jobs that he wants to create as many public jobs as possible so that as many people as possible can enjoy the lavish benefits and job security that only a government job can offer.
I think that his thinking is really that simple.
Obama thinks the private sector is doing fine in the same way that mosquitoes, cockroaches and subway rats are doing fine.
What kind of a country is this where they are going to ask the real middle class to not retire at 65 but bump it out to (yikes!) 80. So we can earn money for our garbage collector & the janitor at your state’s highway rest area to retire at 55 with 80% of their $80,000 salary !
We need to rename these jobs they are NOT PUBLIC SECTOR, (thats a smoke screen) they are GOVERNMENT sector !
Mrs Whatsit: the chart can be found here.
Many excellent comments. Obama dropped his mask a little too much there. He revealed that he does not understand that the private sector provides the funds to operate the government. To him it seems that the country can’t do well unless the government is growing.
Unfortunately, he’s not the only one. People have been voting for this type of pol for a long time. LBJ got the ball rolling. Reagan tried to roll it back but was unsuccessful. For the last thirty years government spending has been rising faster than GDP. In the last three years, exponentially so.
Njcommuter’s link is a great one. The public sector pension plans are over-promised and underfunded. They depend for their soundness on the health of the investment markets. We all know that investment returns have been very low to non-existent in the last 12 years. That means even properly funded plans are 72% below where they should be with more normal investment returns. Everyone is going to have to give up some percentage of their promised pensions. Social Security, Medicare, and public sector pensions are all going to be reduced by some amount if we are going to come out of this crisis. On the other end the private sector has to be unleashed so investment returns on pension assets can return to some semblance of normal. Growth of government spending has to be reduced to less than GDP growth for the forseeeable future to get the debt under control. All this can be accomplished if we have leadership in Congress and the White House. We don’t have it now.
This morning I just read Micky Kaus’ thoughts on the Obama quote over at The Daily Caller. I find them particularly insightful.
http://dailycaller.com/2012/06/09/why-obamas-gaffe-wasnt-a-phony-story/
Backing up to the WI recall election a bit, here is a VERY funny video of the DNC headquarters just after the election:
http://www.youtube.com/watch?feature=player_embedded&v=VC_ult6-Tb4
Thanks, Neo. I still can’t figure out what the “index” is on the vertical axis, but I did discover that research.stlouisfed.org is a fascinating site where visitors can make their own graphs out of oodles of economic data. So, I’ve been having fun over there making my own graphs — none of which show that the private sector is “doing fine.”
It’s staggering to realize that the President does not understand — or perhaps does understand, but doesn’t want Americans to understand — the causal connection between the health of the two sectors.
I have made this basic comment before but it needs, I think, repeating.
I still think ol’ Barry is hitting the CHOOM, and I suspect that he has never actually given ”weed” up.
Be that as it may, though, it may well be easier for him to believe that things are going along “swimmingly” because of all the shenanigans that have gone on with the formerly fairly reliable statistics turned out by the Federal Statistical apparatus, which used to try to portray, as best they could, what was actually happening in the economy and the job market.
As Orwell well knew, one of the primary tactics of the Left is to mess with language, and to change the meaning of words and, thus, how people perceive reality and what they believe it to be. Now that “messing” is apparently extending to statistics
It appears that Obama & Co’s people within these agencies –by changing definitions and/or what is measured, by concentrating on some measures and ignoring others–have “cooked” the numbers to portray a “reality” that is either better or worse than the actual “situation on the ground,” depending on what Obama & Co. seek to prove.
Thus, to show that there is no or little inflation, the content of the standard “basket of goods and services” used to measure the Consumer Price Index and, thus, Inflation, which is updated each year, was reportedly changed by removing some of the items from the basket that were costing more, and trending the inflation rate upward.
To make the case that things were so bad on the poverty front (that the nation desperately needs four more years of Obama & Co’s efforts and programs to fix the dire situation), the goal posts have been moved and the definition of “poverty” has recently been changed, from meaning a lack of a minimal level of income, food, clothing, and shelter, to one of “relative poverty” i.e. if you have fewer cars, TVs, a smaller, less expensive House, or food that is less in quantity, or more basic and less fancy than somebody else, then, you were now, vs-a-vis that other person or persons, “in poverty,” thus massively increasing the number of people that can be said to be “in poverty” here in America.
To show that the unemployment situation is not as grim as it actually is, the policy is to always refer to the top line national unemployment rate, and not refer to the broader (U-6) rate, which includes those who have been unemployed for a year or more, have given up looking, or who are underemployed which, taken together, result in a much higher total unemployment rate.
And, just this week, we have found out that, the Administration is arriving at its claimed massive numbers of new “green jobs” created by having the Bureau of Labor Statistics classifying things like bicycle repair shop clerks, bus drivers, oil lobbyists, and garbage men as doing “green jobs” (http://www.foxnews.com/politics/2012/06/06/issa-obama-administration-classifies-jobs-with-political-purpose/)
So, if Obama & Co. wants to believe in an alternative reality in which the private sector is doing fine, they can probably find the cooked statistics to keep their illusions up.
Well, in shortest space what you just described is a dictatorship of the proletariat, where the laborers and so forth earn more than the others. Last century we called that a SOVIET society ran by committee (a soviet) which would have the larger number of laborers voting in committee to take the wealth of the able.
been saying that’s what they been making for a long time, but alas, till you actually realize its true in a visceral way, and not have some excuse at hand, you wont actually absolutely oppose such… (and only absolute will work)
as far as parasites go, they are not malaria, they are Dracunculiasis or similar, where the removal of the condition can be as fatal as keeping it is debilitating.
you can kind of imagine them as a combination of Dracunculiasis (embeds and grows and removal can be deadly), malaria (invisible to the immune system), and Toxoplasmosis Gondii (changes the mind of the victim to make more victims more receptive) – Their major method of entry is to appeal to the victims innate senses of fairness and their goodness and guilt by deceptively redecorating trash options as better (by getting the victim to ignore workability or actual functional principals) and so subverting positive process to their parasitical ends. These things are generally accomplished by a very highly defined set of excuses, methods, and rules which they employ – and which are counter intuitive to their victims (who cant let go of the idea of positive outcome) who tend to get confused and think them harmlessly stupid and take their defenses down rather than see the doppelgangers for what they are.
The private sector is doing fine in the same way that ObamaCare will provide surpluses and that if you like your health insurance you’ll be able to keep your health insurance (even though the feral government will regulate the health insurance you like out of existence … because the fact is that Barky will just tell you that you really didn’t like it).
Don’t try to dig too deeply into the “reasoning” of the Indonesian Imbecile. He’s a pathological liar and the shallowest of thinkers. The shallowest.
the definition of “poverty” has recently been changed, from meaning a lack of a minimal level of income, food, clothing, and shelter, to one of “relative poverty” i.e. if you have fewer cars, TVs, a smaller, less expensive House
This pinged one of my pet peeves, “poverty” in America. I remain to be convinced that there is ANY poverty in America. In an online debate with a lib I pointed out that 98+% (IIRC) of American households have a color TV. That seems to be a useful operational yardstick by which to measure poverty, since I maintain that anyone who is truly impoverished (i.e., lacking in adequate food, clothing, and/or shelter) would not waste money on something as frivolous as a color TV.
A similar point obtains for “hunger” in America, which appears not to exist outside of the fevered imaginations of our liberal friends. When’s the last time you’ve seen someone who looked malnourished? (Supermodels don’t count.) We have an obesity problem, and it is most severe among the poorest citizens. But nothing daunted, leftists continually go back to the well of “hunger in America.”
Occam–Unless there is a “crisis” somewhere in America, these guys on the Left–politicians, government bureaucrats, academics, social workers, various ministers and/or race hustlers, NGOs, various think tanks and advocacy groups– don’t get paid in one form or another–no accolades for the last article, speech, or book, speaking gigs, tenure, salaries, promotions, contributions, honors and awards.
So, we had the “Great Society” and “War on Poverty,” “Head Start”–man, they’re great at making up these catchy phrases–that have poured literally $trillions into the economy over the last few decades to fix these problems, and the poverty rate stays basically the same, student’s test store keep declining, “racism” is supposedly everywhere (and we are always just one step away from the Klan, burning crosses, and the knock on the door in the middle of the night–let’s just ignore the fact that the KKK was a product of the Democrat party) and according to various advocacy groups we have massive problems with homelessness, poverty, and “undernourishment” here in America.
All this at a time when there are seemingly a million sources of help, both governmental and private–our “poor” generally have decent housing (and a lot of government money to help them get it), clothing, adequate, if not more, food (and lots of Food Stamps), cars (in some States the poor now get a several hundred dollar annual allowance for car repairs), air conditioning, essentially free medical care, free education, free child care and in some jurisdictions in California, I understand, free toys at Christmas, government aid to pay for transportation to work in some areas, TVs–color and usually flat screen, and perhaps more than one, computers and Internet service, cell phones (now being given to welfare recipients in some locations as absolutely “necessary” in modern day America), and it turns out that our “poor” today here in America have a higher standard of living than many “middle class” Europeans.
OB and Wolla Dalbo,
Re: American poverty.
It has long been my contention that a stable poverty rate is actually and indication of improvement, not ineffective programs.
I liken economic strata to a nuculear mushroom cloud. When one is “rich” (choose your own criteria) one is at the top of the cloud. There is no place else to go except to get richer (or lose wealth). This the constant lament of the socialist leftists that “the rich get richer.”
At the bottom of the economic cloud are the poor. Given that we see a stable poverty rate of ~16% even though our population is growing means that poverty is NOT getting worse. The reason that the 16% does not decrease is that many people at that level begin to become economically productive and successful and move up and out. They are then replaced by NEW people at the bottom level of the economic cloud. The 16% poverty rate might be a stable %-age, but it’s not the same people year after year (except for a very small %age of truly poverty stricken).
Thus, IMO, the chronic leftist complaint of “rich getting richer” is in reality a complaint about people leaving the poverty level and beginning to become successful and productive.
So the left complains, in effect, that the poor become less poor and are moving up the economic ladder. Quelle surprise!
From a link:
Obama and his campaign have been emphasizing that the economy is growing despite the worst recession since the Great Depression, and the comment that the private sector was “doing fine” was meant in contrast to the public sector, which has seen months of job cuts in part due to Republican-led budget cuts.
From another link:
It is absolutely clear that the economy is not doing fine,” Obama said in his correction. “That’s the reason I had a press conference.”
The private sector is increasing in jobs. The public sector is losing jobs. Yet overall, the economy is not doing fine.
Implicit conclusion of the POTUS: Time to tax the private sector to provide more public sector jobs. After all, how much money do you need? Time to redistribute again.
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our “poor” today here in America have a higher standard of living than many “middle class” Europeans.
Absolutely true. Europeans as a group are poor by American standards. Tell a European that American high school students often have their own cars; watch the astonishment cross their faces. When I first moved to Europe, I was shocked at how poor Europeans were relative to us, as evidenced by, e.g., the living space available to them. Many was the time I sat in a living room where the legs of those on opposing couches were interdigitated. (Granted, I’m pretty long in the legs, but this was ridiculous; we had to correlate movements when changing crossing legs.) On looking at a prospective house purchase I was amazed to find that I could touch opposite walls of what was apparently a child’s room.
Similarly, although I’ve only been there for a few months at a time, Japanese are also poorer than we are; they have gadgets, but their homes are microscopic by American standards.
Both Europeans and Japanese envy our standard of living, even those they may not like other aspects of American culture (fair enough). Life is much easier in the US compared to Europe or Japan.
The 16% poverty rate might be a stable %-age
I believe it’s stable because poverty is defined as being in the bottom 16% of the income distribution. That makes for a lot of stability, kinda like saying we need to spend more money on education because half of the kids are below average.
OB,
Regarding relative poverty and the European lifestyle I agree. The European socialist lifestyle is evidence that socialism is all about defining down. It is the social equivalent of regression to the mean; i.e., a shared poverty designed to dis-incentivize individual achievement.
It would be a real awakening for most the I-know-better-than-you nanny staters if they were forced to spend a year actually living a European lifetyle in the manner of a European “grunt.” In other words, not importing $$ from outside, and visiting museums and posh cafes, but being forced to earn a living and live as the European common man does. I’d bet that we’d hear a lot less about the superiority of the Eurosocialist state in our national dialogue.
Hold your left hand out and that’s the public employees hope and dreams. Hold your right hand out, and that the private employee’s hopes and dreams.
See which one fills up.
Of course you do know the adage “Wish in one hand and shit in the other and see which one fills up first,” right?
But on another level, government work is pretty awful. Too much bitchin, fightin, non-achievement, rules, PC, pork . . . Not all, of course, mind you. The obvious policemen and firemen exceptions come to mind. Teachers? Maybe 20 years ago, but not anymore. That’s why more and more people prefer to send their children to private school.
It would be revealing to see just how much money is spent on government jobs, including the subsidies, and see what fraction the trotted out police and fireman necessity assumes.
The obvious policemen and firemen exceptions come to mind.
Here’s the part I don’t get, living in the People’s Republic of California: how is police and fire protection a Federal matter? We pay through the nose for such services through local taxes. How does Jugears come into this?
but being forced to earn a living and live as the European common man does.
Salaries for a secretary in the UK back in the 80s: #5 K ($8 K). For a managing director (CEO): typically #50 K ($75 K). Not exactly big bucks.
That TPM link is infuriating. Does the Left even bother about facts and reason at this point? The author says the quote will be taken out of context by Republicans, so gives the full quote, which is as damning in context as it would be out of context. In fact, it’s worse in context because he specifically states that it’s the public sector that is doing poorly. And then he shows a chart which demonstrates the exact opposite point! But it’s by Matt Yglesias, TPM readers, so don’t worry, it will be fully supportive of whatever liberals would like to be true, so don’t even bother analyzing it. They expect so little of themselves and their readership.
Occam’s Beard
I once entered the comment thread on a Euro Blog, where the Euros were claiming that their poor were so much better off than poor in the US. I pointed out that while the poor in the US have less living space than the better off, the poor in the US have more living space per capita than the average European. I was informed that was an irrelevant statistic. How can you compare living in a house trailer in the country to having an apartment in Paris? I concluded it was a waste of time to discuss with the Euros.
Which reminds me of one of the national Heaven/Hell jokes.
Heaven is an American house
Hell is a Japanese house
Heaven is a Japanese wife
Hell is an American wife.
[I am just reporting what a Chinese told me.]
http://www.timbro.se/bokhandel/pdf/9175665646.pdf Dwelling space, page 23.
Absolutely a valid point, OC. And on the (I think) Stephanopoulos show Ann Coulter tried to make that point; it bounced off the rim.
No traction because people really don’t think in terms like that. Federal/state spending has become identical so that even to ask the question gets a big “hunh?”
At least to the people who don’t have to pay taxes!
Government promotes itself as a scientific manager. It sets goals with numeric precision and finds direct ways to meet these goals.
Team Obama economists come into Obama’s office each week and discuss how to get the economy going. They discuss the official statistics of GDP (Gross Domestic Production) and jobs held. The government wants a statistical recovery.
Team Obama wants to report hard numbers, however they are accomplished. If you argue with numbers, you are a moron. Who are you to question the non-partisan measurements of a government bureaucracy with huge datasets and giant computers? You are a peasant.
The economists point out a direct plan. When government hires more workers, their pay and benefits are counted as increasing GDP no matter what they do or accomplish. Obviously, they now have a job, so the employment statistics improve immediately. This is a no brainer! It is a two’fer.
Expanding government employment directly and immediately improves the two statistics which government cares about. It is the direct path to statistical prosperity.
Plus, Team Obama believes in the Keynesian Multiplier. They actually believe that they will produce more wealth for us all, if they can pay out more cash to accomplish anything or nothing. So, it is a three’fer.
( If the Multiplier were true, then we could counterfeit our way to wealth. But sorry, it isn’t true. )
Here are the facts about government master plans, oversight, and statistics.
Unintended Consequences and Perverse Incentives
=== ===
[edited] Managers and employees of glass plants in the former Soviet Union followed master-plan production guidelines.
At one time, they were rewarded according to the tons of sheet glass produced. Not surprisingly, most plants produced sheet glass so thick that one could hardly see through it. (And, this glass did not fix prior applications such as broken windows.)
The rules were changed to reward the total area (square meters) of glass produced. Then, they produced glass so thin that it broke easily.
=== ===
Team Obama wants to manufacture more statistical GDP and jobs numbers in any way it can. Thick or thin doesn’t matter.
“”Europeans as a group are poor by American standards. “”
OB
This is why man made global warming was invented by socialist/leftist. To make peasantry an acceptable and righteous cause. And all dissenters are just uncaring rubes who hate the earth and nature.
A lot of fire departments outside of dense urban areas, and close to them, are not financed at all by taxes other than perhaps one or two people, while the rest of the endeavor is volunteer. that is, local shop owners, and people have beepers and plectrons and will drop and respond to calls in their area using the trucks they maintain and repair using charity events
Artfldgr,
That is an excellent observation, Another gem of wisdom that is hidden in plain sight and usually overlooked.
Thanks,
The current president says that part of the problem is that state and local governments “don’t have the kind of flexibility that the federal government has in dealing with these kinds of problems.”
True, state and local governments can’t print money or borrow it so easily. That’s good. It creates more accountability.
The $800 BN “stimulus” merely delayed the decline of the public sector employment picture. His answer: more stimulus.
“The result is the most precarious budget situation we have seen in years. We now have an annual budget deficit of almost $300 billion, not counting more than $180 billion we borrow every year from the Social Security Trust Fund.”
Obama in “The Audacity of Hope.”
What Obama was saying was very simple and clear. It is very clear that the US, at local, State and Federal levels is on the edge of a major austerity drive to reduce public costs and debts — Wisconsin and the two California city votes last week are just the start.
Excessive public expenditure is a drain on the private sector, which in the end needs to be taxed excessively to pay for excessive public expenditure — the point that the Republicans have been highlighting, and can expect to hammer as the year wears on. It’s something Obama just cannot understand.
President Obama is all about public spending — he does not understand or trust the private economy, and he fears the collapse of growth (and indeed a large-scale retraction) of the public economy.
What he was trying to say is simple: he thinks the argument public spending needs to be constrained to help the private economy is wrong. He believes the private economy does its own thing, and rises and falls on a cyclical basis and will naturally (magically?) self-correct, whereas the public economy needs specific, continued, spending. He also sees the public economy as superior, rather than having the private economy’s crass pursuit of profits.
In his eyes, the private economy is “doing fine”, while the public economy faces a huge crisis, and desperately needs help. He is arguing to keep up the spending to save the public economy, rather than reducing spending to help the private sector — on the basis it is the public sector holding up the economy (look at his background and you’ll see why he thinks that way — it’s all been public money).
Obama simply has no concept of the causal relationships between the private and public economies. He really, really, does not understand where the money comes from, and he is genuinely struggling with why so many people can’t understand his position.
Ahhhh, to be such an intellectual giant amongst the pygmies! From Obama’s point of view, he’s not just the smartest guy in the room, he’s the only smart guy in the room, any room, anytime, anywhere. It must be so lonely! ROFL
Republican: “Hope and change? Hope and change is no good here, I need something more real.”
Obama: “The private sector is doing fine.”
Republican: “No, it isn’t.”
Obama: “The private sector is doing fine.”
Republican: “No, it isn’t! What do you think you are, a Jedi, waving your hand like that? I’m a Republican! Mind tricks don’t work on me–only reality!”