Thursday, September 13, 2012


Is This Election Really About Jobs?

The above chart is based on data from the St. Louis Fed’s FRED data site; if I correctly extracted and interpreted the data, why are the Republicans whining about employment dynamics during the Obama administration?

1.  Private Sector Employment:
a.  When Obama took office, the financial meltdown that began in 2008 had put private sector employment into a stall that had turned into a spin[1] by early 2009.
b.  Private sector employment pulled out of this potentially fatal descent in early 2010 and now has recovered more than all its lost altitude.
2.  Government Sector Employment:
a.  Total public sector employment has declined 3.0% since the beginning of 2009.
                                              i.   The largest component, local government, is down 3.6%.
                                             ii.   State government, the second largest component, has experienced a 3.0% decline.
                                            iii.   The smallest component, Federal employment, has barely moved the needle although it has increased 0.5% over the period and contributed the census-related spikes in 2009 and 2010.

Since Obama took office, the entire bite taken out of employment has come from the public sector, driven by substantial declines in state and local employment. Presumably, the largest state and local employment employers, education and public health and safety, have borne the brunt of the overall decline.

Meanwhile, the private sector employment’s nadir was reached in February 2010, a decline of 3.8% from January 2009. Subsequently, it has recovered to 100.4% of the January 2009 level, in other words, a 4.4% increase of over the past two and a half years.

Isn’t this the shift to private sector emphasis that the Republicans have been wishing for? Wouldn’t Mr. Romney have a better chance if he had the balls to say, “Elect me and I’ll build on the strong foundation that Mr. Obama has built over the past four years"?

[1] A spin is an aggravated stall resulting in autorotation about the spin axis wherein the aircraft follows a corkscrew downward path.

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