About Those Jobs Numbers

Sept 2nd, 2011

Well, the August jobs numbers are out and they are bad. In fact, the employment figures for the last month are net zero. In the midst of those clamoring to score points on today's report, Matt Yglesias makes this observation:

"Looks like we had 17,000 thousand new private sector jobs in August, which were 100 percent offset by 17,000 lost jobs in the public sector.

The striking zero result should galvanize minds, but it’s worth noting that this has been the trend all year. The public sector has been steadily shrinking. According to the conservative theory of the economy, when the public sector shrinks that should super-charge the private sector. What’s happened in the real world has been that public sector shrinkage has simply been paired with anemic private sector growth. This is what I’ve called “The Conservative Recovery.” Conservatives complain about the results because the President is a Democrat named Barack Obama. But the policy result is what conservatives say they want. Steady cuts to the government sector, offset somewhat by private sector growth. The reality is that this dynamic sucks, and we ought to be forcefully trying to avoid public sector layoffs knowing that workers are also customers for the private sector. But we’re not.

Hopefully Ben Bernanke and co will ponder this as they head into their September meeting."

Once more, leaders from both parties are ignoring the fact that the government is contributing to the collapse in demand.