The Republican Jobs Plan

This morning lots of headlines said no jobs had been added to the economy in August. But that’s not the whole story. Matt Yglesias writes,

Looks like we had 17,000 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.”

As Matt goes on to say, in the whacky world of Republican economics, laying off public workers is supposed to grow jobs in the private sector. I’ve never quite understood how that’s supposed to work, though. I think it’s something like the tooth fairy leaving you money when you lose a tooth.

Matt is right that the loss of government jobs is what’s dragging down overall job growth. Steve Benen wrote almost a year ago,

The monthly employment picture from the Bureau of Labor Statistics is starting to look repetitious. September’s totals were published this morning, and the new report looks a lot like the last few reports — the private sector is slowly adding jobs, but we can’t get our head above water because of the loss in the public sector.

19 thoughts on “The Republican Jobs Plan

  1. The Republican “Job Plan” now is, until the election of 2012, to make the ecomony as bad as possible, and jobs as scarce as humanly possilbe, so that, if/when the come into power in 2013, anything they do will be percieced as an improvement.

    And if they don’t get power after the 2012 election, to make things even MORE miserable in the 4 years until 2016.
    And that, everyone, is THE REPUBLICAN JOB/ECONOMICS PLAN!

  2. What about the Texas Miracle? Didn’t that produce any jobs in August? Wow, they don’t do miracles like they used to.. Used to be they could raise the dead, walk on water, hang out in a furnace, float axe heads, part the seas…but now we only get wimpy miracles that can’t even produce a couple of minimum wage jobs…sheesh!

  3. Hey, in 1938/39, that (giving the enemy everything they ask for and getting screwed every time) was called “appeasement.” Seems to me that the Rs publicly proclaim Chamberlain as very inept (at best) when he tried it…

    So, why again are we appeasing the enemy (Republicans/Big Business)?

  4. The economics of this recession are not difficult.

    People were fired when consumption took a dive. Buyers got spoiled when Wall Street took a dive and real estate crashed. Now there are fewer people employed- many of those who are working are making less. People who were borrowing from their home equity to make up for anemic pay can’t because they are underwater in their mortgage if they haven’t lost the house.

    But don’t miss the basic point. This economic paradox is simple, even if the solution is not. People are unemployed because consumption is down. Consumption is down because people are unemployed. Any real answer has to increase consumption, which creates demand which business has to hire people to meet.

    The bootstrap *should* happen with increased government spending, which puts people to work. The money these new workers goes into the market in consumption answer will maintain the economy as the government draws down spending. Basic Keyesian economics. We can’t take that approach because the deficit is too high, thanks to two unfunded wars and the Bush tax cuts.

    Wall Street is sitting on nearly 2 trillion in retained earnings. They are very profitable and paying Damn little in taxes.

  5. Which brings me to a Reverse Keysian Bootstrap as a way to break the economic paradox. What if….we simplified the corporate tax code and closed ALL loopholes. Top corporations would pay 35% to do business in the USA. (You only pay taxes on profits – this doesn’t affect struggling companies.) The only way to avoid that big bite… is to expand and hire IN THE USA. Close the call center in India answer hire a thousand people here. Start the expansion NOW – build that big planned facility it at a break-even now, on the assumption that its better than paying taxes and you will be positioned when the economy recovers. And it will.

  6. It’s supply side economics wearing different clothes. Remember in the 80s, Reagan’s people were pushing the notion of cutting taxes to liberate business? Same idea. By now we should be completely awash in (private sector) jobs, by this magical thinking.

  7. “laying off public workers is supposed to grow jobs in the private sector”

    Unless I’m not seeing something here, my guess if you were laid off in a public sector job, it would stand to reason you should get re-employed in a similar position in the private sector. Otherwise, you would have to get retrained as something else.

    Not saying that the conservative theory is totally off-base, (just to be clear, I’m not agreein’ either) it’s just that when I look at the numbers on the BLS page, I see the biggest job loss in the public sector was in the local education sector. This normally implies teachers. However, the largest gain in the private sector was in health care. So unless there was a sudden loss of school nurses, the trade-off didn’t happen according to plan.

    Now, I certainly understand that such a trade-off probably wouldn’t happen simultaneously, but it still seems to me that moving from one job you lost to another normally implies you move to the same or a similar type of job. Assuming there isn’t enough teaching jobs in the private sector it would appear career changing then becomes the norm. Career changing involves a need for teachers to teach those new careers and yet they are the largest of job losses.

    I’m not sure if we’ve entered a paradox here.

    Just sayin’

    • Unless I’m not seeing something here, my guess if you were laid off in a public sector job, it would stand to reason you should get re-employed in a similar position in the private sector. Otherwise, you would have to get retrained as something else.

      Think about this: Conservatives seem to think that laying off government employees magically CREATES jobs in the private sector. In other words, when a bunch of say, teachers are laid off, somehow this is supposed to inspire business owners to expand and hire more people.

      Now ask yourself, in what universe would this be true?

      It’s true that under some circumstances, high public debt contributes to inflation and reduces the amount of money available for things like business loans and mortgages. But we are not in those circumstances. Inflation is not a problem. Corporations have plenty of money to expand. The problem is that there is reduced demand for products and services because of the job situation, and public employee layoffs makes that worse.

  8. What about the Texas Miracle?

    Once the dimwits get back in power there will be plenty of jobs. Of course by then unemployment will be so high they’ll have convinced a substantial portion of the Wal-Mart generation that we need to drop the minimum wage. Pay less live better! Then the jobs will start rolling, and good thing too cause you’ll need at least three just to keep from the gutter. I say we let the dumfucks in the door, lets get this over with, the sooner the suffering begins the sooner it will end.

  9. Use the World War II solution. Tax the rich and spend the money. The federal government needs to spend between $250 billion to $500 billion additional every year until this issue resolve itself.

  10. “Now ask yourself, in what universe would this be true?”
    I would say in a universe where faith trumps reality, and where ideology superseeds reason.
    A universe where after 16 years of Bill Clinton, the sprayed bug crazies got their Elmer Gantry / Yosemite Sam hybrid, and now are in a tizzy because they are fearful of uncertainity in the markets, and want that damned African outta the WH.
    In a recent conversation with a righty, I was enlightened with the following:
    ALL government workers are lazy no accounts
    Unions are no longer needed because they drive up costs, and besides workers now have plenty of protection.
    Doctors deserve to make tons of money because they get out of school with incredible debt.
    ALL Muslims want you dead.
    “WE” must defend and protect Israel at all costs.

    In MHO, the way to fix this mess is to stop the usury that is killing the economy.
    The banks are borrowing money at next to nothing, but poor Debbie and Bob are trying to clean up their credit card debt at 15% +, and struggling with a first and second mortgage, worried about loosing their jobs, working more hours, spending more to send the kids to school. getting hammered with increased medical costs and insurance premiums, and have a vanishing retirement “portfolio.
    The milk cows are being starved to death, and the farmers are wondering why they are not producing milk.
    The economy will improve when Debbie and Bob are no longer afraid the bank will throw throw them out of their home, no longer worry which bill can wait ’till next month to be paid,wonder if they will need to work until they drop dead,aren’t scared shitless that they will get “pink slipped” on Monday, and will think something different than “how will I pay for this?” when a strange ugly mole pops up on their back.
    And because it’s the weekend, I won’t get started on this worship of all things Martial that is truly killing our country and souls.

  11. Hey, everyone, lighten up!
    It’s a holiday, so I hope everyone enjoys their Corporation Appreciation Day weekend. *

    *This holiday, future generataions will learn, was once called “Labor Day.”
    But no one will understand why anyone would have ever wanted to celebrate serfs.

  12. This is not as off topic as it may seem, but I should warn you that this documentary has some disturbing moments. It presents the confluence of ideas that lead to racism, its history and the history of class struggle. It is not the kind of fluff cranked out for your satellite TV provider. It would almost certainly be significantly edited for US consumption. It is important to watch the NEXT episode in the series. The ideas being put forth to justify slavery will sound very familiar, and disturbingly so. Features of the Republican/Libertarian “jobs plan” and their historical roots are nicely summarized.

    Don’t watch this if you need to “lighten up” in the near term. But, it is very worth watching.

    Happy Labor Day.

  13. The reason laying off public workers is supposed to make a boom in private employment is that increasing the number of unemployed people shooting for private jobs is that the more desperate people are for a job the lower the salary and benefits they’ll be willing to reluctantly agree to. Conversely the more employment options people have the greater the ability to hold out for a more ideal job.

    • JR –seems to me there already are plenty of unemployed people willing to work for less. But it still doesn’t explain how more jobs that don’t already exist would be created. I hadn’t heard a lot of jobs are going unfilled because people are holding out for higher salaries.

  14. Pingback: It’s the Economy, Stupid | Left-Handed Nib

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