Barack Obama, Government Job Slayer

Yesterday’s employment report showed another decline in government employment. But there’s a pretty amazing statistic developing during the Presidency of Barack Obama. In the post war era a US President has NEVER averaged a contraction in government employees throughout his entire term. But that’s exactly what Barack Obama is doing. At -0.7% per month, he is on pace to average a contraction in the total government workforce for his Presidency. He is the greatest government job killer in the modern economic age!

slayer

And it’s not all state and local. No, he is an equal opportunity government job killer. And with the exception of the Census hiring (which wasn’t really his decision to begin with) and a brief stint in 2009, government employment growth has been negative through his entire term.

Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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  • Dunce Cap Aficionado

    Is this from FRED data?

  • SS

    SOCIALISM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • http://orcamgroup.com Cullen Roche

    Yes.

  • http://orcamgroup.com Cullen Roche

    Yes.

  • socal

    that chart is tracking growth; i’d like to see a chart expressed in raw numbers relative to the total population of the us. also, not sure how you can attribute local job cuts in this figure. detroit for example, can’t possibly be part of the executive strategy to slash gov’t jobs.

  • John Warner

    This President is not a Democrat, he is a moderate Republican and this chart and his policy prove it. I hear all the time how Government is inefficient, but guess how inefficient it will be come when the people who administer it disappear. We are a country of over 313 million people and expected to be over 400 million by 2051. Only true Republicians think that less people in government administration will make it efficient. I say “you think the lines are long now, you think the telephone wait to talk to a live government person is long, JUST WAIT.”

  • http://orcamgroup.com Cullen Roche
  • Billiejones

    Is the “Job cutting” a direct result of “Obama policy” or is it the result of concessions he has made in order to further other policies of his? In other words…..did Obama actually decide to cut gov’t jobs on his own accord or was it pushed on him by congress and thus just associated under his name?

    Im asking because I honestly dont know, but i thought a lot of Gov’t job cuts were a result of the sequester which wasn’t Obamas idea.

  • Billiejones

    “you think the lines are long now, you think the telephone wait to talk to a live government person is long, JUST WAIT.”

    – Arent you assuming that gov’t is the ONLY entity that can fulfill these services? Obviously you cant privatize national defense or other gov’t elements…….but why couldn’t DMV be privatized for example? As long as the incentive structure is properly aligned….i think you would find that a private DMV has the potential to be MUCH more efficient with fewer resources. How long is your typical wait when buying insurance vs at the DMV?

  • http://highgreely.com John Daschbach

    Perhaps a more important measure is real non-defense discretionary spending, which has been cut to it’s lowest level in 75 years. I think anyone who is familiar with the data knows that what we need is a President who increases discretionary spending and jobs while allowing the deficit to expand, say a real liberal like Ronal Reagan.

  • Widgetmaker

    The true story of this administration. To think where we would be now if gov’t job growth was similar to that of the Reagan and GWB years. It was foolish to cut government spending so much in the face of a depressed economy. Unemployment would be so much lower and so many millions of lives would not have been needlessly ruined. We will be paying for this for years to come.

    To think that this Kenyan Muslim Socialist president has a more fiscally conservative record than Ronnie and George the younger. The Republicans in Congress would rather see this country fail than this president succeed.

    Thanks for pointing out this little known fact, Cullen.

  • Widgetmaker

    If it were only so. But with all the talk of spending cuts, such a “radical” idea would be a complete nonstarter with the extremists who wield so much influence over our Congress. Pity.

  • Cowpoke

    You would quit your Job too if your CEO (Obama) was such a#$#$@^.. Nevermind, Actually look at the numbers since the Sequestor kicked in, then you can blame the Repubs.

  • http://www.google.com Somebody

    Actually one should look a bit further in history with these charts and notice at least 2 things at one glance:
    -Government employment decreased in last 2 longer recessions out of 3 and that third was Oil Crisis in 70’s
    -Starting with FRED’s timescale from 1952, US population has doubled and amount of Government employees has more than doubled

    So one could assume that recessions tend to harm everything and everyone when lasting somewhat longer than “typically”, Obama actually has done nothing special to Government employment but is more like puppet to financial and fiscal realities, and last but not least that the computers and computing have not been able to help with governing US, quite the contrary i guess.

  • tealeaves

    Apparently Obama is the ideal candidate for the anti-big government tea partiers

  • Greg

    But why privatize the DMV? Are we going to have more than one?

    The only advantage to privatizing something is when you can have multiple choices which bring competition. There would be no such thing with the DMV. There is ONE drivers license that you need and one way to get it.

  • Billiejones

    Competition helps a lot in terms of pricing and efficiency and i agree that healthy competition is very important. However its not needed to improve the current terrible DMV experience. DMV could be vastly improved in terms of efficiency and user experience if it was privatized….even without competition. Profit motive solves that. Prices might increase or an ala carte option could be introduced….ie: streamlined wait times/processing in exchange for a higher fee. The net result would be improved efficiency no doubt. As i pointed out, pricing would likely go up…..but thats just a function of a persons utility. Under an a la carte model, you only pay increased fees for that which you perceive as having value. Additionally a LOT of excess “fat” could be cut from the current DMV system which may actually offset the pricing issue to some degree.

    You could also go to an “agent” model where certain “approved” agents are able to process your registration, drivers test etc. without need to go to the actual DMV. DMV currently uses a similar model for drivers school after tickets etc…….although, like the DMV its currently incredibly inefficient.

    Im sure there are many other models that would work, these are just the ones that came to mind.

  • http://machinedlearnings.com Paul Mineiro

    In California, AAA provides a subset of DMV services, and it is vastly more pleasant to go there, well worth the annual membership fee.

    Unlike the Highlander, there can be more than one.

  • Midas 2

    The Federal Gov. now employs 2% of the working people in the US. In 1966 the US employed 4.3%. Of course the population was smaller in 1966. But the reduction is noteworthy in view of demands for a smaller government.

  • http://orcamgroup.com Cullen Roche
  • Midas 2

    J.D. Look at Reagan’s record before you invoke his actions. He tripled the debt, had to raise taxes, and the Fed rate went to 18%.

  • Midas 2

    See my reply above.

  • DRR

    Government has contracted out some employment position to the private sector. A good comparison chart would be total government contribution to GDP minus transfer payments

  • J
  • http://www.fanbrowser.com/ Cowpoke

    Midas 2, He also accelerated the collapse of the evil empire and allowed BILLIONS of kempt up capital in eastern europe to repatriate itself into western coffers.

    I would LOVE to see this again, unfortunately BUSH and OBOZO and Dumb Arse Americans Who are not willing to go the distance.

    We Had out feet up on the middle east coffee table in Iraq. We were Are In Afghanistan. And Were Iraq.
    See Map:
    http://tinyurl.com/ns7zzcq

    We Had IRAN BOXED IN………………….. I would again take a Reagan Style debt Run Up to Check mate Iran.

  • JohnE
  • Shorehaven

    Per this federal government website there have been very minor decreases in federal employees from 2009 to 2011.

    http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/

    Also per this website there were major decreases in federal employees during the Nixon years- mostly a reflection of Nixon’s effort to wind down Viet Nam. Also Bush Sr. and
    Clinton had fairly significant decreases in federal employees. Once again, the Obama years do not show decreases to comment on.

    As for recent state and local decreases, they are reflection of recent historically high state and local deficits and debts. The states and local governments had no choice but to reduce their bloated governments.

  • http://orcamgroup.com Cullen Roche

    That data doesn’t even include 2012 and 2013 when over 110,000 federal jobs were cut. Keep in mind, the federal workforce is much smaller than the state and local workforce. So yes, federal is down less than S&L, but it’s still down substantially since Obama came into office. This guy is presiding over an unprecedented period of govt job cuts. It’s not all his fault obviously, but the buck stops somewhere, right?

  • tw

    Paul Krugman made this point on TV a few weeks ago and Rand Paul was flabbergasted. Someone needs to share this chart with the tea party.

  • CuriousLurker

    I really got a chuckle reading the comments to this piece (and comments all over the interwebs). Obama isn’t going to get any credit for anything good, ever…. in the minds of some people. It just can’t happen because he is a Kenyan, Socialist, Black, Idiot…

    Oh well. Like anyone that is old enough to remember the “good old days”, Obama is a moderate Republican as already stated by John Warner (above). He just happens to reside left of the Far Right.

    I worked for the USDA in a past life. Hired in 1981 by President Ronald RayGun. Talk about deficit explosion! Oh yeah, I forgot, deficits don’t matter. RayGun also raised my taxes 6 times.

    What a strange world we live in!

  • sforst

    I find it difficult to give Obama credit or blame for the economy, as congress doesn’t let his agenda through. I would love to have seen what happens with 4 or 6 years controlling both the House and Senate. Those first 2 years saved us from depression, it’s a shame he hasn’t been allowed to play this thing out and be fully accountable for whatever the short and long term impacts are of his Presidency.

    I used to see Republicans as the adults in the room. Wow, was I wrong!

  • JWG

    Are you also going to claim that Obama is responsible for increased US oil and gas production? Just because it happened and he was there doesn’t mean he had anything to do with causing it. In fact, he may be trying to reverse a strong and preestablished trend. The Democrats are the party of government; let’s not be naive.

  • LVG

    I think CR is being a little bit sarcastic. He said in another comment that he doesn’t blame Obama for all the job losses. That would be stupid. Just as stupid as calling Obama a socialist like a lot of people do.

  • Ricky

    Why aren’t you (and Krugman) distinguishing between FEDERAL government employees and STATE and LOCAL government employees when you are talking about Obama’s performance? When one looks at only Federal employees, according to the federal Office of Personnel Management (www.opm.gov, data available through 2011), the number of federal employees has RISEN every year under Obama from 2007 through 2011 with the exception of 2011 when the number of employees decreased by 1% due to temporary census workers. In contrast, during Bill Clinton’s 8 years as president, the number of federal employees fell by 16%, or more than 800,000 workers. While I agree with your assertion that Obama is a job killer, that hardly applies to federal employees.

  • http://orcamgroup.com Cullen Roche

    1) Obama was not President in 2007 or 2008.

    2) He took office in 2009.

    3) The OPM data does not include 2012 or 2013 during which 110,000+ federal jobs were cut.

  • Uncle Factual

    The problem is that this isn’t his policy. It’s because of all the stuff the house Republicans have pushed through. Save Obamacare, every single economic proposal he has put forth has been shot down.

    If Obama had his way, he’d invest quite a bit of money into very sensible things, among them state and local government, a long time ago. Just look at his proposals.

    The only thing he managed to get was some tax hikes on the wealthy during last year’s debt ceiling debacle.
    Obama’s getting “credit” for something that he has no control over, since Congress has the power of the purse and they’ve been saying no all the time.

    By the way, before anyone thinks that the Republican party is somehow disciplined, we should remember that when they have the white house you see things like unfunded massive tax cuts to the wealthiest or medicare part D or other kinds of pork.

    The Republicans only act the way they do when they’re in opposition, as soon as the enter the position of power, their anti-big government inclincations fade very fast.

    The best government is something like we have now. When democrats are in opposition, they usually go along with the pork. Republicans typically do so at a lower rate. But Democrats do a better job running the country with the presidency than the Republicans.

    Typically, whenever a Republican is in the white house, debt rises. When democrats are in the white house, debt tends to fall. Obama has been the exception because he came into office at the lowest nadir of the Great Recession. Romney would have done a much worse job than Obama had he been elected, not just on the economy, but on foreign policy too.

  • Lukey

    Indirect government employment (contractors, non-profit social service agencies administering federal programs, etc.) should be included in these numbers to make them comparable. There was almost none of these in 1966.

  • Shorehaven

    Thank you for responding and being open. Some blogs/websites dish out politcal kool-aid and delete comments that do not go along with the message. And some of their commenters join in by defining people that don’t go along as racists and/or other twisted definitions.

    I appreciate the Obama administration cutting some federal jobs (110,000?). The federal government is not nearly as bloated as state and local governments. The problem going forward is senior citizen entitlements are eating into government outlays. The entitlement growth is putting a squeeze on everything.

    BTW, Nixon reduced federal government by 1.5 million employees, Bush Sr. reduced it by 500,000, and Clinton by 600,000.

  • Shorehaven

    BTW, did Nixon’s 1.5 million reduction in federal employees contribute to the stagflation of the late 1970’s?

    You can make the argument Bush Sr.’s federal employees reduction of 500,000 contributed to the recession during his administration.

    I assume Clinton’s administration eluded a recession because of the growth of private debt during his two terms.

  • Mike

    Clearly it has not been Obama’s agenda to cut federal government jobs. Anyone who argues that point is living in progressive/populist devotee fantasyland. I know many Obama devotees, and the slipperiness of their arguments is astounding at times.

    Sequestration is responsible for many of the 2013 job cuts. Obama railed against its implementation. The US Postal service has been crumbling for years.

    States and local govts were badly damaged by the real estate bust and layoffs ensued.

    Obama’s hands have been tied since 2012 because we have checks and balances in our democracy, and “elections have consequences” to steal a line from queen nancy.

    As the cost of supporting retirees from a shrinking labor pool continues to ramp, the taxpayer will be squeezed evermore, and all politicians will be placed under ever greater pressure to make a poorly designed and basically untenable system look rosy. Pointing fingers seems to be the strategy of the day.

    Social security was originally designed to be insurance for those few lucky folks who lived past the age of 65, which used to be “old”

    Now, 65 is the beginning of a long and illustrious golf career for many. Paid by the younger productive tax base.

    Medicare is another story.

    Obama is not a socialist, he is a progressive populist. I don’t know which is worse.

  • Diggity

    Federal jobs were not lost due to sequestration. Forced furlough (non-PTO) were the byproduct of the sequestration. I think the argument should be turned on its head however. What I see this visualization demonstrating is that government employment has NOT expanded as a result of policies enacted by the Obama administration. This is in stark contrast to the way his policies are portrayed by the hard right. So Obama does not equal big government as suggested even if the government’s “reach” has been extended (TARP, HARP, ACA) during his tenure as president.

  • Clark

    How about a chart over time showing average pay of a government worker vs. the private sector?

  • Shorehaven

    You can make the argument this administration is as authoritarian as any.

    Per the New American Foundation we had 477 drone strikes under Bush Jr. and we have had 2,355 strikes and counting under this administration. You can call this robotizing of the military. Reduce the military personnel number but maintain the same interventionism.

  • Keophus

    The real problem with what’s happened during the Obama years is the vast increase in the numbers of people that are receiving government handouts.

    The reduction in government workers is a small blessing, but not particularly meaningful in the grand scheme of things.

    If you fail to pay your taxes, someone will certainly notice and be by to fix that problem.

  • Mod

    I’ve lived in two mid-atlantic states and if my insurance interactions were as easy as my DMV experiences I’d be thrilled. Both states went to an automated segmentation system years ago for DMV transactions. Frankly, the experiences are routinely better from a customer service perspective than many for profit entities I’ve dealt with including Comcast, Wells Fargo, and insurers. The private sector is NOT always better.

  • Ricky

    1) As my 14 year old would say, thank you captain obvious for pointing out that Obama was not president in 2007 or 2008.

    2) see my number 1

    3) So now that we’ve cleared up Obama cut no federal jobs his first 3 years in office, you pull up a figure from somewhere that 110,000+ federal jobs were cut his 4th and 5th years in office. Using your job-cut number, and considering that there were 4,403,000 federal employees in 2011 (according to the OPM), a cut of 110k+ in 2 years is a grand total of LESS THAN ONE PERCENT. Taking your number even further, under Obama the number of federal employees has fallen each year by an average of two-tenths of one percent.

    So once again I repeat, Obama is certainly a job killer, but not at the federal employee level.

  • Ricky

    Gotta make a correction in my math before captain obvious pulls out his calculator. A 110k decrease over two years would be a grand total of almost 2-1/2 %, for a yearly average of just under one-half of one percent. Still an insignificant number.

  • http://orcamgroup.com Cullen Roche

    1) You cited 2007 as your starting date for evidence that Obama was a job killer saying “every year under Obama from 2007…”. Of course, picking the peak in employment before the recession is a convenient way for you to skew the facts. And saying “under Obama from 2007″ is just a flat out error on your part. There was no “under Obama from 2007″. There’s “under Obama from 2009″. You conveniently included two horrible job killing years that Obama really had nothing to do with.

    2) The point you missed is that no post-war President has seen govt employment decline throughout the entirety of his Presidency. So even if the drop is small it’s literally unprecedented because all of his predecessors were govt job creators. Even the guys I am sure you think are free market Republicans.

    3) Private employment has expanded by 4 million + jobs since Obama took office in February 2009. In other words, DESPITE his govt cuts the job market has actually done pretty well.

    4) This would all be obvious to you if you could take your political blinders off and try to see the facts for what they are as opposed to what you’re trying to make them.

  • Ricky

    “The point you missed is that no post-war President has seen govt employment decline throughout the entirety of his Presidency.”

    Your statement is laughably false. As I pointed out in my first post, according to the Office of Personnel Management website, the number of federal employees under Clinton fell by 16%, or 800,000. Under Obama it has fallen about 1/2% per year on average. Go check it out–I’ll wait.

    Here’s the exact location where the information can be found: http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/

    BTW, I ignored any of your statements referring to politics. They’re inaccurate and shallow. I come to your excellent website because it is very thought provoking regarding the monetary system, fiat money and related issues.

  • http://www.orcamgroup.com Cullen Roche

    The st louis fed data says different. Maybe im wrong. If so, sorry. No need to argue about it….

  • d

    This is because many of the big contributors to both parties are government contractors. When the government doesn’t do something, it usually puts out a contract for a private company to do it. Those government jobs are now in the private sector. And the companies involved are making a ton of money.

  • Billiejones

    Your opinion would fall in the tiny minority….DMV service is universally hated according to surveys. As for insurance….i live in CA which has silly insurance laws….but i have a good agent, i let her deal with it. Profit motive solves a lot of convenience problems if a person is willing to pay for the convenience……those who aren’t get the same shitty service they are currently getting anyway so nothing lost.

  • Shorehaven

    Here’s a St. Louis Fed chart of federal employment numbers, excluding military personnel.

    http://research.stlouisfed.org/fred2/series/CES9091000001

    It appears federal employment numbers today are similar to Jan. 2009.

    It also appears the Clinton years had around a 400,000 reduction of federal workers (excluding military personnel).

    Nixon years are hard to decipher, but it appears around 100,000 to 200,000 reduction. Per the opm website he had around a 1,300,000 decrease in military personnel. Did this partially cause the inflation of the 1970’s?

    Cullen, what caused the 1970’s inflation? It is all very confusing to me.

  • Mod

    Not sure how you know I’m in a tiny minority but have you dealt with your cable company lately? Or tried to get a live person who knows what their doing at a large bank? Alternatively, that insurance you have if it’s health insurance there’s a good chance you’ve taken a drug discovered or tested by the NIH. And how we’re communicating? Thank the government.

    My only point is don’t be so blinded by ideology. Good and bad entities exist in both worlds.

  • http://orcamgroup.com Cullen Roche

    Federal employment is very tiny as a % of overall employment. That’s why I used total govt employees. I don’t think anyone would argue that the federal workforce is really all that consequential. It’s the total govt workforce that is generally cited as being “bloated” or whatever. Anyhow….

    The 70s, in my view, were a weird combo of labor strength (unions), oil based inflation and high credit growth.

  • Oso

    thank you Michelle.

  • Anonymous

    Total government spending is now at 40% of GDP. The prior 30 years it ran around 35% of GDP. At the beginning of the last century it was less than 10% of GDP. Whether or not government employees are increasing or decreasing is not the issue. It is the amount of our economy that government controls that is the real issue.

  • http://www.engineersedge.com Edge

    Yell that out at a Tea Party convention!