Obama: Government Job Slayer
Little known or distributed fact: President Obama is a government job slayer. That’s right. When compared to both GW Bush and Bill Clinton, President Obama is absolutely crushing the size of the government workforce. While Presidents Bush and Clinton added well over 500,000 government jobs during their first terms, President Obama has cut more than 500,000. For anyone who remembers the early Clinton and Bush years there was a great deal of decent employment data and the government workforce played a big role in those economic expansions. But as this morning’s employment data showed, that positive effect is absent from this “recovery”. This chart comes courtesy of Warren Mosler:
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.
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59 Comments
Huh…….?
It’s funny how everyone calls Obama a socialist when he’s cut the government workforce more than any President in decades.
Reagan hired about 300,000 more gov workers & about 500,000 more military for a total of about 800,000 more federal workers on gov pay (huge increase since that was a greater percentage of the nations population back in the 1980s.. it would be the equivalant of hiring 1.6 million more gov workers today) than Obama
&
Reagan did Keynesian-style domestic spending on military contractors (that had to be spent/hired on domestic since you can’t offshore/buy F-15s/tanks from China) to the tune of $1.9 TRILLION dollars of more deficit spending (which would be equal to about $3.8 TRILLION dollars in today’s dollars.
ie, one of the reasons Reagan had a better economy is that he increased gov deficit spending(aka as money creation) to fund increased spending/demand, production, & hiring thru deficit spending(of which tax cuts were part of the deficit spending)
Obama is treading water because his deficit spending is too little (needs at least $1 trillion more..ie, remove or suspend all payroll taxes for years, make the first $50k tax-free, build solar/wind arrays, etc)
Misleading statistic since the losses are mostly at the state and local
level. Please breakout federal numbers separately.
State and local cuts are mainly due to the Federal government’s balanced budget pressures. The buck stops with Obama.
State and local losses are due to a shrunken tax base and the fact that State and local employment soared during the house bubble. Local governments spent like drunken sailors while property tax revenues were rising 20-30% year after year. Now the hangover has hit with full force.
ZIRP is also killing State and local pension funds. This must have a negative effect on employment as well. It has more to do with Bernanke than Obama, though.
Agreed. Very misleading article as Obama has no control over employment of state government workforces. That is why in his daily stumps he continues to press the other side for more money for police fireman and teachers
This is simply untrue. Obama could have passed a spending bill in the first two years that offered much more aid to the states (he deserves credit for what was passed, but it clearly wasn’t enough). But he chose healthcare. As I’ve said before, the states are currency users and have balanced budget amendments. So, if their revenues collapse, as they did, and the federal govt doesn’t pick up the slack then they will inevitably have to fire workers. And that’s exactly what happened. I don’t blame Obama entirely, but the buck stops at him on this one. Anyone who understands the monetary system can see that this one clearly falls at the federal level and filters down.
Yeh but in retrospect….who knew how bad the economy really was when that mutilated bill was passed. Why is it impossible to do anything now? Obama has been clueless I agree…but in this climate Obama could have been the next fdr or Abraham lincoln and I bet he still would have failed. Blaming Obama is nice but I would like to see congress feel some fire…they all will be reelected however…
Obama could have passed anything he wanted in those first two years. You can’t blame Congress. He chose to pass healthcare and waited 3 years on his big job’s bill. It was a mistake. And there were lots of us saying the stimulus was too small and too poorly targeted in 2009. I was saying it daily. He made a clear choice to push healthcare through when he had Congress. He sacrificed jobs for healthcare. It’s that simple.
2 years, Cullen, really???? The Dem’s had 60 votes in the Senate for 4 months from September 24, 2009 thru February 4, 2010. Remember Al Franklin, Kennedy, etc. Democrats lost their 60 seat majority again when Scott Brown was sworn in Feb, 2010.
Meanwhile, the stimulus bill was passed, GM was bailed out, UE benefits extended, etc. He did what he could in the face of birth allegations, filibusters, oil spills, 2 wars, etc, etc. Maybe more importantly was the rise of the Tea Party which convinced the country that debt/deficits were killing us… they got elected in late 2010, but to do that it meant they were effectively controlling the converstation for all of 2010. How does one pass a spending bill in the face of that?
YOU understand our economy in the way that STILL only a few people do. Maybe (a big maybe) if you were President you could have pulled off a jobs bill that would have done more than what Obama accomplished… but name me one politician now or then who could have done that?????
Cullen, you should run for President (or any Monetary Realist or MMT person)!!!!!!…
there should be a law that you must understand MR or MMT in order to hold political office instead of outdated gold-standard based economic theories made up 50-100 yrs ago by Mises, etc
1. It’s good Obama reduces the amount of government workers. It reduces the financial burden on the private sector.
2. Less government workers leads to less total US income.
3. The public sector consists of the federal, state and local government. Wich of those three contributed the most to the current onslaught ? Did the federal government contribute to the reduction of jobs ?
I would refer to Steve Keen’s statement: GDP = total income + change in debt.
http://www.opm.gov/feddata/HistoricalTables/TotalGovernmentSince1962.asp
As you can see, federal employment is up about 200,000.
Still puts him well below Clinton or Bush, inauguration-to-date.
The govt includes state and local. I know President Obama is not directly to blame for all the job losses, but ultimately, he’s the government employee who has the greatest influence on these outcomes. So while it’s not fair to blame him for the job losses, it’s also not fair to say he plays no role in state and local job losses.
It’s mind boggling there are the same number of federal employees today as there were in 1995. I wonder if this includes contract workers.
Such stats do NOT include contractors. The Federal Government hires a tremendous number of contractors. There also seems to be a cyclical move to outsource work from Feds to Contractors, and a few Administrations later the policy gets reversed, then rinse and repeat.
the US was much smaller 20 yrs ago…
and back then in the 80s, the US employed not about 500,000 MORE military & 300,000 more civilian workers while total population size was 30-50% less 20-30 yrs ago.
to clarify, 1980 US population had about 200 million, & it grew by 50% to 300+ million US now
John:
Keep the facts coming; thank you.
I don’t see why this would be attributed the President when it is obviously due to Congress.
Technically, we can blame all of this on govt as a whole. But as someone said before, the buck stops with the President. If he can’t get Congress to work with him then the blame is going to fall on his shoulders whether that’s fair or not. Even so, he had two full years where he probably could have passed just about anything he wanted to. He went with healthcare when he should have gone with jobs.
it was more like 6 months, with the GOP stating over and over again they were going to stop anything he did in order to make him a one-term president. What Obama is to blame for is believing anyone on the other side of the aisle cared one iota about anyone other than themselves. his favorite book… Team of Rivals… he thought he could incorporate them and their thinking and lead that way… boy was he wrong. it’s revisionist history to say he could have “passed anything” for anything even remotely close to 2 years
Agreed. We pride ourselves on having a democracy, but then all political news and analysis assumes we have a dictatorship.
States have to run balanced budgets (in the long run) since they are
tax constrained. Tax receipts at the state and local level are down
due to the recession. Therefore state and local employees get laid off.
So, as President Obama has wasted 3 years complicating who pays for health
care, rather than fixing demand leakages, I guess you are right.
Exactly.
He “did” health care because the Progressives and Socialists have had the socialization of medicine as their utopian dream for 125 years. He finally had a large enough leftist majority in Congress to pass it. Objective measures of the ideological tilt of Congress showed that the 2009-2010 Congress was the farthest left in 94 years. He knew that majority would not last past the midterm election. It was his one shot to fulfill a cause that generations of Socialists have given their entire lives for. He even said several times that enacting ObamaCare would be worth being consigned to one term, and many of his fellow Democrats said similar things – that it was worth losing over in Nov. 2010.
Sorry but this sounds like a rightwing conspiracy theory. Another viewpoint would be that he tried to address our biggest long term problem of healthcare spending, and got nothing but cries of socialism and death panels. They could have just as easily pushed Medicare for all or a public option. Instead they went with a pretty centrist solution that had Republican origins, and got no credit for doing so.
I would argue that he has gone with jobs. If he hadn’t, the situation would considerably worse than it is now. Let’s analyze the problem correctly please…………
The “correct” analysis is precisely as John noted. State and local govts are revenue constrained entities with balanced budget amendments. If they don’t get federal funding during a time of revenue collapse then they must slash spending. So, Obama’s misunderstanding of the way our monetary system works directly resulted in the states having to cut massive numbers of jobs. Had he been more cognizant of this he’d have spent less time focusing on healthcare and more time on ensuring that the states don’t crush the labor market.
And I’ve been saying this for years:
http://pragcap.com/thoughts-on-healthcare-passage
The funny thing is, Obama’s still going to beat Romney. Even with all these gaffes.
That’s the way it looks right now. But the real campaign hasn’t started yet, and the swing voters aren’t paying attention yet. Still, I have to give Obama the edge because he has the powers of incumbency, thus he can hand out inducements and rewards to the various groups he needs to win.
as someone pointed out below, he was doing a heck of a lot more than just healthcare… GM, dealing with 2 wars, killing Bin Laden, etc.
As for “too much focus on HC” I think you’d change your tune had we gotten single-payer… a huge burden would be lifted from the private sector, and the required deficits to get us out of the BSR would have resulted. Further, HC has been strangling this country for decades, and literally killing people yet the GOP refuses to even acknowledge the issue thus forcing a Dem President to focus on it when given the chance.
To believe in the GOP you must believe they are lying about everything. I don’t think they are lying – they will give tax breaks for themselves, strip social safety nets, and nominate ultra conservative supreme court justices who will send us back to the dark ages
I’ve always thought it’s strange that we continue to put this burden on employers, when it was sort of an accident resulting from the WWII labor situation.
And GM and Chrysler and the banks…..?
Obama has not been ignoring the jobs issue……why can’t you see that…?
An alternate approach, instead of federal funding during a time of revenue collapse, would be to cut federal taxes and let the states raise taxes. Same basic idea, the fed runs a deficit and the states get more income, but it allows the people closest to the situation to control where to spend the extra money. Too often congress gives money to the states with strings attached. As an example, areas with a declining population and decaying infrastructure could cut teachers and hire construction workers. Other areas have too much new construction and not enough schools.
I don’t think he misunderstood how the economy works. He simply had other priorities.
The chart is good news, Obama just needs to start the hiring again and away he goes to victory……………
There is no time for that. He blew his shot. Obama has to do something bold and clever, like a massive Federal Reserve backed bailout of underwater mortgage debtors. I hear a lot of trial balloons about seizing underwater mortgages by Eminent Domain at their fair market value, and then doing a government re-fi for the actual value of the property. Some cities in CA are experimenting with this concept. Obama and The Bernank could grab the bull by the horns and do it nationwide. I don’t see Bernanke as a bold enough guy to actually assert Eminent Domain authority, though, so Obama will have to do some fancy footwork to spend money without Congressional approval.
Federal employee salaries and benefits under Obama are up by percentages that would make a union leader blush.
Not what I’m seeing. Care to elaborate?
US Public employees now are paid (salary and benefits) 1.6X more than their private sector counterparts.
Fairness?
Is that because it is so easy to fire them?
Educational difference, mostly. A much higher % of US public employees have advanced degrees. In most cases, the higher wages are necessary to hire these people.
Federal employee salaries have been frozen for the last few years. It is that the average private sector salary has gone down in real terms, not that Federal salaries have gone up.
There will be a time in the not so distant future when blogs will turn from commentary around how political events affect bloggers wallets to how political events affect blogges liberty. And I am not referring to the incompetent tea baggers who wouldnt recognize the removal of their liberties if they were being defacated on while being waterboarded. The catalyst for this innevitable change is the failureof a laissie faire capitalistic state.
Cmon this article is a little intellectually dishonest and reads like something posted on yahoo.com. i dont care how hard obama fails…i will never vote for another repub until they change the climate of misinformation and fear they have created. I hope the repubs get destroyed so that this tactic of stalling the government and rooting for a president to fail can be put to rest. If obama loses get ready for the democrats to mimic this tactic with cries of “class warfare” before stalling the republicans for 4 years…rinse and repeat. Government is a joke.
I think it’s also important to note if it was a stated goal of the Obama administration or just a side effect. I believe the latter is true, given how Obama botched the recovery by bowing to special interest. Where is the rebuilding of America he promised? No high speed rail in sight, no new roads, bridges, dams, no overhaul of the ridiculously outdated energy infrastructure (citywide blackouts are mostly unheard of in Germany for example, and we are building new power lines).
Where did all that stimulus money go?
He proposed all that….it was shot down by congress…
And that was back when there was a Democrat congress?
I found this article particularly interesting, although I didn’t check the facts.
http://www.weeklystandard.com/Content/Public/Articles/000/000/016/659dkrod.asp?pg=1
“where did all the stimulus money go”. See my name for the link. 35% was tax cuts. 10% hasn’t been spent yet (it was also a 10 year bill with most coming in the first 3 years). The stimulus was a huge compromise which was the only way it was ever going to get passed.
Candidates can promise all kinds of things… but when your opposition will do and say anything to keep you from your goals, good luck. 4 total months of a super majority in the Senate and arrows flying at your head from every direction… well, what Obama has accomplished is pretty amazing.
Yeah I think Obama just had too much on his plate. The healthcare reform was ill-timed and cost him a lot of political capital.
Looking at the stimulus money, I can’t help but notice that more than a third of the Contracts & Grants money went to Education, which is one of the leakiest places to spend money on and doesn’t really put people to work…
Do you believe what the Weekly Standard writes ? It’s the leading magazine of the right wing neocon bunch. That’s why I would take the entire story with (more than) one pinch of salt.
That’s why I wanted to hear the other side. Especially since this so called “mancession” kind of took a backseat to the phony war on women which both sides use to rally their supporters.
This doesn’t take into account that the Department of Defense has “”outsourced”" a lot of jobs to the private sector. If one would include those jobs then I think the total amount of government workers would have grown more under the Bush administration.
obama reducing government? talk about convoluted logic. lol.
The reason Obama went with health care first is so he will be able to hire 1000′s of New IRS agents to extract the healthcare TAX.
http://dailycaller.com/2010/03/22/irs-looking-to-hiring-thousands-of-armed-tax-agents-to-enforce-health-care-laws/