"The Conservative Recovery Continues"
Private sector job growth continued apace last month, adding 268,000 jobs in April and with the revised numbers we also added 231,000 private sector jobs in March. That’s not a super-strong recovery, but it’s a volume of job growth that’s faster than labor force growth and thus consistent with a falling unemployment rate. Consistent, that is, if you imagine a scenario in which the size of the public sector keeps pace with the growth in the population. But that’s not happening. America’s population grew in March, but instead of adding public sector workers we shed 15,000. And in April, we shed 14,000 more. All told, we’ve had 1.7 million net new private sector jobs over the past year but they’ve been partially offset by 404,000 net job losses in the public sector.
One question here is the wisdom of this. I think it’s been unwise. In the current low interest rate environment, had the federal government engaged in additional borrowing and then engaged in revenue sharing with state and local government, we could have turned those 404,000 public sector losses into zero net losses without any private sector crowding out. What’s more, had we had fewer public employee layoffs those workers would have spent more money on private purchases in their communities and we’d probably have somewhat more retail employment. Most of all, we’re actually now facing something of an objective shortage of houses in America and absent those missing 404,000 public workers we’d be closer to a revival of the construction industry and thus on the path to long-term recovery.
But another issue is simply that this is the recovery conservatives say they want. The balance of economic activity is shifting away from the public sector and toward the private sector. So why is it that we have people running around the country—not just ignorant grassroots folks or talk show entrepreneurs, but billionaire political organizers like David Koch—screaming about incipient socialism?