I get hoarse repeating this, but I have yet to see conservatives really grapple with the fact that month after month we see a labor market that’s basically treading water primarily because government employment is shrinking rather than keeping pace with population growth. Had we had government employment growing along with the population, this would still be a weakish labor market recovery, but it would be a real recovery with the unemployment rate falling bit by bit each month. Such a scenario might even boost general optimism and spur a greater level of business demand and new housing construction. But even without the optimistic “multiplier” progressive story, simply the direct impact of government hiring would be a slow-but-steady recovery.
So what’s the conservative story about this? The conservative story about the Obama economy seems to be that an overweening state is holding the private sector back. But the reality is that the public sector is shrinking. This shrinkage is exactly what conservatives claim to believe will spark growth once they bring the era of Kenyan Anticolonialism to an end. But it’s already happening in a modest way, and has been happening for a year and a half, and it keeps not delivering any private sector magic.