Comment Reveals Obama's Priorities

Greetings from the Left Coast!

Much has already been written and said about President Obama’s recent remark that the private sector is “doing fine,” and that the real drag on the economy is the public sector. But I think the most important thing about this comment is that it reveals his priorities. He is a big government liberal. He truly believes that there is no problem that government can’t solve, provided government has enough resources at its disposal.

Heck, look at how the stimulus bill was crafted: The majority of the money went to state and local governments so they wouldn’t have to make the painful cuts in services that they would otherwise have needed to make because of the reduction in tax revenue. So what happened? State and local governments didn’t make the painful cuts they should have made, the economy didn’t recover, they still don’t have enough money, and, absent another stimulus bill, will have to make the cuts anyway. This is precisely why the stimulus didn’t have the lasting effect it was intended to have.

One of the first academic studies of the effects of the stimulus bill was published in October, 2010, by Timothy Conley of the Department of Economics of the University of Western Ontario, Canada, and Bill Dupor of the Department of Economics of Ohio State University. (The study was revised and updated in May of 2011.) They concluded that the bill created or saved about 450 thousand government sector jobs, and destroyed or forestalled about a million private sector jobs. For the math impaired, that’s a net loss of 550 thousand jobs.

But private sector jobs are not his priority – in some degree because he’s so closely tied to public employee’s labor unions, but also because he just doesn’t get that, ultimately, it’s the tax revenue derived from the private sector jobs that fund the public sector.

I've shared the following three points before, but I think it's appropriate to share them again:

1. The government cannot give anything to anybody without first taking it from somebody else.
2. When someone receives from the government that which they did not work for, it means that someone else worked for it, but didn't receive it.
3. The government cannot create wealth - it can only redistribute it.

When a family’s income goes down, that family often has to make painful adjustments. Continuing to fund the previous lifestyle via credit cards only lasts so long, because the credit cards have limits. When tax revenues fall, governments have to do the same thing. It’s unfortunate, it’s painful, but they have to make the adjustments necessary to live within their means…unless we’re talking about the federal government, which has a magic credit card with a limit that gets automatically increased every time it is reached. But that’s a post for another day.

The bottom line is that President Obama values government jobs more than he values private sector jobs, and that came through loud and clear in his recent comment.

Thanks for listening.