Obama’s “Krugman-levels-of-delusion” explain his remarks on the private sector

by Ryan Streeter on June 11, 2012. Follow Ryan on Twitter.

Obama’s “the private sector is doing fine” comment will rise to the level of Kerry’s “I voted for the war before I voted against it” – if Romney and the Republicans can capitalize on it. Why?

Three reasons:

For one thing, even more than Kerry’s comment, Obama’s is a reflection of his worldview. He sees the world as a battle between government-run goals, which elites can manage administratively, and the myriad goals of private business, which cannot be managed by any administration even as they expand capital and create more jobs. Not only does Obama seem to misunderstand how privately-created wealth creates more jobs, he doesn’t much care about all of that. This cuts against the worldview of most Americans. And that’s a problem for him.

Second, there are a bunch of independents and moderates who earn their living in the private sector and don’t care much for government workers who fare better than they do. Pitying government employees at the expense of a supposed greedy class of private workers is a pretty bad strategy for picking up the independent vote.

Third, his use of “the private sector” comes across as someone who’s never been in the private sector. He speaks of private business like someone who sees it as an alien force, something odd and sinister. He employs the term in an “us-vs.-them” way with him in the “us” category. This is a problem because roughly 8 out of 10 employed Americans work in the the “them” category – that is, the private sector.

Tino Sanandaji has some good comments on the data, which basically shame the Obama worldview:

Prior to the recession, 70.2% of working age adults were employed in either the private or public sector. By the time Obama took over this figure had declined to 67.4%. It declined further during the Obama presidency to 66.1% today, as the working age population increased by 4.2 million while net job growth has been around zero.

Prior to the recession, 58.8% of working age adults had a private sector job. This number declined to 55.9% in Obama’s first month in office, and declined further to 55.1% today. The U.S private sector successfully absorbed new workers throughout the post-war period. During the Obama Presidency it failed to do so, resulting in an increasing share of people who cannot find employment.

So what about the public sector?

Prior to the crisis, 11.4% of working age adults worked in the public sector, holding constant at 11.4 % in Obama’s first months in office, and declining somewhat to 10.9% today. This means that nine tenths of employment share decline since the recession started and sixth tenths of employment share decline since Obama took office was due to a smaller share of adults having job in the private sector.

Sanandaji says it takes “Krugman-levels-of-delusion” to convince yourself that the decline in public sector employment explains “the disastrous job situation in a country with 133 million workers and 201 million working age adults.”

With government workers enjoying the lowest unemployment rates in the country, Obama’s comments have turned him into a President with very little connection to the gritty reality of the lives of most Americans.

Romney has his own problems connecting with ordinary Main Street Americans, but if he hopes to run a smart campaign between now and November, he would do well to capitalize over and over again on the gift that Obama has given him.