Today’s jobs report is terrible. While the Republican response borders on self-parody, the White House has shown a complete lack of leadership on the issue.
As Jared Bernstein wrote this morning, most economists expected the economy to add about 120 thousand jobs. Instead, only about 18,000 jobs were added, but that doesn’t tell the whole story. While the economy added 57,000 private sector jobs, the public sector lost 39,000, offsetting what were already modest gains. According to the Center on Budget and Policy Priorities, state and local government payrolls have shrunk by over 500,000 since 2008.
The RNC immediately sent out a statement blaming “out of control spending” for the problem, which is a little like telling a starving person he or she needs to lose a little more weight. It’s even more perverse that at a time when the economy is backsliding, Democrats in Washington are focused on reaching a “grand bargain” with Republicans on the debt ceiling that will result in even more spending cuts.
Republicans reiterating the same talking points day after day is one thing. What’s worse is that the White House has not only failed to rebut the GOP’s arguments on spending, it has practically endorsed them. As Paul Krugman writes today, rather than pointing out that cutting spending right now means shedding jobs and further slowing the recovery, the White House has embraced the idea that spending is the problem.
One striking example of this rightward shift came in last weekend’s presidential address, in which Mr. Obama had this to say about the economics of the budget: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”
That’s three of the right’s favorite economic fallacies in just two sentences. No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts.
The most generous interpretation of the GOP’s support for the Bush tax cuts is that Republicans actually believed their own rhetoric that massive tax cuts would lead to growth, even though they didn’t. Bush had few if any critics on the right contesting that basic point. Obama, by contrast, could have benefitted from the many people on the left warning from the beginning that Obama’s stimulus alone was insufficent and that the economy wouldn’t recover without more spending to create jobs. But Obama and his team simply didn’t listen.