The private sector is fine (by the standards of the Bush recovery)

by pdxblake

Paul Krugman points us to Angry Bear blog, which brings a graphical look at the current recovery in comparison with recoveries in the 1990s and the Bush recovery, which the very same conservatives who are criticizing the recovery under Obama heralded as a “goldilocks” recovery (that was the specific term used by uber-idiot Larry Kudlow).  The one difference in this chart from other comparisons is that it excludes the private sector, which should be the preferred measure of those who think everything the private sector does is good and everything the public sector (i.e. the government) does is bad for the economy.

What does it show?  It shows that the current recovery in the private sector is slightly stronger than the Bush recovery, although weaker than the 1990s (when, ahem, tax rates on the wealthy were higher than they are today).  This chart shows in very clear terms that Obama’s supposed suppression of the private sector is nothing but hot air (for anyone who may have not already caught on).

The difference between this chart and data showing this recovery is weaker than the Bush Administration is due to lower government spending.  The Bush Administration increased government spending and employment significantly as a result of the creation of the Department of Homeland Security, and that boosted the recovery compared to now, when the stimulus has worn off and state and local governments have cut spending and shed employment throughout.

There are some important questions to address about how to increase the growth rate (and in particular employment growth) back to 1990s level, but the starting point for this discussion should be that cutting the public sector (in the guise of freeing business to grow) is not the way to do it.