On “CBS This Morning” Monday, New York Times columnist Paul Krugman attempted to clean-up Obama’s gaffe from late last week, when he said at a press conference that “the private sector is doing just fine.”
The Nobel Prize-winning economist called it unfortunate and employed the usual suggestion from the left that if the public sector job force wasn’t shrinking, the recovery would be more robust.
“That was an unfortunate line — I mean, the president bungled the line,” Krugman said. “The truth is, the private sector is doing better than the public sector, which is not well enough. And actually the real story about this economy is that cutbacks at the public sector are hurting recovery.”
Krugman said that there would be a difference of 1.4 million jobs if the public sector were able to maintain its pre-recession level plus the normal rate of its growth since the recession.
“By this point in Obama’s presidency, if we had normal public sector job growth, we’d have 800,000 more people — firefighters, school teachers, police officers. Instead, we’ve got 600,000 fewer,” he explained. “So right there it’s like 1.4 million jobs that we should have had in the public sector and of course, those would translate into more private sector jobs too. So, that’s what he was trying to get at and of course, he screwed up the line.”
Krugman went on to discuss implications that the downtrodden European economy may have on the American economy, suggesting that it would take more than just a recession, but a financial collapse since only 2 percent of American goods are sold in Europe.
However, he encouraged the Federal Reserve under Chairman Ben Bernanke to be more proactive, but said he was skeptical of those possibilities until beyond the fall election.