Obama’s ‘clarification’ on private sector was really a doubling down

David Cohen Former Deputy Assistant Sec. of the Interior
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First it was Cory Booker. Then it was Bill Clinton. And then on Friday, it was President Obama’s turn to appear in his own hostage video, blurring the distinction between hostage taker and hostage. It was as if the master of the “kill list” had been forced to select his own “baseball card.”

Like Booker and Clinton, President Obama was forced to reappear before the cameras shortly after uttering something damaging to the president’s re-election campaign. The Clinton and Booker hostage videos were more in keeping with the spirit of George Orwell because they, unlike Obama, were forced to repent for speaking the truth. Obama, on the other hand, was forced to make amends after deadpanning: “The private sector is doing fine.”

The private sector, as everyone not “out of touch” with reality knows, is not doing fine. As even The New York Times had to acknowledge, the 69,000 jobs created last month were far less than what is necessary to keep up with population growth, and the “shabby” job numbers for the two preceding months were revised even further downward. The American Enterprise Institute’s James Pethokoukis has compiled a series of devastating statistics in a rejoinder to the president: Private-sector jobs have increased by just 89,000 a month during the Obama Recovery (compared to 292,000 a month during the corresponding years of the Reagan Recovery, which Pethokoukis says is more like 375,000 a month after adjusting for the population growth since the 1980s); the unemployment rate would have risen to 8.4% had people not dropped out of the workforce from April to May; the U.S. economy is suffering its longest sustained bout of 8% unemployment or higher since the Great Depression; private-sector GDP rose just 2.6% in the first quarter, after barely rising at all (1.2%) last year (compared to increases of 3.8% in 1983 and 6.5% in 1984 during the Reagan Recovery); the U.S. stock market is down 7% since early April; real take-home pay is down over the past year; and after-tax corporate profits dropped in the first quarter.

President Obama’s gaffe came on the heels of Bill Clinton’s heresy, in which the former president asserted that the Bush tax cuts should remain in place until a deal could be reached early next year. Clinton’s prompt “apology” was really a deceptive sleight of hand, not a retraction. “I’m very sorry about what happened,” Clinton told CNN. “I thought something had to be done on the ‘fiscal cliff’ before the election. Apparently nothing has to be done until the first of the year.” The “fiscal cliff” Clinton was referring to is a series of scheduled tax increases and other measures — including the expiration of the Bush tax cuts — that would start sucking hundreds of billions of dollars out of the economy starting on January 1, 2013.

So let’s get this straight: Clinton’s transgression was to suggest that the Bush tax cuts be temporarily extended before they expired so that a long-term deal could be negotiated in early 2013. In his walk-back (Team Obama seems intent on making walking backward an Olympic sport), Clinton said that this was all a misunderstanding: he had thought that something had to be done about the fiscal cliff before the election, but we actually have until January 1. So how, exactly, does this supposed date confusion affect Clinton’s original suggestion that the Bush tax cuts be temporarily extended? It doesn’t. Clinton presumably still favors resolving these issues early next year, and keeping the status quo ante — which would require extending the Bush tax cuts for all, including the wealthy — until then. All this prattle about confusing the dates is just a bright, shiny object to distract us from the fact that Clinton’s retraction was no retraction at all. And to think that they used to call this guy “Slick Willie.”

Taking a cue from the master, President Obama used a similar sleight of hand in his non-retraction of his “private sector is doing fine” comment. “It’s absolutely clear the economy is not doing fine,” the president said later on Friday. “That’s the reason I had a press conference. That’s why I spent yesterday, the day before yesterday, this past week, this past month and this past year talking about how we can make the economy stronger. The economy is not doing fine.”

Well thank goodness he put that to rest. Except that he didn’t. Notice how the president’s “clarification” refers only to the “economy” and not specifically to the “private sector.” To understand the importance of this distinction, let’s review the president’s original remarks in context: “The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government — oftentimes, cuts initiated by governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.”

The president was thus drawing a distinction between the health of the private sector — which he pronounced as “fine” — and the health of the overall economy, which he asserted was being dragged down by weakness in the public sector. The president’s subsequent “clarification,” while creating the illusion of retracting his original remarks, actually reinforced them.

In the president’s view of the world, the way to strengthen our economy is not to remove burdens on the private sector to facilitate job creation. The way to strengthen the economy, according to the president, is to increase taxes and public debt so that we can subsidize bloated government payrolls. Increasing taxes and debt, of course, increases the burdens that must be borne by the private sector. But that’s OK, according to the president, because “the private sector is doing fine.”

President Obama is proposing to transfer ever-increasing amounts of wealth to a public sector that gobbles it up faster than the private sector can create it. Perhaps he’s doing penance for abandoning his public sector union allies in Wisconsin in their hour of need, as they were being routed in a Waterloo of their own making. After promising to “put on a comfortable pair of shoes” and “walk on that picket line” to support his union allies, the president kept those shoes a safe 30,000 feet above the Wisconsin picket lines as he looked down on them from Air Force One.

Of course, the president has been campaigning for yet another public sector stimulus since long before the debacle in Wisconsin. And in an inspiring display of inadvertent bipartisanship, both the Republican House and the Democratic Senate have, thankfully, ignored him.

David B. Cohen served in the administration of President George W. Bush as U.S. Representative to the Pacific Community, as Deputy Assistant Secretary of the Interior, and as a member of the President’s Advisory Commission on Asian Americans and Pacific Islanders. He is the author of Left-Hearted, Right-Minded: Why Conservative Policies Are The Best Way To Achieve Liberal Ideals.