Maybe a little late, Ben and I discuss President Obama's comments in our Scripps Howard column. My take:
Obama was wrong: The private sector isn't doing fine. It's doing astoundingly great -- better than ever, in fact.Something I didn't address in the 300 words is what, if anything, federal policy can do to get big businesses to start investing in the economy again. But I'm not sure I have a good answer to that, in all honesty.
How do we know this? Because corporate profits now comprise more than 10 percent of America's gross domestic product. As Reuters' Felix Salmon noted, that number has never been that big, ever. For comparison's sake, corporate profits topped out at just under 5 percent of the GDP at the end of Ronald Reagan's presidency.
Instead of investing those profits and creating new jobs, which has been the usual pattern after previous recessions, corporations are sitting on the cash and hoarding the money. That's their right, but nobody should think that the private sector is doing poorly, and it belies the notion that Obama is running an anti-business administration.
It's the rest of us who aren't doing so well.
Corporate cash hoarding is one reason why. The other reason? Because government is slimming down.
You wouldn't know that from Republican rhetoric that suggests the president has grown government bureaucracy to create a socialist kingdom. But the Washington Post's Ezra Klein ran the numbers, and the public sector -- including federal, state, and local governments -- has lost 600,000 jobs under Obama. Replace those lost teachers and social workers, and the federal unemployment rate declines to 7.8 percent -- still too high, but also a dramatic improvement.
For comparison's sake, President George W. Bush had grown public-sector employment by 3.7 percent at this point in his tenure, a number that, if duplicated today, would further reduce the unemployment rate to 7.3 percent. If Obama really was a big-government socialist, we might all be better off.
So Obama has produced huge profits and smaller government.
The private sector is doing fine, and it's clearly not enough. But ask yourself: What would Mitt Romney do differently?