The Conservative Recovery

The state of the labor market is not good, which has understandably taken a toll on the popularity of Barack Obama. But what's underappreciated is the extent to which the bad labor market reflects what conservatives say they want to see. As David Leonhardt points out, we're basically seeing a structural decline in public sector employment:

Now I'm not saying people should be happy with the state of the economy. I'm saying, instead, that conservatives should wake up to the fact that their economy theory is nonsense. On their telling, the state of the economy is bleak due to Obama's socialistic policies and if we just trimmed back government the private sector would come roaring back. The truth is that under Obama the private sector has been growing and the public sector's been shrinking. But public sector shrinkage hasn't spurred private job growth, it's been a drag on it. Which is exactly how it should be. Your town's firefighters are also customers for your town's stores and plumbers. Cutbacks in bus service make it more difficult for people to get to work and participate in the economy. If we'd had more stimulus—specifically more fiscal aid to state and local government—then those public jobs wouldn't have gone away (lowering unemployment) and the income streams attached to them wouldn't have gone away either, spurring private employment and further improving the labor market.