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March 6, 2009
Obama stimulates the wrong jobs
The jobs report (or jobless report ) is out for February. There was a loss of 651,000 jobs in the month, but of that total , there was a loss of 660,000 private sector jobs. Which means government jobs grew by 9,000. And this was in February, before any stimulus money arrived, and when supposedly state and local governments were under tremendous pressure, and cutting jobs (hence they needed a big transfer payment from the stimulus package to save them).
The other interesting part of the jobs report is that all sectors lost jobs, except for health and education, where jobs rose by 26,000. Recall the column by Nicolas Kristof of the New York Times, that almost 600,000 teachers' jobs were at stake unless the stimulus passed. Really? That would be 1 of every 5 teacher jobs in the country.
And now the stimulus bill has passed, and the roughly $ 500 billion in new spending, is directed at three principal job areas -- government, health and education. And recall that Obama argued that 90% of the jobs saved or created in the stimulus bill would be in the private sector.
Is it just me, or do these numbers not compute? Looks like the healthiest sectors of the economy (by far), with the lowest unemployment rates, are government, health and education. And that is where the new money is going. Now how exactly is that going to reverse the private market jobs collapse?