President Obama: “The private sector is doing just fine”

Russ Steele

I am sure our local businesses are feeling better this morning knowing that there struggle to survive is the new normal and they are doing just fine.

We do not watch Obama at our house on a regular basis, but this morning I could not find the remote to turn him off. Almost dropped my coffee when I hear him declare magnanimously that “The private sector is doing just fine”

Really?  It is my observation that local business are not doing “just fine.”  I am interested in your assessment.  Is Obama right, or just out of touch?

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About Russ Steele
Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.

3 Responses to President Obama: “The private sector is doing just fine”

  1. sean2829 says:

    I’ll take a stab at this one.

    I think that private businesses are doinga bit better. During the recession that lingered and lingered, there have been consolidations and contractions in industries and these will probably continue for a time but at a lower rate. When competitors go under during a slow spell, the survivors have two great advantages, better pricing power on products due to reduced competition and reduced wage pressure due to more people looking for work. So for individual surviving businesses things can look rosey even if the overall industry is less than what it used to be. These advantages will go away as the economy improves and there is more pressure on prices and wages from new competitors.

    I haven’t noticed many new start ups or significant expansion in the industry that I’m in. Perhaps its because the economy is 4-6% smaller than it was when the recession started. But I think there could be other things in play that no politician will own up to. A lot of head count costs increase during a recession. Insurance, weather it be for health care, unemployment, workers compensation, whatever, are higher. Even if wages for a worker are the same, the costs for each employee are higher. And hanging over every decision you make a bout hiring is how much will health care cost when Obamacare fully kicks in? I estimate the price of each employee to go up by $2 per hour. That money that will not be in our employees pockets, it’s additional funds that the bloated health care system will get.

    The overhang of uncertainty from this issue coupled with this administration miopic fixation on how to more equitably divide a limited pie vs. how to grow the economy is like a blanket suffocating the recovery. Until the structural imbalances are addressed, the private sector will not break out into full, high growth recovery mode.

  2. Sean,

    Thanks for a report from the trenches, I am hoping that we can get back on the path to recover even if it takes five years. Know it there is an end to the economic pain will help us weather the trip.

  3. sean2829 says:

    Bloomberg had a good article on this yesterday. http://www.bloomberg.com/news/2012-06-08/workers-lost-ground-during-recession-as-bosses-gained.html
    The anemic recovery means that blue collar workers have had to accept reduced wages when they went back to work. I think only strong economic growth can fix that.

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