Obama faces McCain moment over ‘private sector is doing fine’ remark

Published on 10/06/2012 00:00

PRESIDENT Barack Obama’s comment that “the private sector is doing fine” has come under attack from Republicans who claim it displays a basic lack of understanding of America’s economic woes.

Republican presidential candidate Mitt Romney asked of the Democrat president: “Is he really that out of touch?” in a row that marks the start of a 12-week campaign leading up to the parties’ conventions. In response, Obama sought to clarify his remarks, saying it was “absolutely clear the economy is not doing fine”. He said that while there had been “good momentum” in the private sector, public sector growth lagged, making it imperative that Congress acts on his proposals to boost state and local government jobs.

It was the latest episode in a week of difficult turns for Obama’s re-election prospects, including a report showing that US unemployment had risen slightly to 8.2 per cent in May as job creation slowed, and new signs that the European debt crisis was hurting the US economy.

The row over Obama’s remarks on the private sector overshadowed a White House news conference on Friday. Accusing Republicans of pursuing policies that would weaken the economy, Obama called for Congress to back legislation to create more jobs, a move blocked by Romney’s party.

He said if his bill had been passed last year, “we’d be on track to have a million more Americans working this year, the unemployment rate would be lower, our economy would be stronger”.

The president said businesses had created 4.3 million jobs in the past 27 months. “The private sector is doing fine,” he said. But Romney, holding a campaign event in Iowa, said the remark defined “what it means to be detached and out of touch with the American people”. He said the comment would “go down in history as an extraordinary miscalculation and misunderstanding”.

Obama was right in that the job picture in the US private sector is brighter than in the public sector. Since the US recession ended in June 2009, private firms have added 3.1 million jobs. Largely because of cuts at the state and local level, 601,000 public jobs have been lost in the same period even as corporate profits have risen 58 per cent. Even so, by historical standards, private job gains in the last three months have been weak after such a deep recession. Obama urged Congress to enact parts of his jobs agenda, including proposals to help state governments rehire teachers, police officers and firefighters.

“I cannot give you a good reason why Congress would not act on these items other than politics,” Obama said.

Seconds after Obama made the “private sector is doing fine” remark, Republicans circulated the quote on Twitter and Romney seized on it about an hour later.

Behind the scenes, Romney aides worked to push what they hoped could be a shift in the campaign. Many remember four years ago, when Republican nominee John McCain asserted that “the fundamentals of our economy are strong” amid a meltdown. Obama’s team went after McCain then and voters were forced to rethink their support for his campaign.