Despite Obama, Two Sectors Are Helping To Drive The 'Obama Recovery'

March 29, 2012 - 5:53 PM

new report from Brookings shows which metropolitan areas around the country are recovering the fastest from the Great Recession - and which aren't - and analysis of the data shows that much of the woefully-sluggish Obama economic recovery is being driven partly by two economics sectors - one long thought dead and the other improving despite the best efforts of the Obama administration to kill it.

Derek Thomas, senior editor for business coverage at The Atlantic, compares America's economy at the official end of the Great Recession in 2009, and two years later at the end of 2011 and finds a big change in what is driving what little economic growth there is. At the end of the recession, he writes, "Practically the only sectors adding workers were government, education and health care (a.k.a.: the feds/eds/meds) all of which were supported by the stimulus. Manufacturing had bottomed out."

"Fast-forward two years. The worker's recovery is stronger than ever. The national unemployment rate has fallen by two points. There have been 23 consecutive months of job creation (ignoring the Census). Practically every sector is adding jobs, except for government, which is wilting under congressional pressure to limit aid to the states. Manufacturing, for its part, has added 400,000 jobs in two years. The recovery following the Great Recession has really been two recoveries -- and there is about to be a third. In the first phase, government stimulus supported stability in state capitals and health care hubs. Cities that avoided the rise in home prices also avoided the crash. In the second recovery, total government shrunk by nearly 300,000 jobs nationwide, and the private sector picked up the pace, led by both well-paying and poorly-paying service sector jobs. Cities with strong manufacturing and knowledge bases have thrived while the feds/eds/meds metros have slipped."

The fastest-growing economic sectors are manufacturing and mining, Thomas writes.

"Manufacturing has added close to 400,000 jobs in the last 24 months, and a good deal of the action is in autos/machinery/metal products. Meanwhile mining is the number-one fastest growing industry in the economy, and our supply of cheap natural gas should encourage a revival in the M&M sectors, especially around the Great Lakes and the northwest. With 80 percent of the country employed in services, I'm not optimistic that manufacturing can recapture its mid-twentieth-century glory, but it doesn't have to. As long the M&M bounce continues, employment growth will ricochet through the service-sector in cities revitalized by capital and labor investments in factories and offices."

Ironically, the Obama administration's energy and environmental policies are aimed at driving up energy costs, reducing coal mining and making it more expensive and difficult for the oil-and-gas sector to recover domestic supplies, which could put the growth of mining and manufacturing at risk.

While it is beyond the scope of this blog post to compare Brookings' list of the 20 strongest metro economies to the red state/blue state maps, a quick glance at the Brookings map showing the strongest and weakest metros in 2011 does reveal something quite interesting:

The largest clusters of economically weak metros are in the northeast and California - places where liberals and liberal policies have controlled government and public policy almost exclusively for many years. Meanwhile, many of the hottest metro economies across America are in conservative-leaning states like Tennessee, Oklahoma, Kentucky, Kansas, Texas, Iowa, Idaho and Arizona. While the Obama stimulus produced a short-lived bump in government jobs, it appears conservative leadership and economic policies are poised to produce real, longer-term economic growth.

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