In this post historian Robert Higgs observes that in our current recession, private sector employment has fallen sharply while public sector employment has held steady and public compensation has increased. It was much the same during the horrible interventionist period under Hoover and FDR, when the private sector (where goods and services are produced) took it on the chin while the government mushroomed.

As Higgs has noted elsewhere, this is in sharp contrast with the 1920-21 recession. The Harding Administration cut the federal budget and reduced taxes, leading to a swift and robust recovery. If you want economic growth, the government must stop impeding and drawing away resources from productive enterprises. I think most statist politicians understand that, but prefer growth of government to a rising standard of living.