- Caught Between A Boot And An AA$$ Kicking

The short answer to why Obama can't seem to create any new jobs (other than temporary census work) is obvious. He doesn't have any idea how. The simple fact is, community organizing doesn't add anything to the GDP, and apart from throwing some government cash to sign makers and bullhorn retailers, no new business will come from it. This is what happens when the government 'spreads the wealth around'. It takes the wealth from people who know what to do with it, and gives it to people who don't.

Here's the issue that I think will define 2010 both politically and economically. 95% of the jobs in the June employment statistic came from government hired census workers; the private sector hasn't done any hiring at all to speak of. My bet, given all the uncertainty the administration is creating in the regulatory environment, is that the trend will continue. And that means that in September, when we get the last monthly unemployment number that the electorate will have a chance to react to before the election, all those jobs will roll off. This is a worst case scenario for the Obama administration.

If it goes this way, the community organizer in chief will be facing an unemployment rate that's rising pretty dramatically immediately before a mid-term election. And his tools for coping with it will be greatly diminished. The American people are already on to the true nature of his 'stimulus' bills, so he won't be able to spend anymore. Instead, what he will do is pressure the Fed and Treasury to come up with a way to monetize debt and create more liquidity in the hope that it will spur economic activity. It will work too - inflation always does. But while it might be good for team Obama politically, that isn't to say it will be good for the country as a whole.

Obama says he wants to help small business... but the truth is, he doesn't know how to do that either. And every time he tries to target a government benefit to a specific group, the net effect is that it either helps the wrong people, or does nothing at all. The latter is most likely. Small business people will not respond to a directed government benefit because they know that if the government giveth, it can just as easily take away. And you can't build a business on politics.

He could cut business taxes and that would create real growth - much of it for small businesses. But something like that is contrary to his instinct and the demands of his base. His base insists that he punish the rich, the banks, the oil companies, the medical companies, and anyone else with the audacity to take a risk. They are worried about sentiment and intent not results, and his rhetoric is proof that he's listening to him. So instead of new jobs we're getting boots on the neck and butt kickings. Such is the way of things when you put a doctrinaire leftist in charge.

Eventually, the administration will manage to create inflation and that will create additional economic activity. But it's the only thing coming from Washington right now that will.