Monday, November 23, 2009

It's the (Lack of Jobs), Stupid!

The Job Summit in which the Obama administration proposed a few weeks ago is about as timely as FEMA's response to Hurricane Katrina.

Job Summit...really?

Of course the White House communications team had to formulate their own counter punch to the two Republican gubernatorial victories in Virginia and New Jersey. Remember, those were the victories that both Speaker of the House Nancy Pelosi (D-CA) and Rep. Elijah E. Cummings (D-MD) both chalked up to "big wins" for the Democratic party. There's spin and then there's spin.

Pelosi and Cummings made Bill O'Reilly's oft-coined 'The Spin Stops Here' mantra look, well - bold and fresh.

Ironically, the administration's hyper-focus on health care reform has placed millions of jobless Americans in harm's way. Despite obvious employment data from the Bureau of Labor Statistics and stark evidence, both anecdotal and scientific, from economists of all stripes, the Obama team (Vice-President Joe Biden, notwithstanding), has jeopardized millions of people.

The Answer isn't Complicated

For decades, small business has been the incubator for jobs in America. It is that simple. Yet, despite nearly every expert, from billionaire Warren Buffett to Moody's Chief Economist Mark Zandi, small business has been left out in the cold.

To make matters worse, CIT, one of the largest lending groups in the US, filed for chapter 11 in October. CIT is to small business as the American Dream is to the 'Little Engine that Could.' Certainly, CIT is worthy of some Treasury department assistance - Goldman Sachs, Bank of America and AIG received help. Now, the companies that need it the most and would certainly have immediate positive impact on the jobs situation, are left at the door, much like Lehman Brothers was curiously left out.

To be sure, the job market is bleak and the unemployment level is at a mark not seen since 1982 - 1983. Reagan and his team back then jump-started the economy by realizing where jobs came from (hint: it's not from government). Not until entrepreneurs are given opportunity and "too big to fail" financial institutions actually "lend" money (money that the government doled out to them to lend), will the economy start to rebound from its anemic state.

For Rich and Poor

As of October, 2009, the unemployment numbers for African-American (15.7%), Hispanics (13.1%) and Teenagers (27.6%) are unsettling. Yet, it is also unsettling to visit a local unemployment office and see the number of people with Bachelor's and Master's degrees looking for a job.

According to the Labor Department, there are six people looking for work for each available job. This ratio is untenable.

A Job Summit sounds nice, however, it won't be helpful if it doesn't go beyond the ubiquitous invites of say: Bill Gates, the SEIU, CEOs of juggernaut companies such as Google and Apple and the Rolodex of economists that the White House will probably hand out RSVPs to.

The number one problem in the US is jobs. Hopefully, the administration, using a broad, bi-partisan approach, will think about tax credits for business, loans to small and medium-sizes businesses and an understanding that the TARP and stimulus money should be used to re-focus our energy on job growth.

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