Health Care Defeat May Be Silver Lining For Obama

For President Obama, the sudden and stunning realization that his health care reform bill is a no-go, thanks to an out-of-the blue electoral result in Massachusetts, is no doubt a bitter pill. But when you think about the number one issue on people's minds, job creation, it may turn out to be a blessing in disguise.

Now the President, if he is willing, can focus on that issue. Reports out of the nation's capital indicate he's prepared to do just that. He had already sown the seeds for a job creation measure in December, touting tax credits for new hires in 2010, so it's not as though he's completely ignored it.

The political benefits of putting together an effective jobs package could still accrue to Obama, but that's not the primary reason for it. At this writing, the official national unemployment rate was 10% and the more telling number, which measures the unemployed still looking for work and discouraged workers, is at 17%. That's why this issue should be, if you'll pardon the pun, Job One.

I sense that the economy is poised to rebound fully, but job creation is a lagging indicator of a complete recovery. This time, however, I think jobs creation needs more of a push than usual. My humble advice to the Prez is to invite a group of CPAs to Camp David and go down the list of tax, regulatory, and accounting measures that could be implemented to incent hiring, especially in small businesses.

I would personally nominate Madison's Gordon Meicher, who probably would have an entire scroll of recommendations, but the more they serve small businesses, the better. Other than the legendary Paul Volker, who did the most to tame inflation in the 1980s and appears to be behind some of the more sound ideas coming out of the administration, I'm not that impressed with the President's economic advisors.

Given his party's electoral difficulties, people already are labeling Obama as a "one-termer" and they are predicting doom for his party in the 2010 Congressional elections. I've seen too many premature political obituaries to buy into that, and 10 months (to November) is a long time in politics, especially if Obama can quickly piece together and pass an effective jobs bill. That means he'll have to swallow hard and pare back pieces of his agenda that include tax increases, but he has more to gain from stimulating job creation than passing cap-and-trade.

Remember the term "job creation." Our success at achieving it will determine whether elected officials keep theirs.

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