Wall Street was abuzz two days ago when the New York Stock Exchange closed above 10,000 points for the first time in over a year.  There were people celebrating as if it was New Year’s Eve or a Mardi Gras Festival on Bourbon Street.  I have no doubt that beers were bought and dinners were comped.  When it closed above 10,000 again yesterday, I am sure that the ritual was repeated.  But does any of this truly indicate that we are out of a recession or that the worst times are behind us?

It troubles me when such events are overblown in the interest of making people think things are truly better than they are.  I will admit in full disclosure here, that if the market had tanked 1000 points it would certainly be terrible news and the President would likely be the target of blame – so I will give him his credit, and allow him to take the glory he has earned with hitting this milestone.  That being said, if he gets the credit for the stock market hitting 10,000 then he also gets the blame for unemployment still finding 500,000 new applicants last month.  The administration tried to spin that as a positive by saying that the figure was down from 530,000 the previous month.  AWESOME – lets celebrate.

I fully understand that unemployment is generally a lag indicator that never improves until long after the recession has technically ended, and I don’t even dispute the argument that this recession has in fact subsided.  My problem rests with the mentality of this administration, and its attempts to spread it like an infectious disease to the American People.  Typically, when a recession comes to a close and the economy begins to recover, it does so by creating new business.  For most Americans they think of this as new jobs and rightfully so.  But the dilemma that I believe this administration is regrettably overlooking is that they are placing two major obstacles in the way of those new jobs from every coming to fruition.

The first is their incessant desire to take from the “rich.”  As they move forward with their progressive agenda, they continuously target this illustrious group and paint them as the evil villain.  They call upon images of corporate jets and 5 or 6 homes.  They tell stories of bonuses and payouts like those that Hollywood movies are made about.

The real truth is that the true entrepreneurs are the “Millionaires Next Door.”  They are the hardworking businessmen who now have to weigh every business venture against the actions of our federal government.  How can they decide to take on  10 new employees or begin construction on 5 new homes, when not only do they not know how their personal income tax bracket will be affected, but they also have to worry about how their capital gains will be taxed, their health insurance plans will be change AND taxed, and how their gas/oil costs will increase?  The answer is they can’t predict any of these things, so they do nothing.  They create no new jobs.  They create no new business.

The second major problem with this administration’s strategy for recovery post-recession comes with its own legislation.  Cap and Trade will effectively increase the costs at every level of production.  Penalizing companies for the carbon footprint will do nothing but slow the pace of new business / job creation by effectively pricing many companies out of the market.  And on an even smaller more intimate level, the combination of proposed cap and trade and the weakened dollar, are raising the cost of oil on a daily basis – not because the evil oil barons are raising costs, but because our government is making our dollar worth even less.  Add in the impact of government-run healthcare, and small business owners find themselves in no position whatsoever to move forward with new plans.  How could any business man or woman with any degree of business acumen begin to draft a proposal or business plan for the next 12 months?  The answer is they cannot.  There are simply too many variables to consider.

The grim reality is that jobs will continue to be lost into the foreseeable future.  Companies have begun to recover financially by increasing production with smaller staffs.  Until the demand for their products increases dramatically, they will have no need to hire new workers.  They will work the employees they already have even harder because those employees have no where else to go.  Until the corporate world can accurately predict the next big move of this administration and this Liberal Congress, there will be no new jobs, and there will be no genuine recovery.

So, yes the market soaring above 10,000 should make us all feel nice and warm inside, and we should even credit the President for helping to achieve this milestone; but until this administration and this Congress slow the wheels of the engine driving the federal bureaucracy, we will have no real recovery and the credit will belong only to our brilliant progressive leaders.

Tags: 10000, Congress, dollar, Dow Jones Industrial, economy, inflation, Obama, oil, recession, stock market, unemployment, Wall Street

This entry was posted on Friday, October 16th, 2009 at 3:48 am and is filed under DOMESTIC ISSUES, ECONOMY-BUSINESS. You can follow any responses to this entry through the RSS 2.0 feed.