Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 9/28) 

Editor’s Note: Liz Peek is a financial columnist and the author of wOw’s SHEconomics.

Should President Obama have gone to Copenhagen to win the 2016 Olympics? Probably not, since the elimination of Chicago is something of an embarrassment. Still, since this campaign might have brought jobs to the U.S., it was worth the effort. 

While Congress is debating the fine points of public options, smog production, Charlie Rangel’s ethics violations and whether credit card companies should give you one month or two to deal with a rate increase, more than 20 million Americans are without jobs. Today there are some 15 million people looking for work, 2.2 million who are unemployed but have given up the hunt, and another 9.2 million who have part-time jobs but would like a steadier situation. In addition, brokerage firm Charles Schwab recently reported that there are as many as 9.5 million retirees who are considering returning to the workforce.

Where are all those jobs going to come from? That’s what investors are beginning to ask, as job losses continue at a discouraging pace.  Today the Bureau of Labor Statistics reported that job losses in September totaled 263,000, up from 201,000 in August. Earlier in the week the government surprised economists by reporting that unemployment claims had increased by 17,000. Optimists pointed to the four-week moving average of claims which, with a slight decline to 548,000, reached the lowest level of the past 36 months. Instead of pointlessly analyzing these modest ups and downs, maybe we should step back and consider: more thsan a quarter million more Americans – mothers, fathers, sons and sisters — lost their jobs in the past month. The devastation is terrible.

The Obama administration has given the economy several shots of adrenaline through the Cash for Clunkers deal, the stimulus program and the $8,000 credit for new homebuyers. It is not enough. The minute we ran through the Clunkers bankroll, U.S. auto purchases plunged 23%, with GM and Chrysler both reporting a sales drop for September of over 40%. Similarly, the expected demise of the first-time homebuyer credit in December has the housing industry worried that sales will drop there too. 

Meanwhile, sentiment readings from corporations have become less rosy. ISI Group reports that their pulse-taking among companies showed weakness for the second week in a row, with shipping, homebuilders and truckers’ responses "well below their peak." This echoes a disappointing durable good order figure last week.

It is clear we need a more sustaining therapy. It cannot come from government spending because federal budget deficits already threaten to compromise the dollar and produce future inflation. Instead, it must come from the private sector. All over the world governments are cutting taxes to spur industry, while U.S. legislators are panting to increase taxes – taxes on energy, taxes on foreign profits, taxes on small businesses, taxes on health insurance plans. Consider: France, a country that admires socialism almost as much as a superbly ripened Camembert, has just announced plans to eliminate a burdensome tax levied on business fixed investment. Francois Fillon, the finance minister, calls the change a "competitiveness shock." In addition, the administration is reducing taxes on small businesses if they hire workers.