As most investors know, before President Obama took the oath of office, there were a half dozen problems waiting for him and his administration -- problems that no-doubt have discouraged many qualified, future aspirants from even thinking of running for the presidency during what will surely be a decade of repair and correction for the United States.
But if one had to isolate one problem President Obama must fix -- one on which his presidency will likely hinge -- it would be, of course, the U.S. economy, and within that, the issue of jobs.
Simply, Obama and the Democrats have to find ways -- fiscal, monetary, public, and private -- to get the "great American job creation machine" going again, or the party will be in deep trouble in 2010 and 2012. And that's also why signs in November that the U.S. economy appears to be turning the corner -- from a job creation standpoint -- represent a "ray of light" for Obama, the Democrats, and the nation. The economy lost only 11,000 jobs in November, continuing a roughly half-year trend of about 100,000 fewer job losses per month. Provided current demand trends continue, the nation could start registering monthly net job gains as soon as Q1 2010. As the late actor Jack Palance would say, "I'll believe it, when I see it."
The above is not to state that the Iraq War, Afghanistan War, other anti-terrorism measures, health care reform, budget deficit, national energy policy, and relations with key allies are not occupying Obama's and congressional Democratic leaders' days and nights -- they are -- it's just that public policy professionals know that absent a healthy economy with strong job growth, policy successes in the non-economy areas will not lead to electoral victory in 2010 or 2012, or to a thriving nation.
In an interview with MSNBC, The Huffington Post founder and editor Arianna Huffington did a good job articulating both the mood of the nation and the composition of the segments of the electorate up for grabs in 2010, and probably, in 2012, and I encourage investors to listen to her observations. There is justified populist anger -- Democratic-Independent-Republican -- in the nation, stemming from the fact that millions of Americans cannot find work while Wall Street professionals -- some in federally bailed-out institutions -- have received billions in bonuses, and as the United States government deploys hundreds of billions of dollars to stabilize the financial system. Americans want to know why hundreds of billions were spent to stabilize the financial system -- for some, a noble goal and a constructive policy -- but why hundreds of billions of dollars more was not spent to stabilize their lives, to help them with their urgent financial circumstances. If job growth resumes, these Americans will receive the answer.
However, while the populist complaint is valid, some of the fringe political philosophies that have tried to take advantage of that populist sentiment, as Huffington pointed out, are not. Birther groups, "death panel" fear mongers, climate change doubters, and other fringe elements on the right have sought to take advantage of the typical person's plight and craft a new political coalition. Former Alaska Gov. Sarah Palin -- woefully inexperienced, stunningly unaware, and not remotely prepared for the vice presidency or the presidency -- now appears (for the moment) to be the leader of this faction.
Political science research teaches us that the nation, so new into the current presidency, still sides with President Obama and the Democrats: coalitions forged over a decade don't disappear overnight. However, as noted, all of that support is contingent on the majority coalition's ability to create jobs. The American people want opportunities and a fair chance at achieving the American dream, and it's Obama's and the Democrats' task to make that economic environment a reality. If they don't, the American people are clearly stating they'll seek someone else who can.
Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.