Jobs, and a Call for Revolution

Bridgewater and John Mauldin are spreading the word. As I have mentioned before, the only priority right now should be job creation and establishing a backstop for the unemployed. This is all that matters right now. Forget North Korea and Iran. Let the DoJ handle the torture issue. Let FDIC raise funds for the eventual disintegration of one or more of the big banks.

Jobs.

Without them, we'll plunge into a depression that will destroy the Union of 50 States. Without them, the world economy will step back thirty years.

Here's what a Bridgewater analyst says:

“Normally, labor markets lag the economy because incremental spending
transactions are financed via debt, stimulated by interest rate cuts. But as
long as credit remains frozen, spending will require income, and income comes
from jobs. And debt service payments are made out of income. Therefore, in a
deleveraging environment job growth becomes an important leading, causal
indicator of demand and other economic conditions."

In short, fixing finance won't fix the economy. This is a very important point to digest. Wall Street and the markets attract the big media buzz, and the Fed/Treas/SEC/FDIC are dedicated to the repair and growth of Dow Jones. They will all fail if Obama does not zero in on the jobs issue.

All unemployment benefits need to be extended indefinitely. This will be the only way to allow the country to delever and devalue still-bubbled assets. Companies that came in above expectations for Q1 did so on the cost-cutting power of layoffs. Sad, but true. There needs to be more of it. A lot more of it.

Is this contrary thinking to my shrill cry for more jobs? No. We need a backstop for job loss. We need to let companies regain their footing in a world where everything's being re-priced.

At the same time, we need to give the recently unemployed the opportunity for new ventures. Health care costs and business startup costs must be made reasonable. The recently unemployed have skills and experience that should not be put to waste. Untold innovation and improvement is being kicked to the curb.

I am calling for revolution. A small business revolution.