In 2010 It'll Be Jobs, Jobs, Jobs

Soon the Democrats will have their healthcare victory. It may be a hollow victory that barely resembles their initial goals, but it will be declared momentous and beneficial to all Americans. We will have more laws and taxes for the sake of illusive healthcare improvements. Any consequences of the legislation, such as debt, increased taxation and job losses, will be several years away, so the celebration can begin.

With some sort of a healthcare victory behind Obama and the Democrats, they can turn their attention to what Americans are really concerned about. That is the economy and job creation. The party in power has been slow to realize that healthcare reform is not the voters' number one priority. In 2010 the Democrats will innundate us with job creation legislation.

Just like healthcare costs and coverage, job creation can either be nurtured simply and effectively, or politicians can talk big, tinker, and accomplish little. Rest assured, Obama will get a jobs bill and victory will be declared. No, he won't accomplish an improvement in employment by simply lowering corporate income taxes or the highest personal, marginal rates paid by a business owner of a Sub S or LLC. That would never happen as it would make sense. Jobs legislation will need to be targeted so social goals and constituencies can be served. Power must be preserved. The mid-term elections must maintain the Democratic majority and 10+ percent unemployment will not accomplish that. So, let the jobs tinkering begin.

What private sector growth can Democrats tolerate? The list is short: green jobs in sustainable energy, unionized workforces in manufacturing, the entertainment industry, design and construction of government building projects, data processing that consolidates and improves medical recordkeeping, and agriculture. These constituencies are apt to receive extra assistance.

We will see a general investment tax credit for the purchase of capital goods or additional employment. Capital goods purchases and employment growth in targeted industries will see an expanded tax incentive. Wind and solar projects, energy efficient appliances and transportation, almost any item manufactured and exported by a union member, will attain special status in the name of job creation. Rebuilding the construction industry with unionized labor by funding more school and transportation projects. None of this will be called stimulus as that has become synonymous with wasteful spending. In 2010 we will have job creation. Democrats will attempt to sound like Republicans.

Capital goods manufacturers that export will see an ITC driven sales boom on top of the weak dollar benefit. The likes of Cat (CAT), Deere (DE), Trinity (TRN) and Valmont (VMI), among others, will see revenue growth. Even in an "U" recovery some stocks will appreciate and select American manufacturing companies may benefit from Obama's next victory. Forget about the additional debt and taxation that will accompany, like healthcare reform, the job creation "success" as it won't cause credit and inflationary problems for several years. It will be a "victory" or the Republicans will get a chance to get change correct.

Back to stocks. Deere, while certainly not cheaply priced, is an unionized exporter that serves the agriculture and construction industries and might be a place to park a few dollars while Obama creates jobs, jobs, jobs.

Disclosure: William Kabourek currently owns no shares of companies mentioned in this article.

Comments

[CTOPIN]

Things were just oh so wonderful under the previous administration, right?...the one that stuck it's head in the sand and ignored all the problems that were brewing, allowing the Madoffs and the sub prime mortgages and the lack of oversight by the SEC and the exhorbitant bonuses on Wall Street and the endless spending in Iraq and so on, to completely destroy the economy right before the election, so that he could run off and hide, never to be seen or heard from again. Right. It's all Obama's doing.

2009 Nov 11 11:08 AM

[Reno611]

Please save your partisan rebukes for a political blog.

2009 Nov 11 12:18 PM

[j-dub]

I guess it's unfortunate then, that there won't be any, any, any.

2009 Nov 11 12:41 PM

[CTOPIN]

Right...since the article contained no political slant, since writers, particularly those reporting on subjects pertaining to Wall Street, are all 100 percent objective and non-partisan.

2009 Nov 11 01:13 PM

[ryanclarke]

Without small business expansion in 2010 ... there will be no jobs, no jobs, NO JOBS!

2009 Nov 11 02:20 PM

[User 508969]

CTOPIN,

Bush started the problem and Obama is now expanding this problem instead of trying to fix it. All in the name of big government. Please stick your head in the sand until the next republican government screwed the country up more. You can then tout how bad the republicans are when both parties are to blame.

2009 Nov 11 03:10 PM

[Destin]

Partisan hacks like CTOPIN need to take a hike. Noone is applauding Bush here, and until someone invents a time machine allowing us to go back and correct admittedly horrendous mistakes then we have to focus on the HERE and NOW. I am sick and tired of people excusing bad policy just because the "other guy" was worse. This is why the "lesser of two evils" grows more & more evil with each election cycle and the only "change" we EVER get is the rate at which America circles the drain.

2009 Nov 11 03:28 PM

[CTOPIN]

You're entitled to your opinion, as I am to mine. Even if some policies are proven wrong and need to be corrected or improved upon, it's better to have a do-something leader than a do-nothing leader. Mistakes of the last however-many years cannot be undone in 10 months.

2009 Nov 11 03:42 PM

[William Kabourek]

Nice little political hornet's nest I stirred up. Good. First, I generally vote Republican, but they are far, far from perfect. I suspect they would have made significant errors if they were in charge. But they aren't, so I call it like I see it and it isn't pretty. It's hard to feel confident in our economic future when you witness trillions of debt obligations rising and know that the likely solution is increased taxes and/or inflation. The USA will survive, but I'd prefer that my grandkids live the life I've had as opposed to that of a Frenchman. All of the above make it hard to buy and hold equities beyond a trade. Thanks for reading my article and responding.

2009 Nov 11 03:44 PM

[CTOPIN]

"First, I generally vote Republican".....

Now there's a shocker.

"but they are far, far from perfect."

And getting farther by the minute. The party of No is really the party of No Ideas and No Leadership.

2009 Nov 11 03:52 PM

[William Kabourek]

CTOPIN, I thought I was being clear regarding my opinion of politicians:neither party is working for the taxpayer, but the Republicans are marginally better. Now, I'm finished unless you want to talk economics or securities. If you want to blather on, then go to a yahoo board or a political site.

2009 Nov 11 04:44 PM

[User 492911]

What will stop this rise in equities? ...I'm taking a severe pounding in my S&P Jan & Feb puts, and I too am amazed that every time there is a correction which is warranted on the basis of rising unemployement, negative trade balance, unprecedented expansion of Federal debt, mounting foreclosures more than offsetting touted increases in home sales, etc, within the very next day our 'dear' government (as in Dear Leader') announces yet another spending program. It was not a coincidence to see that within 4 hours of the 10.2% unemployment increase, the Aug and Sept figures were "revised" to magically add 90,000 jobs to offset this potentially negaitve impact? Basically, we are being lied to on an unprecedented scale. However, they will have a very hard time generating positive 'recovery' spin on the dismal retail spending numbers in the forthcoming holiday. This speculative bubble will be brought up short by the American populace as it 'votes' with its wallet. Add to that mounting foreclosures and unemployment and we will surely have a major correction no later than mid January. The investment-bank-casinos will not be hurt as they will short the markets, making even more money, but accelerating the plunge replicating the 1930 fall after that bear market rally. The higher these markets go, the bigger the fall. DOW 10,350 or thereabouts would equal the 1930 rally. Veritas will win out my fellow alumni.


On Nov 11 07:15 PM Harvard_trader wrote:

> Can anything stop this bull market?
>
> good articles: financeopinionss.blogs...

2009 Nov 11 09:50 PM

[CTOPIN]

William Kabourek, I thought I was being clear as well. I have as much right to blather as you do and your comments are no less political than mine ("the Republicans are marginally better"), so perhaps you should go to a political site as well.


On Nov 11 04:44 PM William Kabourek wrote:

> CTOPIN, I thought I was being clear regarding my opinion of politicians:neither
> party is working for the taxpayer, but the Republicans are marginally
> better. Now, I'm finished unless you want to talk economics or securities.
> If you want to blather on, then go to a yahoo board or a political
> site.

2009 Nov 12 11:24 AM

[Reno611]

"What private sector growth can Democrats tolerate"

tell me that this is not a loaded bit of writing. I am a democrat and I can tolerate quite a bit of growth, trust me. The problem, is that without some government involvement/regulation the growth only goes to the pocketbooks of the top 1%. WK, your insight on areas that might grow in 2010 is good, I just think it makes you look dumb and one-sided to couch it in such loaded political terms.

2009 Nov 12 02:06 PM

[Chancer]

Why wait until 2010 to concentrate on jobs?

Can't they walk and chew gum at the same time?

Is healthcare buy itself more important then jobs and the entire economy?

It must be for Obama and the Democrats.

2009 Nov 12 02:17 PM