Obama Is Right On 10% Unemployment...What He Doesn't Know Is That It Will Sink Him

The business world is still trying to figure out how to deal with Barack Obama. They've gotten over the fact that they let their oppressor in through the front door, and the internal debate has been whether to play ball or push back. However, word is getting back to corporate circles about the treatment that the administration dispensed during the two automaker bankruptcies and companies are getting less reluctant to push back. Caterpillar got the ball rolling downhill with a mild jab after they were shamelessly used to sell the porkulus. Now we have a British bank summarily dumping all of its American customers rather than be hounded by Obama's overseas tax grab efforts. Steve Ballmer has pushed back on Obama's corporate tax proposals. Today, Discover credit card President David Nelms says his company is going to offer less credit, rein in incentives and maybe raise fees in the aftermath of Obama's credit card industry clamp down. Also, GE today came out with an early salvo against Obama's financial sector regulatory reform. And these are just the items that make the headlines, there are fierce battles brewing behind the scenes.

The bottom line is this, American business saw a Democrat win coming and bet that if they got on board prior to the election, they would have a seat at the table on all manner of policy issues. They realize they bet wrong, really wrong. Some will scream loudly, some will fight behind the scenes, but most who can will do what will ultimately be most damaging to Obama's agenda and political future - they will sit on their hands and refuse to play. They will pull back, hoard cash, avoid risk, wait Obama out. And guess what, employment isn't going anywhere if this is what American business chooses to do. I reiterate my prediction that we will not see 8% unemployment again in this Obama administration and we may not even see it below 10%. Obama himself even realizes this, but I don't think he knows how persistent this bad number will be given the ill-will he has sown with the business community not 150 days into his Presidency. Unemployment will be, as the British say, a sticky wicket.