President Barack Obama

The Obama administration has announced that it will be conducting a White House conference on job creation in December. This  upcoming employment pow-wow apparently was sparked by the continuing rise in U.S. unemployment numbers combined with a decline in polling numbers favourable to the Democratic Party.

President Barack Obama made a critical strategic error, in my opinion, when he selected Clinton administration retreads and Bush administration continuity to frame his economic agenda during his first year in office. Larry Summers, Timothy  Geithner and Ben Bernanke are the hand maidens of Clinton and Bush administration deregulation that crippled America’s financial system. Yet, it is precisely these minions of economic disarray that Obama selected as the saviours of the U.S. economy. It is as though  the ex-CEO of Enron was pulled out of prison to head the salvation of General Motors.

The clique picked by Obama to head economic policymaking has done what would be expected of them. They have sacrificed the real economy to backstop Wall Street, socialize its losses incurred through its unique brand of casino capitalism, and inflate a new equities asset bubble. Grow the bubble big enough, they must  think, and eventually the unemployment  numbers will recede.

Economic mythology is now being confronted by political reality. The so-called jobs summit has an air of desperation about it, as the Democrats begin to contemplate the loss of Congress in the 2010 mid-term elections. The next step will probably be a second Obama economic stimulus program, which may temporarily bring about a slight improvement in employment numbers, but at the cost of a further deterioration of America’s already bleak public fiscal posture. This will further weaken the dollar, which undoubtedly will bear political consequences in the 2010 mid-term elections. Obama may be in for a bitter surprise in the second half of his presidential term.

In securing his stimulus plan, Barack Obama sought bipartisan support. Ultimately, however, not a single Republican congressman voted for the stimulus bill In the Senate, only three Republican senators backed the legislation, reflecting the bare number needed for approval without the risk of a filibuster.

With the U.S. economy in a deep and worsening recession, President Barack Obama insisted that major stimulus spending was necessary to stem the hemorrhaging of jobs. Since the recession began, more than three million Americans have joined the ranks of the unemployed. President Obama has now scored an important victory, however with the economy facing grave challenges, his work is far from done. Obama will be focusing in the days ahead on the banking and housing crisis.

The fighting that has erupted between Hamas and Israel in the Gaza Strip will push up the Middle East to the top of the Obama agenda, at a time when President-elect Barack Obama would prefer to focus almost exclusively on the U.S. economy.

Barack Obama will be seeking to improve the public image of the United States in the Arab and Muslim world, which has severely deteriorated during the Bush presidency. He must also demonstrate traditional political support for Israel. His public stance on the issue of Hamas firing rockets from Gaza into Israel elicited the following comment from Barack Obama:

“If somebody was sending rockets into my house, where my two daughters sleep at night, I’m going to do everything in my power to stop that,” … “And I would expect Israelis to do the same thing.”

Will Obama be able to show that he can be a balanced American president in addressing the Arab-Israeli conflict, or will he be perceived as too pro-Israeli by the Arab world? The fighting between the Israelis and Palestinians has truly come at a challenging time for the incoming Obama administration.