Retardant #1

We return to that primary retardant hampering this recovery. Those immune to economic cycles or those who may consider themselves so situated perhaps don’t care. For the rest of us, especially for those of us who depend on discretionary consumer activity for sustenance (restauranteurs, plastic surgeons, nurserymen) business is off; our guess, after our own crude survey - 40% vs H1, 2008 for this segment of the economy.

This is not a complex issue (although lefty economists want you to believe that it is). Banks are not the answer; they have nothing to do with it. Corporate liquidity in not a problem. Nor is consumer demand moribund; that won’t work for an excuse either. Of course they're not buying vacation homes or new plants or getting face lifts, that's for sure, but in fact consumers’ core retail spending is 4.8% ABOVE its year ago level, its tenth straight year-on-year increase. What’s that you say? Can’t be? Yes it can. It's spending on necessary items. Retail sales may be 3.5% below their 7/08 peak, but they’re not in the tank. Key - there is enough there to encourage employers.

So what is it? Simple. Major employers are unwilling to sign permanent help, even though they sense the demand, domestic and foreign. But it is only permanent employees who really spend $. There is no trickle down without them.

There are two reasons for the employers' reluctance: First, the very real burdens placed on the employer by Obama -something we and others have detailed endlessly. Next, and carrying even more horsepower, the major uncertainty that goes with a bona fide statist in the WH. Even the IMF senses BO’s fiscal recklessness. What might be next?

This conclusion is not ours (although most any fool could figure it out). No, we have it from the employers directly.

We can’t call every major employer although we have quoted the likes of Intel, GE and most recently, Federal Express. Their message is the same. But to gather more in just one call we spoke today to the owner of a major employment firm in CA, actually in Marin. This guy talks to the employers so we don’t have to. His business is booming, but, for temps only. And from every single major employer, from LA to Redding, Dem or Rep, the message is the same. Until BO’s agenda is reversed, we’re not doing a thing.

Now if this doesn’t tell you something folks then you live under a rock.

Most of these potential employers look as we do to Nov for relief. Anybody who owns a business - perhaps our nursery pals - had better hope they’re right.

Robert Craven