I had a conversation today with one of Ottumwa’s small business owners.  They verified the concerns that small business owners have and the uncertainty that keeps them from expanding or spending money on growing or hiring.

We are all aware of the fact that unemployment for the month of June rose to 467,000 non-farm payroll jobs lost.  This was higher than reported in May and although lower than earlier in the year, it was greater than predicted.  The unemployment rate increased to 9.5% and is a “grim jobs report”, according to Donald Marron a former senior economist with the Council of Economic Advisors.

Marron has dug deeper into the jobs report revealing a decline in hours worked by private-sector employees, now 7% over last year.  Therefore, not only is the economy losing jobs, but there are fewer hours worked for the jobs that remain.

Job loss has expanded from construction and manufacturing to the service sector with a 244,000 drop.  Within that category, 118,000 jobs were lost in the important professional and business-services sector.  Over the past 3 months, average hourly earnings barely increased at 0.7% annually.

Credit is still tight as banks are holding onto their cash for balance sheet expansion and until these excess revenues come down, the effect of the Fed’s monetary stimulus will be muted.  In fact, the real gross domestic product is expected to fall by by 1-2% annually.  Much worse than the expected 3% growth placed into the budget for the deficit projection (meaning the deficit and debt will be greater).

The fiscal stimulus has yet to stimulate!  Although there are some indicators that the economy is improving, it is at a snail’s pace.  Further we have all heard by now and have memorized that the unemployment rate is a lagging indicator.  These hidden facts point to a much more dire predicament for the economy than the unemployment rate and job loss alone would indicate.

The Obama administration and Congress can still right this ship.  The government’s fiscal nymphomania (penned by Larry Kudlow) needs to end and the deprecating talk from the administration needs to stop.  Marginal tax rates for individuals, businesses and investors could be reduced to spur business expansion.

Especially for small businesses and low income individuals, we could suspend the payroll or FICA tax for 6 months.  Too much regulatory change causes unrest and small business owners rightfully do not think they have a level playing field.

The cap and trade debacle which does nothing to reduce carbon emissions, by does a lot to pay off supporters of the administration should be delayed and real debate ensue.  This is also true for the health care reform bill currently sending shock waves through the economy.

Is the administration watching the sell-off in the stock market, and do they care?  Is not this a poll of its’ own?  And if so, is President Obama’s approval rating going the way of the stock market?