Ed Harrison has a good post up at Naked Capitalism that covers a lot of ground relative to jobs, deficits, the Obama administration and just the overall bad trend of policy.

I recommend that you read the whole thing but I was taken by this little piece:

In particular, a looming crisis at the state and local government level, coupled with continued distress at regional and local banks will mean a deadly combination of higher taxes, fewer jobs and less credit for households and small businesses. Unless we see a change in the political climate in Washington, now oriented toward deficit reduction over jobs, we are likely to see a double-dip recession late in 2010 or 2011.

I would change his phrase about a “… deadly combination of higher taxes, fewer jobs and less credit…” only to the extent that I would substitute the word impossible for deadly. Unless the jobs piece of the puzzle is attacked and solved more taxes will snuff out any job creation and the ensuing and dreaded “double dip” will further discourage banks from extending credit.

The ultimate fallacy is that higher taxes will somehow serve to attack the deficit problem when in fact all they will do is further depress economic growth and likely result in less government revenue absent raising them to confiscatory levels.

If you have read much of what I have written, you will know that I am probably pigeon-holeable (is that a word?) as a fiscal conservative. I’ve written that higher taxes in some form are inevitable and that ultimately they will have to be broad based (think VAT) in order to work. I abhor the idea but reality does have to be faced from time to time.

Right now, however, the only item that should be on the agenda is jobs. If Obama and the rest of the Washington establishment want to survive they need to recognize this now. There is no recovery in “fly over country.” Desperation and fear are the realities out here and believe me it is palpable. Any plan that gets people back to work will be met with open arms and if the devil offers it then so be it.

For the foreseeable future, the emphasis has to be on jobs. Tax policy that encourages hiring, expanded programs to foster small businesses, a stern look at the labor arbitrage engaged in by the nation’s multinationals and any other program that will encourage, aid and abet the formation of new enterprise in the country needs to move to the top of the agenda.

Create jobs by the millions and you solve most of the other problems.