Much of the $787 stimulus money was squandered on pet projects that created few jobs. For example, grants to build green buildings displace other planned construction and don't increase the amount of commercial space rented or built over the next several years.
The biggest banks received more than $2 trillion in TARP and Federal Reserve assistance to clean up their balance sheets and recapitalize securities trading, while the 8000 regional banks got little assistance and remain burdened by toxic real estate loans. Consequently, more than 230 regional banks have failed, and small and medium sized businesses cannot get credit to expand.
In addition to credit, businesses need more customers to create jobs, and the trade deficit-in particular, imports of oil and the imbalance with China-cut a huge hole in demand for U.S. goods and services. Without addressing oil and China, other efforts to create jobs are futile.
The president's moratorium on deep water drilling, though popular with environmental fundamentalists, kills jobs two ways-directly, by laying off workers in the oil and gas industry and indirectly, by sending too many consumer dollars abroad that could be spent here.
Detroit has the technology to build much more efficient gasoline-powered vehicles now, and a shift in national policy to rapidly build these would reduce oil imports and create many jobs.
China's undervalued currency that makes its products artificially cheap and deceivingly competitive on U.S. store shelves, but its promise of new flexibility on the yuan has not translated into meaningful revaluation.
If President Obama wants to fix the federal deficit and create jobs, perhaps he should dust off George Bush's 2007 budget and spend a lot less, get serious about better using and developing more conventional fossil fuels, and finally fixing trade with China.
Peter Morici is a professor at the Smith School of Business, University of Maryland, and former Chief Economist at the U.S. International Trade Commission.