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Busch: What I Want To Hear From Obama Today

Since last month's surprisingly good employment data, the market expectations have been building for a positive number this month. So with today's -85k print, they were clearly disappointed. Initially, the US dollar dropped, bond yields dropped, and the stock market dropped. If we would've had a strong number, key resistance levels for further US dollar strength would've been tested. Alas, not today.....yet.

On employment, I would agree with those that say the government needs to do more to help the jobs situation. But I disagree that the government creates the jobs.

Here's what I'd like to hear from President Obama at 2:40 PM ET today:

1. Announce that the best the government can do is create the conditions for business to grow and that he will do everything possible to make this happen especially small business.

2. Next, announce he will tell Congress not to raise taxes in 2011 and make permanent the tax cuts that are going to roll off in 2011.

3. Announce a long term fiscal reduction plan in which any tax hike in the future will be met with a spending cut to reduce the deficit and debt. (For all those that point to the Clinton years and how well the economy did after tax hikes, I would remind them that defense spending dropped by around $100 billion as well.)

NOTE: CNBC.com will carry the President's statement live at 2:40 PM/ET.

There is no government magic spell or incantation to revive job growth in the private sector. They have to incent the private sector to take risk and get the rewards that come from creating jobs. This is the lesson from 7 fat years of growth under JFK and Reagan. Let's see what President Obama does today. If he follows what is prescribed above, I would expect a stock market rally and a drop in long term bond yields with a rally in the US dollar.

The good news is that the White House is leaking out some of what the President is going to say and it includes credits for small business. Stocks are rallying, bonds yields are higher, and the US dollar has rallied on the news!

If not, here's what could happen. For the first half of the year, the economy is recovering and the stock market will do well, but with slow/no job growth. This will not likely change initially, but the rally and economy will run into trouble towards the end of the year (2nd half?) as uncertainty over tax and fiscal policy may derail business confidence.

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Andrew B. Busch is Global Currency and Public Policy Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a frequent CNBC contributor. You can comment on his piece and reach him hereand you can follow him on Twitter at http://twitter.com/abusch.