President Obama received his first report card Nov 2, 2010 from the American people. Democratic candidates were decisively beaten in Congressional elections, with the Republicans picking up more than 60 seats. This was the largest swing in major party representation since 1948. Even a kind rater would give President Obama an "F".

As for the Senate, Democrats lost 6 seats to the Republicans but kept the majority. Because of the Senate's unusual rules, a simple majority isn't enough to pass legislation (usually 60 votes are necessary to avoid endless debate), the Senate remains in Democratic control but it's unlikely to be able to do anything the next 2 years. Since Harry Reid, the Senate Democratic Majority Leader kept his seat and his party's majority, but the Democrats lost the ability to push legislation without Republican support, a fair grade here might be a "C".

When President Obama swept into office in 2008, few could have predicted this result only 2 years into his

"Hope and Change" administration. There are many explanations for this in the press - the rise of an angry "Tea Party", the difficulty of emerging out of a very deep financial crisis,the time and expense of waging 2 huge wars overseas against declining popular support, and so on. Perhaps the reason President Obama lost was a comment his former Chief of Staff (Rahm Emmanuel) made in the early days of Mr. Obama's campaign - "Never let a good crisis go to waste."

What does this mean? Despite the enormous challenge of the biggest financial crisis since the Great Depression of the 1930's, President Obama used the crisis and his super majority in the Congress and Senate to focus on Health Care, Financial Reform and Labor legislation. The first legislation signed in his term was the Ledbetter Act, designed to provide fair treatment for women who received lower pay than men in the past. He was also a strong advocate of the Employee Fair Choice Act, which would have eliminated secret elections during union campaigns, thereby making it much easier for unions to organize.

With official unemployment at 9.6% and 'unofficial' unemployment at 17%, the American people wanted Mr. Obama to focus all his efforts on job creation. But he chose not to do that because he felt this would be the best opportunity for Democrats to create government-run health care. This was something the Democrats have been trying to do since the 1960's but finally they had the votes to succeed.

The President and the Democrats were successful in enacting Health Care Reform but at tremendous cost. It's unlikely that this Reform will be repealed during the next 2 years because of the President's power to veto any attempt. But it could become a huge campaign issue in 2012 when Mr.Obama runs for re-election.

Business can relax for the next 2 years because it's unlikely the President will be able to propose new labor legislation involving more regulation. The Employee Fair Choice Act is effectively dead, while other legislation to liberalize mandated employer-provided sick leave or extend Family & Medical Leave protection to smaller companies should also be unlikely.

Large companies are sitting on enormous reserves of cash because of the uncertainty of further government controls and taxes. It's still uncertain whether the change in Congress will provide the stimulus needed to allow companies to invest in more hiring, but they'll know that dramatic change like the Health Reform Act won't happen. Whether this is enough to improve hiring, we'll soon find out.