Watch the Western: Rhythm 1 online guitar lesson by Joe Dalton from Big Twang
Laying down a nice pad is very supportive to singers and soloists. These chords stay out of the soloists way, and add color and rhythm while providing a full sounding pad.
I use my thumb in the picking hand to provide a soft and full tone. I lift my fingers on the fretting hand to add the stacatto effect on the second and fourth beats. This is a signature western swing rhythm guitar effect.