With unemployment threatening to break the dreaded 10% level and the mid-term elections starting to focus politicians as nothing else can, the Obamites threw out the trial balloon yesterday and then promptly pulled back.
Commerce Secretary Locke pretty much confirmed that the subject is under consideration. A spokesman, later noted that his comments were “imprecise”, whatever that means. His original comments were made on Bloomberg TV. Here is the link to the updated article from Bloomberg and I found this particular part of his comments interesting.
Locke, in an interview with Bloomberg Television, said: “If there is to be another stimulus — and that’s being hotly discussed and very seriously considered within the administration as well as members of Congress — it needs to be very targeted, very specific and we need to be very mindful of the deficit as well.”
As I wrote last night one of the problems with the entire approach to stimulus has been targeting and making it specific. What that means in English is that we’re going to make sure that the money goes to our friends and we get the maximum political boost from the expenditures.
That sort of targeting is why we get artificial boosts in home and auto sales with marginal long-term stimulus. So far the administration has proven itself adept at lining the pockets of bankers, auto workers and real estate agents while failing woefully to truly move the economy out of recession.
Make no mistake, absent a miraculous reversal of the unemployment numbers a second stimulus is already baked in the cake. No one in the administration is going to be “mindful of the deficit.” Their only thing they are mindful of is the debacle that will result if the unemployment rate isn’t down substantially by mid to late-spring.
You’ll see desperation legislation, not anything resembling a rational approach to the problem. The usual economists will tout rationales to give the administration cover, but at its base it’s going to be good old Chicago vote buying.