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Blocking Stimulus For Politcal Gains?

Todays post from Barry Ritholtz refers to an accusation that further stimulus is being put off until after the November elections; something I strongly believe in, and eerily similar to my previous post on 1931 European Depression Redux where Austrian officials are putting off their 2011 budget until after their Fall elections [an unconstitutional act by the way]. Will we see more of this posturing for political gains across the globe? Me thinks so. I look forward to your thoughts and comments below. For your StockBuz consideration:

“Now I’m looking at the political system turning itself into a paralyzed beast. A lost decade now looms as a much bigger risk. The Fed’s running out of powder; Its really powerful ammunition has been expended.”

-Alan Blinder, former vice chairman Federal Reserve, on whether the US could sink into a Japan-style quagmire

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Peter Goodman has a longish article in the NYT Week in Review, What Can Be Done to Cure the Ailing Economy?.

It is notable for a few reasons: Great chart porn (see right), a few good quotes (see above), and a bombshell from Bruce Barlett, the Treasury economist in the first Bush administration.

Bartlett has become a pariah to the Republican party, saying out loud what few people dare to even think. He notes that we are already in gridlock, with the GOP deploying a blocking strategy. He thinks nothing substantive is going to change for a simple reason:

“Clearly, a weak economy in 2012 will be very good for whoever the Republican presidential candidate is. It’s hard to see how the Republicans lose by blocking stimulus.”

That is a pretty damning accusation. Bartlett is essentially arguing that the anti-stimulus crowd is doing so not for ideological beliefs, but for political advantage. He is implying their goal is to keep the economy weak in order to prevail politically.

That is quite an accusation . . . Do any of you buy it?

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Source:
What Can Be Done to Cure the Ailing Economy?
Peter S. Goodman
NYT, August 28, 2010
http://www.nytimes.com/2010/08/29/weekinreview/29goodman.html

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